THERE’S caution and there’s fear. DTZ’s decision to withhold its final dividend despite booking a 110 per cent rise in pre-tax profit to £3.6m for the year, a dramatic turnaround from last year’s £35.1m loss, looks like the latter.
Chief executive Paul Idzik cited “economic uncertainty and geopolitical risk” for his caution. “You have to be smart in this market and we are trying to be smart,” he said.
But being smart also involves taking a risk. Yes, after exceptional items of £26.m, including redundancy costs, DTZ made losses of £22.9m, but this was down from last year’s £79.7m and reflects the cost-cutting changes DTZ has made to ensure it can weather a second correction in global property prices. It expects pre-tax profit to rise to £11m and £20m in 2011 and 2012 respectively, and is confident it can now survive future “choppiness”.
Rewarding shareholders, who have not received a dividend since 2008, would be a good risk to take.