Final Results

Savills PLC 08 March 2006 WEDNESDAY 8 MARCH 2006 EXCELLENT YEAR FOR SAVILLS Savills plc, the international property adviser, today announces its results for the year ended 31 December 2005. 21% growth in underlying earnings per share. Financial Highlights Underlying Results • Underlying Group profit before tax up 30% to £57.2m (2004 - £43.9m). Underlying profit is calculated by adjusting reported profit before tax to deduct profits on disposals of £0.4m (2004 - £11.2m) and share based payment adjustment of £1.9m (2004 - £3.9m) and add back amortisation of intangibles and impairment of goodwill of £0.9m (2004 - £0.6m). • Underlying revenue (excluding trading property sales) up 18% to £373.9m (2004 - £316.6m). • Underlying basic earnings per share (based upon underlying group profit) up 21% to 66.5p (2004 - 55.0p). Reported Results • Revenue up 14% to £373.9m (2004 - £328.0m). • Group profit before taxation of £58.6m (2004 - £58.3m). • Basic earnings per share of 67.2p (2004 - 72.7p). • Proposed final dividend up 28% to 16p per share (2004 - 12.5p). Peter Smith, Chairman of Savills plc, commented: 'Savills has had an excellent year and I am delighted to report a strong set of results following good performances from all of our operating businesses. Confidence in investment markets remains strong and the residential prime markets are resilient. We have enjoyed a positive start to the year and with the increasing range of services we offer and geographical regions in which we operate, we are confident that the Group is well placed to have a satisfactory 2006.' ***Chairman's Statement, Group Chief Executive's Review of Operations and Finance 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 Citigate Dewe Rogerson 020 7638 9571 Simon Rigby Sarah Gestetner George Cazenove There will be an analyst presentation today at 9.30 am at 25 Finsbury Circus, London EC2M 7EE. CHAIRMAN'S STATEMENT RESULTS Savills has had an excellent year and I am delighted to report a strong set of results following good performances from all of our operating businesses. The results for the year ended 31 December 2005 are reported in accordance with International Financial Reporting Standards (IFRS). Underlying Results • Underlying Group profit before tax up 30% to £57.2m (2004 - £43.9m). Underlying profit is calculated by adjusting reported profit before tax to deduct profits on disposals of £0.4m (2004 - £11.2m) and share based payment adjustment of £1.9m (2004 - £3.9m) and add back amortisation of intangibles and impairment of goodwill of £0.9m (2004 - £0.6m). • Underlying revenue (excluding trading property sales) was up 18% to £373.9m (2004 - £316.6m). • Underlying basic earnings per share (based upon underlying group profit) up 21% to 66.5p (2004 - 55.0p). Reported Results • Revenue was up 14% to £373.9m (2004 - £328.0m). • Group profit before taxation was £58.6m (2004 - £58.3m). • Basic earnings per share were 67.2p (2004 - 72.7p). • Proposed final dividend is up 28% to 16p per share (2004 - 12.5p). • Shareholders' funds increased to £167.7m (2004 - £103.5m). • Cash and cash equivalents increased to £99.9m (2004 - £89.9m). DIVIDENDS In the five years to 31 December 2005 reported earnings increased by an average of 17% per annum and dividends by an average of 22% per annum. This year the Board has recommended an increase in dividend of 28% with a final dividend of 16p per share to those shareholders on the register on 18 April 2006, payable on 18 May 2006. This gives a total ordinary dividend for the year ended 31 December 2005 of 24p (declared in 2004 - 18.5p), in line with our current progressive dividend policy. KEY HIGHLIGHTS This year Savills continued with the selective expansion of its business in the UK, continental Europe and specifically in Asia, where we have now established a market-leading presence in Korea. In the UK, Savills strengthened its commercial retail offering in Bristol and Manchester and expanded its expertise in the London West End industrial services sector. New offices were also opened in Horsham, Huntingdon, Islington, Tunbridge Wells and Weybridge, thereby expanding our presence in key prime locations. In continental Europe, as part of our continued strategy to grow our business in key commercial centres, we acquired AWON Gestion, a Paris based property management business and also acquired 51% of Factor Immobilien Management GmbH in Berlin. In both Italy and Sweden we now offer valuation services. Since the year-end we have opened a new office in Munich. In Asia, the investment and transactional markets in Hong Kong remained strong. We strengthened our valuation and professional services offering in Hong Kong and created Savills Professional Services, which includes a newly formed real estate investment trust (REIT) team. The property management team in Hong Kong acquired Showcase, a business specialising in exhibition and marketing services to office and retail landlords. Savills now provides the full complement of agency, property management and professional services in Shanghai and Beijing as well as in Hong Kong. During the year a new office was added in Macau. As announced on 19 December 2005 Savills further expanded its operations in South Korea with the acquisition of a 50% stake in Korean Asset Advisors and BHP Korea which provide property, asset management and brokerage services in Korea from their office in Seoul. Our fund management arm, Cordea Savills has also had an excellent year, offering an increased range of products to both institutional and retail clients in the UK and across Europe. Cordea Savills also increased funds under management, growing the Charities Property Fund and maintaining its position as the leading property fund for UK charities. Cordea Savills Wealth Management established its brand and launched three products: DIVERSE, QPC and Serviced Land Fund No 1. During the year Trammell Crow Company (TCC) exercised an option to acquire shares under a Deed of Option dated 9 May 2000. On 29 April 2005, together with 1,677,970 ordinary shares acquired in the market, 5,243,229 ordinary shares were allotted to TCC. TCC's total holding is therefore 19.43%. As announced on 8 December 2005, Daily Mail and General Trust plc made an offer for Fastcrop plc, a public company in which Savills had a 13.72% shareholding through its wholly owned subsidiary Savills (L&P) Limited. Fastcrop plc is the owner and operator of the Primelocation website. The proceeds on disposal of our shareholding amounted to £6.2m and any resultant profit on disposal will be recognised in the 2006 financial year. SHARE BUYBACK PROGRAMME AND ANNUAL GENERAL MEETING At the last Annual General Meeting 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 2005, 100,000 shares (0.15%) were repurchased for cancellation under this programme. The Company may make further purchases of shares under this authority in the open period up to the Annual General Meeting to be held on 10 May 2006. This programme has proved to be particularly earnings enhancing over the past couple of years. 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 2005 and which will be distributed to shareholders at the end of March 2006. At the Annual General Meeting due to be held on 10 May 2006, it is the Board's intention to make a recommendation to shareholders that the share capital of Savills be sub-divided so that each shareholder will receive two shares for every one share held. Subject to the satisfaction of any relevant regulatory requirements, further details of the proposed share split will accompany the Notice of Annual General Meeting which, together with the Report and Accounts for the year ended 31 December 2005, will be distributed to shareholders at the end of March 2006. BOARD AND STAFF There have been no changes to the composition of the Board this year. As noted in our last Report and Accounts, with effect from 31 March 2005 Robert McKellar transferred to Hong Kong to take up the role of Chief Executive - Asia Pacific. Robert McKellar's Group financial responsibilities have principally been assumed by Danny O'Donnell, the Group Financial Controller. Savills' continued development and growth is a result of the committed and dedicated efforts of our talented staff whose continued ability to provide a professional service to our clients is the basis for the excellent results achieved in 2005; 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. OUTLOOK Confidence in investment markets remains strong and the residential prime markets are resilient. We have enjoyed a positive start to the year and with the increasing range of services we offer and geographical regions in which we operate, we are confident that the Group is well placed to have a satisfactory 2006. Peter Smith, Chairman GROUP CHIEF EXECUTIVE'S REVIEW OF OPERATIONS AND FINANCE 2005 was an excellent year for Savills, as it expanded its range of property related services to the global market. Underlying pre-tax profits increased from £43.9m to £57.2m. Underlying profit is calculated by adjusting reported profit before tax to deduct profits on disposals of £0.4m (2004 - £11.2m), share based payment adjustment of £1.9m (2004 - £3.9m) and add back amortisation of intangibles and impairment of goodwill of £0.9m (2004 - £0.6m). There was a smaller corresponding increase in underlying earnings per share (based upon underlying group profit) from 55.0p to 66.5p due to the dilutive effect of the issue of new shares to Trammell Crow Company on 29 April 2005. In the UK, our Commercial business enjoyed another record year following rapid expansion and success in acquiring significant new teams. We are recognised as one of the leading commercial property service providers with national coverage through specialised offices in the main business centres. The UK Residential business made a cautious start to the year but the market regained confidence and the year finished on a much stronger note, particularly in London. In Europe the main focus of our business is investment and, as with the UK markets, this remains strong. There is particular interest at the moment in the German market where international 'value' investors are particularly active. Asia Pacific had an outstanding year and overall revenue for that region now constitutes 26% of the Group's total. The largest part of our Asia Pacific profits were generated in Hong Kong where we have a particularly strong market position. We continue to expand our business in China and have recently opened a new office in Macau, where the new casino developments will provide substantial growth. TRANSACTIONAL ADVICE The Transactional Advice business stream comprises commercial, residential, agricultural agency and investment. During the year revenue was £166.9m (2004 - £146.3m), representing 45% of our total revenue, generating operating profits of £33.0m (2004 - £26.7m). Commercial Investment and Agency The investment markets performed well in 2005, as the positive money supply and increasing demand from both institutional and retail investors continued to drive pricing. A significant deal was advising Land Securities on the acquisition of a retail warehouse and food store portfolio for £367m acquired from LxB. During the year the combined team transacted over £16bn of deals, strengthening our position in the market. The International Investment team had another record year with net billings of c£10.5m. The team continued to operate in a variety of markets including the UK, France and Italy with the majority of this year's income generated from projects in the UK; transactions totalled £1.57bn. Two highlights for the year included advising on the sale of One Curzon Street on behalf of CGI for £280m and advising on the sale of the Lloyd's Building, London on behalf of DEKA for £231m. The Business Space team continued to take market share and one of the more interesting deals was the sale of Widewater Place, Harefield, Uxbridge on behalf of Invesco for £35m to Insight Investment. In January 2005, Savills and its partner Trammell Crow Company were appointed by Norwich Union to advise on its surplus properties throughout the UK. The portfolio comprised more than 150 properties, with over 200 sub-leases and 1.69m sq ft. The appointment was the result of a competitive tender by Norwich Union and underlines Savills' capability to undertake multiple disposal transactions for major corporates. Our Birmingham Development team acted on behalf of Countryside Properties PLC in joint venture with Quintain Estates and Development PLC in the agreement and lease with Birmingham City Council to develop City Park Gate, an important regeneration site on the edge of Birmingham city centre. The scheme will include up to 600 apartments, 150,000 sq ft of offices and a food store. Despite rapidly rising commercial rents, our Leasing teams in Hong Kong Island and Kowloon increased revenue on the back of very strong tenant demand. In Shenzhen, the Commercial Leasing team was appointed to let Great China International Exchange Square, a project comprising eight stories of c10.0m sq ft of retail and over c19.4m sq ft of office space. In Australia, despite a relatively weak sales and leasing market, profitability increased. The Australian business has particularly strong operations in Queensland and Western Australia. The Sydney Commercial Leasing team, leased eight floors of 60 Union Street, Pyrmont, Sydney totalling 181,135 sq ft to American Express; this was the largest single leasing deal ever achieved by Savills in Australia. The sale of 400 William Street, Melbourne was the Melbourne central business district's largest site sale in 2005. Savills acted for the purchaser and has been appointed leasing agents for the project. Retail and Leisure With a dedicated team throughout the UK, the Leisure team advised on all aspects of the leisure industry in 2005. As part of its strategy for growth, the Commercial Leisure team expanded their expertise into asset management and investment sectors which culminated in leisure investment transactions in excess of £250m. In particular, we provided specialist asset management advice at Printworks, Manchester, a 340,000 sq ft scheme owned by Henderson Global Investors and British Airways Pension Fund; where we secured four new operators for Printworks in 2005 and raised footfall by 15% in the same period. The Out of Town Retail team returned another strong performance despite some areas of the retail market showing signs of weakness. During the year, the team further extended its nationwide coverage opening a new commercial office in Bristol. The team were appointed by Matalan Plc as their national advisers to provide portfolio asset management, acquisitions and disposals. In 2005, the team advised on over 100 retail parks for major landlords such as British Land, Morley, Royal London Asset Management and Legal & General. Hotels and Healthcare The hotel investment market doubled in 2005 with strong operator demand; the department capitalised on this by leading many transactions including Marstons, Queens Moat Houses and Radisson. The apart-hotel concept emerged and Savills led the market on schemes throughout London and Europe. The Healthcare team had another strong year in which key valuation and agency staff were recruited, thereby strengthening the team. The team have advised on and sold over £800m healthcare related properties and businesses in 2005. Institutional The specialist Institutional team has significant activity in the conference centre, schools and charity sectors. Highlights included the acquisition of the Sundridge Park Hotel and Conference Centre (140,000 sq ft) on behalf of Cathedral Group Plc in a deal worth in the region of £15m. The team also worked with the Healthcare team on retirement property projects with assets worth in excess of £150m. An unusual sale was that of Green Island, in Poole Harbour, which had been used for a number of years by a charitable trust for holidays for those with disabilities. This was acquired by a private purchaser for a sum in excess of the £2.5m guide price. Residential Agency After a poor start to the year, the residential markets gained momentum and traded well during the late spring and summer with a strong performance during the autumn. The average Savills property sold for £1.3m in London and £0.7m in the country. Our Knightsbridge office was involved in two of the highest value residential sales in central London; a house in Belgrave Square, SW1 with an asking price of £33m; and the sale on behalf of Hammerson plc and Grosvenor of Dudley House, 100 Park Lane at a guide price of £40m. Other highlights included the sale of Maperton House, Somerset, voted Country Life 'House of the Year' in excess of its £3.5m guide price, Tor Point in Surrey at a guide price of £5.2m and the Ward Estate on Loch Lomond sold for in excess of £3m, possibly the most expensive property in West Scotland during 2005. Residential Investment The Residential Investment team continue to value a wide range of investment portfolios as well as several large portfolios for institutional clients and banks, including a large investment portfolio of tenanted apartment blocks throughout England on behalf of British Land with a value in the region of £30m. Purchasing Advice Prime Purchase, Savills' independent subsidiary which specialises in acquiring residential property in both central London and the country for retained clients, continued its impressive growth since it began in 2002, with an increase in turnover of over 29% during the year. Of particular note was the purchase in London of the freehold of 4 Wilton Crescent and its mews house and in the country of West Court near Newbury, which was included in the Country Life List of the 10 best houses to have been sold during the year. Country houses with amenity land of between 200 and 550 acres were acquired for clients in Surrey, the Cotswolds and Devon. Over 55% of purchases in the country last year were secured for clients either privately or before marketing. Residential Letting With the opening of lettings businesses in Islington, Chiswick, Wimbledon and Tunbridge Wells, residential lettings have continued to grow in an increasingly buoyant market. Our core lettings business in London had a record year, whilst country lettings also showed growth with further scope for expansion. Average rents have increased, particularly in the prime central London house market and the large country house market. Auctions The auction market continues to grow in importance as a method of sale and this year we added a commercial auction department to complement our existing residential auction team. Considerable synergy has developed between the two teams that allows a comprehensive sales service to a full range of clients on a wide range of property types which is reflected in our achieving sales of over £287m this year. We sold over 1,000 properties, with an overall success rate of 85%; making Savills the fourth largest property auction house in the UK by volume. The Commercial team sold over £104m in its first nine months trading and we expect to improve on this figure with a full year's trading in 2006. The Auction business benefits considerably from our extensive office network; this year we created a Savills Auction Subscription Service which allows subscribers to receive electronic catalogues and up-to-date research as well as financial market movements supplied by Savills Private Finance, our financial services business. New Homes Following the expansion and growth of our New Homes department we now offer clients 22 specialised operations across the UK with further openings planned in 2006. In 2005, we sold 3,922 units with a combined value of £1.4bn. Working independently or with Development and Planning disciplines we are now advising on a substantial number of major regeneration schemes; it is hoped this will lead to significant instructions over the coming years. New instructions included Pan Peninsula by Ballymore Properties near Canary Wharf, a 340 unit development with a 50th floor cocktail bar and panoramic views over London. Launched in November, 143 reservations were received on launch day. We were also instructed by Arsenal Football Club plc on the development of Highbury Stadium into 711 apartments with a total value of £300m; this scheme was launched in September 2005 with sales achieving record levels. Upper Strand Developments instructed us in a 500 unit development in Edinburgh's Granton district, which forms part of one of the largest waterfront regeneration schemes in Europe. International New Homes The demand for residential and investment property abroad continues to expand both in volume and exposure to new regions. 'Leaseback' skiing properties in Switzerland and France have been particularly popular for both investment and leisure opportunities. We have successfully introduced projects in a number of emerging markets such as Croatia and Bulgaria and established a number of new local associations. Development The Development team has substantially grown and the future pipeline of both consultancy and agency instructions has increased significantly. The team maintained an involvement in a number of major projects across Greater London which included consultancy work as part of the delivery of the Olympics' facilities in 2012. The Development & Regeneration team increased their involvement in public sector projects as key authorities have taken a role in the regeneration of east London and the Olympic area. Our expertise and market share in the delivery of major strategic developments outside London have also been expanded. We are currently advising BP on two major new settlements: Harlow (8,000 houses) and Swansea (5,000 houses) and the design and format of the new settlements is being directed by the Princes Foundation. Farm and Estate Agency 2005 has been a year of recovery in the agricultural agency market with more farms for sale but supply still limited. The average value of farmland increased by 12% during the year. The finalising of European support payments in spring 2006 is expected to bring more normality to a market still trading on low national turnover. Sale instructions ranged from Brook Hall in Suffolk (guide price £6.2m) to the Trewarthenick Estate in Cornwall (guide price £9m). 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. Operating profit for the year was £12.9m (2004 - £10.9m) on revenue of £71.8m (2004 - £59.3m). Valuation The Commercial Valuation department is regarded as one of the leading valuation teams in the UK. Based in our principal offices of London, Manchester and Edinburgh, the team provides national and international advice on investment and development property for a range of purposes including advice to lenders for loan security purposes and to clients for litigation, stock exchange, tax and accounts purposes. Over the course of 2005, the department expanded with the addition of new consultants. The department valued in excess of £20bn of real estate assets and has provided independent valuation advice to over 50 different lending organisations as well as many property companies and property owners. The Residential Valuation department is also a leader in providing valuation and investment appraisal services for loan security, acquisition, disposals and accounts. We acted on behalf of Westminster City Council in the sale of their headlease in the landmark building Dolphin Square, Pimlico, to Westbrook Partners, a US property investment company, for a price in excess of £175m. Another key highlight was our appointment to manage and value the renowned Phillimore Kensington Estate in London, the first change in managing agents for 200 years. The addition of the Phillimore Estate Management team has provided synergy with the other portfolio and leasehold enfranchisement activities of the department. The expanded Loan Security Valuation team valued in excess of £4bn of residential and mixed use development schemes and high value property. In addition to our valuation departments in London, valuations of both commercial and residential properties were undertaken in 22 offices throughout the country from Edinburgh to Southampton and Norwich to Exeter. In Asia, Savills were successful in recruiting a 35 man professional team for Hong Kong and mainland China, which specialises in valuation, land use rights, tribunal and other forms of consultancy. The team was very active in initial public offering ('IPO') and real estate investment trust ('REIT') consultancy advice and was involved in the valuation of the property portfolio for the listing of the Construction Bank of China, the largest global IPO in 2005. In Singapore, the acquisition of Valuers & Property Consultants (Singapore) Pte Ltd, a specialist valuation team, has increased our revenue and profile considerably. In Australia, the professional services division secured the appointment by the Australian Department of Foreign Affairs and Trade to value 121 Australian embassies and ambassadorial residences globally. Building Consultancy The Commercial Building Consultancy business was reorganised in 2005 into specialist service focused teams which enabled the business to take on more complex, high value projects. The Technical Due Diligence and Project Monitoring teams were involved in a number of high profile commissions during the year including the survey of 12 German shopping centres for the Kenmore Group and the construction monitoring of a large City office building for DIFA, Deutsche Immobilien Fonds AG. They also acted for the Gatsby Charitable Foundation on feasibility work in relation to their planned donation of c£45m to the University of Cambridge for the establishment of a new institute for the study of plant diversity and development. The Lease Management team provided strategic dilapidations and service charge advice to some 120 landlord and tenant clients on claims and reviews between £10k and £25m. 40% of this work was undertaken in the capacity of expert in dispute resolution procedures. The Project Management team undertook a number of projects for Japanese clients including Mitsui & Co (UK) Plc, Japan Satellite Television (Europe) Ltd and Suzuki GB PLC. The Refurbishment team rolled out an improved full design and contract administration service to their residential and commercial clients, securing 18 new projects with a total value in excess of £20m. Industrial Building Consultancy has continued to expand its services in the logistics and distribution sector having acted as 'Fund Surveyors' on over 2m sq ft of new-build space for MetLife Investments and pre-acquisition support on around 1.5m sq ft of new developments. Retailer and logistics occupier clients include Mothercare and Frans Maas. Building consultancy services in our regional offices continued to grow at a steady rate with billings for Manchester and Birmingham reaching £1.6m. The team continues to be involved with Kenmore Group on pre-acquisition surveys and the refurbishment of a number of buildings. Our professional team continue to undertake pre-acquisition surveys, dilapidations instructions and minor refurbishments on behalf of ICI Dulux Decorator Centres, who have become a key client. Close liaison with Greater Manchester Pension Fund has provided good instructions on the Roundthorn Industrial Estate where a number of refurbishments have been undertaken in the last twelve months. Landlord and Tenant Following the negative rental growth during the last couple of years, the markets have seen a return to positive growth in 2005, with the market now generally optimistic about increased levels of rental growth in 2006 and beyond. During the year, the Rent Review team expanded through acquisition and recruitment; retail specialists have been added in Bristol and London. We now act for over 60 landlords in this high profile sector of the property market. Affordable Housing and Student Accommodation The department has continued to strengthen its profile in the specialist affordable and student accommodation markets winning an increasing proportion of agency instructions; the largest of which in 2005 was the disposal of a mixed student/affordable scheme in Brentford comprising accommodation of 1,000 beds. Rating Our specialist Rating department has been assisting business with all aspects of rating for over 50 years. The department is now working on the 2005 list appeals; one supermarket has already had its 2005 list bill reduced by £0.25m. Planning The Planning division expanded in 2005, with teams operating from ten offices and increasing the diversity of our skills base to include urban design, master planning and environmental impact assessment alongside planning and retail consultancy. Recent changes to planning legislation are producing a peak in planning consultancy work and there are pressures to deliver high quality growth and regeneration. Our ability to integrate planning advice and urban design with wider property and research skills enables us to produce development solutions that are marketable, sustainable and most importantly can be delivered through the planning process. Notable projects during the year included the promotion of several of the country's largest urban extensions including 14,000 new homes at Harlow and 7,000 houses at Milton Keynes. In the energy and water industry sectors, we have prepared an application and environmental impact assessment for the UK's largest proposed windfarm in Scotland and we are handling a major new waste water treatment facility on the south coast. Housing Consultancy The department reported its strongest financial performance since it was established in 1989; a new team was recruited in Horsham which increased the size of the team by 60%. Working internationally for the first time, the team valued several substantial housing portfolios. Strategic advisory work continued to grow with a number of new instructions from national housing providers and strong ongoing instructions for loan security valuations. Strategic Projects Our Telecoms team has significantly increased its market share and has ongoing work with Vodafone, Orange and O2 as the mobile phone operators continue to roll out the 3G Network. Following the electricity regulator's last price review, there has been a significant increase in activity as UK regional electricity companies invest in the refurbishment of their networks and we are involved in managing the interface between landowners and the construction teams. Portfolio valuation advice was provided to National Grid as part of its disposal of four of its distribution networks. In Australia, Savills announced the formation of a Strategic Project Delivery business, which will focus on the delivery of infrastructure, commercial and industrial projects. Research The Research department advised a wide variety of clients on investment, development, planning and other issues relevant to all sectors of the UK and overseas property markets. Our prognosis for a soft landing in the UK housing market was proved to be correct; house price inflation in 2005 according to the Government's index looks set to be very close to our 2% forecast and our forecast of falls in urban building land values was also correct, falling by -2.5% in 2005. The department continues to have involvement with some of the biggest UK development sites, providing in-depth studies of housing demand, pricing and phasing as well as ground-breaking research and information on place-making, plus the integration, management and funding of neighbourhood and commercial uses. In Asia, the Savills Research & Consultancy business provided economic and property market analysis for The Link Management on the £2.5bn government privatisation of 180 retail and car park facilities. This was Hong Kong's largest privatisation and the world's largest IPO of a real estate investment trust (REIT). Savills Research & Consultancy was appointed to advise on the successful launch in December 2005 of Prosperity REIT, established by Cheung Kong Holdings, Hong Kong's largest property developer. The REIT consisted of office and industrial properties valued at approximately £338.0m. PROPERTY AND FACILITIES MANAGEMENT The Property and Facilities Management business continued to grow, generating fee income from managing commercial, residential and agricultural properties. During the year, revenue was £104.4m (2004 - £85.8m), generating an operating profit of £7.8m (2004 - £6.0m). Facilities Management Savills Guardian, an integrated facility management business based in Hong Kong had another successful year. The business secured a Public Sector Association contract managing 5,000 housing units and a contract for hotel cleaning and maintenance for Disneyland, Hong Kong. Overall margins in Hong Kong for Guardian are under pressure and the business is looking to mainland China and Macau to secure more lucrative contract margins. Commercial Management The UK Property Management business has continued to develop at an impressive rate in terms of overall turnover, quality of instructions and client profile. Organic growth has been achieved and our client base now represents the full spectrum of UK property investors with each office acting for a mix of local investors and major funds. The team has successfully expanded a number of existing mandates from clients such as GE Real Estate, Morley Fund Management and UBS. Of particular note is the recruitment of a three-man management team in Birmingham which has helped strengthen the department. A new management department has also been set up in Leeds and it is hoped that similar expansion in Bristol will follow. The Japanese business, which is headquartered in Tokyo, was acquired at the end of 2004 and generated property management and leasing revenues of £1.2m in 2005. Long term, Japan will be a key market for Savills in Asia and we are developing our plans to grow our presence in the world's second largest real estate market. The property management business in Hong Kong increased revenues by 30% and acquired a business called 'Showcase' which specialises in offering exhibition and marketing services to office and retail landlords and has a close alignment with the property management business. In Korea, Savills acquired a 50% stake in Korean Asset Advisors and BHP Korea, approved by the Bank of Korea on 3 January 2006 and which operates property, asset management and brokerage services in Seoul. The business manages over 10m sq ft of grade A office and retail space in Seoul and acts for key institutional clients. The opportunities to expand and grow the Korean business are considerable and benefits are already emerging from synergies between our businesses in China and Korea. Land and Farm Management 2005 began to see the countryside adjust to EU reform of the Common Agricultural Policy. Against this background of reform, Savills has been consolidating the growth of its rural business following the acquisition of Smith Woolley, Colvilles and Elvey & Co. This has broadened our network and skill base allowing us to provide a much improved service to our clients and led to enhanced fee income. PROPERTY TRADING AND INVESTMENT As there were no properties held for sale during the year no revenue was generated in 2005 (2004 - £13.0m) nor operating profit reported (2004 - £10.1m). FINANCIAL SERVICES The Financial Services division comprises Savills Private Finance Limited, which provides residential mortgage broking services, commercial debt broking services, commercial and private insurance services and associated financial planning products. The division made operating profit of £4.4m (2004 - £3.9m) on a revenue of £25.8m (2004 - £20.1m). Savills Private Finance continued to trade well, especially in the high net worth mortgage broking market. The Commercial Debt Broking, Financial Planning and Property Insurance divisions have also made significant contributions. New offices have been opened in Leeds, Sevenoaks and York bringing the total number of offices to twenty. Despite an increase in fixed costs associated with the investment in and growth of the business, profit for the year was ahead of 2004. The business is now well placed to ensure further profit growth. FUND MANAGEMENT Cordea Savills, the Group's fund management business, made operating profit of £0.6m (2004 - loss of £0.5m) on revenue of £4.7m (2004 - £3.6m). Funds under management expanded to £1.7bn during 2005 but the year was characterised by investment in infrastructure and developing a pipeline of new funds to be launched in 2006. In the UK, Cordea Savills achieved strong investment performance for its discretionary pension funds. The year was also notable for the growth of the Charities Property Fund, which expanded in size from £242m to £309m, making it the leading property fund for UK charities. We launched our first pooled product aimed at UK and European pension funds: the Cordea Savills Student Managed Hall Fund; this fund was seeded with £65m of halls purchased from UNITE Group plc. 2005 also saw Cordea Savills Wealth Management establish its brand in the UK private investor market with the launch of its first three products: DIVERSE, QPC and Serviced Land Fund No 1. In Italy, Cordea Savills received approval from the Bank of Italy for an SGR (the regulated Italian fund management company) and an exceptional team has been formed with Gerardo Solaro del Borgo appointed as Managing Director and Riccardo Delli Santi and Gualtiero Tamburini appointed as Independent Directors. With strong management and investment teams positioned in offices in Milan and Rome, the business is poised for further growth in the rapidly growing Italian property funds market. We expect Cordea Savills to emerge, in due course, as a major European investment manager servicing the needs of a wide range of domestic and international clients. FINANCIAL HIGHLIGHTS: • Underlying Group operating margins of 14.3% (2004 - 13.2%). • Strong cash balances with a year-end balance of £99.9m, even after making an additional lump sum payment of £10m into the Pension Plan. • A very strong performance from Asia Pacific this year with turnover up 16% and operating profit up 30%. 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 (in aggregate £9.4m) and overseas (in aggregate £3.2m) including: • On 1 March 2005, Savills (L&P) Limited acquired Holden Matthews Estate Agents Limited. • On 31 March 2005, Savills SA acquired AWON Gestion, a Paris based property management business. • On 13 May 2005, Savills Commercial Limited acquired Mansfield Elstob Main Limited, a Bristol based commercial property services business. • On 22 June 2005, Savills PM Holding purchased Showcase Ltd. • On 13 October 2005, Savills (Overseas Holdings) Limited acquired a major shareholding in Factor Immobilien Management GmbH. • On 26 September 2005, Savills Commercial Limited acquired Brown Harknett International Limited. • On 7 October 2005, Savills Commercial Limited acquired S Y Moorhouse Wright Limited. • On 19 December 2005, Savills announced the acquisition of a 50% shareholding in Korea Asset Advisors and BHP Korea, which received formal approval from the Bank of Korea on 3 January 2006. Assets classified as held for sale On 16 December 2005, Savills announced the acquisition of 100% of the units in a property unit trust which owns a portfolio of three student accommodation buildings operated by UNITE plc. The assets are to be used as seed capital for a fund launched and managed by Cordea Savills. The assets acquired are recorded as held for sale and total cash consideration was £16.5m. Net cash outflow for investing activities during the year amounted to £31.8m (2004 - inflow of £3.1m). Aubrey Adams, Group Chief Executive SAVILLS plc CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2005 Year ended Year ended 2005 2004 Notes £'000 £'000 Continuing operations Revenue Revenue 373,866 316,619 Other revenue - sale of trading properties - 11,356 Total revenue 2 373,866 327,975 Employee benefits expense (227,510) (190,922) Depreciation expense (4,573) (4,051) Amortisation of intangibles & impairment of goodwill (1,465) (1,302) Changes in trading property stock - (9,177) Other operating expenses (85,914) (75,363) Profit on disposal of investment property - 8,094 Profit on disposal of subsidiary, associate & available for sale investments 367 917 Operating profit 2 54,771 56,171 Finance income 3,940 2,361 Finance costs (461) (584) 3,479 1,777 Share of post tax profit from associates and joint ventures 329 364 Profit before income tax 58,579 58,312 Income tax expense (including foreign tax of £4.3m (2004 - 4 (17,799) (17,340) £2.3m)) Profit for the year from continuing operations 40,780 40,972 Discontinued operations Loss for the year from discontinued operations 3 (504) - Profit after income tax 40,276 40,972 Attributable to: Equity shareholders of the parent 39,974 40,690 Minority interest 302 282 40,276 40,972 Earnings per share From continuing and discontinued operations Basic earnings per share 7 67.2p 72.7p Diluted earnings per share 7 62.6p 66.1p From continuing operations Basic earnings per share 7 68.1p 72.7p Diluted earnings per share 7 63.4p 66.1p From discontinued operations Basic earnings per share -0.9p 0.0p Diluted earnings per share -0.8p 0.0p Dividends per share Final dividend proposed 5 16.0p 12.5p Dividends paid (ordinary and special) 5 40.5p 16.0p SAVILLS plc CONSOLIDATED BALANCE SHEET at 31 December 2005 31.12.05 31.12.04 Notes £'000 £'000 ASSETS Non-current assets Property, plant and equipment 14,679 11,922 Goodwill 54,255 46,095 Intangible assets 4,699 2,549 Investments in associates and joint ventures 3,402 2,831 Financial assets - Other investments - 3,834 - Available for sale investments 10 10,486 - Deferred income tax assets 23,892 17,333 111,413 84,564 Current assets Assets classified as held for sale 64,853 - Work in progress 3,180 2,666 Trade and other receivables 115,336 87,241 Cash and cash equivalents 99,921 89,919 283,290 179,826 LIABILITIES Current Liabilities Borrowings 1,910 3,823 Liabilities directly related to assets 48,867 - classified as held for sale Trade and other payables 136,102 113,367 Current income tax liabilities 5,644 8,405 Employee benefit obligations 1,739 1,499 Provisions for other liabilities and charges 675 665 194,937 127,759 Net current assets 88,353 52,067 Total assets less current liabilities 199,766 136,631 Non-current Liabilities Borrowings 1,516 1,115 Trade and other payables 989 2,269 Retirement and employee benefit obligations 24,926 27,490 Provisions for other liabilities and charges 1,708 1,999 Deferred income tax liabilities 2,313 62 31,452 32,935 Net assets 168,314 103,696 EQUITY Capital and reserves attributable to equity holders of the parent Share capital 9, 11 3,325 3,026 Share premium 11 80,885 43,114 Other reserves 11 6,528 (1,243) Retained earnings 11 77,001 58,609 167,739 103,506 Minority interest 11 575 190 Total equity 168,314 103,696 SAVILLS plc CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2005 Year ended Year ended 2005 2004 Notes £'000 £'000 CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from continuing operations 8 44,859 58,004 Interest received 3,829 2,454 Interest paid (461) (584) Income tax paid (15,564) (15,303) Net cash generated from operating activities 32,663 44,571 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of subsidiary, net of cash disposed 120 4,666 Proceeds from sale of property, plant and equipment 38 99 Proceeds from sale of associates, joint ventures and investment property 503 15,628 Dividends received 324 3,144 Net loans (to)/repayments received from related parties (413) 96 Acquisition of subsidiaries, net of cash acquired (7,528) (10,418) Acquisition of assets for sale (16,490) - Purchases of property, plant and equipment (7,268) (6,458) Purchases of intangible assets (872) (944) Purchase of investment in associates, joint ventures and other investments (176) (2,715) Net cash (used in)/generated from investing activities (31,762) 3,098 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of share capital 38,075 903 Proceeds from borrowings 706 1,605 Repurchase of own shares (520) (5,751) Purchase of own shares for Employee Benefit Trust (4,158) (4,238) Repayments of borrowings (4,322) (7,598) Dividends paid (23,133) (9,309) Net cash generated from/(used in) financing activities 6,648 (24,388) Net increase in cash and cash equivalents 7,549 23,281 Cash and cash equivalents at beginning of the year 89,919 67,625 Effect of exchange rate fluctuations on cash held 2,453 (987) Cash and cash equivalents at end of year 99,921 89,919 SAVILLS plc CONSOLIDATED STATEMENT OF RECOGNISED INCOME & EXPENSE for the year ended 31 December 2005 Year ended Year ended 2005 2004 Notes £'000 £'000 Profit for the year 40,276 40,972 Revaluation of available for sale investments 6,582 - Actuarial loss on defined benefit pension scheme (7,301) (9,495) Tax on items directly taken to reserves 9,574 4,652 Foreign exchange translation differences 2,702 (1,401) Net income/(expense) recognised directly in equity 11,557 (6,244) Total recognised income and expense for the year 51,833 34,728 Attributable to: Equity shareholders of the parent 51,621 34,427 Minority interest 212 301 51,833 34,728 Effects of changes in accounting policies Attributable to equity shareholders of the parent - increase in retained earnings due to revaluation of available for sale investments on adoption of IAS 32&39 on 1 January 2005 960 - Attributable to minority interest - - 960 - NOTES 1. Basis of preparation The results for the year ended 31 December 2005 have been extracted from the audited financial statements. The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations as adopted by the European Union and with those parts of the Companies Act, 1985 applicable to companies reporting under IFRS. In preparing comparatives for 2004, the Group has chosen to utilise the IFRS1 exemption from the requirement to restate comparative information for IAS32 and IAS39 on financial instruments. 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 2005, on which the auditors have given an unqualified audit report, have not yet been filed with the Registrar of Companies. The financial information in this statement has been prepared in accordance with the IFRS accounting policies set out in the Group 2005 Annual Report & Accounts. These policies are in line with the press release entitled 'adoption of International Financial reporting Standards' and issued on 29 June 2005. This is available on the Company's investor relations website at ir.savills.com. The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. 2. Segment analysis Year ended 31 Transactional Consultancy Property & Fund Property, Financial Unallocated Total December 2005 Advice Facilities Management Trading & Services * Management Investment £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Revenue United Kingdom - Commercial 60,759 39,850 32,838 4,733 - 3,211 127 141,518 - Residential 61,124 22,358 7,013 - - 22,596 - 113,091 121,883 62,208 39,851 4,733 - 25,807 127 254,609 Rest of Europe 15,148 2,112 4,642 - - - 39 21,941 Asia Pacific 29,854 7,494 59,968 - - - - 97,316 Total revenue 166,885 71,814 104,461 4,733 - 25,807 166 373,866 Operating profit United Kingdom - Commercial 13,929 7,881 3,224 580 - 828 (4,335) 22,107 - Residential 10,120 3,946 857 - - 3,533 - 18,456 24,049 11,827 4,081 580 - 4,361 (4,335) 40,563 Rest of Europe 3,768 402 255 - - - 99 4,524 Asia Pacific 5,223 676 3,503 - - - 282 9,684 Operating profit/ 33,040 12,905 7,839 580 - 4,361 (3,954) 54,771 (loss) Net Finance income 3,479 Share of results of associates and joint ventures 329 Profit before income tax 58,579 Income tax expense (17,799) Profit for the year from continuing operations 40,780 Year ended 31 Transactional Consultancy Property & Fund Property, Financial Unallocated Total December 2004 Advice Facilities Management Trading & Services * Management Investment £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Revenue United Kingdom - Commercial 51,785 34,068 24,481 3,637 12,953 2,575 - 129,499 - Residential 58,747 18,346 5,457 - - 17,477 - 100,027 110,532 52,414 29,938 3,637 12,953 20,052 - 229,526 Rest of Europe 11,143 1,120 2,320 - - - - 14,583 Asia Pacific 24,611 5,723 53,532 - - - - 83,866 Total revenue 146,286 59,257 85,790 3,637 12,953 20,052 - 327,975 Operating profit United Kingdom - Commercial 12,645 7,010 1,933 (543) 10,100 744 (862) 31,027 - Residential 8,280 3,115 286 - - 3,163 - 14,844 20,925 10,125 2,219 (543) 10,100 3,907 (862) 45,871 Rest of Europe 2,289 226 318 - - - - 2,833 Asia Pacific 3,492 508 3,467 - - - - 7,467 Operating profit/ 26,706 10,859 6,004 (543) 10,100 3,907 (862) 56,171 (loss) Net Finance income 1,777 Share of results of associates and joint ventures 364 Profit before income tax 58,312 Income tax expense (17,340) Profit for the year from continuing operations 40,972 The unallocated segment includes holding company costs, group bonuses and other expenses not directly attributable to the operating activities of the Group's business segments. *For the purpose of the segmental information above, and to assist in the comparison of segmental information, the benefit arising from the amortisation of the share based payment charge as discussed in more detail in note 6, is retained within the unallocated segment. 3. Discontinued operations Year ended Year ended 2005 2004 £'000 £'000 Revenue 149 - Expenses (869) - Loss before income tax (720) - Income tax credit 216 - Loss after income tax (504) - Student accommodation assets and associated debt were acquired during the year as seed assets for a Cordea Savills fund to be launched in the 1st quarter 2006. It is expected the Group's share of these assets will be diluted to a small holding of a maximum of 5% before the next balance sheet date and as such these assets and associated liabilities are classified as held for sale. The loss for the year relates to losses on the mark to market of two interest rate swaps taken out on the loans secured on the properties. All operating results are classified under discontinued operations. The discontinued operations all relate to the unallocated segment. 4. Income tax expense The income tax expense has been calculated on the basis of the underlying rate in each jurisdiction adjusted for any disallowable charges. Year ended Year ended 2005 2004 £'000 £'000 United Kingdom corporation tax (13,009) (16,059) Foreign tax (3,964) (2,296) Deferred tax (826) 1,015 (17,799) (17,340) 5. Dividends Year ended Year ended 2005 2004 £'000 £'000 Amounts recognised as distribution to equity holders in the period: Interim dividend of 8.0p per share (2004 - 6.0p per 4,942 3,394 share) Ordinary final dividend of 12.5p per share (2004 - 10.0p) 6,990 5,563 Special dividend of 20.0p per share (2004 - nil) 11,128 - 23,060 8,957 Proposed final dividend for the twelve months ended 31 December 2005 of 16p per share 9,861 - The Directors have recommended a final dividend for the twelve months ended 31 December 2005 of 16 pence per ordinary share. The final dividend, if approved at the Annual General Meeting on 10 May 2006, will be paid on 18 May 2006 to shareholders on the register as at 18 April 2006. 6. Underlying profit before tax Year Year ended ended 2005 2004 £'000 £'000 Reported Profit before tax 58,579 58,312 Add back amortisation of intangibles (excluding software) & 913 639 impairment of goodwill Less disposal of trading & investment properties, subsidiary, associates & available for sale investments (367) (11,190) Less Share based payment adjustment (1,934) (3,906) 57,191 43,855 The Directors regard the above adjustments necessary to give a fair picture of the underlying results of the Group for the period. The adjustment for Share based payment relates to the transitional impact of the new accounting standard accounting for share based compensation. The annual bonus is paid in a mixture of cash and deferred shares and the proportions can vary from one year to another. Under IFRS the deferred share element is amortised to the income statement over the vesting period whilst the cash element is expensed in the year. The adjustment above addresses this by deducting from profit the difference between the IFRS 2 charge and the value of the annual share award. 7. Basic & Diluted earnings per share Year to Earnings Shares EPS Earnings Shares EPS 31 December 2005 2005 2005 2004 2004 2004 £'000 '000 Pence £'000 '000 Pence From continuing and discontinued operations Basic earnings per share 39,974 59,450 67.2 40,690 55,938 72.7 Effect of additional shares - 4,418 (4.6) - 5,647 (6.6) issuable under option Diluted earnings per share 39,974 63,868 62.6 40,690 61,585 66.1 From continuing operations Basic earnings per share 40,478 59,450 68.1 40,690 55,938 72.7 Effect of additional shares - 4,418 (4.7) - 5,647 (6.6) issuable under option Diluted earnings per share 40,478 63,868 63.4 40,690 61,585 66.1 Adjusted underlying basic earnings per share Year to Earnings Shares EPS Earnings Shares EPS 31 December 2005 2005 2005 2004 2004 2004 £'000 000 Pence £'000 000 Pence From continuing operations Basic earnings from continuing 40,478 59,450 68.1 40,690 55,938 72.7 operations Amortisation of intangibles 639 - 1.1 639 - 1.1 (excluding software) and impairment of goodwill after tax Share based payment adjustment (1,354) - (2.3) (2,734) (4.9) after tax - Less sale of trading properties - - - (1,525) (2.7) after tax - Less sale of investment property - - - (5,666) (10.1) after tax - Less sale of subsidiary, associate ( 257) - (0.4) (642) - (1.1) & available for sale investments after tax Adjusted underlying basic earnings per share 39,506 59,450 66.5 30,762 55,938 55.0 8. Cash generated from continuing operations Year ended Year ended 2005 2004 £'000 £'000 Profit for the year from continuing operations 40,780 40,972 Adjustments for: Taxation 17,799 17,340 Depreciation expense 4,573 4,051 Amortisation of intangibles & impairment of goodwill 1,465 1,302 Net finance income (3,479) (1,777) Share of post tax profit from associates and joint ventures (329) (364) Profit on disposal of investment property - (8,094) Profit on disposal of subsidiary, associates & available for sale investments (367) (917) Loss on sale of property, plant and equipment 364 193 Decrease in property held for sale - 2,052 (Decrease)/increase in provisions (833) 481 Decrease in employee and retirement obligations (9,574) (13,964) Charge for share based compensation 1,913 1,144 Provision against investments in associates and joint ventures 18 16 Operating cash flows before movements in working capital 52,330 42,435 (Increase)/decrease in work in progress (431) 126 Increase in debtors (23,471) (14,671) Increase in creditors 16,431 30,114 Cash generated from operations 44,859 58,004 9. Share capital On 29 April 2005 Trammell Crow Company (TCC) exercised an option to subscribe for 5,243,229 shares representing over 7% of the Group's share capital. This was in accordance with the terms of an agreed Option Deed dated 9 May 2000, entered into at the time of the Strategic Alliance. The shares were issued at a price of 701.28p, representing a 20% premium to the average closing mid-market price of the Ordinary Shares as taken over the preceding five days prior to exercise. 10. Available for sale investments The Group adopted accounting standards IAS 32 and IAS 39 covering financial instruments from 1 January 2005 and this resulted in a change in the measurement of available for sale investments from cost to fair value. At 1 January 2005, this change resulted in an increase in the value of the Group's investments of £960,000 reflecting the valuation of certain of the Group's listed equity investments to market value. Further revaluations were made during the period relating to the Group's investments in unlisted equity securities, the largest of which was an increase of £4.9m relating to the Group's holding in Fastcrop plc. This investment has been sold subsequent to year end. £'000 At 31 December 2004 - Adoption of IAS 32 & 39 - reclassification from other investments 3,834 Remeasure to fair value 960 At 1 January 2005 4,794 Additions 10 Disposal (900) Revaluation 6,582 At 31 December 2005 10,486 Available-for-sale financial assets include the following: Listed securities UK - equity securities 10 Unlisted securities UK - equity securities 7,618 UK - limited partnership 2,858 10,486 11. Statement of changes in equity Minority Total Attributable to equity holders of the Group interest equity Share Share Translation Revaluation Other Retained capital premium reserve reserve reserves earnings £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 December 2004 3,026 43,114 (1,420) - 177 58,609 190 103,696 Adoption of IAS 32 and IAS 39 - - - - 288 - 960 672 Balance at 1 January 2005 3,026 43,114 (1,420) 672 177 58,897 190 104,656 Total recognised income and - - 2,792 4,900 - 43,929 212 51,833 expense for the period Employee share option scheme: - Value of services provided - - - - - 1,913 - 1,913 Issue of share capital 304 37,771 - - - - - 38,075 Purchase of own shares (5) - - - 5 (520) - (520) Purchase of treasury shares - - - - - (4,158) - (4,158) Dividends - - - - - (23,060) (73) (23,133) Disposals - - - (598) - - - (598) Business combinations - - - - - - 246 246 Balance at 31 December 2005 3,325 80,885 1,372 4,974 182 77,001 575 168,314 Minority Total Attributable to equity holders of the Group interest equity Share Share Translation Revaluation Other Retained capital premium reserve reserve reserves earnings £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2004 3,070 42,237 - - 107 40,564 562 86,540 Total recognised income and - - (1,420) - - 35,847 301 34,728 expense for the period Employee share option scheme: - Value of services provided - - - - - 1,144 - 1,144 Issue of share capital 26 877 - - - - - 903 Purchase of own shares (70) - - - 70 (5,751) - (5,751) Purchase of treasury shares - - - - - (4,238) - (4,238) Dividends - - - - - (8,957) (352) (9,309) Business combinations - - - - - - (321) (321) Balance at 31 December 2004 3,026 43,114 (1,420) - 177 58,609 190 103,696 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 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

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