Savills posts rise in revenue, steady profits
Savills reported steady full-year profits and an increase in revenue on Thursday as it announced the acquisition of US project management firm Macro Consultants and cautioned over the impact of the coronavirus.
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In the year to the end of December 2019, group revenue rose 10% to £1.93bn, driven by a strong performance in its less transactional business lines, where revenue grew 16%. Underlying pre-tax profit was stable at £143.4m amid a £3.5m reduction in profit from the implementation of IFRS 16, while statutory pre-tax profit ticked up 6% to £115.6m.
Underlying basic earnings per share came in at 78p versus 77.8p in 2018.
Savills said its "resilient" performance reflected geographic diversity and the strength of less transactional service lines.
The company’s transaction advisory revenue grew 2% during the year, led by North America, Europe and the Middle East. Revenue from the property and facilities management segment rose 17%, while consultancy revenue was up 15%.
UK profits increased by 7% to £81.9m, led by property management and consultancy, it said, while the Savills UK residential business grew revenues by 6%, outperforming the decline in UK market volumes. Savills said investor sentiment improved "substantially" following the clear General Election result, driving a strong finish to the year.
The company also announced the acquisition of US project management firm Macro Consultants for an undisclosed sum.
The acquisition completed on Wednesday and is part of the firm's strategy "of expanding the complementary real estate consultancy services offered by Savills US and its other businesses around the world".
Savills also provided some colour on the impact of the Covid-19 outbreak.
"In Asia, particularly China, it is clear that Covid-19 is having a significant impact on transactional activity and may have a similar effect elsewhere, depending to an extent on the length and severity of each outbreak. Our focus is on the welfare of our staff and clients and we have instituted protective measures in locations potentially affected by this virus.
"The situation is dynamic and due to the uncertainty, it is difficult accurately to predict the full impact of this issue on our business for 2020 as a whole. However, given the nature of the real estate market, we would anticipate that any near term slowdown caused by sentiment and specific measures taken to combat Covid-19 would generally result in a temporary delay in activity rather than an absolute loss of business."