Buoyant London sales push Savills to 177% jump in profits

A strong performance in the London housing market helped Savills to a 21% jump in revenue and a 177% leap in pre-tax profits.

The international real estate group said group revenue for last year was £677m. Profits before tax shot up to £36.8m from £13.5m the year before.

House sales revenue jumped 22% and underlying profits went up 13%.

In reporting its performance, Savills picked out the strength in the prime London residential and commercial markets, but also said that record performance from its activities in Asia Pacific represented 41% of group revenue during 2010.

But Jeremy Helsby, Savills group chief executive, warned: “In the near term, it is unclear how markets will react to the recent catastrophic events in Japan, particularly at a time of unprecedented global economic and political change.”

He said that although the “longer term potential of our Asian business remains compelling”, Savills is expecting to do less business in Asia during 2011.

Against that, he is predicting further growth for the prime London residential and commercial businesses.

He said: “Although it is impossible to be certain in current circumstances, we anticipate that any slowdown in Asia should be largely offset by improving performances elsewhere.”

Last year, residential transaction business jumped by 22% from £71.3m in 2009 to £86.8m, primarily as a result of strong performance in London and the Home Counties. Profits also soared by 13%, to an underlying profit of £13.3m last year.

Savills said the London market was ‘significantly’ influenced by overseas buyers, but that in the broader prime market, the availability of mortgage finance remained an obstacle.

The group also said that its new homes business had a ‘superb’ year, with revenues more than doubling as landmark developments such as One Hyde Park came to the market.

But Savills did lose money last year in its financial services business, where overall revenue declined 16% from £11.2m to £9.4m. It said this was largely due to the suppressed UK mortgage market.

Its financial services division recorded a £1.9m loss. However, this was a reduction on the £2.9m loss made in 2009.