14th Mar 2019 08:48
LONDON (Alliance News) - Real estate investor Savills PLC on Thursday said its profit declined in 2018, hit by a range of factors, including a charge from the equalising of its guaranteed pension plan.
Shares in Savills were down 9.9% at 832.00p on Thursday morning.
Savills posted a pretax profit of GBP109.4 million for the year, down 2.7% from GBP112.4 million.
The company incurred a one-off charge relating to its pension plan of GBP3.1 million versus no such charge in 2017, which hurt profit.
Savills's profit also took a hit from a drop in transaction fees from its investment management business; negative currency movements; higher acquisition-related charges; and lower profits on investment disposals.
Employee benefits expense was GBP1.17 billion versus GBP1.06 billion in 2017 while other operating expenses increased to GBP473.3 million from GBP418.5 million.
However, revenue increased 10% to GBP1.76 billion from GBP1.60 billion.
Savills declared a final ordinary and supplementary interim dividends totalling 26.4 pence per share for the year, which takes the total dividend for 2018 up 3.3% to 31.2p per share from 30.2p per share.
Savills Chief Executive Mark Ridley said: "Savills delivered both revenue and underlying profit growth in 2018, driven by a robust second half of the year. In addition to maintaining or growing our share of transactional markets, the performance of our less transactional business lines was key to this performance."
Underlying profit, which is adjusted for exceptional items and non-operational items, was up 2.3% at GBP143.7 million from GBP140.5 million.
"We have made a solid start to 2019; however, the year ahead is overshadowed by macro-economic and political uncertainties across the world. It is difficult accurately to predict the impact of these issues on corporate expansionary activity and investor demand for real estate. At this stage, we expect to see declines in transaction volumes in a number of markets and growth in our less transactional business lines; accordingly we retain our expectations for the group's performance in 2019."
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