Real estate advisor’s profits hit by lockdown restrictions

Real estate advisor Savills has reported a 69% slump in first half pre-tax profit as the business took a “significant” hit from the Covid-19 pandemic which prevented property visits.

In the six months to the end of June, pre-tax profit fell to £7.7m from £24.7m with revenue down £55.6m to £791.4m.

Savills said reported that UK residential revenue was down 8%, reflecting “significant reductions” in transactional activity during lockdown,but added that this was partially mitigated by a strong recovery in June.

Mark Ridley, group chief executive of Savills, said: “During this period, our less transactional businesses have provided a solid platform for the group and our transactional business teams have partially mitigated the effect of significantly lower levels of trading activity by winning increased market share.

“Much of this is due to our strategy of remaining open for business throughout, retaining the strength of our teams and focussing resolutely on addressing both the pandemic-related, and longer term, needs of our clients.

“Looking forward, as a consequence of Covid-19 the economic environment remains highly uncertain, chiefly in respect of expected recovery trajectories across the world and the occurrence of second wave outbreaks causing further lockdowns.”

“In addition, it is unclear how significantly the longer term economic impact of Covid-19 will weigh on corporate and investor sentiment.”

However, Ridley pointed to signs of recovery in residential markets and a number of commercial transaction markets around the world.

He said: “Clearly, our performance in the second half of 2020 will be highly dependent upon the extent to which such signs become a sustained recovery for the markets in which we operate.

“We are confident in the group’s ability to withstand all modelled scenarios for the year and to continue both to execute our growth strategies and deliver a resilient performance in 2020.”