Following a year when Savills (SVS) battled the twin challenges of political unrest in Hong Kong and uncertainty in the UK, the real estate services group warned that trading activity would be weighted towards the second half of the year as real estate investors and occupiers grapple with the uncertainties thrown up by coronavirus.
Yet despite a 14 per cent decline in transaction advisory adjusted operating profits, due to a decline in investment activity in Hong Kong, costs associated with developing the North American business and weaker UK residential transactions, the group put in a resilient performance.
The decision to grow the proportion of revenue earned from less transactional types of business meant the group was able to hold underlying pre-tax profits steady. Consultancy revenue rose 15 per cent and property and facilities management generated a 17 per cent increase, although the latter also contributed to the decline in the group’s underlying margin to 7.4 per cent, from 8.2 per cent the prior year.
Analysts at Numis forecast adjusted pre-tax profits of £140m and EPS of 76.1p for 2020, rising to £149m and 81p the following year.
| SAVILLS (SVS) | ||||
| ORD PRICE: | 914p | MARKET VALUE: | £ 1.31bn | |
| TOUCH: | 913-918p | 12-MONTH HIGH: | 1,268p | LOW: 809p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 351p* | NET DEBT: | 47% † | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)** |
| 2015 | 1.28 | 98.6 | 47.0 | 12.0 |
| 2016 | 1.45 | 100 | 48.8 | 14.5 |
| 2017 | 1.60 | 112 | 58.8 | 15.1 |
| 2018 | 1.76 | 109 | 56.2 | 15.6 |
| 2019 | 1.93 | 116 | 60.6 | 17.0 |
| % change | +10 | +6 | +0 | +9 |
| Ex-div: | 09 Apr | |||
| Payment: | 12 May | |||
| *Includes intangible assets of £419m, or 293p a share **Excludes special dividend of 15.6p in 2018 and 15p in 2019 | ||||
| † Includes lease liabilities of £267m | ||||
