Savills sees Continental European losses narrow

Savills, the UK-listed advisory firm, saw losses at its continental European operations narrow by 14% in the first half of 2012 to £3.5 mln from £4.7 mln in the year-earlier period. However, revenue was up 8% at £31.6 mln thanks to higher income from advisory fees in the Netherlands, Ireland and Paris. Continental Europe currently accounts for just under 10% of total revenue.

At group level, Savills saw pre-tax profit fall 9% to £18.2 mln on revenue up 5% at £353.3 mln. The revenue increase reflected strong growth across the company’s non-transactional businesses, offsetting a fall in earnings from advisory fees. Transaction advisory revenues were down 4% overall following lower volumes in Asia Pacific and the UK (excluding Central London). Non-transactional businesses now account for over 60% of group revenues and profits.

Commenting on the results, Group CEO Jeremy Helsby attributed the better-than-expected first-half performance to the continued growth of the company’s consultancy and property management businesses around the world and the strength of its businesses in the UK and Asia Pacific. ‘In addition, despite the continued deterioration of European transaction markets, we have materially reduced losses in our Continental European businesses whilst continuing to invest in our core teams.’

For the second half, Helsby said he saw ‘no material change’ in the overall outlook for the business. ‘In Asia, we anticipate an improvement in activity levels in our principal markets. In the UK, the combination of the seasonal summer quiet period and the London Olympics means that it is still too early to predict the trading environment from September onwards. In Continental Europe, we expect transaction markets to remain unsettled in core markets and very subdued in southern Europe. In the US, we have a healthy pipeline of business.’