Savills racks up record profits

One of Savills' strengths is the diversity of its revenue stream. That's partly the result of a broad geographical spread: non-UK operations now account for 52 per cent of group revenue, up from 49 per cent in 2013 despite strong growth in the home market. Much of the increase reflects the acquisition last year of US commercial real estate services group Studley. This has transformed the group's US operations, with revenue jumping from £6.8m to £112m last year, generating underlying profit of £12.4m.

Subdued trading in China, Hong Kong and Singapore was offset by stronger trading in Japan to leave revenue from the Asia Pacific region flat, while a dose of self-help and improved market conditions lifted Savills' mainland European operations out of the red to register a small profit. As for the different business types, transactional advisory revenues grew by 38 per cent, boosted by the Studley acquisition, to account for nearly half the group total. Consultancy delivered a 13 per cent increase in revenue.

Sensibly, Savills has maintained a cautious stance on the outlook for its UK operations ahead of the general election. But in the prime residential market it still registered a 6 per cent increase in trading volumes last year, while the value of second-hand residential properties sold rose 8 per cent to £6.6bn. Even in London, where election jitters are most prevalent, property transactions edged ahead. Investor interest in new developments remained strong, with more transactions boosting the volume of properties exchanged by 46 per cent to £2.8bn. Savills reckons there is still plenty of room for further growth, with sales volumes in London 13 per cent below the 2007 peak.

Analysts at UBS are forecasting underlying EPS of 54.8p for the coming year (from 55.2p in 2014).