Property adviser Savills said in a trading update on Wednesday that it expects underlying profit before tax for 2008 will be significantly below analyst forecasts as the company had to contend with increasingly challenging markets in the past few months.
Property adviser Savills said in a trading update on Wednesday that it expects underlying profit before tax for 2008 will be significantly below analyst forecasts as the company had to contend with increasingly challenging markets in the past few months.
'Whilst some deals are completing, we are not seeing the seasonal pick-up in activity we have grown to expect,' the company said, adding: 'Many pipeline transactions, which were at an advanced stage, have either been delayed or are not proceeding.'
Savills said that while its UK Residential, UK Commercial and Asian businesses are performing as expected during the last quarter of 2008, its businesses in Europe and the US as well as its mortgage broking business have experienced a significant fall-off in expected 2008 volume mostly due to their high degree of dependency on transaction levels. Furthermore, its Consultancy businesses are continuing to trade well but are starting to see the effects of the challenging market conditions with a slowdown in new instructions. The Fund Management division is benefiting from contracted revenue streams but, given the current economic climate, fundraising during the year has been modest and transaction fees have been lower than planned. Financial Services, which is predominantly UK Mortgage broking, has seen market conditions deteriorate further.
'A return to higher levels of transactional activity will depend on how quickly confidence returns to financial markets. The steps that we continue to take to reduce costs and our successful strategy of reducing dependence on transactional income will continue to serve us well in these uncertain times,' it concluded.
