Interim Management Statement

RNS Number : 7463V

Savills PLC

08 November 2010

 



8 November 2010

SAVILLS PLC

("Savills" or "the Company")

Interim Management Statement

Savills plc, the international real estate advisor, publishes the following Interim Management Statement (IMS) for the period from July to date.

Summary and Overview

Since June our UK and Asia Pacific businesses have continued to outperform and our European and US businesses, whilst continuing to face challenging market conditions, have performed in line with our expectations.

As we enter the crucial final weeks of the year, it is clear that transactions in the Prime London Residential business have continued at a healthy level, albeit that as anticipated, the fourth quarter will see lower volumes than the exceptional fourth quarter of 2009. Our UK Commercial Transaction Advisory business has also continued to perform strongly with third quarter revenue over 60% ahead of the same period last year. We anticipate that it will continue to perform well through the last quarter of 2010 although with limited growth against the strong comparative quarter last year.

In Hong Kong we have yet to see any downturn in Transaction Advisory revenues in what will, in all probability, turn out to be a record year for Savills in that market. Contrary to our expectations, the third quarter continued to show strong period-on-period revenue growth at over 65%. However, as a result of the high level of transaction activity during 2010, which is up over 100% year-on-year, and the consequent shortage of available stock, we believe that the previously anticipated reduction in investment transaction activity is now more likely to take effect during 2011.

As a consequence of the continued strength of our trading performance, particularly in Asia, and the potential completion of some significant London transactions prior to the year end, we anticipate that the Group's underlying profit before tax for the year to 31 December 2010 will be in excess of £40m.

Transactional Advice

Commercial

In the UK, investment market activity has continued to be focused on prime Central London and retail assets. In the strong markets of Central London it is unlikely that yields will be significantly further compressed. However we have seen improvement in leasing activity, particularly in the London office market.

As previously stated, transaction activity in Asia Pacific, particularly the office markets of Hong Kong, Australia and Singapore, has continued strongly through the period and the performance of this business will be significantly ahead of our expectations for 2010.

In Continental Europe there has been some improvement in market activity in Paris, certain German cities and in the Nordic region. Although loss-making in aggregate, our businesses have continued to trade in line with our expectations.

In the United States the investment market has begun to improve. Our US capital markets business, although loss-making, has seen an upturn in its transaction pipeline in comparison with the first half of the year and has performed in accordance with our expectations.

Residential

Our UK Residential Agency business has continued to match 2009's strong performance since June driven by continued strength in the prime London market. A highlight has been the sales performance of a range of luxury developments that have come to market, with some material transactions outstanding which could complete within the calendar year.

More generally, lead indicators have suggested since the second quarter that a plateau would be reached and this has now happened. It remains to be seen what effect both the strengthening of sterling, and falls in the mainstream markets will have on prime London market sentiment, however we are anticipating a tempering of market activity for the next few months.

Consultancy

Our Consultancy Service businesses have continued to perform in line with our expectations for the year.

Property Management

UK Property Management has continued to perform well since the half year and we are beginning to benefit from the recruitment conducted earlier in the year. In the principal Asia Pacific markets of Hong Kong and China the business has continued to perform in line with our expectations.

Financial Services and Fund Management

Revenue at Savills Private Finance has continued to be stable, however the UK mortgage market remains stagnant.

Revenue at Cordea Savills is in line with expectations. We have started to see reasonable funds inflow from segregated and investment advisory mandates in addition to core pooled funds.

Financial Position

The Group is in a net cash position and has an unutilised facility of £50m. Savills continues to review opportunities that arise for infill acquisitions and the recruitment of individuals and teams, who are attracted in part by our continued financial strength.

For further information, contact:

Savills                                 020 7409 8844

Jeremy Helsby, Group Chief Executive

Simon Shaw, Group Chief Financial Officer

Tulchan Communications    020 7353 4200

John Sunnucks

Matthieu Roussellier

Forward looking statements

Certain information included within this statement is forward-looking and by its nature involve risks and uncertainties because it relates to events and depends on circumstances that will occur in future. 

Forward-looking statements include, without limitation, projections relating to results of operations and financial conditions, market estimates, the Company's plans and objectives for future operations, including future revenues, financial plans and expected expenditures and divestments.

There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by these forward looking statements including a number of factors outside the Company's control. All forward-looking statements in this report are based upon information known to the Company on the date of this IMS. The Company gives no undertaking to update forward looking statements whether as a result of new information, future events or otherwise.

 

END

 

 

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