Full Year Trading Update

Savills PLC
22 December 2004

22 December 2004

                                   SAVILLS PLC
                          ('Savills' or 'the Company')

                            Full Year Trading Update


  • Full year profits likely to be more than 10% ahead of expectation.

  • Special dividend of 20p.



Savills, the international property advisor, is pleased to announce a trading
update for the year ending 31 December 2004.



   Background

When we released our results for the six months ended 30 June 2004 on 1
September 2004 the Chairman reported that while interest rate increases would
ultimately have an impact on the UK property market, increasing tenant demand
and strong investment markets would ensure high levels of activity in 2004.
Whilst we believed that residential volumes could fall we reported that we
expected no material impact on profitability.  That confidence was justified and
we set out below an update of our trading position for the year ending 31
December 2004, prior to the announcement of the preliminary results on 2 March
2005.


Main Business Streams

Transactional

Leasing markets in London and the South East appear to be improving and there
are signs of renewed tenant interest.  Office markets in the regions remained
stable and are showing modest growth.  Tenant demands for the best retail
schemes, both in and outside of town centres, remain strong.

Investment markets remained very active in 2004, with demand continuing to
outstrip supply. As a result yields have continued to harden across all types of
asset classes; Savills has been well placed to take advantage of these excellent
market conditions.

Momentum in the prime residential markets from the end of 2003 carried into the
first half of 2004.  Although rising interest rates and consumer uncertainty
appear to have affected the mainstream market, the prime sector in which Savills
principally operates has been less affected.  After a slower August and
September, there has been a marked upturn in activity in the last quarter and
although our under offer book is ahead of this time last year, we expect buyers
to continue to demonstrate caution.

In Asia, resurgence in property prices during 2004 has had a significant impact
on transaction volumes and both our commercial and residential investment sales
teams have enjoyed considerable success.

Consultancy

Savills' consultancy business has continued to make excellent progress across
the board in 2004.  The valuation and housing consultancy practices have grown
their revenue streams and the new teams and individuals recruited in the last
couple of years are beginning to make a full contribution to the business.

Property Management/Facilities Management

Income from the Property Management business is very steady and we expanded this
area of activity considerably in 2004 with the recruitment of new teams in
Shopping Centre, Leisure and Retail management and acquisitions of specialist
land management firms Smith Woolley in the Midlands and Colvilles in the South
East.  In Asia, Savills is well established as a market leader, both in Hong
Kong and more recently in China.  On 1 December 2004, we opened an office in
Tokyo and are well placed to expand as opportunities arise.  The Hong Kong based
facilities management business produced a satisfactory performance.

Property Trading

Since the half-year Savills completed the sale of the remaining properties held
within the Property trading and investment division.  As announced on 10 August
2004, the sale of Talbot Green Retail Park, Llantrisant generated a profit of
£7m.  Matalan, Leicester Street, Northwich was transferred at market value of
£8.5m to Savills Investor Syndicate No 1. LP and 86-88 Above Bar, Southampton
was disposed of for £2.85m; these transactions together produced a further
profit of £2.2m. No properties now remain within the property trading and
investment division.  Over the last two years total pre-tax profits of £15m have
been generated from property trading and investment and these profits are
regarded as non-recurring.  We intend to pass the post tax benefits of these
profits to shareholders by way of a special dividend of 20p per share payable
with the final dividend.

Financial Services

Savills Private Finance is having another outstanding year and has performed
well ahead of plan but has slowed recently. The business has expanded further
this year opening new offices in Birmingham, Brighton, Cambridge, the West End
and Wimborne and acquiring Sherwins, a mortgage broker specialising in mortgages
for the affordable homes market.

Fund Management

The launch of Cordea Savills, the fund management business that has been
recently strengthened and rebranded, was well received by the market. Two funds
have been launched since the rebranding.  Assets under Management have, as a
result, increased from £1.2bn to £1.4bn and provide a recurring and valuable
income stream for the future.  Initial recruitment and set up costs for the new
team coupled with the ongoing costs of further key recruitment, have impacted
profits in the short term.


Rebranding

With effect from 1 January 2005 all trading subsidiaries of Savills will no
longer include the prefix 'FPD', thereby consolidating the branding of the
Group.


Overview

The current Group performance demonstrates clearly the benefits of being a
broadly based property advisory group.  Commercial markets continue to be very
active, particularly on the back of strong investment demand.  While we expect
prime residential markets to show some caution, nevertheless they are currently
proving considerably more robust than mainstream markets.  As a result of this
the Board believes that the full year profits will exceed current market
expectations by more than 10%.  The Group continues to be strongly cash
generative and this allows us to maintain our progressive dividend policy.


                                      Ends


For further information

Savills plc                                                        020 7409 9923
Aubrey Adams, Group Chief Executive
Robert McKellar, Group Finance Director

Citigate Dewe Rogerson                                             020 7638 9571
Simon Rigby
Sarah Gestetner



                      This information is provided by RNS
            The company news service from the London Stock Exchange