Savills plc, the international real estate advisor, today announces its unaudited results for the six months ended 30 June 2019.
Key Financial Information
- Group revenue up 16% (14% in constant currency*) to £847.0m (H1 2018: £727.8m)
- Group underlying profit** before tax down £4m (9% as reported;12% in constant currency) to £38.4m (H1 2018: £42.4m), of which £1.6m relates to the implementation of IFRS 16
- Group profit before tax down 7% to £24.7m (H1 2018: £26.7m)
- Underlying basic earnings per share 20.9p (H1 2018: 23.4p)
- Basic earnings per share 12.8p (H1 2018: 13.8p)
- Interim dividend increased 3% to 4.95p per share (H1 2018: 4.8p)
* Revenue and underlying profit for the period are translated at the prior period exchange rates to provide a constant currency comparative.
** Underlying profit before tax (‘underlying profit’) is calculated on a consistently reported basis in accordance with Note 3 to the Interim Financial Statements.
Highlights
- Significant growth from our less transactional businesses with revenue up 20%
- Commercial Transaction revenue growth driven by strong North American performance (up 31%) mitigating effect of reduced activity in UK and Hong Kong Transactional markets
- UK Residential revenue down 1.5% outperforming a market backdrop of considerably lower sales volumes; UK Residential Lettings revenue up 26%
- Property and Facilities Management revenue up 27%, Consultancy revenue up 5%
- Savills Investment Management revenue up 20% as a result of fund performance and increased activity in Continental Europe. Period end AUM up 13% at €18.3bn
Commenting on the results, Mark Ridley, Group Chief Executive of Savills plc, said:
“Given the lag effect of significant investment in recruitment in the preceding period and facing some challenging transactional market conditions, we had anticipated a slight decline in profits for the first half of 2019. The Group has delivered a resilient first half performance reflecting both the robustness and geographic diversity of our market positions generally, and the strength of our less transactional businesses.
“In many markets, particularly the UK and Hong Kong, political and economic uncertainty has considerably reduced the volume of real estate trading activity in recent months, although occupier demand remains robust. Underlying demand for the secure income qualities of real estate remains high, but these macro uncertainties weigh on investor sentiment and make predictions in respect of near term market activity difficult to determine with accuracy. Continued investor demand, restricted supply and expectations of continued low interest rates suggest that, if political clarity emerges, the medium and long term dynamics of the real estate markets in which we operate remain positive.
Despite this environment, we have a robust pipeline of activity for the second half, and we currently continue to anticipate that our performance for the full year will be in line with the Board’s expectations.”
There will be an analyst presentation today at 9.30am at Savills, 15 Finsbury Circus, London, EC2M 7EB. A recording of the presentation will be available from noon at http://ir.savills.com.