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While total revenues for the year were $496.7m (including a one-off $46m from leasing out their real estate brand), compared to $317.3m for 2003, it is the net profit that shows most clearly the company’s dramatic recovery.

Sotheby’s registered a loss of $20.7m for 2003, which included $16.6m in staff retention costs, restructuring and special charges relating to their anti-trust lawsuit. For 2004, that net loss had turned into a net profit of $86.7m, with a total of only $2.3m in extraordinary charges to dent that figure.

What is notable is that it shows the auction house – having spent the past few years reining in costs and, more recently, raising charges – has returned a 17.5 per cent net profit on turnover.

Whilst Sotheby’s acknowledge the important boost in revenue from charge increases, they also note that much of the increase in auction sales came at the top end of the market, where vendor’s commissions tend to be lower as auction houses compete for business.

Buyer’s premiums are not subject to such discounts, however, and the potential for single objects, such as paintings, to add to the bottom line was illustrated amply by the $93m (£54.7m) Picasso Rose Period portrait Garçon à la Pipe, which attracted $11.2m (£6.6m) in buyer’s premium when it sold in New York on May 5.

Chief executive Bill Ruprecht, who had previously stated that Sotheby’s were pursuing profitability rather than market share, appeared to have hardened his position towards competing for trophy sales with the emphasis he gave in his statement to the Picasso sale and other highlights.