Global real estate services provider Savills plc (LON: SVS) saw its profits dip during the first half of 2019, despite seeing Group revenue jump on a year-on-year basis.
The Company reported a 16% growth in first half group revenue, up 16% to £847.0 million. Despite this, its underlying profit for the period dipped 12% on constant currency, down £4 million to £38.4 million (£1.6 million relating to implementation of IFRS 16). Group profits before tax dipped 7% to £24.7 million.
Though ahead of market trends, UK Residential sales volumes were down 1.5%, however Letting revenues grew 26%. Further, Savills Investment Management revenue rose by 20% and Facilities Management revenue jumped 27%.
Commenting on the results, Mark Ridley, Group Chief Executive, said,
“Given the lag effect of significant investment in recruitment in the preceding period and facing some challenging transactional market conditions, we had anticipated a slight decline in profits for the first half of 2019. The Group has delivered a resilient first half performance reflecting both the robustness and geographic diversity of our market positions generally, and the strength of our less transactional businesses.”
“In many markets, particularly the UK and Hong Kong, political and economic uncertainty has considerably reduced the volume of real estate trading activity in recent months, although occupier demand remains robust. Underlying demand for the secure income qualities of real estate remains high, but these macro uncertainties weigh on investor sentiment and make predictions in respect of near term market activity difficult to determine with accuracy. Continued investor demand, restricted supply and expectations of continued low interest rates suggest that, if political clarity emerges, the medium and long term dynamics of the real estate markets in which we operate remain positive.”
“Despite this environment, we have a robust pipeline of activity for the second half, and we currently continue to anticipate that our performance for the full year will be in line with the Board’s expectations.”
The Company’s shares are down 1.90% or 18.00p to 929.50p 08/08/19 13:31 BST. Peel Hunt reiterated their ‘Hold’ stance on Savills stock. The Group’s p/e ratio stands at 12.18, their dividend yield is 1.68%.
Elsewhere in property development and estate agency news, there have been updates from; Bellway plc (LON: BWY), Tritax Big Box REIT PLC (LON: BBOX), Belvoir Group PLC (AIM: BLV), Intu Properties plc (LON: INTU) and LSL Property Services plc (LON: LSL).