Savills’ profit up on business growth

Consultancy Savills reported a 5.7% rise in pre-tax profit for 2019, driven by an uptick in its UK operations including in the North West.

James Evans, head of Savills Manchester, said: “Just as Manchester continues to grow, so does our office and, with more than 240 colleagues based in the city, we are delighted to have contributed to these robust results.”

Charlie Kannreuther, head of residential sales at Savills in the North West & West Midlands, added: “Growing market share proved to be the key to another successful year in the region.

“Our Cheshire residential offices performed particularly well despite the ongoing backdrop of political uncertainly.

“This highlights the generally strong confidence in the housing market in the region.”

Savills’ profit before tax rose to £115.6m for the year ended 31 December, compared with £109.4m in 2018, it said in a stock exchange filing today.

Group revenue up was up 10% to £1.93bn, driven by strong performance in the company’s less transactional business lines.

These include property and facilities management and consultancy work, which together accounted for 57% of total revenues in 2019 and saw a 16% revenue hike.

Savills, along with JLL, is marketing the sale of Manchester’s Renaissance Hotel

Meanwhile, Savills’ UK residential division grew its revenues by 6% year-on-year, “outperforming the overall decline in the UK real estate market”, the company said.

A late pick-up in project volumes at the end of the year, reported by Savills in its year-end trading update in January, helped to offset previous market sluggishness related to Brexit, and political unrest in Hong Kong.

Mark Ridley, Savills’ group chief executive, said: “[The firm] delivered a good performance in 2019 in some challenging market conditions.

“This reflects the strength and resilience of our global, diversified business as we continued to grow our less transactional service lines and outperform in many of our transactional markets.

“We continue to focus on growing our less transactional businesses, increasing our share of the global transactional markets and enhancing the resilience of the business.”

“While we continue to monitor the impact of global uncertainties on investor and occupier demand for real estate, we have made a good start to 2020 with the first two months outperforming the same period last year on all measures.”

It is “difficult to predict accurately” the likely impact of the global coronavirus outbreak on Savills’ business in 2020, he added, “although we do expect a greater weighting of activity to the second half of the year.”