But while the welcome $24.3m (£12.15m) profit makes the headlines, other statistics in the company’s statement make for more interesting reading. Perhaps most telling is the revelation that while nearly half the lots (47 per cent) sold by the company in 2006 were valued at less than $5000, they made up only 2.5 per cent of net sales. This alone would explain why Sotheby’s have decided to cut the middle market adrift and concentrate their efforts in the lucrative upper echelons of the Contemporary and Modern art fields.
Although the company have been enjoying a bumper sets of results in the past 12 months, the first quarter profit is largely the result of some extraordinary transactions. These include the maturity of a $20m (£10m) life insurance policy resulting from the death of Old Master dealer Robert Noortman and $4.8m (£2.2m) from the sale of their former Billingshurst saleroom. However, they also lost $15m (£7.5m) relating to intangible assets and goodwill of Noortman Master Paintings BV. Revenues for the period totalled $147.4m (£73.7m), a 54 per cent increase on the $96m taken in the same period last year. This was put down to higher commissions as a result of sales activity increasing by more than half.
Unfavourable exchange rates – mainly the weak dollar – have hit Sotheby’s to the tune of $2.6m (£1.3m), and salary and incentive costs have been rising as the company have increased staff numbers in key areas, adding another $8.2m (£4.1m) to the bill.
Ivan Macquisten
Sotheby’s post rare first quarter profit
SOTHEBY’S are celebrating a rarity – a profit in the first quarter of the year, when a seasonal dip in sales activity usually means making a loss.
