Savills has increased its full-year profit expectations and now expects to surpass 2019’s profit levels after seeing continued strong trade since June, particularly in the UK and Asia Pacific regions.
The London-based estate agent said it is likely to achieve profit “materially ahead of 2019” for 2021 after it saw positive trading trends continue into the second half of the year. It posted pre-tax profit of £115.6m in 2020, and £109.4m in 2019.
“As indicated with the interim results in August 2021, in the first half the Group experienced a strong period of trading, reflecting both the robustness and geographic diversity of our business and the strategy of maintaining staffing levels throughout the course of the pandemic,” Savills said.
Since June, the Group has not just continued to trade strongly, particularly in the UK and Asia Pacific regions, but the firm has also started to see the anticipated levels of recovery in continental Europe and the Middle East (“CEME”) and North America, albeit the latter regions have yet to return to 2019 levels of activity.
Savills Investment Management has continued to perform well, “somewhat ahead of expectations”, bolstered by the early exercise of the option to acquire the remaining interests in DRC Capital LLP and its strong performance since May.
Savills added: “The continued strength of UK prime residential markets has exceeded our expectations and the anticipated tapering of market volumes in our segments is now expected to take effect through 2022 rather than significantly affecting performance in H2 2021. This, together with better than anticipated improvements in the UK commercial capital transaction markets, indicates that for the financial year as a whole the UK business is likely to materially exceed both our earlier expectations for 2021 and the outturn for 2019. We also expect outperformance in the Asia Pacific region on both bases.
“In addition to improved trading, the Group has benefited from a continuation of lower than normal levels of discretionary expenditure which is expected to continue through the remainder of the year. We anticipate that this expenditure will progressively increase through 2022.
“In summary, strong trading conditions in a number of our businesses and largely non-recurring cost savings indicate that, subject to the impact of further COVID related lockdowns and the pace of transaction execution in this final quarter, the Group is likely to achieve overall profits materially ahead of 2019 for the current year, before a resumption of more normalised trading and cost dynamics in 2022.”
Comments (2)
Group experienced a strong period of trading, reflecting both the robustness and geographic diversity of our business and the strategy of maintaining staffing levels throughout the course of the pandemic,” Savills said.
Look after your staff and your staff look after you. They are now in a strong market with good staff. All those companies who furloughed staff and paid them the minimum required lost a lot of good staff. Now you cannot recruit any, who wants to work for a company who does not look after thier staff? Savills are a class act and will strengthen because the good people want to work there. I bet Savills do not have a problem recruiting.
And don’t forget they repaid all furlough monies, the same as Knight Frank, Winkworth, Belvoir and others.
Connells, Hunters (now PFG), Foxtons have taken taxpayers money and paid dividends and bonuses.