Savills reiterates full year guidance, despite market uncertainties

James Evans

International real estate advisor, Savills, said its half year results to June 30, 2022, were in line with expectations, and it maintains its guidance for the remainder of the financial year.

Group revenue of £1.037bn was up 11%, or nine per cent in constant currency, on the previous year’s figure of £932.6m.

Pre-tax profit of £50.4m was a reduction on £63.3m a year ago. But the group has increased its interim dividend from 6p to 6.6p per share.

It also saw its net cash level jump from £106.7m in 2021 to £149m.

During the reporting period transaction advisory revenues were up 14%.

Commercial transaction revenue increased 26% overall with growth across all regions, although residential transaction advisory revenue was down 11%. The UK residential markets performed well, albeit with anticipated reduction in activity levels.

Property and facilities management revenue was up eight per cent, and consultancy revenue by six per cent. Savills Investment Management revenue was significantly ahead with assets under management up by nine per cent to £22.8bn.

Group chief executive, Mark Ridley, 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.

“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.”

He added: “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 focusing on improving the sustainability characteristics of their portfolios as well as creating environments in which staff can thrive.”

Looking ahead, he said: “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.”

James Evans, head of office at Savills Manchester, said: “We continue to invest in our Manchester office and expand our already extensive service offer.

“In spite of the challenges of the pandemic and uncertainty associated with the wider economy, the North West continues to attract investment and development and we are pleased to be advising many clients across all property sectors.”

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