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CNinsight100: Big three continue to dominate QS

The table of the top QS firms is notable for a number of reasons. Firstly, the combined turnover of the largest QS firms has increased in the latest financial year by 1.5 per cent to hit £1.4 billion, compared with £1.37bn at the same point last year.

Despite the increase in turnover, the combined pre-tax profit of the top 10 firms has fallen by almost 28 per cent to £140 million in the most recent financial year, compared with £193m a year earlier.

The most notable performance is a negative one, as Lambert Smith Hampton made a pre-tax loss of £20.8m in its financial year ending 31 March 2009. The bulk of this loss was caused by a goodwill impairment totalling £14.7m as the value of Lambert Smith Hampton Limited, which was acquired in 2007, was written down.

The group also incurred exceptional costs of £1.5m in respect of redundancy payments to staff.

It is perhaps understandable that the commercial property specialist has experienced a tough market, given the fall in value of the commercial sector during the recession.

The sector is still suffering under the weight of over £50bn of loans, which are either in default or breach of covenants.

While there are signs of a revival in the London commercial market, this is still at a very early stage and a number of developments are yet to get the final go-ahead.

It is also unsurprising that, given the tough market and falling profits in the QS sector, employment levels have fallen, albeit by only 1.4 per cent at the largest firms. Despite this, the average salary for employees of the top QS firms has increased to £45,000.

As in other specialist sectors, the three largest firms are significantly ahead of their smaller competitors.
The three largest firms by turnover are much bigger than King Sturge in fourth place - indeed, third place Davis
Langdon’s turnover is twice its level, at £208m.

In August, Davis Langdon agreed to be taken over by US giant, Aecom Technology Corp, in a deal worth £200m. Activity is largely concentrated in a few big companies, while the tail-end firms - specialists in their own right - are forced to fight with the heavyweights for work.

There are some notable absences from the list, which ranks QS firms by turnover. Turnover and profit figures are
unavailable for Turner & Townsend and Jacobs, primarily as a result of their partnership status and the fact they are not obliged to release such details.

Click here for more from the CNinsight100

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