Property giant cautious over political uncertainty for coming year

Property group Savills saw annual revenues rise, but pre-tax profits fall, for the year to December 21, 2018.

Group revenues hit £1.76bn, a 10% improvement, although pre-tax profits dipped 3%, from £112.4m in 2017 to £109.4m.

It said underlying profit levels rose 2% to £143.7m.

Group chief executive Mark Ridley, said: “Savills delivered both revenue and underlying profit growth in 2018, driven by a robust second half of the year.

“In addition to maintaining or growing our share of transactional markets, the performance of our less transactional business lines was key to this performance.”

He added: “We have made a solid start to 2019; however, the year ahead is overshadowed by macro-economic and political uncertainties across the world.

“It is difficult accurately to predict the impact of these issues on corporate expansionary activity and investor demand for real estate.

“At this stage, we expect to see declines in transaction volumes in a number of markets and growth in our less transactional business lines; accordingly we retain our expectations for the group’s performance in 2019.”

James Evans, head of office at Savills Manchester, said: “The Manchester office has transacted some significant deals over the last 12 months across all sectors and has also seen continued growth in our non–transactional teams.

“This success is testament to our people who are dedicated to provide first class client service.”

Charlie Kannreuther, head of residential at Savills in the North West and West Midlands, added: “2018 was an exciting year for our Cheshire business with a record number of transactions which culminated in the opening of our Knutsford office in October.

“The three offices in Chester, Wilmslow and Knutsford have made a strong start to 2019 and are looking forward to further success.

“The addition of our rural department has already proved beneficial, performing strongly in its first year.

“We have won a number of rural management and consultancy mandates and look to further expand this area of the business.”

Russ Mould, investment director at Manchester investment firm AJ Bell, said: “Given the breadth of its exposure to real estate, taking in the full spectrum of property services, Savills is seen as a bit of a bellwether for the sector.

“As such, today’s results are likely to have an impact beyond the company.

“As flagged in January, profit for 2018 was down 3%. But the reason for a negative market reaction to the numbers is the outlook.

“Despite a ‘solid start’, the company expects to see transactions fall in 2019 as global economic and political uncertainties hit demand. This warning could well shake the foundations of the wider industry.”

He added: “Beyond these macro concerns, at a micro level the company reaffirmed its backing for Yopa, revealing a small additional investment in the online estate agent.

“This comes after fellow Yopa backer LSL Property Services wrote down the value of its holding in the company by 61% earlier this month.”