Savills laps up buyers’ ‘drive for space’ as profits surge

Shares in high-end estate agency group Savills have jumped sharply today after the company posted strong profits and sales figures for the first six months of this year.

The FTSE 250-listed company is currently trading up 4.4 per cent or 51.00p to 1,211.00p on the stock market.

Driven by buyer demand for more space, the international firm raked in revenue of £932.6million in the six months to 30 June, which is £140million more than a year ago.

Pre-tax profit for the period came in £63.8million, up from £7.7million in the first half of last year, when the pandemic reached fever-pitch.

On the up: Savills saw pre-tax profit for the first half come in at £63.8m, up from £7.7m in the first half of last year

With buyers flocking to the market ahead of the end of the primary phase of the stamp duty holiday on 30 June, Savills saw its UK residential transaction activity reach record levels over the period.  

Revenues in this sphere surged by 97 per cent, with UK buyers’ ‘drive for space’ pushing activity up.

Savills also said it had seen ‘extraordinary’ demand for houses in the six months to 30 June in many of the markets it operates in.  

In the ‘second hand agency’ business, revenues stemming from the UK increased by 155 per cent, driven by both the weak comparative period in which lockdown all but eliminated the key 2020 Spring sales season, and the continuation of the ‘abnormally high level’ of post-lockdown activity which started in the second half of last year 

Savills said overall transaction volumes exchanged were up 131 per cent in London and 204 per cent in the regional markets.

The firm’s shareholders are also in line for a boost, with Savills upping its dividend to 34.6p a share, against 3.9p a share in the same period last year.   

Savills, which generates a hefty slice of its revenue from overseas and commercial property and consultancy operations, said the pace of recovery from the pandemic around the world was variable. 

It added: ‘In 2020, COVID-19 had a significant impact on investor and occupier activity as the pandemic spread across the world. H1 2021 saw commercial markets showing varying speeds of recovery from the pandemic, reflecting different local lockdown restrictions, rates of vaccination and international travel restrictions. 

‘Investor focus worldwide continues to be on logistics, residential and life sciences in particular, with improving sentiment towards other commercial sectors’.

Ideal: Buyer demand for more space and houses during the pandemic has given Savills a boost

Mark Ridley, the group’s chief executive, said: ‘In summary, the combination of strong trading in the less transactional service lines, improving transactional markets (including the completion of previously delayed transactions) alongside continued cost management, has resulted in a record first half performance for the Group.

‘Looking ahead, we expect some discretionary cost to start to normalise and certain of our markets to moderate in the second half of the year and, while pandemic risks continue including the current lock downs in a number of Asian markets, we are confident in the Group’s ability both to benefit from progressive recovery in transactional markets and to continue to execute our growth strategies.

‘Assuming no new material disruption the Board expects the performance for the year as a whole to be meaningfully ahead of its previous expectations.’

This post first appeared on Dailymail.co.uk