The ever-canny Savills management team had guided down stockbrokers' expectations to the point that the property broker could bill its half-year results as "better than anticipated" despite a 4 per cent fall in underlying profits. Strong growth in the more stable facilities management and consultancy businesses did not quite offset a 37 per cent plunge in transactional profits.
The core brokerage business - which includes the high-end estate agency for which Savills is best known in Britain - was weakest in Asia, where government measures to cool an over-heating housing market are finally working. Fee income from the Asian residential business fell 23 per cent to £8.1m, despite strong growth in Singapore, and the much larger commercial property operation in Asia also posted a decline in revenues.
Curiously, the residential business in Britain was also weak, with fee income down 5 per cent to £45.7m - admittedly, after an almost frantically busy period last year. Savills reported a "cooling of activity" in London and a "small rise" in country sales - a reversal of the previous trend. Contrast that with the commercial property division in London, which managed to grow its revenues by 7 per cent thanks to strong investment markets in both the City and West End.
Broker Numis Securities expects adjusted full-year pre-tax profits of £54.5m, giving EPS of 31.4p (from £50.4m and 28.2p in 2011).
SAVILLS (SVS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 378p | MARKET VALUE: | £501m | |
| TOUCH: | 376-380p | 12-MONTH HIGH: | 401p | 252p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 159p* | NET CASH: | £5.7m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividends per share (p) |
|---|---|---|---|---|
| 2011 | 336 | 20.0 | 12.0 | 3.15 |
| 2012 | 353 | 18.2 | 11.5 | 3.30 |
| % change | +5 | -9 | -4 | +5 |
Ex-div: 15 Sep Payment: 15 Oct *Includes intangible assets of £154m, or 116p a share | ||||
