Real estate and Fabergé put Sotheby’s on track

Auction and related revenues were $59.1m, compared to $38.1m for the same period in 2003 – a rise of 55%.

The $21m boost came largely from the private sale of the Forbes Fabergé Collection in February and a 20 per cent increase ($6.3m) in auction commission revenues. Dwarfing that rise, however, is the additional $45m earned as a one-off licence fee relating to Sotheby’s real estate brokerage business in February. Although not part of the company’s usual run of business, this windfall has allowed liabilities to be cut significantly.

Anti-trust expenses had already been taken into account by the first quarter of 2003, so although these fell again for January to March 2004, the sums involved were small. More significant are the cuts in staff retention costs (a net fall from $2.23m for the period in 2003 to $0.18m in 2004) and restructuring charges ($3.7m to $0.08m). These improvements reflect the board’s stated aim to pursue profits rather than market share.

Chairman Michael Sovern told shareholders on May 7 that the company’s continuing focus would be on cutting costs. Expenses had been reduced by $70m since 2000, and staff numbers cut by 30 per cent, he said.