High-end agency and international property consultancy Savills has reported strong half-year figures for its UK business - but warns that Brexit makes it difficult to predict how the rest of 2018 will perform.
“UK residential transaction business grew both revenue and profit during the period” says its statement to the City, released at 7am.
"In the face of some challenging market conditions, Savills has delivered a resilient first half performance reflecting our geographic diversity, breadth of operations, recent business investment activity and the strength of our UK residential business” says Jeremy Helsby, Savills’ group chief executive.
Savills says its residential transaction divisions in the UK saw revenue grow 6.0 per cent to £58.2m.
“In the second hand agency business, revenues benefited from a growth in our average sales value, offsetting a fall in the number of exchanges. Savills overall transaction volumes were down by seven per cent in London and 10 per cent in the regional markets; however the average value of London residential property sold by Savills in the period was up 16 per cent to £3.2m and regionally up 3.0 per cent to £1.2m” says the company.
Its new development sales revenue increased 17 per cent; the growth in average transaction value was 9.0 per cent together with a 10 per cent increase in the number of units reserved during the period.
However, it warns: “Ongoing political and economic uncertainty created by the negotiations to leave the EU make it difficult to predict market volumes for the rest of the year.”
Underlying profits in the UK residential transaction business increased by 17 per cent to £6.3m.
Savills’ higher-level figures reflect its operations across commercial and consultancy sectors as well as residential, and its presence across the world as well as in the UK.
Its group revenue for the six months to the end of June was up 2.0 per cent to £727.8m although group pre-tax profit was down 18 per cent to £26.7m.
“In line with our overall growth strategy, we have continued to invest across the business, which has affected profits in the short term” continues Helsby.
“During the period we completed the acquisition of Cluttons Middle East, providing Savills a strategic platform for growth in this region. In addition, in the UK we further enhanced our leading property management platform announcing the acquisition of the third party property management portfolio of 'Broadgate Estates' from British Land.
“Continued growth in our less transactional businesses, significant overseas earnings and strong shares in many of our most important transactional markets position Savills well to weather fluctuations in markets and to capitalise on the opportunities which we expect to emerge over time.
“We have a robust pipeline of activity for the second half, despite an environment of escalating political and economic uncertainty, and we continue to anticipate that our performance for the full year will be in line with the Board's expectations."