Shares in Savills lifted yesterday after it announced a 21% rise in pre-tax profits to £60.8m last year.
The 25,000 staff worldwide will now share a bonus pool of over £100m.
Globally, group revenue was up 12% to £806.4m, with growth driven by the group’s performance in Asia Pacific, the UK residential market, and an improved share of prime central London’s commercial market.
A highlight of the year was Savills’ sale of the Fitzroy Place development in central London to rich foreigners in a two-day selling frenzy.
The scheme, on what was the Middlesex Hospital in Mortimer Street which lies off Regent Street, has 237 luxury apartments where prices go up to £12.5m and even a parking bay costs £75,000. The scheme will not be finished until next year.
The firm says it enjoyed its largest volume of sales in just one weekend, marketing the development to buyers in Hong Kong and Singapore. It is understood that around half of the apartments sold before being offered to British buyers.
However, the group’s results for last year do refer to clear difficulties in the UK housing market, with availability of mortgage finance particularly cited. The UK residential business as a whole brought in £97m revenue, up from £95m, with little change in underlying profits at £14.7m, just below the £14.8m made in 2011.
UK residential exchanges were up 2% on the year before, but volumes in the central London market were down 7% because of last year’s changes in the Budget to Stamp Duty. Savills’ sales volumes in London were 25% below their 2007 peak.
Transaction volumes in the country were up 5% year on year, but the real star was the new homes market, where Savills saw a “significant” increase in transactions.
Savills also revealed some UK job losses, having merged its UK residential and commercial businesses on January 1 when Savills (L&P) Ltd and Savills Commercial Ltd became Savills (UK) Ltd. The merged entity is trading as Savills.
The two head offices are to be taken into one new one, in Margaret Street, London, in mid-May, with the building currently being fitted out.
The group says the benefits of the merger are “more associated with client service improvements than with cost savings”. However, the move will rationalise the firm’s leases in the UK and has “eliminated a small number of duplicated support roles”.
Jeremy Helsby, group CEO, said: “Our positions in both prime commercial and residential markets have enabled us to benefit from improving transaction volumes through 2012, particularly in the final quarter in Asia and the UK.
“We have reduced the losses in Continental Europe and our Investment Management business grew assets under management substantially.
“The changes we have made to our business over the last few years, including acquisitions, recruitment and restructuring, have improved the group’s underlying profit margin.
“We have made a strong start to 2013, particularly in the UK and Asia, and we expect to make further progress across the group in the year ahead.”
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