10th Mar 2016 08:30
LONDON (Alliance News) - Real estate advisor Savills PLC on Thursday recorded a surge in pretax profit, boosted by strong revenue growth from its US business.
Savills recorded GBP98.6 million pretax profit for the year ended December 31, 16% higher than GBP84.7 million in 2014, after revenue came in at GBP1.28 billion, up 19% from GBP1.08 billion in 2014.
Savills recommended a final dividend of 8.0 pence per share, meaning total dividend for the year will be 26.0 pence per share, up from 23.0p for 2014.
Savills said the strongest revenue growth was in its US business Savills Studley, where it completed three bolt-on acquisitions in the year. As such, US revenue was up 71% to GBP192.5 million from GBP112.3 million in 2015.
However, its UK residential business saw revenue decline by 1.0% to GBP127.9 million, due to weaker resale volumes and tax changes in the UK government's 2014 Autumn Statement. However, Savills said overall it saw growth in its UK business coming from increased revenue within its commercial business, up 17% to GBP98.8 million.
Savills added its Asia Pacific business had shown resilience in the face of changeable markets over the year, but cautioned this division could take a hit over 2016, particularly in the tier two Chinese cities. Savills added it also expects trading in the UK residential and commercial markets to be subdued in the run up to the UK referendum over EU membership, and as Stamp Duty reforms take effect.
"We have made a good start to 2016 with a solid pipeline of business carried over from last year in many markets, although the impact of global macro-economic and political concerns on real estate markets worldwide is uncertain," said Jeremy Helsby, chief executive.
"However, the strength of our enlarged US operation, the increased size of our investment management, property management and consultancy businesses and the breadth of our UK business together with further improvement in Continental Europe, all bode well for the future of our company. Accordingly, the board's expectations for the year as a whole remain unchanged," Helsby added.
Shares in Savills were up 7.3% at 705.00 pence on Thursday, the best performer in the FTSE 250.
By Hannah Boland; [email protected]; @Hannaheboland
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