Diversity boosts underlying profits at Savills

A drop in transactional volume on the UK commercial property side saw fee income dip by 23 per cent to £32.1m. However, residential fee income grew by 10 per cent to £57.2m, boosted by a significant increase in volume ahead of the stamp duty levy imposed from 1 April. And despite lower activity in the second quarter, Savills helped to mitigate the effects by expanding its activity in lower value homes, particularly in London.

Much the same pattern was seen in the Asia Pacific operation, where a 20 per cent fall in profits from commercial transactions was offset by a 173 per cent jump in underlying profits on the residential side to £3m, underpinned by a particularly strong showing in the Beijing and Shanghai markets. Group profits from consultancy work rose by 5 per cent to £8.2m, while on the property and facilities management side, underlying profits jumped by a third to £10.2m. Investment management saw revenue nearly double to £27.5m, reflecting a full contribution from SEB Asset Management acquired in 2015, and pushed profits up by more than a half to £3.9m.

Analysts at Numis are forecasting pre-tax profits of £120m and EPS of 63.2p for the year to December 2016 (from £122.4m and 63.2p in 2015).