Savills reports interim profits lifted by Asia and London's overseas investors
Savills
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16:35 19/04/24
Commercial and residential estate agency Savills reported strong first half results as Asia and London office sales offset a decline in the UK housing market.
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Savills' London commercial division completed nearly £9bn of transactions thanks to 78% of sales being made to foreign investors lured by weaker sterling and, while Brexit is seen as an increased risk, still see the UK as comparatively secure source of income in a global context.
However the FTSE 250 company noted that increasing capital controls in China "are likely to reduce current levels of international real estate investment from that region".
Group revenue for the first half of the year of £714m was up 15% or 7% at constant currency rates, with underlying profit before tax increasing 12% or 5% at CCR to £48.1m.
Asia revenues rose 24% and profit 66% as Hong Kong, Japan and Australia all performed strongly.
UK residential revenue fell 4% and profits declined 27%, but commercial fee income increased 23% and profit by 67%.
In the US, Savills Studley saw revenues rise 10%, but due to the additional costs relating to acquisitions and team-hires, profit fell 62% and leasing activity remains subdued.
Group earnings per share increased 18% to 25.7p and the interim dividend was upped 6% to 4.65p.
Chief executive Jeremy Helsby said: "In line with our overall growth strategy, we have continued to build on the Savills Studley platform in the US, particularly our capital markets business, with recruitment and incremental acquisition activity across the country.
"In addition, we have continued to invest in our Asian platform and, since the period end, in Europe we have announced the acquisitions of Larry Smith and Aguirre Newman, further strengthening our positions in Italy and Spain respectively.
"Continued growth in our less transactional businesses, significant overseas earnings and strong market shares in many of our most important transactional locations position the group to withstand short term reductions in local activity and to capitalise on the opportunities which we expect to emerge."
As a result of the outperformance in the half, particularly in Asia and UK commercial property, house broker Numis increased 2017 PBT marginally to £133m from £130m, which is broadly flat on 2016.