Savills PLC Year End Trading Update (1290Y)
January 12 2022 - 2:00AM
UK Regulatory
TIDMSVS
RNS Number : 1290Y
Savills PLC
12 January 2022
12 January 2022
SAVILLS PLC
("Savills" or the "Group")
Year-End Trading Statement
Full year performance very significantly ahead of expectations -
FY22 outlook currently unchanged
Savills plc, the global real estate advisor, publishes the
following trading statement in respect of the year ended 31
December 2021.
Since the trading update on 9(th) November 2021, the Group has
experienced an extraordinarily strong final trading period,
particularly in the UK and Asia Pacific regions alongside improved
performances in Continental Europe and the Middle East ("CEME") and
North America; both of which have more than eliminated the losses
of 2020. All Savills businesses have exceeded their forecasts
notwithstanding the impact of renewed pandemic-related restrictions
in many locations. In particular, commercial capital transactions
and Prime Residential Agency experienced much stronger completion
volumes than previously anticipated. Our Less Transactional
businesses have also outperformed their previous expectations.
In addition, as previously disclosed, the Group has benefited
from substantially lower levels of discretionary expenditure in
respect of travel, entertaining and marketing events in particular.
These are expected to revert to more normal levels over the course
of 2022.
As a result of this strong trading performance coupled with the
benefit of abnormally low levels of discretionary expenditure, the
Group expects Underlying Profit Before Tax ("UPBT") for 2021 to be
very significantly ahead of the upper end of its previous range of
expectations.
Despite the backdrop of pandemic-related uncertainty in 2021,
the UK performed exceptionally well across all business lines.
There were notably strong performances from the Transactional
Business lines, albeit Commercial office leasing volumes remained
below historic averages in the majority of markets. Savills'
strengths in both logistics and retail warehousing, both of which
enjoyed significant volume increases year-on-year, also contributed
to our overall outperformance. The UK prime residential market
continued to perform exceptionally strongly through the last
quarter and volumes in the Prime Central London market clearly
began to improve. Currently there is a definite shortage of sale
stock, so despite outperformance in 2021, our expectation of a
moderation of activity in 2022 remains intact.
Our commercial investment activities benefited from significant
increases in trading volumes, indeed the last quarter of 2021 saw
volumes in EMEA exceed the five year average. This was partly due
to an unwinding of pandemic driven delays as capital, which would
ordinarily have been invested earlier, but for pandemic-related
uncertainty, was increasingly deployed through 2021.
Our Asia Pacific business as a whole performed well ahead of our
expectations. Hong Kong sales activity and market share remained
strong through the period and Australia, Singapore and Japan also
enjoyed strong trading activity in the final quarter.
Savills Investment Management outperformed its expectations with
the benefit of the acquisition of DRC Capital from the end of May
in strong markets for real estate debt investment, together with
new fund launches and strong investment performance from the
majority of our products. The latter in particular gave rise to
higher than anticipated performance fees in the final quarter.
Looking to the year ahead, the Group's previous expectations
remain unchanged at this early stage. Inflationary pressures in
many markets will result in employment costs increasing at the
highest rate for many years and we anticipate that discretionary
costs will progressively normalise. In respect of trading revenues,
at this stage, we anticipate some normalisation of commercial
capital transaction volumes and a moderation of levels of activity
in some residential markets, particularly in the UK.
Savills intends to report 2021 full year results on 10 March
2022.
This announcement contains inside information. The person
responsible for arranging for the release of this announcement on
behalf of the Company is Chris Lee, Group Legal Director &
Company Secretary.
For further information, contact:
Savills 020 7409 8934
Mark Ridley, Group Chief Executive
Simon Shaw, Group Chief Financial Officer
Tulchan Communications 020 7353 4200
Elizabeth Snow
Mark Burgess
Forward looking statements
Certain statements in this announcement are forward-looking
statements relating to the Group's operations, performance and
financial position based on current expectations of, and
assumptions and forecasts made by, management. They are subject to
a number of risks, uncertainties and other factors which could
cause actual results, performance or achievements of the Group to
differ materially from any outcomes or results expressed or implied
by such forward-looking statements. The Group's principal risks are
described in the 2020 Savills plc Annual Report which can be viewed
online at http://www.savills.com . Such forward looking statements
should therefore be construed in light of such risks, uncertainties
and other factors and undue reliance should not be placed on them.
They are made only as of the date of this announcement and no
representation, assurance, guarantee or warranty is given in
relation to them including as to their accuracy, completeness, or
the basis on which they are made. No obligation is accepted to
publicly revise or update these forward-looking statements or
adjust them as a result of new information or for future events or
developments, except to the extent legally required. Nothing in
this Statement should be construed as a profit forecast.
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END
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