Final Results
Savills PLC
5 March 2002
FOR IMMEDIATE RELEASE TUESDAY 5 MARCH 2002
Savills plc, the international property adviser, today announced results for the
year ended 31 December 2001.
• Group pre-tax profit £21.6m
• Group turnover £235.4m
• Earnings before interest, tax, depreciation and amortisation (EBITDA)
£28.9m
• Basic earnings per share 24.2p
• Final dividend of 6.5p per share making a total for the year of 9.75p,
representing an annualised 8% increase over the dividend of 6.0p for the
eight months to 31 December 2001
Richard Jewson, Chairman of Savills plc, comments: '2001 has been a testing year
with financial markets showing negative returns and many businesses latterly
disrupted by the terrorist attacks in the US. Against this background Savills
has performed well and I am pleased to announce pre-tax profits of £21.6m. As in
previous years, the second half profit has exceeded the first half by some 14%
for 2001.
'We are confident that we are in a good position to continue to increase market
share and to take advantage of economic recovery when it comes in the markets in
which we operate.'
*** Chairman's Statement, Operating and Financial Reviews &
Preliminary Announcement of Results follow ***
Savills plc. Registered in England No. 2122174. Registered Office 20 Grosvenor
Hill, Berkeley Square, London W1K 3HQ
For further information, contact:
Savills 020 7499 8644
Richard Jewson, Chairman
Aubrey Adams, Group Chief Executive
Grandfield 020 7417 4170
Simon Buerk/Olly Scott
Harry Hunt 07788 426 223
CHAIRMAN'S STATEMENT 2001
RESULTS
2001 has been a testing year with financial markets showing negative returns and
many businesses latterly disrupted by the terrorist attacks in the US. Against
this background Savills has performed well and I am pleased to announce pre-tax
profits of £21.6m (pro forma year to 31 December 2000 - £25.9m). Following the
change in our year end at December 2000, this comparative figure and those which
follow in this commentary are unaudited pro forma numbers for 12 months to 31
December 2000; the statutory 8 month comparatives will be found in the Accounts.
As in previous years, the second half profit has exceeded the first half by some
14% for 2001.
Turnover increased by 10% to £235.4m (year to 31 December 2000 - £213.5m).
Operating profit margins were 8% (year to 31 December 2000 - 10%). Basic
earnings per share were 24.2p (year to 31 December 2000 - 31.1p).
Shareholders' funds increased by 12% to £86.5m (as at 31 December 2000 - £77.1m)
including cash balances of £40.3m. Debt of £18.4m relates to properties held for
resale.
DIVIDEND
The Board is recommending a final dividend of 6.5p making a total for the year
of 9.75p, which represents an 8% increase over 9.0p, which is calculated at the
annualised dividend for the last year, reflecting the actual payment of 6.0p in
respect of eight months to 31 December 2000. This increase reflects our
confidence in the prospects for the Group.
HIGHLIGHTS
The Group has taken a number of steps to increase the range of services which we
can provide to clients and our geographical spread, within the UK and overseas.
Our property advisory businesses in the UK traded well and the total number of
staff in the UK has grown by 9% over the year to 1,705. We re-launched our web
presence on www.fpdsavills.com and Primelocation.com, in which we have a
shareholding, is consolidating its position as the leading residential portal
for the mid and upper markets. We continue to invest in our IT business systems.
In mainland Europe, we acquired an additional 15% of our Dutch associate,
FPDSavills Nederland B.V., taking our shareholding to 40%. We have increased our
presence in the European investment market through the recruitment of a UK based
International Investment team and we have strengthened our offices in Paris,
Frankfurt and Berlin.
Our Far Eastern business has benefited from the strength of its management
business and during the year we have increased our shareholdings in our
Australian subsidiaries.
We have been working closely during the year with our strategic partners Trammel
Crow Company to develop a European corporate real estate outsourcing business
with a focus on substantial contracts for leading blue-chip companies.
TrammellCrowSavills is pursuing major business opportunities, certain costs of
which have impacted on the results for the year.
Grosvenor Hill Ventures has had a relatively quiet year while developing The
Mill Discount Department Store in West Yorkshire. We were pleased to announce in
November a joint acquisition with Helical Bar plc of a retail warehouse park in
Lisburn, Northern Ireland.
In March 2001, First Pacific Company, who had been a shareholder since 1997,
sold its remaining 19.6% shareholding in order to concentrate on its core
businesses in Asia Pacific. These shares were placed with a range of
institutional shareholders.
BOARD AND STAFF
On 28 February 2001 H Pryor Blackwell resigned as one of the Directors nominated
by Trammell Crow Company and on 1 March 2001 he was succeeded by E Stevenson
Belcher, who had assumed overall responsibility for international business
development. On First Pacific Company's sale of its remaining 19.6%
shareholding, David Eastlake and Michael Healy both resigned from the Board on
13 March 2001.
Our exceptional staff have produced good results in difficult circumstances. I
pay tribute to their resilience and enthusiasm. We have been pleased to recruit
a number of new senior staff who are attracted to the culture we have developed
here.
OUTLOOK
Prospects for the property industry and the markets in which we operate are
reasonable. The likelihood of rental growth slowing in commercial markets and
price rises slowing in residential markets has not dampened the enthusiasm of
investors for a sector which is increasingly seen as providing safe returns at a
time when other asset prices are volatile.
European investment markets are strong and we feel particularly well placed in
Germany. Asian markets are difficult, but we have a platform from which growth
in China should produce benefits and we have recruited some key senior staff in
Shanghai to further strengthen our agency presence.
We are confident that we are in a good position to continue to increase market
share and to take advantage of economic recovery when it comes in the markets in
which we operate.
Richard Jewson, Chairman
GROUP CHIEF EXECUTIVE'S REVIEW OF OPERATIONS
Despite the uncertain market conditions in the first half of the year and the
caution in the markets caused by the events of 11 September 2001, the Group
performed strongly.
The residential and agency businesses have experienced a testing year in 2001.
These results also reflect certain one-off costs (including those relating to
our investment in The Mill Discount Department Store, West Yorkshire and other
business pursuit costs) which have been partially offset by the profit from the
gain of our investment in Killik & Co.
We have continued to develop by recruiting new staff, investing in new areas of
business and expanding our geographical spread to reduce our exposure to
individual regional economies; the proportion of our business outside the UK is
now 40%.
TRANSACTIONAL ADVICE
The Transactional Advice business stream comprises commercial, residential,
agricultural agency and investment advice on purchases and sales. During the
year turnover was £103.3m, representing 44% of our total turnover, generating
profit before interest and tax of £12.2m.
Commercial Agency
Despite the difficult markets, particularly in the latter half of 2001 and the
significantly reduced level of activity in Central London, Commercial Agency
teams performed well during the year.
Having advised Development Securities plc and their funding partners on the
purchase of the 11 acre site, the West End Agency team succeeded in pre-letting
over 70% of the 340,000 sq ft of offices within the 1st Phase of the development
at PaddingtonCentral; one of the largest mixed use regeneration projects in
Europe, which included the pre-letting of a new 193,000 sq ft headquarters
building to Visa. Proposals are currently being finalised for the 2nd Phase.
Other significant deals include:
• Pre-letting of 60,000 sq ft to Linklaters & Alliance at 3 Bunhill Row on
behalf of Helical Bar plc;
• Letting of 100,000 sq ft in City Point on behalf of City of London Office
Unit Trust;
• Letting of 177,500 sq ft of warehouse space to Exel Logistics on behalf of
ProLogis Developments Limited;
• Letting of a 40,000 sq ft office to PricewaterhouseCoopers on behalf of
Wilson Bowden Developments;
• 62,000 sq ft leasehold acquisition on behalf of Batleys in West Thurrock;
• Sale of over 25m sq ft site in Croydon for AIK to Land Securities;
• Pre-letting and letting upon completion of 184,000 sq ft on behalf of
Tishman International to United Biscuits, HJ Heinz and Fujitsu; and
• Acquisition of eight switch and data facilities for 186K Ltd., the
telecoms subsidiary of Lattice Group plc across the UK.
The European offices enjoyed another profitable year's trading, particularly in
the Investment and Agency operations in Frankfurt and Madrid, which carried out
a number of large transactions on behalf of both local and international
clients. During 2002 we will continue our strategy of growing our existing
offices, which in 2001 resulted in the recruitment of senior fee earners,
particularly in our Paris and Berlin offices. In 2001 we also increased our
shareholding in our Dutch associate, FPDSavills Nederland B.V. from 25% to 40%.
We are retained by Pradera as consultants on the formation of and ongoing
valuation of their European portfolio and our Greek associate was involved in
the largest investment transaction in Athens, the purchase of Village
Entertainment Park on behalf of the Pradera European Retail fund for circa
€60m.
In Hong Kong, the flagship of the FPDSavills Asia Pacific operation, the
investment sales division performed well, completing several large transactions
in a very competitive market. Our valuation and retail businesses reported
satisfactory profits, which were offset by losses in Commercial and Residential
Leasing, and in Residential Sales. Chinese markets suffered operating losses due
to the effects of the economic slow-down in the US. Losses in Singapore
reflected the cost of strengthening the operation and we increased market share
in the Philippines.
Residential Agency
The residential markets opened 2001 with concerns over the repercussions of the
slowing US economy. Despite this, trading started more strongly than expected
both in London and the Country. FPDSavills set new price levels in Eaton Square
during this period, and a new office was opened in Canary Wharf which gave us a
total of three offices in the Docklands area.
As the year progressed, a note of caution crept in to the market, particularly
in London. Regional markets remained strong throughout the year and, despite the
shock of 11 September 2001, 10% more regional properties were sold in the second
six months.
Although the immediate aftermath of 11 September 2001 was quiet, particularly in
London, the last two months of the year saw a gradual return of confidence and
at this time FPDSavills set a new record for the sale of a house in the Boltons
(guide price £12m).
Auctions
From a standing start under 31/2 years ago the Auctions department is now one of
the top four residential auctioneers and attracts a wide range of sellers
including local authorities, housing associations, utilities, mortgagees,
executors, receivers, public and private property companies and private
individuals. Auction sale prices range from a ground rent at £5,000 to a
development site for £6m, one of the biggest residential auction lots sold last
year. In all through 2001 this department sold 495 lots to a value of £93.5m.
Commercial transactions doubled last year compared with the previous year and
has potential for further growth. The freehold ground rent sale of the Guardian
Building in Farringdon Road, London EC1 at £2.16m was a particular highlight.
New Homes
During the year FPDSavills were involved with the sale of over 2,200 new homes
worth in excess of £810m. These sales were generated out of 20 of our UK
offices, from Scotland down to the South Coast. We were delighted to win a new
award judged by our clients the housebuilders as 'Best Residential Development
Agent 2001'.
The year saw several successful exhibitions of London developments in South
Africa, where our association with Pam Golding Properties has resulted in high
sales rates.
Highlights during the year included the sale of 75 units at PaddingtonCentral on
behalf of St George plc, and in early November, we were encouraged by the sale
of over 150 apartments at the launch weekend of New Providence Wharf, close to
Canary Wharf, on behalf of Ballymore Properties.
Notable new instructions won during the year include being appointed by LCR,
Fairbriar and London Town as sole UK agents on the 311 unit development,
Wandsworth Riverside Quarter, and also the appointment of our Guildford office
at Brockham Park, near Dorking on a high quality development of 48 units by
Redrow Homes and Bewley Heritage.
Development
The Mixed Development department has continued to grow aggressively throughout
the UK, concentrating particularly on the urban environment in accordance with
Government policy.
We provide advice upon some 19,000 acres of strategic development land, which is
likely to produce in the order of 200,000 residential units over the next five
to ten years.
A major instruction is the appointment as development consultant to the South
West of England Regional Development Agency on their major Temple Quay scheme in
Bristol (over 100 acres which is likely to ultimately accommodate over 3m sq ft
of offices, leisure and retail and up to 1,000 residential units, together with
integrating the redevelopment and refurbishment of Brunel's Temple Meads
Station). Elsewhere across the UK our development teams have been involved in
major new housing proposals at Oakington Barracks in South Cambridge (600
houses), Bedford (5,000 houses), Ells Field, Rugby (7,000 houses) and South
Woodham Ferrers, Essex (1,500 houses).
During the year we established a team dedicated to advising developers on
affordable housing and key worker issues. Working with our Planning department
we advised Grainger Trust plc on their joint venture acquisition of a site in
Clapham Old Town, London SW4, where a mixed development is proposed
incorporating 48,000 sq ft of private residential, 10,000 sq ft of affordable
housing and 32,000 sq ft of commercial space.
The Development and Regeneration team have advised Cricklewood Regeneration Ltd,
the joint venture between RailTrack Development Ltd and Pillar Developments on
the commercial aspects of the proposed redevelopment of a large site at
Cricklewood for 133 acres of mixed development, to include a new station, retail
and commercial development to generate up to 18,000 new jobs and 3,400
residential properties.
The team has also been providing and co-ordinating cross-sector advise to
Meridian Delta Ltd, the joint venture between Quintain and Lend Lease, on the
development proposals for the reuse of the Dome and regeneration of the
Greenwich Peninsula.
Farm and Estate Agency
Because of foot and mouth there was a sharp downturn in the number of farm and
estate sales last year. However, FPDSavills increased its market share of
advertised acres to 23% of the market; in Scotland we advertised 35% of the
market. In both England and Scotland FPDSavills holds by some distance the
largest market share of any agent. The Ashcombe Estate, about 1,000 acres on the
Dorset/Wiltshire border, formerly rented by Cecil Beaton, attracted huge
publicity when launched at the guide price of £9m.
Commercial Investment
Boosted by seven interest rate cuts during the year as base rates fell from 6%
to 4%, the commercial investment market was underpinned by debt funded buyers
attracted to long dated leases and strong covenants. The strong consumer
spending created renewed interest in the retail sector in the latter part of the
year, in particular shopping centres and retail warehouse parks. The largest
transaction of the year was acting for Pillar Property plc on the sale of £880m
of retail warehouse stock to the Hercules Property Unit Trust, a Jersey based
closed ended fund. Other key transactions included:
• the acquisition of Rivercourt, 120 Fleet Street for a partnership between
Irish investors and Green Property, the Dublin based listed property company
for a purchase price of £246.5m; and
• the acquisition of Marble Arch Tower for £69.2m.
During the year, the Group was retained to raise £128m equity, to provide
development, marketing and leasing advice. The commercial Business Space team
advised on the acquisition and is retained to let the 33 acre office development
site by the Trust; over 600,000sq ft of this 1.5m sq ft office development
scheme has been constructed, of which more than 71% is let or committed. The
scheme was IPD's best performing fund during 2000 and won the 2001 Development
of the Year award.
Retail and Leisure
The Retail Warehouse team operating within the UK from offices in London,
Manchester and Edinburgh had another very successful year, with business
focussed on advising landlords and retailers. The team represented 37 landlords
on over 62 retail parks, providing in excess of 7m sq ft of floorspace and
acquired almost 500,000 sq ft of new floorspace for retailers such as B&Q Plc
and Uniqlo, a Japanese fashion retailer. The Leisure team enhanced its
reputation as a market leader in the fast-growing health and fitness sector
advising Esporta on the acquisition of eight health and fitness clubs. It also
advised Invicta on an acquisition in Germany, the first in their Europe-wide
expansion programme.
Fund Management
The UK Fund Management operation enjoyed a successful year with funds under
management growing by 18% to £870m and discretionary clients continuing to
strongly outperform their benchmarks. New clients secured during the year
include the £100m Hampshire Pension Fund mandate and a significant private
client. The Charities Property Fund doubled in size during 2001 and now stands
at £40m, with 105 charities having invested, providing an attractive income
yield and with the exemption from Stamp Duty providing a significant pricing
advantage.
CONSULTANCY
Our consultancy business generates fee income from a wide range of professional
property services including valuation, building consultancy, landlord and
tenant, rating, planning, strategic projects and research. Market changes
provide new opportunities for expansion as evidenced by the increase in business
in Asia Pacific from clients who require objective property and planning advice
as the region recovers from the downturn. Our consultancy businesses are far
less affected by short term movements in market confidence and continued to
perform well during 2001. Profit before interest and tax for the year was £5.6m
on turnover of £37.3m.
Valuation
The commercial Valuation team has enjoyed another successful year, increasing
turnover by 22% on the previous 12 months. The primary focus remains valuations
for banks, which has been underpinned by a favourable finance market and low
cost of money. We acted for The Royal Bank of Scotland on Delancey's public to
private bid, and also for a consortium of German banks on a major sale and
leaseback transaction of department stores. We continue to prepare valuations
for Canary Wharf Group plc, have advised on two further securitisations during
the year and are currently advising on a third. We have also prepared valuations
for the £1bn construction finance facility at Canary Wharf, one of the largest
loan facilities in Europe. We place increasing emphasis on Europe and have
carried out a number of continental European portfolio valuations during the
year.
Despite the difficult market in 2001, the Hotel Valuation team reported on a
record £1.5bn assets and introduced Ascott Group (Pte) to Crown Dilmun, creating
the UK's largest joint venture services apartment owner and operator, valued at
£146.5m.
Our Residential Valuation Department is retained by Westminster City Council to
advise on its interest in Dolphin Square, Pimlico; a well known building which
comprises 1,050 flats, a hotel, shops, two restaurants and a leisure complex.
Commercial Building Consultancy
The commercial Building Consultancy department had another successful year,
continuing a trend of increased income and profit. This growth has been made
through focusing on the needs of clients in different sectors as well as
in-depth provision of project management, building surveying and development
monitoring. Over the year we have strengthened the teams that advise on
professional and development work in order to provide support to our increased
market share and service the quality of schemes on which we are advising,
including significant developments in London with a total construction cost well
in excess of £100m. We have retained our position as market leaders in the
provision of large stock condition surveys for the social housing sector and
have enjoyed significant growth in our procurement advisory service, advising on
investment strategies that exceed £2bn expenditure on construction.
CMI Project Services Limited, which was established to provide specialist
project management on large flagship developments, is managing prestigious
projects with a total construction value of circa £300m on behalf of clients
such as Hutchison Whampoa and Pembroke Real Estate, a subsidiary of Fidelity
Investments.
Outside London our Building Consultancy teams enjoyed a good year. Key projects
included restoration of a 15th Century manor house at The Manor, Ashby St
Ledgers (best known for its connection with the Gunpowder Plot), conversion of a
Grade II* Listed mansion to quality apartments at Exning House, Newmarket, and
conversion of Benacre Hallo, Suffolk to high quality apartments.
During the year, FPDSavills Architects became a registered practice and provided
architectural services through the UK and a team called Capital Projects was
established to advise on the refurbishment of London houses and apartments.
Landlord and Tenant
In 2001 the Landlord and Tenant team recorded their most successful year,
increasing turnover by 20% from the previous financial year. This reflected
increased returns in the central London and South East office markets, fuelled
by the high levels of rental growth over five years to 2001. Market share was
also maintained in the out of town retail sector, commercial property's star
performer over the past five years and where Savills are the market leader.
Profit achieved in the period was at an all time high and prospects for 2002 are
equally positive. A specialist in the industrial sector has been recruited.
Rating
The Business Rates team continues to advise commercial property occupiers of all
types of property on the reduction of their rates bill and appeals settled show
an average reduction of circa 8%, against a Government target to limit
reductions to 4.4%. The team also provides advice to clients with significant
nationwide portfolios, such as Compass Roadside's settlement of appeals for 13
motorway service areas, 134 Little Chef Restaurants and Travelodges, with a
total rateable value of approximately £17m. The recent Government White Paper on
Local Government Finance confirms that there will be a revaluation of commercial
property for rating purposes with effect from April 2005 and, whilst some
aspects of the system remain uncertain, looking forward this is a positive
indicator for future business.
Planning
During the year the Planning division continued to expand its national coverage
and now covers all sectors, which include commercial, residential, retail,
leisure and institutional. Notable successes during the year include;
• planning approval for a new community of 1,000 houses at St Crispin
Hospital, Northampton;
• 500 new dwellings in a former quarry in Matlock; and
• a complex mix of redevelopment and refurbishment of an entire island site
next to the Royal Opera House, Covent Garden.
Strategic Projects
An excellent year included two particularly dominant projects which were outside
our normal activities within the utility sector. The first was with 186K, the
telecoms subsidiary to Lattice Group plc, where we designed, negotiated and
delivered 1250 km of fibre optic route from the Midlands to Scotland and back.
The second was with DEFRA where we assisted in managing the control of foot and
mouth outbreaks throughout the UK. By the height of the season these two
projects had meant building and working with a team of up to 175 field agents.
Our telecoms business has also expanded very successfully with the provision of
new services to clients, which include all but one of the major operators,
together with two network providers.
Housing Consultancy
We continue to be leaders in the valuation of affordable housing and we have now
added a team to advise on this and key worker accommodation. We have now valued
for loan purposes about half of all local authority housing stock transfers,
including last year four city councils together totalling about 155,000 homes,
and option appraisals or independent valuations for five Scottish councils
totalling about 115,000 homes. Annual valuations and loan valuations of
traditional Housing Associations continue to be a mainstay of the business.
Research
The Research department offers research services to clients in all sectors of UK
and European real estate. It monitors the major markets but specialises in niche
and emerging markets. New opportunities are identified by the department in the
face of changing conditions. A good example of this is in the agricultural
sector. The ownership and use of rural property continues to evolve in the wake
of the foot and mouth outbreak and income from existing agricultural activities
will probably not recover substantially from currently depressed levels. Clients
have responded to this by seeking more information on the future direction of
the sector. We have completed a number of research projects in this area for the
UK conservation, countryside and environment agencies in 2001. Much work has
also been done in connection with affordable housing provision, its impact on
developers' businesses and the emerging sector of residential investment.
Reports have been issued on Leisure, Hotels and Building, reforming some of the
traditionally held views in these sectors. We also regularly produce market
reports on a wide range of commercial property markets throughout Europe and
Asia and are active in providing bespoke analyses to developers, funders, and
occupiers of all types of commercial real estate.
PROPERTY MANAGEMENT
Our Property Management business continues to perform in line with expectation
in generating fee income from managing commercial, residential and agricultural
properties for owners. During the year, turnover was £49.7m, generating a profit
before interest and tax of £2.9m.
Commercial and Residential Management
The Commercial Property management business has had a very successful year and
has secured new management business in excess of £1.5m fees per annum. The BA
Pension Fund appointed us to manage three leading retail and leisure complexes
including the Printworks in Manchester and Atlantic Wharf in Cardiff. New
shopping centre management instructions include The Plaza, Oxford Street, London
and The Triangle in Manchester. Turnover for the UK commercial management
business was £5.8m in 2001 and is projected to rise to £6.8m in 2002,
underlining the growth in this sector of our business.
In Hong Kong, the Group contributed increased profits through increased
properties under management and cost reduction initiatives, despite the pressure
on operating margins. The opening up of the Chinese market provided new
opportunities and the Group has maintained its market lead in China. In
Australia, the merger of Byvan's management operation with the various state
offices allowed the Group to reap the benefits of synergy and economies of
scale. The Group aims to enhance the competitive advantage of the Thai and
Philippine operations by introducing International standards of service.
Australia reported increased operating profits for 2001. During the year the
Group successfully acquired the minority interests in the Queensland and Perth
operations and is now one of the major National firms in Australia.
FPDSavills continued to expand the service it offers to corporate and
institutional investors in the emerging residential investment sector. Our
residential property management business has enjoyed a very strong year of
growth both within the institutional investment market and related services. The
year ended on a high note, winning against intense competition, the mandate to
provide full management services to ING Real Estate's large residential
portfolio throughout England.
Land and Farm Management
Our Land Management business continues to consolidate its leading market share
position. The problems facing the agricultural community have enforced the need
for substantial re-structuring within rural businesses and our ability to
identify new business streams on behalf of clients has been an important source
of new work. Over recent months we have been extending our management into
corporate rural businesses where there is substantial growth potential.
Despite difficult trading conditions in the agricultural sector, our specialist
farming subsidiary, Aubourn Farming, continues to successfully expand its
business and technical consultancy service in line with its strategic objective
of developing a national business.
Our investment in our Benchmarking Survey of rural businesses, to which many
clients and non clients contribute, has grown in strength and now provides
valuable performance indicators on business streams and property assets.
FACILITIES MANAGEMENT
The Facilities Management business provides a comprehensive range of services to
occupiers of property, ranging from strategic advice through project management
to all the services relating to a building. During the year turnover was £32.6m,
generating a profit of £2.3m.
Our facilities management operation consists of two main parts; FPDSavills
Guardian in Hong Kong and TrammellCrowSavills in Europe.
FPDSavills Guardian provides a range of property management services, primarily
in Hong Kong, including Hong Kong government outsourcing contracts. This
business is performing well and in line with targets. Due to the expiration of a
major government contract, in December 2001 the Group sold its 50% interest in
the Serco-Guardian joint venture to the joint partner, Serco Plc, at a gain to
the Group of £1.1m.
TrammellCrowSavills was formed in June 2000 as a global real estate outsourcing
company, to deliver corporate real estate services to multinational companies in
Europe and extended its coverage to Asia through its acquisition of FPDSavills'
Asia Pacific subsidiary, Construction Management International.
TrammellCrowSavills' main clients include American Express, Standard Chartered,
EMC and Ernst & Young. TrammellCrowSavills is pursuing major business
opportunities, certain costs of which have impacted on the results for the year.
PROPERTY TRADING
Grosvenor Hill Ventures, our principal property trading subsidiary, has
continued to seek property joint venture opportunities in the UK. A notable
purchase was a retail warehouse park in Lisburn, Northern Ireland, in joint
venture with Helical Bar Plc.
Following significant effort to achieve major new lettings and changes to the
tenant profile, trading at The Mill Discount Department Store, West Yorkshire
has improved, particularly in the last quarter of 2001. The loss before interest
for the year of £1.5m on turnover of £2.2m includes the cost of reconfiguring
the scheme.
FINANCIAL SERVICES
The Financial Services division is comprised of a corporate finance advisory
business (Savills Finance Limited) and private client financial services
business (Savills Private Finance Limited) which is primarily focusing on
residential mortgage broking and associated financial products.
During the year the remaining 10% interest in Killik & Co was sold to the other
partners, generating a profit of £2.4m.
Savills Private Finance
During the year Savills Private Finance increased turnover by 61% and produced a
record profit. The main focus of the business continues to be residential
mortgage broking, with teams now situated in eight offices throughout the
country.
The Commercial Finance division of Savills Private Finance has successfully
arranged in excess of £100m of loans for clients during 2001. The team's
experience has benefited from new transactions in the healthcare and leisure
market and we are becoming important sources of new business for commercial
lenders active in the UK market.
Savills Finance Limited
The Residential Property Unit Trust managed by Schroders and advised by Savills
Finance Limited had an outstanding year and was recognised as the
best-performing property fund in the CAPS Pooled Pension Fund Survey in 2001
returning 22.7%, 12.5% ahead of its nearest rival. The Trust continues to grow
and has now acquired properties with a total value of around £45m. In addition,
Savills Finance Limited is working towards the launch of a number of innovative
projects in the emerging residential investment sector.
Aubrey Adams, Group Chief Executive
SAVILLS plc
PRELIMINARY ANNOUNCEMENT OF RESULTS
year ended 31 December 2001
Year to 8 months to
31.12.01 31.12.00
£'000 £'000
Turnover
Continuing operations 238,242 162,067
Acquisitions 1,677 -
Less: Share of joint ventures (4,483) (5,377)
Total Group turnover 235,436 156,690
Operating profit
Continuing operations 18,157 13,470
Acquisitions 81 -
Group operating profit 18,238 13,470
Share of operating profit of joint ventures 708 851
Share of operating (loss)/profit of associated undertakings (773) 516
Operating profit including share of joint ventures & associated undertakings 18,173 14,837
Profit on disposal of interests in subsidiary undertakings 435 793
Profit on disposal of interest in joint venture 1,052 -
Profit on disposal of interest in associated undertakings 2,455 1,350
Profit on disposal of property 121 -
Profit on disposal of investment 53 -
Profit before interest 22,289 16,980
Net interest
Group (719) 392
Joint ventures 16 59
Associated undertakings (36) (3)
Total net interest (739) 448
Profit on ordinary activities before taxation 21,550 17,428
Taxation on profit on ordinary activities (6,881) (5,941)
Profit on ordinary activities after taxation 14,669 11,487
Equity minority interests (1,108) (959)
Profit for the financial period 13,561 10,528
Dividends paid & proposed (5,490) (3,359)
Profit for the period transferred to reserves 8,071 7,169
Basic earnings per share 24.2p 18.7p
Basic earnings per share before interest, tax, depreciation & amortisation 51.6p 37.1p
Diluted earnings per share 21.8p 17.0p
Dividend per share 9.75p 6.0p
SAVILLS plc
SUMMARY GROUP BALANCE SHEET
at 31 December 2001
31.12.01 31.12.00
£'000 £'000
Fixed Assets
Intangible assets 30,134 29,883
Tangible assets 29,137 29,248
Investments
Investments in joint ventures
Share of gross assets 589 3,729
Share of gross liabilities (31) (2,028)
558 1,701
Investments in associates 5,936 6,994
Other investments 4,419 5,586
Total investments 10,913 14,281
Total Fixed Assets 70,184 73,412
Current assets
Property held for resale 25,446 15,801
Work in progress 2,473 2,815
Debtors 61,558 62,309
Cash at bank & short term deposits 40,299 29,696
129,776 110,621
Creditors - amounts falling due within one year (87,178) (82,661)
Net current assets 42,598 27,960
Total assets less current liabilities 112,782 101,372
Creditors - amounts falling due after more than
one year (22,568) (21,759)
Provisions for liabilities & charges (2,843) (1,959)
Net assets 87,371 77,654
Capital & Reserves
Called up equity share capital 3,146 3,129
Share premium account 41,227 40,867
Profit & loss account 42,155 33,069
Equity shareholders' funds 86,528 77,065
Equity minority interests 843 589
87,371 77,654
SAVILLS plc
CONSOLIDATED CASH FLOW STATEMENT
year ended 31 December 2001
Year to 8 months to
31.12.01 31.12.00
£'000 £'000
Net cash inflow from operating activities 25,991 18,778
Dividends received from associated undertakings 1,047 1,147
Net cash (outflow)/inflow from returns on investments & servicing of
finance (1,846) 9
Tax paid (10,548) (4,731)
Net cash outflow from capital expenditure & financial investment (6,436) (16,155)
Net cash inflow from acquisitions & disposals 2,144 232
Equity dividends paid (5,203) (2,549)
Cash inflow/(outflow) before use of liquid resources & financing 5,149 (3,269)
Management of liquid resources 1,911 5,316
Financing 6,232 4,827
Increase in cash 13,292 6,874
STATEMENT OF TOTAL RECOGNISED GAINS & LOSSES
Year to 8 months to
31.12.01 31.12.00
£'000 £'000
Profit for the financial period
Group 13,700 9,367
Joint ventures 610 807
Associated undertakings (749) 354
13,561 10,528
Currency translation differences on foreign currency net investments 859 264
Total recognised gains & losses for the period 14,420 10,792
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS
Year to 8 months to
31.12.01 31.12.00
£'000 £'000
Profit for the financial period 13,561 10,528
Dividends (5,490) (3,359)
Retained profit for the period 8,071 7,169
Issue of share capital 377 24
Currency translation differences 859 264
Goodwill previously written off to reserves 156 -
Net increase in shareholders' funds 9,463 7,457
Shareholders' funds at beginning of period 77,065 69,608
Shareholders' funds at end of period 86,528 77,065
NOTES
1. Basis of preparation
The Accounts for the year ended 31 December 2001 have been prepared under the
historical cost convention, modified to include the revaluation of investment
properties and in accordance with applicable United Kingdom accounting standards
on a consistent basis with prior periods.
The financial information in this statement does not constitute statutory
Accounts within the meaning of s240 of the Companies Act 1985. The statutory
Accounts for the eight month period ended 31 December 2000, on which the
auditors have given an unqualified audit report, have been filed with the
Registrar of Companies.
There was a change in the companies accounting reference date to December in the
previous financial period. To assist with the understanding of these financial
statements, unaudited comparative figures for the profit and loss account for
the 12 months to 31 December 2000 have been disclosed.
2. Segmental analysis
Year to Transactional Property Facilities Financial Property Holding
31 Consultancy Advice Management Management Services Trading Company Total
December £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
2001
Total
Group
turnover 37,295 103,305 49,711 32,611 8,165 4,349 - 235,436
Operating
profit/
(loss) 5,455 11,954 2,143 1,845 159 (396) (2,922) 18,238
Profit/
(loss)
before
interest &
taxation 5,613 12,172 2,916 2,317 2,468 (396) (2,801) 22,289
8 months
to 31
December
2000
Total
Group
turnover 23,186 69,917 30,979 23,607 3,264 5,737 - 156,690
Operating 3,261 11,798 1,584 924 (2,149) 226 (2,174) 13,470
profit/
(loss)
Profit/
(loss)
before
interest &
taxation 3,521 11,805 1,993 2,298 (689) 226 (2,174) 16,980
NOTES
3. Geographical analysis of turnover, profit before interest & tax (PBIT)
Turnover PBIT Turnover PBIT
Year to Year to 8 months to 8 months to
31.12.01 31.12.01 31.12.00 31.12.00
£'000 £'000 £'000 £'000
United Kingdom 141,867 16,923 94,259 10,754
Rest of Europe 8,724 1,936 7,315 2,723
Asia 84,845 3,430 55,116 3,503
235,436 22,289 156,690 16,980
Profits before interest and tax for the year ended 31 December 2001 for
Asia are shown after charging goodwill amortisation of £1,350,000 (8 month
period ended 31 December 2000 - £804,000). The profits before interest and tax
for the year ended 31 December 2001 for Europe are shown after charging goodwill
amortisation of £178,000 (8 month period ended 31 December 2000 - £119,000).
4. Taxation
The tax charge has been calculated on the basis of the underlying rate in
each jurisdiction adjusted for any disallowable charges.
5. Dividends
The Directors have declared a final dividend for the year ended 31 December
2001 of 6.5 pence per ordinary share (8 month period ended 31 December 2000
- 6.0 pence per share). The current number of shares in issue is 62,990,826.
6. Earnings per share
The calculation of earnings per share is based on the following weighted
average number of shares:
Year to 8 months to
31.12.01 31.12.00
'000 '000
Basic Earnings per share 56,112 56,300
Diluted earnings per share 62,228 61,761
For the year to 31 December 2001, earnings are adjusted by £15.4m (8 month
period ended 31 December 2000 - £10.3m) representing interest, taxation,
depreciation and amortisation of goodwill in order to calculate the adjusted
basic earnings per share.
NOTES
7. Notes to consolidated cash flow statement
Year to 8 months to
(a) Reconciliation of operating profit to 31 December 2001 31 December 2000
net cash inflow from operating activities £'000 £'000
Operating profit 18,238 13,470
Depreciation charges 5,840 3,568
Amortisation of goodwill 1,748 1,288
Loss on the sale of fixed assets 679 346
(Increase)/decrease in property held for sale (9,645) 2,981
Decrease/(increase) in work in progress 357 (681)
Decrease/(increase) in debtors 984 (9,829)
Increase in creditors 5,074 6,250
Increase in provisions 589 168
Increase in provision for ESOP share options 1,427 1,217
granted
Increase in provisions for diminution in value of 700 -
fixed asset investments
Net cash inflow from operating activities 25,991 18,778
Year to 8 months to
31 December 2001 31 December 2000
(b) Reconciliation of net cash flows to £'000 £'000
net funds
Increase in cash 13,292 6,874
Cash inflow from increase in debt (6,073) (5,075)
Capital element of finance leases repaid 218 272
Cash inflow from decrease in liquid resources (1,911) (5,316)
Finance leases & loans acquired with subsidiaries (62) -
Exchange movements 739 -
6,203 (3,245)
Net funds at beginning of period 249 3,494
Net funds at end of period 6,452 249
NOTES
7. Notes to consolidated cash flow statement (continued)
Acquisitions
(excluding
Cash cash & Exchange
(c) Analysis of At 31.12.00 flows overdrafts) movement At 31.12.01
changes in net funds £'000 £'000 £'000 £'000 £'000
Cash at bank 11,822 11,982 - (49) 23,755
Overdraft (2,848) 1,310 - - (1,538)
13,292
Liquid funds on one month
deposit 1,051 662 - - 1,713
Liquid funds on short-term
deposits 16,823 (2,573) - 581 14,831
26,848 11,381 - 532 38,761
Debt - due within one year (5,166) (4,500) (19) (8) (9,693)
- due after one year (21,159) (1,573) - 215 (22,517)
Finance leases (274) 218 (43) - (99)
Net funds 249 5,526 (62) 739 6,452
SAVILLS plc
PRO FORMA CONSOLIDATED PROFIT & LOSS ACCOUNT
year ended 31 December 2001
Year to Year to
31.12.01 31.12.00
£'000 £'000
(Unaudited)
Turnover
Continuing operations 238,242 219,480
Acquisitions 1,677 -
Less: Share of joint ventures (4,483) (5,971)
Total Group turnover 235,436 213,509
Operating profit
- Continuing operations 18,157 21,508
- Acquisitions 81 -
Group operating profit 18,238 21,508
Share of operating profit of joint ventures 708 887
Share of operating (loss)/profit of associated undertakings (773) 711
Operating profit including share of joint ventures & associated
undertakings 18,173 23,106
Profit on disposal of interests in subsidiary undertakings 435 793
Profit on disposal of interest in joint venture 1,052 -
Profit on disposal of interest in associated undertakings 2,455 1,350
Profit on disposal of property 121 -
Profit on disposal of investment 53 -
Profit before interest 22,289 25,249
Net interest
Group (719) 557
Joint ventures 16 65
Associated undertakings (36) (3)
Total net interest (739) 619
Profit on ordinary activities before taxation 21,550 25,868
Taxation on profit on ordinary activities (6,881) (8,053)
Profit on ordinary activities after taxation 14,669 17,815
Equity minority interests (1,108) (939)
Profit for the financial period 13,561 16,876
Basic earnings per share 24.2p 31.1p
Basic earnings per share before interest, tax, depreciation & amortisation 51.6p 56.2p
The pro forma statements have been prepared on the following basis:
1. Consistent accounting policies.
2. The results for the year ended 31 December 2000 have been extracted from
management accounts and have not been audited, but have been included to
assist in the interpretation of results.
3. Earnings per share is based on the profit for the financial year, divided by
the weighted average cost of shares in issue (2001 - 56,112,208 shares, and
2000 - 54,291,551 shares).
Earnings before interest, taxation, depreciation and amortisation of
goodwill were £28.9m and £30.5m for the years ended 31 December 2001 and 31
December 2000 respectively.
Copies of this statement are being sent to shareholders and are available from:
Savills plc, 20 Grosvenor Hill, Berkeley Square, London W1K 3HQ
Telephone: 020 7409 9920 Fax: 020 7491 0505 Email: meast@fpdsavills.co.uk
Contact: Michaela East
In addition, with prior notice, copies in alternative formats i.e. large print,
audio tape, Braille are available if required from Lloyds TSB Registrars, The
Causeway, Worthing, West Sussex BN99 6DA.
This information is also available on the Company's website at:
www.fpdsavills.com
End
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