Savills report 11% revenue increase

Estate agents Savills has announced an 11 per cent revenue increase as part of its unaudited half year trading report.

This sees the group’s revenue increase from £932 million in the first half of 2021, to £1.03 billion in the same period of 2022. The group has also reported an underlying profit (before tax) of £59.2 million, down slightly on H1 2021’s £66.1 million.

Underlying earnings remove one-off losses or gains and non-recurring costs from the total. Including these leaves the group with a reported profit before tax of £50.4 million, down from last year’s £63.3 million.

The group also reported an underlying basic earnings per share of 32.4p, and an earnings per share of 26.6p once one-off costs are removed. This creates an interim dividend of 6.6p, up 0.6p on last year.

The group has seen a significant increase in its net cash, reporting £149 million, up from £106.7 million for the same period last year.

Mark Ridley, Group Chief Executive of Savills plc, said: “2022 has presented a number of heightened macro-economic, geopolitical, and, in some locations, continued Covid-related risks to investors, corporates and to many people's personal lives.

“I am delighted with the responses of our people and our clients to doing business in challenging circumstances and specifically in respect of their support for Ukraine.

“Despite staff cost inflation and the anticipated increase in discretionary costs, we have performed well so far this year, in line with the Board’s expectations.

“With our strong balance sheet, we are continuing to undertake a variety of business development activities across the Group to enhance our service to clients worldwide.”

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Looking at the individual parts of Savills’ business, its transaction advisory revenues are up 14 per cent, while its commercial transaction revenue has increased 26 per cent overall.

These areas make up for residential transaction advisory revenue, which was down 11 per cent as UK residential marks experienced an anticipated reduction in activity levels.

Meanwhile, less transactional businesses performed well in aggregate, seeing revenue increase by 9 per cent. Similarly, property and facilities management revenue rose by 8 per cent, while constancy revenue rose by 6 per cent.

Savills also report their investment management revenue as ‘significantly ahead’, with assets under management up 9 per cent to £22.8 billion.

Mark added: “With inflation driving interest rates up globally, a new experience for many market participants, real estate markets began to adjust in the second quarter. We expect that process to continue through the second half of the year.

“However, there remains significant investor interest in the secure income characteristics of real estate and occupiers are progressively focussing on improving the sustainability characteristics of their portfolios as well as creating environments in which staff can thrive.

“At this stage it is too early to predict with any accuracy the potential impact of the political and economic environment on real estate transaction volumes globally, although clearly the risk is towards a short term reduction in activity as markets adjust to, inter alia, rising debt cost.

“Notwithstanding this risk, given our performance to date and having previously taken a cautious view of likely transactional performance in 2022, at this stage the Board’s expectations for the year as a whole remain unchanged.”

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