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Savills profits tumble 18% as Brexit creates uncertain outlook

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  • 09/08/2018
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Savills profits tumble 18% as Brexit creates uncertain outlook
Savills has reported an 18% drop in year-on-year profits in the first half of 2018, as the group faces challenging economic and political conditions.

 

The estate agent’s profit before tax fell to £26.7m in the six months to the end of June, compared with £32.4m a year earlier.

Group revenue edged up 2% year-on-year to £727.8m.

In the UK, the estate agent’s revenue and profit increased, but a slowdown in the commercial market impacted performance, as investment volumes fell.

Revenues were helped by growth in the average sales value in the residential market, offsetting a fall in the number of exchanges, Savills said.

Overall transaction volumes were down by 7% in London and 10% in the regional markets.

 

Warning for overseas investors

The estate agent said weaker sterling and relatively higher yields have maintained overseas investor interest in UK real estate – but warned rising interest rates could dampen activity.

Savills added that ongoing political and economic uncertainty created by Brexit negotiations make it difficult to predict market volumes for the rest of the year.

Jeremy Helsby, group chief executive at Savills, said: “In the face of some challenging market conditions, Savills has delivered a resilient first half performance reflecting our geographic diversity, breadth of operations, recent business investment activity and the strength of our UK residential business.

“In line with our overall growth strategy, we have continued to invest across the business, which has affected profits in the short term.

“Continued growth in our less transactional businesses, significant overseas earnings and strong shares in many of our most important transactional markets position Savills well to weather fluctuations in markets and to capitalise on the opportunities which we expect to emerge over time.

“We have a robust pipeline of activity for the second half, despite an environment of escalating political and economic uncertainty, and we continue to anticipate that our performance for the full year will be in line with the board’s expectations.”

Estate agents Foxtons and Countrywide both reported a loss for the first half of 2018.

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