Savills half-year results – revenues rise, but profits fall

High-end estate agency Savills has posted a mixed set of half-year results, with revenue up to over £1 billion but the property group’s pre-tax profit declining by an alarming £13 million, dropping from £63.3 million to £50.4 million year-on-year.

Following in the footsteps of Connells, LSL and The Property Franchise Group (TPFG) – who all posted mixed results last week, with TPFG having the most cause for cheer – Savills announced that revenue was up by more than 10% to £1.04 billion in the six months to the end of June. This was up from £932.6 million in the same period last year.

Underlying pre-tax profit fell from £66.1 million to £59.2 million. The group also reported that it has current net assets of £736 million.

Savills, which is listed on the London Stock Exchange and a member of the FTSE 250 Index, has increased its dividend from 6p to 6.6p, with chief executive Mark Ridley remarking that there is a risk of a short-term drop in activity given the current economic and geopolitical climate.

As well as the cost-of-living crisis and the ongoing war in Ukraine, there’s also the bitter battle over who will be next Prime Minister, and dealing with the legacies of Covid and Brexit.

“Despite staff cost inflation and the anticipated increase in discretionary costs, we have performed well so far this year, in line with the board’s expectations,” Ridley commented in a statement.

He said there remains ‘significant investor interest’ in the ‘secure income characteristics’ of real estate, despite soaring inflation accelerating the growth of interest rates, a trend which Ridley believes will continue into the second half of this year.

The firm, founded in 1855 in the UK, has become one of the world’s leading agents and property adviser companies. It operates globally across a number of continents and has become known in recent years, along with rival Knight Frank, for its in-depth reports and research into various aspects of the property market.