Final Results

Savills PLC 02 March 2005 WEDNESDAY 2 MARCH 2005 RECORD YEAR FOR SAVILLS Savills plc, the international property adviser, today announces its results for the year ended 31 December 2004. • Pre-tax profit of £50.2m (2003 - £34.1m) • Turnover up 9% to £328.0m (2003 - £301.7m) • Group operating profit up 10% to £39.0m (2003 - £35.3m) • Basic earnings per share 62.2p (2003 - 37.0p) and basic earnings per share excluding sale of trading & investment properties, impairment and amortisation of goodwill 55.7p (2003 - 37.7p) • Final dividend up 25% to 12.5p per share (2003 - 10.0p), making 18.5p for the full year, a 36% increase on last years 13.6p. Plus a special dividend of 20.0p per share making a total for the year of 38.5p per share (2003 - 13.6p) Peter Smith, Chairman of Savills plc, commented: 'Our results this year show the rewards to be gained from being a broadly based property advisory group ready to take the opportunities of a constantly evolving market. This is my first report as Chairman and I am, therefore, particularly delighted to be able to report an outstanding set of results following strong performances from all our operating businesses. The continuing buoyancy of the global investment markets is encouraging for the prospects in all parts of our Commercial business in 2005; prime residential markets remain resilient. We have enjoyed a satisfactory start to the year and are confident that the Company will continue to perform well.' ***Chairman's Statement, Review of Operations, Financial Review and Preliminary Announcement of Results to Follow*** Savills plc. Registered in England No. 2122174. Registered Office 20 Grosvenor Hill, Berkeley Square, London W1K 3HQ For further information, contact: Savills 020 7409 9923 Aubrey Adams, Group Chief Executive Robert McKellar, Finance Director Citigate Dewe Rogerson 020 7638 9571 Simon Rigby Sarah Gestetner George Cazenove There will be an analyst presentation today at 9.30am at 25 Finsbury Circus, EC2M 7EE. CHAIRMAN'S STATEMENT RESULTS This year marks the 150th anniversary of Savills and it is fitting that this is also the year in which the Group consolidated all of its subsidiary branding under the Savills name. While the name is longstanding and the firm is built on a solid foundation, as a listed company Savills plc is only fifteen years old and we still consider ourselves a young, dynamic and forward thinking Group. We continue to broaden and strengthen our property expertise across a wide spectrum of markets and disciplines. Our results this year show the rewards to be gained from being a broadly based property advisory group ready to take the opportunities of a constantly evolving market. This is my first report as Chairman and I am, therefore, particularly delighted to be able to report an outstanding set of results following strong performances from all our operating businesses. Profits in the second half have historically exceeded the first half and this has again been the case this year with a full year pre-tax profit of £50.2m (2003 - £34.1m). 2004 turnover increased by 9% to £328.0m (2003 - £301.7m). Group operating profit was £39.0m (2003 - £35.3m). Group operating profit margins, excluding the sale of trading properties, were 11.6% (2003 - 11.2%). A reduced effective tax rate of 30.2% (2003 - 36.4%), together with increased profits resulted in basic earnings per share increasing substantially to 62.2p (2003 - 37.0p). Shareholders' funds increased to £102.8m (2003 - £95.7m) and cash balances to £90.1m (2003 - £71.9m). DIVIDENDS The Board is recommending a final dividend of 12.5p per share to those shareholders on the register on 15 April 2005, payable on 12 May 2005, making a total for the year of 18.5p (2003 - 13.6p). This increase is in line with our current progressive dividend policy, which remains unchanged and reflects long-term confidence in the business. In addition to the final dividend and as announced in our trading update statement of 22 December 2004 the Board have decided this year to recommend a special dividend of 20.0p per share to be paid on 12 May 2005 to those on the register as at the close of business on 15 April 2005. This is possible because £15.0m was generated from property trading and investment over the past few years. These profits are regarded as non-recurring and the Board has taken the decision to pass the post-tax benefits of these profits to shareholders. HIGHLIGHTS In the UK we have continued to develop the business and expand on the range of services we are able to offer our clients. The investment markets have remained strong, and our agency teams have been active and successful. We have expanded our offering to commercial clients in the UK and in October 2004 opened an office in Leeds adding to our increased commercial presence in the Regions. We have also added to our network of residential and multi-disciplinary offices in fifteen new locations through a combination of new openings and small acquisitions in key locations. This year saw the launch of our fund management arm, Cordea Savills. During the year funds under management increased materially as the result of two new fund launches: the Savills Investor Syndicate No.1 for UK private and institutional investors and Europa Immobiliare No.1 a European fund for Italian private investors where Cordea Savills acts as delegated investment manager and advisor. The Government has recently reiterated its commitment to the creation of an increased supply of housing stock. Savills, with its unique expertise in the areas of affordable housing and mixed-use development, are assisting clients in these areas. Both commercial and residential investors now have an increased appreciation of the importance of property as an investment class and Savills is well placed to take advantage of the opportunities that will arise from this increased awareness. Our Research teams continue to provide widely respected advice to private and commercial clients through the production of articles such as 'The Residential Property Focus' and 'Office Futures'. New and emerging markets continue to be explored. In Europe we recruited a team and opened an office in Poland. We also purchased a majority stake in our Associate in Sweden, Tufvesson & Partners Fastighetsradgivning AB, which is part of our continued strategy to grow our offices in commercial centres throughout Europe. In Asia and Australia we continue to make progress and consider opportunities as they arise. This past year we opened an office in Tokyo and expanded our offering in Singapore through the acquisition of Hampden & Partners, where we continue to develop our investment operation. Offices in China are now profitable and making a strong contribution to our Asian business; our new operation in Macau is offering clients access to professional services and retail markets. SHARE BUYBACK PROGRAMME At the last Annual General Meeting (AGM) shareholders gave authority for a limited purchase of Savills shares for cancellation of up to 5% of the issued share capital. During the year ended 31 December 2004 1,410,000 shares (2.3%) were repurchased for cancellation under this programme. As announced on 22 December 2004, the Company undertook an irrevocable, non-discretionary programme to re-purchase its own shares during the close period. During this period the Company bought 100,000 shares for cancellation. The Company may make further purchases of shares under this authority in the open period up to the AGM to be held on 4 May 2005. This programme has proved to be particularly earnings enhancing and Shareholders will again this year be asked to consider a resolution to approve the re-purchase of shares. This is outlined in the Notice of Annual General Meeting which will accompany the Report and Accounts for the year ended 31 December 2004, and which will be distributed to shareholders at the end of March 2005. BOARD AND STAFF I joined the Board on 24 May 2004 and took over as Chairman on 1 November 2004 following the retirement of Richard Jewson. I am privileged to have taken over at this exciting time in the life of the Company. On behalf of the Board, I wish to convey our appreciation for the valuable contribution made by Richard Jewson. Under his guidance, Savills has over the last decade grown significantly with pre-tax profit having increased tenfold. The Board is pleased to announce that with effect from 31 March 2005, Robert McKellar has been appointed to the role of Chief Executive - Asia Pacific. He will have specific responsibilities for growing and developing this important part of our business. Danny O'Donnell, will be appointed Group Financial Controller and will report directly to the Group Chief Executive. Danny O'Donnell will have specific responsibilities for managing, monitoring and controlling the Group's systems of financial control. In addition, each operating division has a dedicated Finance Director who liaise closely with the corporate financial management team. Savills' continued development and growth is a result of the committed and dedicated efforts of our talented staff whose ability to add value to our clients is the basis for the excellent results achieved in 2004; I thank them all for their contribution. Our reward system is an important mechanism in providing a balance between the interests of staff and shareholders. My appointment as Chairman presented a timely opportunity for the Board to consider the composition of its various Committees and to ensure that its governance processes fully reflected the requirements both of the size and structure of the Company as well as that of the revised Combined Code. Full details of the various committees is outlined in the Corporate Governance Report in Savills' Report and Accounts for the year ended 31 December 2004 which will be distributed to shareholders at the end of March 2005. OUTLOOK The continuing buoyancy of the global investment markets is encouraging for the prospects in all parts of our Commercial business in 2005; prime residential markets remain resilient. We have enjoyed a satisfactory start to the year and are confident that the Company will continue to perform well. Peter Smith, Chairman GROUP CHIEF EXECUTIVE'S REVIEW OF OPERATIONS 2004 was a record year for Savills with pre-tax profits up by 47% and basic earnings per share of 62.2p (2003 - 37.0p). This was largely as a result of strong operating profits from all parts of the business, with the commercial investment markets particularly buoyant. The commercial agency markets continued to perform well throughout 2004 despite concerns that the market was slowing; strength in transactional income was primarily from the investment market where investor confidence remained strong. In the UK we have increased our services to commercial clients in key regional locations through a number of small strategic acquisitions and additional office openings. Trading in Savills' European offices was again profitable this year with strong performances from Spain, Germany and Italy. Our investment teams in Germany and Spain performed particularly well in a very difficult market. We continue to expand and strengthen our presence in Europe, where we identified opportunities for growth and this year saw the opening of a new office in Poland. In December we acquired a 51% stake in our associate business in Sweden. Our investment in the development of our fund management operations both within the UK and on a pan-European basis, resulted in Cordea Savills becoming the manager of two new closed end property funds. €283m of equity was raised in respect of Europa Immobiliare No.1 for investment in property assets over the next couple of years and £24m of equity was raised in respect of Savills Investor Syndicate No.1 Fund for UK investors. In Asia, the business continued to benefit from a strong market and a dominant position in investment and residential sales with Chinese buyers continuing to be active despite rising prices. In China, income growth remained strong, in particular the property management sector which has been successful in winning several new mandates. In Singapore, the addition of a residential business increased the scope of the property services offered. Towards the end of the year following the acquisition of a third-party property management business, we opened an office in Tokyo. This acquisition ties in with our strategy to further expand our successful Asian operations. As announced today, Robert McKellar, our Group Finance Director has been appointed as Chief Executive - Asia Pacific with effect from 31 March 2005. Savills remains focused on developing and expanding the services it offers both in the UK and internationally by recruiting high quality staff, investing in new areas of business and where appropriate opening new offices. TRANSACTIONAL ADVICE The Transactional Advice business stream comprises commercial, residential, agricultural agency and investment. During the year turnover was £149.0m (2003 - £119.4m), representing 45% of our total turnover, generating profit before interest and tax of £25.1m (2003 - £18.0m). Commercial Investment and Agency In the first quarter of 2004, property remained in strong demand from both private and individual funds in the UK and abroad, who were attracted by the relatively high secure yields offered by commercial property investment. During 2004, this increased demand and competition for stock gave rise to some yield compression but the markets have remained firm. The European investment team acted in the sale of a new office development in Paris for CGI for €334m. In the UK, our London and regional investment teams were also involved in a number of significant transactions, including: • the acquisition for CGI of White City retail development, the UK's single largest commercial property transaction in 2004; • the disposal for Deka Immobilien Investment GmbH of St Enoch Centre, Glasgow for £272.5m; • the disposal for Pillar of a number of retail and leisure assets; including the disposal of Fulham Broadway Shopping Centre (£97.7m), London; Omni Leisure Park Edinburgh (£74.3m) and Gallions Reach Shopping Park, Beckton (£78.7m); • £195m worth of acquisitions and disposals on behalf of Modus Properties which included C12 Shopping Park, Southport and Castle Dene Shopping Centre, Peterlee; • the acquisitions of Durham City Retail Park, Nova Scotia Retail Park, Blackburn and the sale of the B&Q Warehouse, Sunderland on behalf of F&C Asset Management; • one of the largest industrial estate transactions in the North West, Globe Industrial Estate, on behalf of ING Real Estate; • the disposal of BHP Billiton Petroleum Great Britain Limited UK office headquarters, namely One Neathouse Place, London for Quintain, achieving a price of £68m; • advising the Prudential on the acquisition of Temple Quay House, Bristol for £44m; • the sale of Forbury Square, Reading comprising of 148,000 sq ft new Grade A offices on behalf of Argent Estates Limited sold to Stonemartin Plc and Morley Fund Management for £40m; and • the acquisition of Leon House, Croydon, for Exemplar Properties and HSBC Active Property Fund at a price of £35m. A developing part of our investment business is the provision of property investment advice to clients in relation to indirect investment in property. This year our investment advisory team acted for UBS in relation to the property related aspects in respect of their South East Office Recovery Fund (SERF). The West End Office Agency department acted in 40 transactions totalling 330,000 sq ft. Notable transactions included the assignment of the lease of the 50,000 sqft. 30 Berkeley Square, Mayfair to GE Capital and advising Boodle Hatfield, solicitors, on their relocation to new offices of 30,000 sq ft at Lumina, 89 New Bond Street. In the City, we advised IPC on the acquisition of their new European headquarters building of 450,000 sq ft at 1 Bankside for c£200m. The transactional markets in Hong Kong rebounded significantly from the difficulties experienced in 2003, with income increasing by 100%. The huge upsurge in demand emanated predominantly from Hong Kong and Chinese buyers who were quick to realise the hidden value in previously depressed prices. Savills was able to act for over 50% of the grade A transactions in Hong Kong and strengthen its position as the premier capital transactions agent. Retail and Leisure The Retail Warehouse team experienced another strong growth year with an increased number of leasing and development instructions. The team advised on over 100 retail parks throughout the UK for clients such as Hammerson plc, Pillar Plc, Henderson Retail Warehouse Fund and Royal London Asset Management, as well as leading retailers such as B&Q plc, Boots The Chemist Ltd and Next plc. The In-Town Retail department was expanded with the recruitment of three new Directors who joined the London office in July. Along with the Commercial Investment team, the department provided advice to Land Securities Plc closing one of the largest swap deals ever recorded which included acquiring four shopping centres at Lewisham, Welwyn Garden City, Glasgow and Taplow which formed part of the £720m combined asset swap transaction with Slough Estates, completed in December 2004. Hotels and Healthcare 2004 has seen further growth in revenue and profit together with continued expansion of the department with the recruitment of additional valuers and agents. Notable deals include the Corus Hotels PLC portfolio and a portfolio of Accor hotels, acquired by London and Regional Properties under a sale and leaseback transaction. We increased our international presence with particular involvement in Spain, Barbados and the negotiation of a deal with Four Seasons for a significant resort in Mauritius. The National Healthcare team continued to consolidate their position as one of the market leaders in the sector in terms of both transactional and consultancy advice. The team widened their banking client base and advised on primary healthcare LIFT schemes. Notable transactions included the sale of Brookmoon Healthcare Ltd, a Midlands based portfolio of purpose built care homes, to Barchester plc and the sale of Scottish care home group Burnfoot Homes Limited to Mead Medical. Residential Agency The residential markets noticed a significant increase in buyer confidence in the first six months of 2004, which resulted in strong activity. On the back of this we expanded our business in the Home Counties and opened new offices in Farnham, Beaconsfield and Harpenden. We also opened offices further afield in Cirencester, Solihull, Wilmslow and Clifton. 2,600 properties were sold during the year equating to approximately £2.6bn in value. The average property sale was c£1.5m in London and c£0.7m in the country. Highlights included: • the sale of eight houses in excess of £10m in London; • the sale of Moundsmere, Hampshire, a substantial country house for well in excess of the £6m guide price; and • Ayot Mountfitchet, the most expensive house ever to be sold in rural Hertfordshire (guide price £5.5m). In Hong Kong, the strength of the recovery enabled Savills to act for an increasing number of local buyers who were keen to take advantage of rising prices for prime residential properties, including new developments. Purchasing Advice Prime Purchase, a wholly owned subsidiary specialising in acquiring residential property in both London and the country on behalf of retained clients, commenced trading in 2002. During the last two years the business has seen excellent growth and had a successful year doubling its turnover in 2004 over that of the previous year. Of particular note was the acquisition of a substantial house in Chesham Place (over 7,250 sq ft) and the purchase of Chedington Court near Sherborne in Dorset, one of the South West's most impressive country houses. Residential Letting There were strong indications of a recovery in the residential lettings market in 2004, illustrated by a 10% growth in new lets in the London region which represented the core of our lettings business. New lettings businesses were acquired in Harpenden and Sunningdale. Auctions With the ever increasing interest in property as an investment or pension provision, a diverse range of clients are now using auctions as a fast and effective method of property acquisition and disposal, for example we acted for private and public companies, local authorities, county councils, housing associations, charities and development agencies. During the year, the London National Auction department sold 640 lots with a value of £140m at an average success rate of 87%, one of the highest in the industry. Residential and commercial properties were sold in Manchester, Liverpool, Birmingham and across the South East to Bristol and the West Country. A new dedicated commercial auction department has been recruited into our London office which will further increase the profile of our auctions business. New Homes At the Building Homes 2004 awards, the Savills New Homes department won 'Best New Homes Agent'. We continue to develop our expertise in the rapidly emerging key worker and residential investment sectors and are advising on many major regeneration schemes which should lead to significant future new homes instructions. The new homes market has experienced some slow down, but despite this 3,535 units were sold with a total value of £1.28bn. Notable transactions included sales at The Knightsbridge, London's most prestigious development, where close to half the 200 apartments are now sold, including a penthouse with an asking price of £18m. New instructions included the appointment by Crest Nicholson for the first phase of their Harbourside scheme in Bristol, and by Ballymore Properties on their 260 unit, Ontario tower development in London's Docklands. International New Homes The International Residential department had a successful year selling property at new resort developments around the world, including The Palm Islands in Dubai, the Arc1950 ski resort in the French Alps and The Provence Golf and Country Club near Avignon in the South of France. A recent trend has been the growing interest in resort buy-to-let property. The associate network has been expanded and the number of high-end instructions and sales has increased. We have recently set up an emerging markets and international residential consultancy division, which has secured several good instructions. Development The Savills Development and Regeneration team assists a range of clients on projects with issues such as sustainable and green designs, collaboration and partnerships in and across private and public sectors, and large scale multi-sector projects. The team was also involved in promoting a number of highly sustainable schemes aimed at reducing CO2 emissions from both buildings and modern lifestyles, including projects in urban and on brown-field sites, using land value and enhanced density to create cross-subsidy. These projects require co-ordination and financial modelling capability. The team's involvement included acting as core advisors and agents on some of the largest development projects in London such as: New Wembley for Quintain Estates and Development PLC; Greenwich Peninsula on behalf of Meridian Delta Ltd; the regeneration of town centres such as Feltham where a multi-use scheme of approximately 1m sq ft is being developed. Farm and Estate Agency Although a number of properties were traded privately throughout 2004, there were fewer flagship estates on the open market and fewer acres of farmland sold than in 2003. The effect of this shortage of supply was that land prices rose by up to 20% during the year. Savills were seen to be active during the year both on the sale and the acquisition of farms and estates for clients. Successes included the sale of the largest privately available estate in 2004 and other highlights included the 1,000 acre Dunmore Estate in Kent. Purchases included the majority of The Burnley Hall Estate in Norfolk, The North Green Estate in Norfolk with a guide price of £3.75m and the Eastcourt Estate in Gloucestershire with a guide price of £4.75m. 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. Profit before interest and tax for the year was £9.6m (2003 - £7.6m) on turnover of £60.2m (2003 - £49.1m). Valuation The Commercial Valuation department had another exceptional year, increasing billing by 38% in London. In addition, our recently established teams in Manchester and Edinburgh enjoyed similar success. The core business of the department continues to be valuations for lenders for loan security purposes, for which we provided advice to over 50 lending organisations during the year. We also saw an increase in our litigation support work. We have gained a reputation, not only for impartiality, but also for valuing properties at the upper end of the market, including major portfolios for financing purposes. Our instructions included a portfolio of 24 Debenhams department stores and a portfolio of 56 Somerfield food stores valued at over £400m and over £150m respectively. We advised on many properties with a value in excess of £100m including St Katharine's Dock, E1 at over £300m, again for financing purposes. The regular valuation of large parts of Canary Wharf for financing, accounts and other purposes remains a major instruction. The Residential Valuation department had another successful year building on its strength as a 'One Stop Shop' professional services provider. The newly dedicated Land and New Homes Valuation team valued in excess of £1bn of residential and mixed use development schemes in London and the South East. In addition, we valued for loan security purposes in excess of £2bn worth of property, including an unprecedented number of houses in excess of £10m each in London. We continue to advise landlords and tenants on enfranchisement valuations, and provide valuations for matrimonial settlement, being retained in some high profile cases. We also valued c£300m of residential property held as portfolio investments. Building Consultancy Our Building Consultancy team focused on stock condition surveys and procurement advice in the social housing sector and enjoyed another year of growth, doubling the size of the business. The Government objective of making all social housing properties decent by 2010 has substantially increased the demand for our specialist services. During the last year, we worked with many Housing Associations and most of the large Metropolitan Local Authorities with notable projects in Haringey, Birmingham, Manchester, Liverpool, Newcastle, Glasgow and Aberdeen. We have also advised on a number of housing PFI schemes. We acted for purchasers of the Radisson SAS Hotel at Manchester Airport as well as a number of prime office buildings. Our sizeable national team carried out the pre-acquisition surveys of the part of the Safeway supermarket portfolio acquired by Barclays Capital and Robert Tchenguiz from Morrisons and now let to Somerfield. We represented the Sainsbury Family Charitable Trusts on a number of projects including the extension and refurbishment of Lord Foster's Sainsbury Centre for Visual Arts. The City based Project Management team, which focus on occupier 'fit out' works, have been successful in securing some significant projects including the monitoring of IPC's new 500,000 sq ft headquarters at Land Securities Bankside scheme, the development, monitoring and fitting out of a new UK parts distribution unit for Suzuki GB PLC and numerous offices including DLA Piper Rudnick Gray Cary Solicitors in Sheffield for Mitsui & Co's European and UK head office. A significant number of pre-acquisition surveys were undertaken in the City, the largest being for Lloyds of London, which reflects the current high demand for investment properties. The Manchester based Building Consultancy team increased their contribution this year. Key clients include Kenmore, Burford and UBS; with the size of projects getting larger year on year. Key framework agreements are now in place with Morley and UBS. Landlord and Tenant Whilst the office market in London and the South East was more difficult with fewer rent review fees generated than in the previous year, the Landlord and Tenant department reported income for the year marginally below that of 2003 with market share increasing. Work on over 200 properties was completed during the financial year; this included working on many of the highest value out-of-town retail schemes throughout the UK. We now act for over 60 landlords in this high profile sector of the property market. The strength and depth across all sectors gives stability and certainty of income in times when individual markets are weak, as was the case in 2004. Rating During the year the Business Rates team in the UK continued to settle appeals achieving an average reduction of 13% with successful appeals. Despite the fact that the appeals we are finalising related to the third regular recent rating revaluation, we still obtained significant six figure savings for a food manufacturing client who we have advised on rating matters for over 40 years. Rates continue to be an operating cost that merit investigation by clients. Our expert knowledge of the interaction of value and liability through the operation of the relevant legislation enabled us to double savings for a number of clients; the technical aspects of the UK business rates system require detailed and comprehensive knowledge to maximise savings. We are well placed to advise clients in connection with the 2005 Rating Revaluation. Planning The Commercial Planning team has grown significantly in 2004, following the acquisition by Savills of PDC Planning Development Consultancy Limited, a specialist planning consultancy firm based in Manchester. The entire team of seven staff transferred to the Manchester office in September 2004. The Manchester team works closely with London, and has already introduced new clients, including Helical Bar Plc for a major redevelopment project in Cardiff city centre. The team already works closely with Land Securities Properties Ltd on a number of projects throughout the UK. The Planning division continues to expand, and is now the sixth largest planning consultancy in the UK according to Planning Magazine's annual survey. Our current position reflects the high level of professional expertise across our planning teams in nine locations. In addition to major developers, landowners and investors, our clients also include English Partnerships and five Regional Development Agencies. Notable projects last year included a new rail station and transport interchange with hotel, offices and housing for Network Rail and Kier Group; and an Urban Village of 4,000 houses, business and community uses for BP on their redundant Llandarcy Oil Refinery in South Wales. Urban design and environmental impact assessment are major components of our work. With a diverse and healthy work stream, we are looking forward to further growth of our planning and urban design teams in 2005. Housing Consultancy The Housing Consultancy department operates from four offices nationally with approximately 45% of turnover from annual repeat valuations. We continue to increase the range of advice on offer as our Local Authority and Housing Association customers diversify and move into new forms of housing and investment. New instructions included asset strategies for six major housing providers and we are beginning to create opportunities for the regeneration of run down housing. Research The Research department continues to provide robust and respected information in the main property sectors, whilst also exploring new and emerging markets where little or no other analysis has been carried out. The geographical information facility within the department developed a new and innovative method of assessing the rapidly growing market of retirement villages as well as developing a European retail demand model. The Residential Research team launched an innovative new subscription service to clients called 'The Residential Property Focus'. The Commercial Research team published a major forward looking project for the British Council for Offices, 'Office Futures', looking at trends over the next 20 years. The European team undertook a feasibility study for a 12m sq ft mixed-use scheme in Cyprus, which is now going through the planning process. The mixed use team continued to innovate in this fast-emerging area, including development of a research tool to inform the master planning process by assessing the appropriate quantity and mix of facilities and amenities in a new community and their impact on property and land values. PROPERTY MANAGEMENT The Property Management business continued to show significant growth, generating increased fee income from managing commercial, residential and agricultural properties for owners. During the year, turnover was £63.3m (2003 - £57.8m), generating a profit before interest and tax of £4.0m (2003 - £3.9m). Commercial Management Commercial Management grew significantly in 2004, primarily resulting from the recruitment of the Shopping Centre team, who were supported in their move by a number of key clients including Catalyst Capita, Edinburgh House Estates, Parkwood Asset Management, O&H Properties and PropInvest. In addition, a number of new clients were won during the year including Morley who appointed Savills in respect of 64 properties throughout the UK. The client base has also been widened and performance will also ensure organic growth. Strong foundations have been laid for the future and there is focus to strengthen and grow the teams throughout the UK. The Property Management businesses in Asia were able to increase revenue despite continued competition and fee cutting. Commercial office rents in Hong Kong have risen significantly which has alleviated pressure on fee levels. Elsewhere in Asia, Savills has opened an office in Tokyo and acquired a property and asset management business that had over twenty contracts for a number of large commercial buildings in Tokyo. Land and Farm Management The major issue affecting the countryside in 2004 was the development of the reform of the Common Agricultural Policy ('CAP'). Savills, with the benefit of extensive research facilities, have played a major role in commenting on government proposals and worked closely with the CLA throughout the year. We are now in an unrivalled position to advise clients on the major effects these reforms will have in terms of both land ownership and agri-business. Government regulations and legal requirements in regard to health and safety, insurance compliance, asbestos regulations and similar issues continue to put burdens on property ownership with requirements for greater management input and responsibility. Opportunities continue to arise from the close correlation between the estate management teams and Savills' in-house development and planning expertise. In line with the restructuring of CAP affecting both the business of land occupation and land ownership, Savills acquired the remaining minority interest in Aubourn Limited and have integrated this service with their land agency advisory management service. They will continue to provide agri-business advice under the Aubourn name within the Savills' group umbrella. Our Rural Property Management in the UK, a core part of Savills' growth, was increased by the acquisition of Smith Woolley (Oxford and the East Midlands), Colvilles (South West) and Elvy & Co (Ayrshire). The addition of these businesses adds about 265,000 acres of management and consultancy work to Savills' existing portfolio. FACILITIES MANAGEMENT Savills Guardian (Holdings) Limited, our facilities management operation in Hong Kong, made profits before interest and tax of £1.8m (2003 - £0.4m) on turnover of £22.5m (2003 - £27.7m). The Hong Kong based facilities management business continued to perform well. Given the integrated offering of our Property Management and Facilities Management business, in the future we will report the figures for Facilities Management with those of our Property Management division. PROPERTY TRADING AND INVESTMENT These sales made a significant contribution in the second half and operating profit for the Property Trading and Investment business for the year was £2.0m (2003 - £5.1m) on turnover of £13.0m (2003 - £32.3m) and an additional £8.1m profit on disposal of investment property. During the year Savills completed the sale of the remaining properties held within the Property Trading and Investment division. As announced on 10 August 2004, the sale of Talbot Green Retail Park, Llantrisant generated a profit of £8.1m. Matalan, Leicester Street, Northwich was transferred at market value of £8.5m to Savills Investor Syndicate No.1 LP and 86-88 Above Bar, Southampton was disposed of for £2.9m. No properties now remain within the Property Trading and Investment division. The Group's interest in Managed Office Solutions (GHV), our managed office space business, continued to develop a strong base and focus on expansion. FINANCIAL SERVICES The Financial Services division is comprised of Savills Private Finance Limited, which provides residential mortgage broking services, commercial debt broking services, commercial and private insurance services and associated financial products. The division made profit before interest and tax of £3.9m (2003 - £3.9m) on a turnover of £20.1m (2003 - £15.5m). Savills Private Finance is recognised as one of the leading providers of mortgage finance to the high net worth market covering both residential and commercial properties. During the year, growth has taken place through selective recruitment of key staff and the acquisition of Sherwins Mortgage Services Limited which enabled the company to enter the affordable housing market. The company is now operating from 19 locations throughout the UK. Fund Management 2004 was a milestone year with the Fund Management business being rebranded and restructured as Cordea Savills. The repositioning of the business and the recruitment of a number of high quality individuals to complement the existing management team, has enabled Cordea Savills to emerge as an important independent fund management organisation. As well as the growth of existing funds, a strategic decision has been taken to create products specifically aimed at UK private investors. In response to this demand, Cordea Savills Wealth Management was created and the first product for the private investor market, Savills Investor Syndicate No.1 Fund, was launched in October 2004. A number of further product launches for private investors are expected during the first half of 2005. Within Europe, Europa Immobiliare No.1 was launched in 2004 in a joint venture with local partner Vegagest SGR. This fund, advised and managed by Cordea Savills, provides a diversified European real estate portfolio for Italian private investors. The fund was distributed principally by Poste Italiane and equity raised substantially exceeded initial expectations. In order to support the current and future growth of the business, Cordea Savills has invested heavily during 2004 in infrastructure and people. Further investment is planned during 2005, which will constrain profits growth in the short term. However, the success of the business in retaining and growing its historic client base, coupled with its successful expansion into new growth areas, bodes very well for the future. Aubrey Adams, Group Chief Executive FINANCIAL REVIEW Results for the year Group turnover increased by 9% from £301.7m to £328.0m. Excluding turnover from property disposals the overall increase was 16%. Group profit before tax increased from £34.1m to £50.2m and basic EPS increased from 37.0p to 62.2p. Financial highlights for the year: • The Group operating margins, excluding property trading profits, increased from 11.2% to 11.6% in 2004. • Operating losses from acquisitions of £0.4m was attributable to the start-up costs surrounding the acquisitions of Smith Woolley and Harpenden. • Profit from the sale of trading property assets of £2.2m was generated during the period compared to £4.7m in 2003. • Profits of £0.3m arising from associated undertakings during the year compares favourably to the final write down of the remaining goodwill in the Group's associated undertaking Trammell Crow Company Limited (formerly Trammell Crow Savills Limited) to a nil value, together with related operating losses, totalling £1.6m in 2003. • Profits of £0.8m from the disposal of an interest in a subsidiary undertaking arose following the decision to dispose of a controlling stake in Adventis Group plc, which was floated on the AIM in September 2004. • Disposal profits on property investment sales of £8.1m were realised in 2004. Acquisitions and Disposals During the year we have completed a number of acquisitions and disposals of businesses or interests in ventures, both in the UK and overseas including: • On 6 October 2004 Savills (L&P) Limited acquired the Smith Woolley partnership for a consideration of £2.4m. • On 1 October 2004 Savills Private Finance acquired the business known as Sherwins Mortgage Services Ltd for £847,000. • In September 2004, Savills acquired the property management business of GMAC Commercial Mortgage Japan KK, which is based in Toyko, for £651,000. • On 22 December 2004 Savills acquired 51% of the Tufvesson & Partners Fastighetsradgivning AB, a Swedish property consultancy business based in Stockholm, for £953,000. • On 6 July 2004 Savills Commercial Limited acquired a business known as the PDC Planning Development Consultancy Limited based in Manchester for £1,000,000. • On 22 November 2004 Savills Commercial Limited acquired a Leeds based investment team for £909,000. • On 1 July 2004 Savills (L&P) Limited disposed of 26% of its shareholding in Adventis Group plc when the Company was floated on the AIM. Savills (L&P) Limited retains 45.5% of the share capital of the business. Net cash outflow for acquisitions and disposals during the year amounted to £5.7m (2003 - £7.6m). Treasury Activities and Policies The Group's treasury operations are co-ordinated and managed in accordance with policies and procedures approved by the Board. They are designed to reduce the financial risks faced by the Group, which primarily relate to funding and liquidity, interest rate exposure and currency rate exposures. The Group's financial instruments comprise borrowings, some cash and liquid resources and various other items such as trade debtors and trade creditors that arise directly from its operations. The Group does not engage in trades of a speculative nature. Further details of financial instruments are provided in Note 18 to the Report and Accounts for the year ended 31 December 2004. The Board reviews and agrees policies for managing each of the above-mentioned risks. These have remained unchanged during the year under review and are summarised below. Interest Rate Risk The Group finances its operations through a mixture of retained profits and bank borrowings, at both fixed and floating interest rates. Liquidity Risk The Group prepares an annual funding plan approved by the Board which sets out the Group's expected financing requirements for the next 12 months. At the year-end, the Group had no debt on which there were fixed or floating interest rates. Foreign Currency Risk Our policy is for each business to borrow in local currencies where possible. The Group does not actively seek to hedge risks arising from foreign currency transactions due to their non-cash nature and the high costs associated with such hedging. Borrowing The Group retains substantial short-term money market facilities with its bankers of £19m which are currently not utilised. Net Interest Net interest receivable is £1.9m (2003 - £0.2m payable). Higher operating cash flows, increased average deposit rates and the disposal of the entire property portfolio during the year together with associated debt, gave rise to the significant movement on last year. Taxation The taxation charge decreased to 30.2% of the profit before tax compared with 36.4% during the year to 31 December 2003. The lower tax charge mainly reflects increased profits from Hong Kong where applicable rates are lower. Minority Interests The minority interest share decreased to £0.2m (2003 - £0.8m) and reflects that element of profits due to the majority shareholders for the year 2004 prior to the disposal of a controlling stake in Adventis Group plc. Earnings and Dividend Basic earnings per share amounted to 62.2p (2003 - 37.0p). Adjusted basic earnings per share excluding sale of trading and investment properties, impairments and amortisation of goodwill amounted to 55.7p (2003 - 37.7p). The Board is recommending a final dividend of 12.5p (net), making 18.5p for the full year, a 36% increase on last year. In addition, the Board is recommending a special dividend of 20.0p per share to reflect the profits derived from a series of one-off property gains during 2003 and 2004 which are unlikely to be repeated. Share Capital During the year ended 31 December 2004, 17,500 shares were issued to participants in the Savills plc United Kingdom Executive Share Option Scheme, 75,000 to participants in The Savills Executive Share Option Scheme and 375,375 to participants in the Savills Sharesave Scheme. A further 55,839 shares were issued to the QUEST. During the year ended 31 December 2004, 1,410,000 shares were re-purchased for cancellation. The total number of Ordinary Shares issued at 31 December 2004 was 60.5m (2003 - 61.4m). Since the year-end, 100,000 shares were re-purchased for cancellation as at 2 March 2005. Cash Flow and Liquidity Net cash inflow from operating activities totalled £56.3m which, after allowing for cash flows including taxation, dividends, investments and capital expenditure (see below), produced a net increase in cash of £23.3m. At 31 December 2004, the Group's cash at bank and on short term deposit amounted to £90.1m. This was deposited with banks and financial institutions with top credit ratings for periods not exceeding six months, to match known outgoings. The Group continues to operate a centralised treasury function, which is not a separate profit centre but purely provides a service to the operating companies. Fixed Asset Investments and Capital Expenditure cash outflow amounted to £9.3m. Pension Scheme During the year, the Company undertook the required triennial valuation of the Pension and Life Assurance Plan of Savills ('the Plan'). Full details of this are provided in the Notes to the Report and Accounts for the year ended 31 December 2004. As a result of this valuation and in order to improve the financial position of the Plan and remove part of the deficit, the Company made a lump sum prepayment of £15m into the Plan in 2004. Intellectual Property No value is attributed in the Group balance sheet to internally generated intangibles such as brand name or intellectual property rights. New Accounting Standards UITF 38 'Accounting for ESOP trusts' In accordance with UITF 38, investment in the Group's own shares, which are held to provide shares to certain employees under a long term incentive plan through its Employee Share Ownership Plan Trust (ESOP) are shown as a deduction from shareholders' funds. Total Shareholders funds as at 31 December 2003 have been reduced by £1,406,000. This change of accounting policy has been reflected as a prior year adjustment and the corresponding amounts have been restated. The restatement of the prior year figures reduced profit on ordinary activities after taxation by £1,207,000 for the year ended 31 December 2003, reflecting an ESOP charge based on the market value of shares at award date rather than cost as required by UITF 17 as revised by UITF 38. The cash flow statement has also been restated to show the relevant cash flows in financing rather than capital expenditure and financial investment. FRS 17 'Retirement Benefits' Full adoption of FRS 17 issued in November 2000 by the Accounting Standards Board which replaces SSAP 24 'Accounting for Pension Costs', has been deferred by the ASB until periods beginning on or after 1 January 2005. In accordance with the transitional arrangements of FRS 17, certain additional disclosures are included in Note 7 of the Report and Accounts for the year ended 31 December 2004. The table in Note 7 illustrates that if FRS 17 had been fully in force as at 31 December 2004, the net worth for the Group would have been reduced by £14.2m (2003 - £17.9m) as a result of a shortfall in the Plan's funding. The Board is reviewing a number of alternative options for providing employee pension benefits due to the increasing economic risk and uncertainty that determine the pension valuations going forward. International Financial Reporting Standards (IFRS) International Financial Reporting Standards (IFRS) will be applied, as required for all European listed companies, for our financial year ending 31 December 2005. The Group has been working towards implementation of IFRS and is well advanced in its plan to meet the requirements of IFRS implementation. The Company has extensively reviewed the impact of the applicable International Accounting Standards (IAS) on the reported UK GAAP results for 2004. The financial effects of the relevant changes are not set out in the accounts for the year ended 31 December 2004. However, the Group can provide guidance as to the accounting impact of IFRS and the principal areas where IFRS differs from UK GAAP, affecting the Group's results are shown below: • Share-based payments - under UK GAAP, the Group has fully expensed the shares granted based on the market value, such that the annual charge represents the annual award. Under IFRS 2, the Group is required to measure the cost of all share based payments granted since 7 November 2002 that have not fully vested and amortise those over the life of the grant using an option pricing model. The cost of the options charged to the profit and loss account in 2004 will now need to be spread over the vesting period. • Goodwill amortisation - under UK GAAP, the Group's policy is to amortise capitalised goodwill on a straight-line basis over its estimated useful economic life. On transition to IFRS, instead of an annual charge to the profit and loss, an impairment review will be carried out at each balance sheet date. Under UK GAAP goodwill amortisation of £2.9m was charged to the profit and loss account in 2004. • Proposed dividends - unlike UK GAAP, which requires proposed final dividends to be accrued, IFRS only permits recognition of the liability to pay a final dividend which has been approved by the shareholders. This will lead to a one off increase in net asset value. • Pension scheme - the Group will be adjusting the opening net assets for the net pension liability of £14.2m in line with IAS 19 as at 1 January 2005. Robert McKellar, Finance Director SAVILLS plc CONSOLIDATED PROFIT & LOSS ACCOUNT year ended 31 December 2004 Restated (See Note 2) Year Year to 31.12.04 to 31.12.03 Notes £'000 £'000 Turnover - Group & share of joint ventures Other continuing operations 316,259 274,015 Sale of trading properties 11,356 28,987 Acquisitions 2,124 - Less: Share of turnover of joint ventures (1,764) (1,310) Total Group turnover 3&4 327,975 301,692 Operating profit Other continuing operations 37,127 30,568 Sale of trading properties 2,179 4,714 Acquisitions (355) - Group operating profit 3&4 38,951 35,282 Share of operating profit of joint ventures 55 30 Share of operating profit/(loss) of associated undertakings 5 274 (1,559) Operating profit including share of joint ventures & associated undertakings 39,280 33,753 Profit on disposal of interest in subsidiary undertakings 763 - Profit on disposal of interest in associated undertakings 154 - Profit on disposal of investment property 8,094 - Profit on disposal of investments - 521 Profit on ordinary activities before interest 3&4 48,291 34,274 Net interest Group 1,870 (208) Joint ventures 4 (2) Associated undertakings 28 (7) Total net interest 1,902 (217) Profit on ordinary activities before taxation 3&4 50,193 34,057 Taxation on profit on ordinary activities 6 (15,168) (12,409) Profit on ordinary activities after taxation 35,025 21,648 Equity minority interests (250) (838) Profit for the financial year 34,775 20,810 Dividends paid & proposed 7 (21,359) (7,584) Profit for the financial year transferred to reserves 13,416 13,226 Basic earnings per share 8(a) 62.2p 37.0p Adjusted basic earnings per share excluding sale of trading & investment properties, impairments and amortisation of goodwill 8(b) 55.7p 37.7p Diluted earnings per share 8(a) 56.5p 34.1p Dividend per share 7 38.5p 13.6p SAVILLS plc CONSOLIDATED GROUP BALANCE SHEET at 31 December 2004 Restated (See Note 2) 31.12.04 31.12.03 Notes £'000 £'000 Fixed assets Intangible assets 44,449 36,021 Tangible assets 12,732 26,762 Investments Investments in joint ventures Share of gross assets 1,472 901 Share of gross liabilities (730) (361) 742 540 Investment in associated undertakings 2,082 280 Other investments 3,834 1,427 Total investments 6,658 2,247 Total fixed assets 63,839 65,030 Current assets Property held for sale - 8,081 Work in progress 2,666 2,801 Debtors Prepaid pension contributions 13,763 - Other debtors 91,473 82,074 105,236 82,074 Cash at bank & short-term deposits 90,056 71,871 197,958 164,827 Creditors - amounts falling due within one year (144,184) (103,753) Net current assets 53,774 61,074 Total assets less current liabilities 117,613 126,104 Creditors - amounts falling due after more than one year (3,384) (19,521) Provisions for liabilities & charges (11,320) (10,306) Net assets 102,909 96,277 Capital & Reserves Called up equity share capital 3,026 3,070 Share premium account 43,114 42,237 Capital redemption reserve 177 107 Profit & loss account 2 56,434 50,301 Equity shareholders' funds 102,751 95,715 Equity minority interests 158 562 102,909 96,277 SAVILLS plc CONSOLIDATED CASH FLOW STATEMENT year ended 31 December 2004 Restated (See Note 2) Year Year to 31.12.04 to 31.12.03 Notes £'000 £'000 Net cash inflow from operating activities 9(a) 56,281 60,563 Dividends from joint ventures & associated undertakings 231 349 Net cash inflow/(outflow) from returns on investments & servicing of finance 1,581 (1,466) Tax paid (14,834) (11,086) Net cash inflow/(outflow) for capital expenditure & financial investment 6,108 (9,886) Net cash outflow from acquisitions & disposals (5,738) (7,604) Equity dividends paid (9,001) (5,840) Cash inflow before use of liquid resources & financing 34,628 25,030 Net cash inflow/(outflow) from management of liquid resources 3,732 (9,425) Net cash outflow from financing (15,079) (5,157) Increase in cash 9(b) 23,281 10,448 SAVILLS plc STATEMENT OF TOTAL RECOGNISED GAINS & LOSSES year ended 31 December 2004 Restated (see Note 2) Year Year to 31.12.04 to 31.12.03 £'000 £'000 Profit for the financial year Group 34,515 22,531 Joint ventures (1) 6 Associated undertakings 261 (1,727) 34,775 20,810 Currency translation differences on foreign currency net investments (1,420) (2,304) Total recognised gains & losses for the year 33,355 18,506 Prior year adjustment - UITF 17 'Employee Share Schemes' as revised by 38 'Accounting for ESOP trusts' (See note 2) (1,207) - Total recognised gains & losses since last Annual Report 32,148 18,506 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS year ended 31 December 2004 Restated (See Note 2) Year Year to 31.12.04 to 31.12.03 £'000 £'000 Profit for the financial year 34,775 20,810 Dividends (21,359) (7,584) Retained profit for the year 13,416 13,226 Issue of share capital 903 743 Purchase of own shares (5,751) (4,256) Purchase own shares for EBT (4,238) (831) Share based compensation credit 4,126 2,158 Currency translation differences (1,420) (2,304) Net increase in shareholders' funds 7,036 8,736 Shareholders' funds at beginning of year (December 2003 originally £97,121 000 before deducting prior year adjustment of £1 406 000 - see note 2) 95,715 86,979 Shareholders' funds at end of year 102,751 95,715 NOTES 1. Basis of preparation The results for the year ended 31 December 2004 have been extracted from the audited financial statements. The financial statements 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 years, except as modified in order to comply with UITF 38 'Accounting for ESOP trusts' (note 2). 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 year ended 31 December 2004, on which the auditors have given an unqualified audit report, have not yet been filed with the Registrar of Companies. 2. Prior year adjustment In accordance with UITF 38 'Accounting for ESOP trusts', investment in the Group's own shares, which are held to provide shares to certain employees under a long term incentive plan through its Employee Benefit Trust (EBT) are shown as a deduction from shareholders' funds. Total Shareholders funds as at 31 December 2003 have been reduced by £1,406,000. This change of accounting policy has been reflected as a prior year adjustment and the corresponding amounts have been restated. The restatement of the prior year figures reduced profit on ordinary activities after taxation by £1,207,000 for the year ended 31 December 2003, reflecting a charge based on the market value of shares at award date rather than cost as required by UITF 17 as revised by UITF 38. There was no impact on the profit and loss account for the year ended 31 December 2004 as the charge for Deferred Share Benefit Plan shares is deducted from the total bonus before determining cash payments The cash flow statement has also been restated by £831,000 for the year ended 31 December 2003 to show the relevant cash flows in financing rather than capital expenditure and financial investment. 3. Segmental Analysis Year to 31 Trans-actional Consult- Property Facilities Property Financial Holding Total December Advice ancy Manage- Manage- Trading& Services Company ment ment Invest- 2004 ment £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Total Group turnover 149,014 60,166 63,290 22,500 12,953 20,052 - 327,975 Group operating profit/ 24,229 9,782 3,477 1,732 1,992 3,907 (6,168) 38,951 (loss) Profit/ (loss) before interest & taxation 25,127 9,605 3,952 1,782 10,086 3,907 (6,168) 48,291 Net interest 1,902 Profit on ordinary activities before tax 50,193 Restated Year Trans-actional Consult- Property Facilities Property Financial Holding Total to 31 Manage- Manage- Trading & Services Company Invest- December Advice ancy ment ment ment 2003 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Total Group turnover 119,377 49,133 57,785 27,651 32,285 15,461 - 301,692 Group operating profit/(loss) 18,047 7,555 3,538 1,889 5,109 3,386 (4,242) 35,282 Profit/(loss) before interest & taxation 17,953 7,555 3,898 411 5,109 3,867 (4,519) 34,274 Net interest (217) Profit on ordinary activities before tax 34,057 4. Geographical analysis of turnover, Group operating profit & profit before interest & tax (PBIT) Restated Total Group Total Group Group operating Group operating Restated Year to turnover profit PBIT turnover profit PBIT 31 December 2004 2004 2004 2003 2003 2003 £'000 £'000 £'000 £'000 £'000 £'000 United Kingdom 229,526 30,904 39,810 206,715 30,021 28,837 Rest of Europe 14,583 2,303 2,303 12,198 2,122 2,068 Asia Pacific 83,866 5,744 6,178 82,779 3,139 3,369 327,975 38,951 48,291 301,692 35,282 34,274 The profit before interest and tax for the year ended 31 December 2004 for Asia Pacific is shown after charging goodwill amortisation of £1,561,000 (2003 - £1,544,000). The profit before interest and tax for the year ended 31 December 2004 for Europe is shown after charging goodwill amortisation of £531,000 (2003 - £278,000). The profit before interest and tax for the year ended 31 December 2004 for the UK is shown after charging goodwill amortisation of £817,000 (2003 - £661,000). 5. Share of operating profit/(loss) of associated undertakings Year Year to 31.12.04 to 31.12.03 £'000 £'000 Share of operating profit/(loss) from interest in associated undertakings 280 (193) Goodwill amortisation on investment in associated undertakings (180) (6) Impairment of goodwill in Trammell Crow Company Limited (formerly (1,186) Trammell Crow Savills Limited) - 274 (1,559) 6. Taxation The taxation charge has been calculated on the basis of the underlying rate in each jurisdiction adjusted for any disallowable charges. Year Year to 31.12.04 to 31.12.03 £'000 £'000 United Kingdom corporation tax (14,930) (11,007) Foreign tax (2,363) (2,431) Deferred tax 2,125 1,029 (15,168) (12,409) 7. Dividends Year Year to 31.12.04 to 31.12.03 £'000 £'000 Ordinary interim dividend of 6.0p per share (2003 - 3.6p) 3,364 2,021 Ordinary proposed final dividend of 12.5p per share (2003 - 10p) 6,943 5,563 Special dividend of 20p per share (2003 - nil) 11,052 - 21,359 7,584 The Directors have recommended a final dividend for the year ended 31 December 2004 of 12.5 pence per ordinary share plus a special dividend of 20.0 pence per share and assuming approval at the Annual General Meeting, these will be paid on 12 May 2005 to the shareholders on the register as at 15 April 2005. 8. Earnings per share (a) Basic & diluted earnings per share Restated Restated Year to Earnings Shares EPS Earnings Shares EPS 31 December 2004 2004 2004 2003 2003 2003 £'000 '000 Pence £'000 '000 Pence Basic earnings per share 34,775 37.0 55,938 62.2 20,810 56,207 Effect of additional shares issuable under option - 5,647 - - 4,900 - Diluted earnings per share 34,775 61,585 56.5 20,810 61,107 34.1 (b) Adjusted basic earnings per share excluding sale of trading & investment properties, impairments and amortisation of goodwill Restated Restated Year to Earnings Shares EPS Earnings Shares EPS 31 December 2004 2004 2004 2003 2003 2003 £'000 '000 Pence £'000 '000 Pence Basic earnings per share as in part (a) above 34,775 55,938 62.2 20,810 56,207 37.0 Amortisation of goodwill 2,915 - 5.2 2,483 - 4.4 Impairment of goodwill 639 1.1 1,186 - 2.1 Less sale of trading properties after tax (1,525) - (2.7) (3,300) - (5.8) Less sale of investment property after tax (5,666) - (10.1) - - - Adjusted basic earnings per share excluding sale of trading & investment properties, impairments and amortisation of goodwill 31,138 55,938 55.7 21,179 56,207 37.7 9. Notes to consolidated cash flow statement Restated (a) Reconciliation of operating profit to net cash Year Year inflow from operating activities to 31.12.04 to 31.12.03 £'000 £'000 Operating profit 38,951 35,282 Depreciation charges 4,711 4,923 Goodwill impairment 639 - Amortisation of goodwill 2,909 2,303 Loss on the sale of fixed assets 193 121 Decrease in property held for sale 2,052 16,575 Decrease/(increase) in work in progress 126 (82) Increase in debtors (14,544) (8,180) Increase in prepaid pension contributions (13,763) - Increase in creditors 29,652 2,726 Increase in provisions 1,213 4,269 Charge for share based compensation 4,126 2,158 Provision against fixed asset investments 16 468 Net cash inflow from operating activities 56,281 60,563 Restated Year Year (b) Reconciliation of net cash flows to net funds to 31.12.04 to 31.12.03 £'000 £'000 Increase in cash 23,281 10,448 Cash outflow from decrease in debt 5,993 787 Capital element of finance leases repaid - 26 New finance lease - (24) Net loans disposed with subsidiaries 12,168 - Finance lease acquired with subsidiary (34) - Loan notes issued on acquisition of subsidiary (552) - (Decrease)/increase in liquid resources (3,732) 9,425 Exchange movements (804) (2,205) 36,296 18,481 Net funds at beginning year 48,979 30,498 Net funds at end of year 85,275 48,979 Acquisitions & disposals At Cash (excl cash Other Exchange At (c) Analysis of changes in 01.01.04 flows & overdrafts) non-cash movement 31.12.04 net funds £'000 £'000 £'000 £'000 £'000 £'000 Cash at bank 41,773 22,903 - - (400) 64,276 Overdrafts (508) 378 - - (1) (131) 23,281 Liquid funds on one month 8,808 (7,761) - - - 1,047 deposit Liquid funds - short-term 21,290 4,029 - - (586) 24,733 deposit 71,363 19,549 - - (987) 89,925 Debt - due within one (2,961) (599) (20) (251) 46 (3,785) year - due after one (19,374) 6,592 12,188 (301) 137 (758) year Finance leases (49) - (34) (24) - (107) 48,979 25,542 12,134 (576) (804) 85,275 Savills plc, 20 Grosvenor Hill, Berkeley Square, London W1K 3HQ Telephone: 020 7409 9928 Fax: 020 7491 0505 Email: vgrady@savills.com Contact: Victoria Grady 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.savills.com End This information is provided by RNS The company news service from the London Stock Exchange

Companies

Savills (SVS)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today