Full Year Trading Update

Savills PLC 22 December 2004 22 December 2004 SAVILLS PLC ('Savills' or 'the Company') Full Year Trading Update • Full year profits likely to be more than 10% ahead of expectation. • Special dividend of 20p. Savills, the international property advisor, is pleased to announce a trading update for the year ending 31 December 2004. Background When we released our results for the six months ended 30 June 2004 on 1 September 2004 the Chairman reported that while interest rate increases would ultimately have an impact on the UK property market, increasing tenant demand and strong investment markets would ensure high levels of activity in 2004. Whilst we believed that residential volumes could fall we reported that we expected no material impact on profitability. That confidence was justified and we set out below an update of our trading position for the year ending 31 December 2004, prior to the announcement of the preliminary results on 2 March 2005. Main Business Streams Transactional Leasing markets in London and the South East appear to be improving and there are signs of renewed tenant interest. Office markets in the regions remained stable and are showing modest growth. Tenant demands for the best retail schemes, both in and outside of town centres, remain strong. Investment markets remained very active in 2004, with demand continuing to outstrip supply. As a result yields have continued to harden across all types of asset classes; Savills has been well placed to take advantage of these excellent market conditions. Momentum in the prime residential markets from the end of 2003 carried into the first half of 2004. Although rising interest rates and consumer uncertainty appear to have affected the mainstream market, the prime sector in which Savills principally operates has been less affected. After a slower August and September, there has been a marked upturn in activity in the last quarter and although our under offer book is ahead of this time last year, we expect buyers to continue to demonstrate caution. In Asia, resurgence in property prices during 2004 has had a significant impact on transaction volumes and both our commercial and residential investment sales teams have enjoyed considerable success. Consultancy Savills' consultancy business has continued to make excellent progress across the board in 2004. The valuation and housing consultancy practices have grown their revenue streams and the new teams and individuals recruited in the last couple of years are beginning to make a full contribution to the business. Property Management/Facilities Management Income from the Property Management business is very steady and we expanded this area of activity considerably in 2004 with the recruitment of new teams in Shopping Centre, Leisure and Retail management and acquisitions of specialist land management firms Smith Woolley in the Midlands and Colvilles in the South East. In Asia, Savills is well established as a market leader, both in Hong Kong and more recently in China. On 1 December 2004, we opened an office in Tokyo and are well placed to expand as opportunities arise. The Hong Kong based facilities management business produced a satisfactory performance. Property Trading Since the half-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 £7m. 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 £2.85m; these transactions together produced a further profit of £2.2m. No properties now remain within the property trading and investment division. Over the last two years total pre-tax profits of £15m have been generated from property trading and investment and these profits are regarded as non-recurring. We intend to pass the post tax benefits of these profits to shareholders by way of a special dividend of 20p per share payable with the final dividend. Financial Services Savills Private Finance is having another outstanding year and has performed well ahead of plan but has slowed recently. The business has expanded further this year opening new offices in Birmingham, Brighton, Cambridge, the West End and Wimborne and acquiring Sherwins, a mortgage broker specialising in mortgages for the affordable homes market. Fund Management The launch of Cordea Savills, the fund management business that has been recently strengthened and rebranded, was well received by the market. Two funds have been launched since the rebranding. Assets under Management have, as a result, increased from £1.2bn to £1.4bn and provide a recurring and valuable income stream for the future. Initial recruitment and set up costs for the new team coupled with the ongoing costs of further key recruitment, have impacted profits in the short term. Rebranding With effect from 1 January 2005 all trading subsidiaries of Savills will no longer include the prefix 'FPD', thereby consolidating the branding of the Group. Overview The current Group performance demonstrates clearly the benefits of being a broadly based property advisory group. Commercial markets continue to be very active, particularly on the back of strong investment demand. While we expect prime residential markets to show some caution, nevertheless they are currently proving considerably more robust than mainstream markets. As a result of this the Board believes that the full year profits will exceed current market expectations by more than 10%. The Group continues to be strongly cash generative and this allows us to maintain our progressive dividend policy. Ends For further information Savills plc 020 7409 9923 Aubrey Adams, Group Chief Executive Robert McKellar, Group Finance Director Citigate Dewe Rogerson 020 7638 9571 Simon Rigby Sarah Gestetner This information is provided by RNS The company news service from the London Stock Exchange

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