Savills plc, the international real estate advisor, has announced its unaudited results for the six months ended 30 June 2022.
Key Financial Information
- Group revenue £1,037.4m, up 11% (9% in constant currency*) (H1 2021: £932.6m)
- Group underlying profit** before tax £59.2m (H1 2021: £66.1m)
- Group profit before tax £50.4m (H1 2021: £63.3m)
- Underlying basic earnings per share** 32.4p (H1 2021: 35.8p)
- Basic earnings per share 26.8p (H1 2021: 34.2p)
- Interim dividend of 6.6p (H1 2021: 6.0p)
- Net cash*** 149.0m (H1 2021: Net cash £106.7m)
* 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’) 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 18).
Trading performance – Key highlights
- Transaction Advisory revenues up 14%
- Commercial Transaction revenue increased 26% overall with growth across all regions
- Residential Transaction Advisory revenue down 11%; UK residential markets performed well albeit with anticipated reduction in activity levels
- Less transactional businesses, performed well in aggregate with revenue up 9%
- Property and Facilities Management revenue up 8%, Consultancy revenue up 6%
- Savills Investment Management revenue significantly ahead with Assets under Management (‘AUM’) up 9% to €26.5bn (£22.8bn)
Commenting on the results, 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.
“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.”
Chris Potts, head of office at Savills Cardiff, adds:
“Savills Cardiff has had a successful half year with the continued implementation of our growth strategy seeing the launch of our Economics & Business Planning team advising on shared prosperity and levelling up funding, plus the growth of our Building & Projects Consultancy team. Our established market leading teams have shown year-on-year improvements across Commercial Investment, Portfolio Valuations, Property Management, Office Agency, Residential Agency, Rural Agency, Energy Brokerage, Development Consultancy and New Homes sales. In addition, our Planning team won the Insider Wales Consultancy of the Year Award.”