Savills has revealed relatively strong figures for 2016 in its report to the City this morning, with group revenue up 13 per cent, pre-tax profit up one per cent, and “improved performance” for its residential activities.
Savills has highly diverse activities, operating around the world as well as in the UK and conducting more commercial property business than residential.
However, it is heavily exposed to the central London residential market which until recently has been highly volatile, unnerved by Brexit and stamp duty concerns for purchasers of high value properties.
Revenue in the firm’s UK residential business dropped by three per cent to £124.4m after a busy early 2016 - thanks to the rush of buyers beating the stamp duty deadline - but quieter trading for the rest of the year.
The firm says its strength in the top end of the residential market benefited from the weakness of Sterling after the EU Referendum; even so, London transactions fell five per cent. However, outside London the agency experienced a seven per cent increase in exchanges year-on-year. Revenue from sales of new homes continued to increase during the year, ending up seven per cent on 2015.
“Our average selling price in London increased slightly to £2.9m (2015: £2.8m) primarily as a result of the weighting effect of an increase in sales of properties over £20m year-on-year. Meanwhile, outside London our average selling price remained unchanged at £1.1m” says this morning’s statement.
“Management and the resilience of our residential businesses led to an improved performance for Savills in 2016” it concludes.
“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” says chief executive Jeremy Helsby.
“We entered 2017 with a continuation of global macro-economic concerns, rising bond yields, uncertainty over the impact of Brexit negotiations in the UK and Continental Europe and a new administration in the US” he continues.
“Savills is a strong and diverse global firm and we continue to look at opportunities to develop our business. We have started the year well and our expectations for the full year remain unchanged.”