The company also reported a first half decrease in expenses of $17.9m on the first half of 2001, although how this sum was broken down was not clear from the figures released.
Comparing like with like, it appears that Sotheby’s were on course to make a profit of $8m for the first half of 2002 but for staff retention costs and bonuses. Other special charges and interest payments are thought to have cut that figure to $0.8m. For the first half of 2001, the respective figures are losses of $0.3m and $1.9m.
Factors helping boost performance for the first half of 2002 include the second quarter fall in Internet-related costs to $2.7m compared to $6.4m for the second quarter of 2001, with further savings anticipated in this sector following Sotheby’s deal with eBay. The resolution of the US anti-trust case has also helped. For the coming quarter, the record sterling price of £45m for Sir Peter Paul Rubens The Massacre of the Innocents in London in July will undoubtedly help the balance sheet.
Mr Ruprecht said the company were on course to exceed their goal of $60m in cost savings from a year 2000 cost base. “In fact, our first half 2002 costs are 20 per cent, or $40m, below the first half of 2000,” he said.
He also revealed that the company had successfully extended to February 2003 their Bank Credit Agreement - scheduled to mature on August 10.
However, his confidence must be tempered by the uncertainty over possible further action following the European Commission investigation into price fixing issues, the development of Sotheby’s French auction business and the fate of former chairman Alfred Taubman’s shareholding.
...And Christie’s?
CHRISTIE’s have announced worldwide auction sales of $989m for the first half of 2002, laying claim to the title of the world’s leading auction house. Whether this is justified in terms of their revenues and profits is uncertain as, being a wholly privately owned company, they do not publish such results.
They, too, have been through a cost-cutting and restructuring programme following the US anti-trust case.
Sotheby’s get a better grip on costs but still face uncertainty
SOTHEBY’S chief executive Bill Ruprecht is bullish about the company’s second quarter performance, reporting a 25 per cent increase in net income on the same period last year.
