Savills increases profits despite ‘geopolitical distractions’

The estate agency group Savills pushed up pre-tax profits by 1 per cent to £100m in the year to December despite what it called “geopolitical distractions” and higher property taxes in many parts of the world.

Savills said revenues were up 13 per cent to £1.4bn, helping underlying profit – which strips out costs related to acquisitions – to rise 12 per cent to £136m.

It proposes to pay 12 per cent higher dividends for the full year 2016, with the combination of ordinary and special payouts totalling 29p a share.

Jeremy Helsby, chief executive, said:

Overall, Savills delivered another record performance in 2016 despite the geopolitical distractions in some of our markets. We benefited from the scale of our operations across the globe, which have grown substantially over recent years, as well as a highly resilient performance in the UK.

Earnings grew especially strongly in Asia, where they were up 21 per cent to £486m, and Europe, where they rose 31 per cent to £171m; by contrast, the group’s home market of the UK generated 3 per cent higher revenues, at £578m.

The company said:

While investors globally have continued to increase their allocation to real estate in the search for secure income in a low interest rate environment, they have experienced a number of headwinds including material rises in property taxes in a number of markets.

The group said its expectations for 2017 were unchanged, despite a “more cautious view” of the UK market given the upcoming negotiations on the country’s exit from the EU.

Revenues from the UK residential business were down 3 per cent to £124m in 2016 as trading volumes were low in the periods before and after the June referendum on EU membership.