AGM Statement

RNS Number : 4025Y

Savills PLC

12 May 2021

 

12 May 2021

SAVILLS PLC

("Savills" or "the Company")

Trading update

Ahead of its "virtual" Annual General Meeting (AGM) to be held at 12 noon today at  Savills, Finsbury Circus House, 15 Finsbury Circus, London EC2M 7EE Savills plc, the international real estate advisor issues the following trading update:

· Our Less Transactional businesses have continued to perform well with progressive recovery in a number of transactional markets becoming evident. The  strategy of retaining staffing levels through 2020 has positioned the Group well for recovery

· For the year to date, the Group has traded better than anticipated and comfortably ahead of the prior equivalent period. Residential markets, particularly in the UK and China have continued strongly; the Commercial Transaction business has benefited both from improving sentiment in many markets and from the completion of transactions which were postponed or delayed during the lockdowns of Q4 2020

· Subject to the impact of further waves of COVID infections, the Board is confident in its expectations for the full year

Mark Ridley, Chief Executive, commented: 

"I am delighted that our strategy of maintaining full client service through the pandemic continues to prove successful and improving sentiment has enabled much of the business development activity undertaken before and during 2020 to begin to bear fruit. We have a strong balance sheet and are focused on continuing to develop our global businesses through the recovery period, keeping our staff and visitors safe and maintaining a first class service to our clients.

"Our Less Transactional businesses of Consultancy and Property Management have continued to perform well to date as clients have begun to review longer term strategies once more and management contracts won in 2020 have begun to translate into revenue.

"Our Transactional businesses have benefited from improving sentiment in most markets, although travel restrictions still represent an obstacle to cross-border capital deployment. In summary, the combination of solid trading in the less transactional service lines, improving transactional markets (including the completion of previously delayed transactions) and continued cost containment, has resulted in a markedly improved performance compared with the same period last year."

Trading Update

In the Asia Pacific region, recovery has been most evident throughout the period in Greater China. More recently we have seen significant improvements in Australia, Singapore and Korea, accelerated in part by business development activity undertaken pre-pandemic, and have a healthy near-term pipeline in Japan. Throughout the period, our substantial Property and Facilities Management business in the region performed well.

In the UK, our performance has been very strong, driven primarily by the continued high levels of activity in the residential markets (both private and institutional), our strength in less transactional service lines and signs of recovery in development markets. We have also benefited from a number of transactions which were delayed during lock down.

In Continental Europe and the Middle East, where Savills is more dependent upon transactional activity, performance has improved compared with the prior period with recovery now evident in the Middle East, Ireland, Germany and France in particular. The current outbreaks of COVID-19 in parts of the region mean that the trajectory of recovery remains less clear.

In North America, where the Group is substantially dependent upon leasing activity by corporate occupiers, our business performance was in line with our expectations but has not yet reached the levels of the same period last year. Given the strong national vaccination programme, pre-transaction activity levels indicate that corporates are beginning to give serious consideration to their longer term real estate needs, which is a precursor to improved transaction levels. We continue to anticipate progressive recovery through H2 2021.

Savills Investment Management has performed ahead of our expectations, albeit in an environment which remains challenging for the deployment of equity capital. Debt markets are more positive for alternative lenders, such as DRC Capital, as the traditional bank lenders have widened margins and tightened LTV covenants and investors seek increasing exposure to this asset class.

Outlook

Our Less Transactional businesses continue to provide a solid platform for the Group and our residential businesses have shown strong recovery, albeit that we expect activity to return to more normal levels, particularly in the UK, during the second half of the year compared with an unusually strong comparative period in 2020. Internationally, commercial investment markets are showing varying speeds of recovery and, subject to further pandemic outbreaks, we expect this trend to continue through the year, although cross-border activity will depend upon how soon travel and quarantine restrictions can be eased.

We are confident in the Group's position both to benefit from progressive recovery in transactional markets and to continue to execute our growth strategies. The Board remains confident in its expectations for 2021 as a whole.

We anticipate announcing the Group's Half Year Results for the six months to 30 June on 5 August 2021.  

For further information, contact:

Savills    020 7409 8934

Mark Ridley, Group Chief Executive

Simon Shaw, Group Chief Financial Officer

Tulchan Communications                                                                  020 7353 4200

David Allchurch

Elizabeth Snow

 

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