The topsy turvy nature of the UK housing market was amply illustrated by the strong half-year results at estate agent Savills (SVS). A combination of excellent growth in transactions in London, where continuing demand for prime property offset a hiatus in the rest of country, and a strong showing in Asia-Pacific helped boost underlying pre-tax profits by 40 per cent to £26m for the half.
The transaction advisory division benefited the most from a robust London market; revenues were up 18 per cent at £149m and underlying pre-tax profits doubled to £14.6m. Booming residential sales also helped the consultancy business, where a 14 per cent increase in turnover to £82.1m triggered a 40 per cent jump in divisional profits to £6.3m. Interestingly, the London/country divide widened to a yearning chasm in these results. For example, London transactions were up 5 per cent year on year, with the average sale price rising by 18 per cent to £3.2m, easily trumping the £1m country valuation and helping to offset a decline in volumes and valuations outside of the capital of 8 per cent and 9 per cent, respectively. Property management profits were flat at £7.8m, reflecting investment in new lettings offices in the UK and adverse conditions in the Australian unit.
Broker Numis Securities forecasts full-year pre-tax profits of £64m and EPS of 36.8p, up from £60.8m and 35.3p in 2012.
SAVILLS (SVS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 626p | MARKET VALUE: | £837m | |
| TOUCH: | 623-626p | 12-MONTH HIGH: | 667p | LOW: 365p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 181p* | NET CASH: | £3.2m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 353 | 17.1 | 11.0 | 3.30 |
| 2013 | 399 | 21.4 | 12.2 | 3.50 |
| % change | +13 | +25 | +11 | +6 |
Ex-div: 11 Sep Payment: 14 Oct *Includes intangible assets of £155m, or 116p a share | ||||
