Key Financial Information
- Group revenue £1,011.4m, down 2.5% (4.1% in constant currency*) (H1 2022: £1,037.4m)
- Group underlying profit** before tax £16.3m (H1 2022: £59.2m)
- Group profit before tax £6.0m (H1 2022: £50.4m)
- Underlying basic earnings per share** 9.2p (H1 2022: 32.4p)
- Basic earnings per share 3.5p (H1 2022: 26.8p)
- Interim dividend of 6.9p (H1 2022: 6.6p)
- Net cash*** £12.9m (H1 2022: Net cash £149.0m)
* Revenue and underlying profit for the period are translated at the prior period exchange rates to provide a constant currency comparative (see Appendices).
** Underlying profit before tax (‘underlying profit’) and underlying basic earnings per share (‘underlying EPS’) are calculated on a consistently reported basis in accordance with Note 3, Note 8 and Note 11(b) to the Interim Financial Statements.
*** Net cash reflects cash and cash equivalents net of borrowings and overdrafts in the notional pooling arrangement (see Note 13 and 19).
Trading performance - Key highlights
- Transaction Advisory revenues (down 20%) supported by market share gains
- Less transactional businesses, performed well in aggregate with revenue up 9%
- Property and Facilities Management revenue up 16%, Consultancy revenue stable
- Savills Investment Management revenue down 4%
- 1.6% margin (H1 2022: 5.7%) reflects impact of reduced market volumes and Savills policy of maintaining bench strength to assist clients in challenging conditions. This positions the Group to benefit from recovery in due course
Commenting on the results, Mark Ridley, Group Chief Executive of Savills plc, said:
“During 2023, global real estate markets have faced the obvious challenges associated with inflation and the related steep rise in interest rates. Different regions have varied in the pace of their adjustment to current conditions and all have experienced a material decline in trading volumes during that adjustment process. Market participants, whether investors or occupiers, seek greater certainty on the trajectory of interest rates over the next 18 months, something which has become somewhat clearer in recent weeks than for much of the period.
“Savills has weathered both the inflationary cost conditions and reduced transaction volumes well, increasing market share and, supported by our strong balance sheet, continuing to undertake selective business development activities to further the Group’s long term growth strategy.
“We are seeing some positive signs in markets such as the UK and continued strength in certain Asia Pacific markets including Japan; in Continental Europe and mainland China we now expect reduced market volumes to continue through much of the year. In many locations we are carrying very strong capital transaction pipelines awaiting the market conditions for launch. In prolonged uncertain conditions, it remains challenging to predict accurately the timing of individual market recoveries. Accordingly, our range of expectations for the year as a whole has reduced somewhat. We do, however, continue to anticipate a significant improvement in volumes of activity through the balance of the year, and into 2024.”