Savills hails strong first half performance
International real estate adviser Savills today posted a 7% rise in pre-tax profit for the six months to June 30 to £26.4million.
Underlying profits before tax were up 28% (24% at constant currency rates) at £38.4m, on revenues 27% higher (25% on a constant currency basis) at £547m.
The Asia Pacific region delivered the strongest growth in transaction revenue, with an increase of 32% compared with last year’s first half to £58.8m.
Transaction revenues in the United States surged from £11.1m to £86.7m, with the acquisition of the Savills Studley business being accompanied by organic growth of 15%.
UK transaction revenues grew by 4% to £93.7m (with commercial up 38% but residential down 13%), offsetting a 7% fall in Continenal Europe revenues to £19m, leaving an overall increase of 55% to £258.2m
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Consultancy revenue grew by 3% to £96.4m, property and facilities management by 13% to £178.4m and investment management by 10% to £14m.
Group chief executive Jeremy Helsby said: “Savills has delivered a strong first half performance as a result of the contribution from Savills Studley in the US and the strength of our existing businesses in key transactional markets of the UK and Asia.
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“Our performance in these markets mitigated the effect of the pre-election slowdown in the UK Residential market, where, lately, we have seen activity levels starting to improve.
“In line with our US growth strategy, we have continued to build on the Savills Studley platform in the US with three bolt-on acquisitions and recruitment across the country.
“In addition we have bolstered our rural business in the UK through the acquisition of Smiths Gore and look forward to the near term completion of the acquisition of SEB Asset Management AG.”
He added: “Looking to the second half, we currently see no significant change in the overall outlook for our business. Our core markets continue to be highly demand-driven as a result of the continued substantial capital allocation to real estate around the world.
“Furthermore, in many markets we are now seeing rental growth and increased occupier confidence. Savills is well placed to act on the opportunities arising from occupier and investor demand globally. The board remains confident in its expectations for the full year.”
Mark Oliver, director at Savills’ office in Ipswich, said: “Our multidiscipline office, which offers residential, new homes, development, commercial and rural expertise, enables us to serve the growing need for in-depth property advice.
“Our unrivalled ability to reach beyond Suffolk through our network of offices has produced some excellent results. Residentially we have taken on many houses which had failed to sell through other agents, leading to success.
“Demand for new build homes across Suffolk has risen significantly and with a strong pipeline of stock coming to the market we are experiencing a good level of interest from purchasers.
“The commercial team has had an encouraging start to the year seeing improved confidence and evidence of a good degree of churn in both the business space and industrial sectors, while our experienced rural team continues to offer business advice to the rural and farming industry which is facing pressure as a result of fluctuating commodity prices.”