Savills confident as margins hold up

Profits and turnover both increased slightly in 2011 for international surveyor Savills, which employs more than 100 staff in Manchester.

Group pre-tax profit rose 9% to £40.0m in the 12 months to 31 December 2011. Turnover was up 7% to £721.5m. A total dividend for the year was proposed of 13.5p, up from 13p in 2010.

Patrick Joynson, head of Savills Manchester, said: "Despite a challenging market the Savills Manchester office has continued to maintain turnover and margins across its teams, whilst strategically strengthening departments where we see opportunities."

Jeremy Helsby, group chief executive, added in his statement to the stock exchange: "I am pleased to report a strong performance overall by Savills in variable global markets in 2011. Our positions in London and Asia, in both the residential and commercial markets, and a strong and growing non-transactional business provided the platform for this performance. Added to this, the relative recovery in our US business and strong profit growth in Cordea Savills enabled us to withstand the challenges in Continental Europe. We remain focused on reducing our losses in Continental Europe while at the same time supporting expansion in the core markets of France and Germany. Challenging markets can provide attractive expansion opportunities and we have been able to open additional offices in London, Germany, China, and the East and West Coast markets of the US.

"We continued to progress our strategy, investing in both our transactional and non-transactional businesses through targeted recruitment and selective acquisitions as well as developing our brand strength as leading advisers in the commercial and prime residential markets.

"2012 has started well albeit that we anticipate a continuation of challenging transaction market conditions in the first half, with greater market confidence emerging to improve financial performance during the second half of the year. We anticipate further recovery in the US, relative stability in the prime Central London Residential and Commercial businesses and continued growth in Fund Management. In Asia, we expect a somewhat reduced volume of transactions but the impact of this should be largely mitigated by further growth in China and in our non-transactional businesses across the region. In Continental Europe it is not yet possible to see through to a sustained recovery; however, assuming the macro-economic situation remains largely unchanged, we expect to improve performance in the region in the current year.

"Subject to unforeseen circumstances, we anticipate performing in line with expectations."

Shares in Savills slipped back 13p to 379p by 10.30am on Thursday. (LON:SVS)