Savills has reported a strong set of half-year results – boosted by a sharp increase in UK commercial transaction fee income and strong growth in Asia Pacific.
The company reported 15% growth in revenue to £714.4m and 12% growth in underlying profit before tax to £48.1m. The performance was aided by the weak pound – in constant currency, revenue grew by 7% and underlying profits by 5%.
However, UK residential transaction fee revenue dropped by 4% to £55m, which Savills blamed on lower volumes at the prime end of the market than in the equivalent period last year when investors were rushing to buy ahead of April’s stamp duty increase.
By geography, the best performing region was Asia Pacific where revenues surged by 26%, significantly ahead of UK (7%), continental Europe (14%) and North America (10%).
In Asia Pacific, significant growth in transaction markets, notably in Hong Kong, Japan and Australia boosted the numbers.
However, in North America underlying profits were down sharply (-62%) which Savills blamed on the costs of recruiting “a significant capital markets team in New York”.
Savills group chief executive Jeremy Helsby said: “Savills has delivered a great first half performance across the group driven, in particular, by strong growth in Asia and a resilient performance in the UK.
“In line with our overall growth strategy, we have continued to build on the Savills Studley platform in the US, particularly our capital markets business, with recruitment and incremental acquisition activity across the country. In addition, we have continued to invest in our Asian platform and, since the period end, in Europe we have announced the acquisitions of Larry Smith and Aguirre Newman, further strengthening our positions in Italy and Spain respectively.”
In a note to investors, analysts at Numis said the investments Savills was making positioned it well to continue to perform well.
“We have upgraded 2017 estimates slightly, although we think the risk remains on the upside,” said they said. “In our view, Savills is well placed to show further progress given its diversification by geography and end-market and the fact it is strengthening its business in the US and Europe through team hires and acquisitions.”