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Savills underlying profit rises 3.5%

By BFN News | 07:18 AM | Thursday 15 March, 2018


Savills, the international real estate adviser, increased its underlying profit by 3.5% to £140.5m in 2017. Revenues rose by 11% to £1.6bn. The group's statutory profit before tax increased by 13% to £112.4m. The total dividend for the year has been increased by 4% to 30.2p per share. Transaction Advisory revenue grew by 13%, Consultancy business revenue by 14% and Property Management revenue by 9%, including the full year effect of the 2016 UK acquisition of GBR Phoenix Beard. Savills' Commercial Transaction business grew revenue by 15% with strong performances in many markets including the UK and significant growth in the Asia Pacific region, in particular, Hong Kong, China, Japan and Australia. The Residential businesses withstood challenging conditions achieving revenue growth of over 6%. Savills Investment Management assets under management increased to £14.6bn from £13.9bn. Investment Management revenue declined, reflecting the reduced level of disposal transactions from the liquidating SEB German Open Ended Funds Savills inherited as part of the acquisition of SEB Asset Management in 2015. The reduction in transaction fees in the Investment Management business, together with a decline in the volume of larger complex transactions in the US and the costs of expansion in a number of markets, restricted the underlying profit margin to 8.8% (2016: 9.4%). The statutory pre-tax profit margin remained stable at 7.0% (2016: 6.9%), with lower acquisition-related costs and profits on disposal of investments offsetting the expansion costs and decline in the US business. Jeremy Helsby, group chief executive, said: "Savills has delivered another strong performance in 2017. Revenue and profits grew in each of our global Transaction Advisory, Consultancy and Property Management businesses despite challenging conditions in a number of markets. The strength of our business in key transactional markets across the globe, including a highly resilient performance in our UK residential business, were key to this result. "Throughout the year we maintained our focus on delivering exceptional service to our clients and continued to build on our global network through complementary acquisitions and new team hires. "We have made a solid start to 2018 with a pipeline of business carried over from last year in many markets, although this is against the backdrop of heightened market uncertainty, geopolitical risks and rising interest rates. We anticipate a tempering of the strong transaction volumes of recent times in some markets; however, at this early stage in the year our expectations for 2018 remain unchanged." Story provided by StockMarketWire.com

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