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Savills sees profits slump

Thursday, 28 August 2008 12:00 AM

Profits at luxury estate agent Savills have fallen significantly "reflecting weaker market conditions in the UK and Europe".

The agent made £19.2 million profit in the first half of 2008, down from the £33.2 million recorded over the same period in 2007 - a drop of 41 per cent.

This was based on revenue of £278.1 million for the six months to June 30th this year, compared to £284.2m in the first six months of 2007.

"2008 continues to be a challenging year for the real estate industry worldwide," said Peter Smith, chairman of Savills.

"However, we have delivered a robust set of figures as a direct result of creating a more balanced business.

"Our strategy over the past few years of reducing our dependence on transactional income by growing our consultancy, property management and fund management businesses has served us well in these unsettled markets."

The situation would have been more serious for the estate agent, but for robust trading in the Savills' Asian and non-transaction businesses.

Despite this, underlying basic earnings per share fell to 10p a share from 17.4plast year.

Interim dividends remain at 6p, the same figure as for 2007.

Savills explains prospects for the UK residential marker continues to depend on how quickly confidence returns to financial markets - which are currently showing no sign of improvement.

Conditions in Europe also remain challenging, as the impact of the credit squeeze is increasingly felt.

Chris O'Toole

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