A pre-election slowdown in the UK residential market did not prevent real estate adviser Savills (SVS) push first-half underlying pre-tax profit ahead by 28 per cent to £38.4m, with revenue from advisory transactions up by 55 per cent at £258.2m.
The star performer was the US operation, which benefited from the acquisition of commercial real estate services group Studley last year. This helped to boost revenue from the US arm from £11.1m to £86.7m, and turned an underlying pre-tax loss of £0.7m into a profit of £7.5m - although an increase in foreign tax suppressed the bottom line.
The core UK residential business saw fee income decrease by 13 per cent to £51.8m, but activity picked up after the May election, with a significant number of new buyers registering - while on the commercial side, transaction fee income grew by over a third to £41.9m.
Crucially, there was a strong revival in Asia, where commercial transaction fee income rose by 29 per cent to £46.1m, while residential fee income was up 43 per cent to £12.7m. However, trading in mainland Europe remained tough, and transaction fee income fell 7 per cent to £19m.
On the back of these numbers, analysts at Numis Securities have upgraded their forecasts for the full year, and now expect pre-tax profit of £112m and EPS of 61p (from £101m and 55p in 2014).
| SAVILLS (SVS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 985p | MARKET VALUE: | £1.36bn | |
| TOUCH: | 985-987p | 12-MONTH HIGH: | 991p | LOW: 560p |
| DIVIDEND YIELD: | 1.1%* | PE RATIO: | 22 | |
| NET ASSET VALUE: | 226p** | NET DEBT: | 8% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 431 | 24.7 | 14.1 | 3.75 |
| 2015 | 547 | 26.4 | 11.7 | 4 |
| % change | +27 | +7 | -17 | +7 |
Ex-div: 10 Sep Payment: 12 Oct *Excludes special dividend of 12p paid in 2014 **Includes intangible assets of £279m, or 203p a share | ||||
