Global market property agency, Knight Frank, has posted its latest figures and provides detail about how the business has fared during “one of the most extraordinary years” in its 125 year history. There’s also much interesting information about the company’s approach to issues such as diversity, equality and climate change.

The headline numbers are:

• Turnover down 7% to £512.7m (2020: £549.6m)
• Record pre-tax profit, up 23% to £173.7m (2020: £141.1m)
• Strong balance sheet with net assets at £299.4m (2020: £264.1m)
• Cash healthy at over seven months of normal operating costs (2020: five months)

The results overview was given by Alistair Elliott, Senior Partner & Group Chairman:

On the back of one of the most extraordinary years in our 125-year history, I am pleased to report a strong set of results.

The firm’s agility and speed of reaction to the pandemic has enabled us to outperform our early financial expectations. This year has cemented our confidence in the firm’s global platform. At the heart of this is our partnership structure, which gave us the ability to plan and respond quickly. We have remained resolute in our focus on our people and the need to continue to invest in our business for the future.

At times of adversity Knight Frank has always shown its true colours – no more so than during the pandemic, when I experienced the firm at its very best. From day one, we came together sharing early learnings from our businesses around the world, allowing us to react quickly with confidence. This firm wide collaboration continues to give us the expertise to better advise our clients across the real estate sectors.

Our diversified offering and the early measures we took to shape the firm in anticipation of the headwinds that lay ahead underpin these robust results and record profit.

Turnover is down just 7% largely due to a reduction in transactional activity across capital markets and office agency showing a far stronger position than our budgets. We planned conservatively given the global uncertainty, then adapted our position to focus on the right areas to deliver outperformance for ourselves and our clients. Notably, UK residential, and especially our country business, which saw record demand levels.

Swift market re-engagement, in parallel with costs constraints, have resulted in our profits growing by 23% on the previous year.

As a group we reduced our marketing spend, our people travelled less and our staff costs lowered – all factors that have positively impacted the firm’s profitability.

Knight Frank initially took advantage of the UK Government’s furlough scheme as well as asking all our people to make a salary sacrifice – precautionary measures taken in readiness for what the firm felt may lay ahead. Yet, with markets responding better than forecasted, we were pleased to pay back the furlough grants and reimburse our people’s salary sacrifice in full.

Throughout the year, Knight Frank has remained focused on being a responsible corporate entity putting people first. Our investment management business (KFIM) achieved strong profits and Knight Frank’s residential facilities management service significantly increased its income and margin. Internationally our performance in the Middle East, Hong Kong and India is especially notable.

We remained a net recruiter, progressed our early careers programme, took on the full intern and graduate intake – as well as made a record number of promotions. We have strengthened our coverage across Africa and Europe, opening new offices in Sofia, Athens and Belgrade and announcing new partnerships in Cape Town, Lyon and North America. The firm has also backed Fifth Wall, the largest venture capital firm focused on real estate technology, with an investment into its European Real Estate Technology Fund.

We are pleased to confirm we remain an independent partnership, debt free and with a robust platform for the future.

We believe the coming year will see greater clarity for the key markets – as people continue to return to workspaces and cities once again take centre stage for home buyers and businesses alike. The year will also see continued growth in ESG [Environment, social and corporate governance] led investment requirements and a search for income as we enter a rate tightening cycle. Investor focus will lead to continued innovation across property markets globally.

This year has seen the Knight Frank Group, which comprises more than 16,000 people across 384 offices in 51 territories, achieve a combined annual turnover of in excess of £1.7bn. There remains a great opportunity for Knight Frank on the global stage and we are focused on a number of key growth areas to drive the business forward.

The firm’s own ESG commitment and the related advice we give our clients has never been so important. Further developing our in-house expertise, Sarah Beattie has joined as a Partner in our Corporate ESG Strategy team, responsible for developing and leading our corporate ESG strategy across our business.

Our purpose is to work responsibly, in partnership, to enhance people’s lives and environments. Playing our part in tackling climate change is critical and it is the responsibility of every business to manage its Green House Gas emissions. Knight Frank has a huge opportunity to make a difference, both through our own actions and the advice we provide our clients. Following a six-month consultation with The Carbon Trust, the firm joined the global race to net-zero, committing to achieve net zero by 2030 globally, with the UK reaching this target by 2027.

To achieve this, Knight Frank will be adapting its buildings, business operations and behaviours, as well as utilising technology and nature-based solutions to reduce the carbon it releases into the atmosphere. We are looking at alternative energy sources to run our operations and transitioning to using 100% renewable electricity, our fleet of cars will go electric and we are reviewing our entire supply chain to collaborate with firms who share our ambition for net zero.

Our early talent population is a key pipeline for our future, and in our 2021 Internship cohort we had 44% female, 56% male, 36% BAME interns, which within the industry is a significant shift and exceeds our own targets.

Our UK graduate intake for this year joined in September and comprised 49% female, 51% male. In 2022 we are aiming for gender parity and again to exceed our own targets around BAME and education.

In the past year we rolled out our Leaders for Today programme where 200 of our leaders completed a six month programme on being an inclusive leader helping to ensure the mindset and approach is deeply embedded in our culture.

The second cohort starts in 2022 which will ensure all those who lead and manage teams are fully inclusive and addressing diversity at every stage of their teams’ careers. We are reviewing our parental leave policies which give our people the time and support they need as they grow their families, looking to equalise these for primary and secondary carers.

We conducted a forensic review of our promotions process to ensure we are considering everyone in the business for promotion at every level of their career. Our vision is to ensure that Knight Frank is an environment where everyone feels comfortable being themselves and that there is equal and transparent opportunity for all – there is no doubt this important initiative is gaining momentum and driving positive results already.

After 38 years with the firm, the past eight of which I have been the Senior Partner, I retire from the partnership in March 2022. Following an election in December 2020, William Beardmore-Gray will succeed me as the firm’s Senior Partner & Group Chairman, effective from 1st April 2022.