Asked if Savills expected its first-half 2011 to be broadly
flat against the same period in 2010, Chief Financial Officer Simon Shaw told
Reuters: “I think that’s probably as fair a position as you can take.”
“The concerns we are looking at ahead are really coming in
this fourth quarter. Until we’ve lived through them we can’t make a more precise
call thereafter,” he said.
Releasing its results for the six months to June 30, Savills
foreshadowed a flattening of the economic rebound in many countries as it
booked both stronger group revenue and underlying profit before tax.
“The Chinese government’s desire to contain overheating in
the residential market, continued concerns over economic growth in many
countries and prolonged low levels of debt availability indicate that the
recovery is likely to flatten off during the coming months,” Chief Executive
Jeremy Helsby said.
Savills had maintained a cautious outlook for the second
half of 2010 since the last quarter of 2009, and saw no reason to change that
given the lingering uncertainties.
“What we’re saying today is, ‘We’re still going to be
performing we think pretty reasonably, but we will not be performing as well as
we did in the second half of 2009,’” CFO Shaw said.
By 0939 GMT Savills shares fell 4.3 percent to 314.6 pence.
In a note to clients brokerage Numis described Savills
results as strong, upping its rating on the shares to ‘add’, while retaining
its 368 pence target price.
Numis said it saw “scope for further upgrades as we track
the level of activity in the UK and Hong Kong specifically, as well as
transaction volumes in other markets.”
Savills booked group revenue of £304.4 million ($469.4
million) for the first half, up 23 percent from the same period a year ago.
Group underlying profit advanced to £17.2 million from £2.5 million.
“We have had a strong first half particularly through the
recovery of transaction markets in the UK and Asia Pacific, which are core to
the group’s success,” Helsby said.
“At the same time we have substantially reduced losses in
the continental European business and are seeing some improvement in the US
market.” Savills transaction advice business saw revenues rise 57 percent to £116.6
million, helping it swing to an underlying profit before tax of £9.4 million from
a loss of £7.6 million a year earlier.
Its property and facilities management saw revenue rise 8
percent to £113.7 million, although underlying profit before tax fell 1 percent
to 7.1 million.
Savills said it would pay an unchanged interim dividend of 3
pence a share.