REG - Savills PLC - Final Results
10/03/2022 07:01
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RNS Number : 2714E Savills PLC 10 March 2022
10 March 2022
Savills plc
("Savills" or "the Group")
PRELIMINARY RESULTS FOR THE FULL YEAR ENDED 31 DECEMBER 2021
RECORD REVENUE AND PROFITS RESULTING FROM EXTRAORDINARILY STRONG TRADING
RECOVERY.
Savills plc, the international real estate advisor, today announces its
preliminary results for the year ended 31 December 2021.
Key financial highlights
· Group revenue up 23% to £2.15bn (2020: £1.74bn)
· Underlying* profit before tax up 107% to £200.3m (2020: £96.6m)
· Reported profit before tax up 120% to £183.1m (2020: £83.2m)
· Reported basic earnings per share ('EPS') up 114% to 104.9p
(2020: 49.0p)
· Aggregate dividend of 55.4p to be paid in May 2022, includes a
one-time special dividend of 27.05p
· Net cash** £340.7m (2020: £177.7m)
* Underlying profit before tax ('underlying profit') is calculated on a
consistently reported basis in accordance with Note 3 to this Preliminary
Statement.
** Net cash reflects cash and cash equivalents net of borrowings and
overdrafts in the notional pooling arrangement (see Note 8).
Key operating highlights
· 2020's strategy of maintaining full operating strength and high levels of
client service positioned the Group well for the progressive recovery in 2021.
· Transactional Advisory revenues up 34% in recovering markets; Commercial
Transaction revenue increased 35% overall with strong growth in the UK and
Asia Pacific. Residential Transaction revenue up 31%.
· Less transactional businesses, in aggregate 58% of Group revenue, continue
to perform well with revenue up 17%.
· Property and Facilities Management revenue up 9%, Consultancy revenue up
24%.
· Savills Investment Management revenue up, driven by base management fees
growth of 30%. Assets under Management ('AUM') up 22% at €25.8bn.
· The Group entered a significant strategic partnership between Savills
Investment Management and Samsung Life Insurance ('SLI') to accelerate the
future growth of the Savills Investment Management business.
· Continued investment in people, technology leadership and innovation in
sustainability including the launch of Savills Earth consultancy services.
Commenting on the results, Mark Ridley, Group Chief Executive, said:
"Savills delivered a record performance in 2021 reflecting the significant
recovery in both residential and commercial transactional markets supported by
growth in our less transactional Investment Management, Property Management
and Consultancy businesses.
The war in Ukraine has shocked the world and, in response, Savills is
providing support both through international charities and via our Polish
operation, focussing particularly on Ukrainian refugees. Our thoughts are with
everyone affected in the region and we can only hope for a peaceful resolution
as quickly as possible.
At this stage it is too early to predict the economic, including longer term
inflationary, impact of the Ukrainian crisis on the world's real estate
markets. Subject to this key uncertainty, we would anticipate real estate
transaction volumes and discretionary spend to normalise in the year ahead,
alongside the continued recovery of global markets as they emerge from
pandemic-related disruptions.
The Group has started 2022 in line with our expectations and the strength of
our balance sheet supports our growth strategy to pursue further complementary
acquisitions and significant recruitment across our global business."
The analyst presentation will be held at 9.30am today by webinar. For
joining instructions please contact nrichards@savills.com. A recording of the
presentation will be available from noon at www.ir.savills.com
(http://www.ir.savills.com/) .
For further information, contact:
Savills 020 7409 8934
Mark Ridley, Group Chief Executive
Simon Shaw, Group Chief Financial Officer
Tulchan Communications 020 7353 4200
Mark Burgess
Elizabeth Snow
Chairman's statement
The Group experienced an extraordinarily strong trading recovery in 2021,
resulting in record revenue and profits.
Results
The Group's revenue increased by 23% to £2.15bn (2020: £1.74bn), with strong
trading in the last quarter of the year led by the UK and Asia Pacific
regions. Both Continental Europe and the Middle East ('CEME') and North
American regions recovered to reverse 2020's losses delivering better than
expected profits for 2021. With more than half of the revenue growth from the
Transaction Advisory business, and reduced levels of discretionary
expenditure, underlying profit for the year substantially increased by 107% to
£200.3m (2020: £96.6m), reflecting a margin of 9.3% (2020: 5.6%). The
Group's reported profit before tax increased by 120% to £183.1m (2020:
£83.2m).
Overview
Savills delivered a record revenue and profit performance in 2021, reflecting
both the robustness and geographic diversity of our business and the strategy
of maintaining staffing levels throughout the course of the pandemic. Overall,
our Transaction Advisory revenue increased 34%, our less transactional
businesses of Consultancy and Property Management grew revenue by 24% and 9%
respectively. The UK Residential Transaction Advisory business delivered a
record performance with a revenue increase of 38%.
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
extremely strongly and volumes in the Prime Central London market clearly
began to improve through the last quarter of the year.
In Asia Pacific, the business as a whole had a good finish to the year. Hong
Kong sales activity and market share were strong and Australia, Singapore and
Japan also enjoyed strong trading activity in the final quarter. In both CEME
and North America the increase in transaction volumes resulted in profits in
both regions for the year. Commercial Transaction revenues increased 27% and
28% year-on-year in CEME and North America respectively.
Savills Investment Management outperformed expectations, as a result of new
fund launches and strong investment performance from the majority of our
products, together with the benefit of the acquisition of DRC Capital LLC
('DRC') from the end of May in attractive markets for real estate debt
investment. Capital raising and deployment were robust following the cautious
approach adopted across the markets during the pandemic. A number of new funds
successfully launched during the year and Assets Under Management ('AUM')
increased 22% to €25.8bn (2020: €21.1bn).
The increase in transaction volumes, alongside substantially lower levels of
discretionary expenditure (travel, entertainment and marketing events all
remained severely curtailed), resulted in an increase to the Group underlying
profit margin to 9.3% (2020: 5.6%).
The impact of the above factors on the Group underlying profit margin
delivered an increase in reported profit before tax of 120% to £183.1m,
representing an 8.5% reported pre-tax profit margin (2020: 4.8%).
Currency movements in the year decreased revenue by £49.8m, underlying profit
by £4.1m and reported profit before taxation by £3.2m.
Impact of COVID-19 and war in Ukraine
The real estate sector has shown resilience in the face of the pandemic.
Global real estate investment volumes substantially recovered during the year,
with volumes 59% higher than 2020. Office investment remains below
pre-pandemic levels, however volumes in the highly sought-after industrial
sector were up 61% on 2019 levels. Residential became the largest sector for
investment globally during 2021, with investors attracted to its secure,
income generating qualities.
Globally, office leasing volumes have been the slowest transactional segment
to recover as Corporate Occupiers assess both return to work strategies for
their staff and, increasingly, the Environmental, Social and Governance
('ESG') impact of their leasehold estates.
The UK housing market performed strongly in 2021, delivering double digit
house price growth and the highest level of transactional activity since 2007.
The prime housing markets performed particularly strongly with activity levels
remaining buoyant even after the end of an extended stamp duty holiday,
despite reduced levels of publicly marketed stock during the second half of
the year. Prime transactions were more heavily weighted to the markets beyond
London, as buyers continued to reassess their housing needs in the search for
space.
In the Asia-Pacific region, investors were resilient in the face of varied
pandemic-related restrictions and geopolitical concerns in 2021 with an
estimated 30% rise in volumes compared with 2020. In many countries which
experienced significant lockdowns, real estate markets appear to have learned
how to manage on a "business as usual" basis.
In Europe, there was also a strong rebound in European commercial and
residential investment volumes in 2021 despite the ongoing pandemic-related
disruptions. European investment volumes reached an apex during the final
quarter of 2021, marking a 25% jump in volumes on the past 5-year average.
In North America, corporate office leasing markets improved during the period,
which became increasingly apparent in the last quarter of 2021. The tech and
life science sector continues to lead demand as the five prominent American
tech giants expanded in key talent hubs with buildings that will incentivise
in-office employee collaboration and satisfaction, even as hybrid work
policies remained largely in force. Demand for industrial space also continued
at a record pace and average vacancy has reduced to 4.5% across the US.
It is too early to predict the impact of the crisis in Ukraine on the world's
real estate markets. Savills derives immaterial revenues (<0.1%) from
clients of Russian origin and we have suspended our long- standing franchise
relationship with an agency in Moscow. The Group does not have operations in
Ukraine.
Sustainability in real estate
Decarbonising the real estate sector is an urgent and pressing need; a
challenge that COP26 highlighted. Consequently, ESG considerations are
increasingly defining both investor and occupier decisions. In Europe, ESG is
already actively shaping the assets and geographies in demand, a trend set to
spread globally over coming periods. Throughout the period, Savills engaged
our in-house sustainability expertise to audit the Group's footprint and
recommend the strategy for progressing to net Zero. The 2021 Annual Report
contains the Group's first report under the Task Force on Climate-Related
Financial Disclosures ('TCFD') framework. In summary, we have achieved
significant reductions in Scope 1 and 2 CO2 emissions since 2016, which
represented 6,738 tonnes CO2e in 2021. We are committing to Science-Based
Targets to deliver our goals, consistent with a no greater than 1.5°C
temperature increase, of achieving Scope 1 and 2 net zero by 2030 and net zero
in our value chain (i.e. Scope 3, including assets under the Group's control)
by 2040.
Business development
Savills strategy is to be a leading multi-sector property advisor in the key
markets in which we operate. Our global strategy is delivered locally by our
experts on the ground with flexibility to adapt quickly to changes in
circumstances and opportunities. They are supported by our global cross-border
investment, residential and occupier services specialists. Over the last few
years we have acquired a number of complementary businesses and added teams
and individual hires to our strong core business.
During the pandemic, the Group has continued to focus on strategic development
of the business, which has been enabled by the Group's strong balance sheet.
In the first half of the year, Savills Investment Management completed the
accelerated acquisition of the outstanding 75% of DRC Capital (a related
party), the specialist European Real Estate Debt Investment Manager.
In December 2021, the Group entered a significant strategic partnership
between Savills Investment Management and Samsung Life Insurance ('SLI') to
accelerate the future growth of the Savills Investment Management business.
The Group sold an initial 25% stake in the Savills Investment Management
business to SLI for consideration of £71.7m (of which £63.7m was received on
completion). SLI, in turn, is committed to investing in excess of US$1bn into
Savills Investment Management products over the initial five year term of the
relationship.
Earlier in the year, the Group acquired T3 Advisors, a leading Real Estate
advisor in the Life Science and Technology sectors in North America. In Q4 we
enhanced our Asia Pacific project management and real estate consulting
capabilities through the acquisition of 60% of the Merx Group of companies
headquartered in Singapore. The Group also further strengthened our market
leading position in Spain by acquiring a largely retail property management
business.
Since the end of the year, the Group has also entered into a business venture
with leading Berlin-based real estate agent Thomas Zabel as part of our
expansion strategy in the European residential market.
In addition to the acquisitive growth in our business, we continue to
undertake organic growth initiatives across the platform, with significant
recruitment across all our regions, with particular focus on North America,
Greater China and CEME.
Focus on technology
Technology continues to be an important focus for the Group, and we benefit
from the investments we have made both internally and externally, through
Grosvenor Hill Ventures (our technology investment subsidiary).
Across the Group data-led insight continues to help us solve many of the most
complex real estate challenges our clients face. While markets around the
world are at different phases of data transparency, our regional centres of
excellence closely aligned to client facing teams help match real estate
understanding with data expertise.
In the summer our award-winning Knowledge Cubed platform underwent a
significant upgrade with the launch of a host of new "apps" to help corporate
occupiers manage their real estate interests. In the UK auction market, we
have continued to take market share by utilising our bespoke live-stream
auctioning platform, and off this success have further expanded our commercial
auction offering.
As employees return to offices across the world, there is an increasing focus
on tenant experience with landlord clients and their customers increasingly
looking to deploy technology that reduces day-to-day points of friction. We've
observed an evolution from the pre-pandemic objective of "community building"
particularly within the multi-tenant office environment to platforms that
genuinely improve the occupational experience. Post year-end we completed the
acquisition of one such platform "Cureoscity" which is currently being rolled
out to our UK Property Management clients to enhance tenant security and
experience.
Our technology-enabled flexible office brokerage Workthere capitalised on the
increased demand for flexible workspace across the globe. It delivered a
very strong end to the year and has a good pipeline for 2022, with
particularly strong performances from the UK, US, Netherlands and France.
During the year we led a funding round into Income Analytics through Grosvenor
Hill Ventures, alongside MSCI. This exciting business is a data technology
firm which provides investors with proprietary global rental default risk
measures on commercial real estate income at tenant, asset, fund and portfolio
levels.
Board
As previously announced, in January 2021 Philip Lee and Richard Orders joined
the Board as Non-Executive Directors. Rupert Robson retired from the Board at
the Annual General Meeting in May 2021 and Tim Freshwater retired from the
Board on 31 December 2021. I thank them both for their enormous contribution
to the Board over the years and Tim in particular for his valuable counsel
latterly as Senior Independent Director.
Dividends
A final ordinary dividend of 12.75p is recommended by the Board (2020: 17.0p),
alongside a supplemental interim dividend of 15.6p (2020: nil). In addition,
in view of the Group's very strong recovery and cash generation since the
lockdowns of 2020, the Board is also proposing a one-time special dividend of
27.05p being similar to the 2019 final ordinary and supplementary dividends
which were cancelled as COVID-19 took hold in March 2020.
The aggregate dividend of 55.4p will, subject to Shareholder approval for the
recommended final dividend at the AGM on 11 May 2022, be paid on 17 May 2022
to Shareholders on the register at 8 April 2022. The total paid and
recommended ordinary, supplemental and special dividend for the 2021 financial
year comprises an aggregate distribution of 61.4p (2020: 17.0p).
People
The strength of our recovery is an absolute testament to the commitment of our
entire global workforce and I would like to express my thanks to all our
staff worldwide for their hard work, their flexible approach during
challenging times and relentless commitment to client service.
Summary and Outlook
Savills delivered a record performance in 2021 despite the backdrop of
pandemic-related uncertainty in the year. This was a result of our strategy to
maintain full operating strength and high levels of client service through the
pandemic, enabling the Group to successfully service clients into the
progressive recovery of many markets in which we operate. Our balance sheet
remains strong and we continue to focus on developing our global businesses
through the coming periods through acquisitions and organic growth.
The war in Ukraine has shocked the world and, in response, Savills is
providing support both through international charities and via our Polish
operation, focussing particularly on Ukrainian refugees. Our thoughts are with
everyone affected in the region and we can only hope for resolution as quickly
as possible.
Looking forward, at this stage it is too early to predict the economic,
including longer term inflationary, impact of the Ukrainian crisis on the
world's real estate markets. Subject to this key uncertainty, we would
anticipate real estate transaction volumes to normalise in the year ahead,
alongside the continued recovery of global markets as they emerge from
pandemic-related disruptions. In addition, inflationary pressures in many
markets will result in costs increasing at the highest rate for many years and
we anticipate that discretionary costs will progressively normalise.
The Group has started the new year in line with our expectations.
Nicholas Ferguson CBE
Chairman
Review of operations
Savills geographic and business diversity were key to achieving the year's
result. Our performance analysed by region was as follows:
Revenue £m Underlying profit/(loss) £m
2021 2020 % growth 2021 2020 % growth
UK 925.6 710.7 30 129.5 78.8 64
Asia Pacific 626.5 575.7 9 59.2 42.3 40
CEME 301.2 240.7 25 15.4 (2.2) n/a
North America 293.7 213.4 38 15.1 (8.4) n/a
Unallocated - - n/a (18.9) (13.9) n/a
Total 2,147.0 1,740.5 23 200.3 96.6 107
On a constant currency basis Group revenue increased by 26% to £2,196.8m,
underlying profit increased 112% to £204.4m and reported profit before tax
increased by 124% to £186.3m. Our Asia Pacific business represented 29% of
Group revenue (2020: 33%) and our overseas businesses as a whole represented
57% of Group revenue (2020: 59%). Our performance by service line is set out
below:
Revenue £m Underlying profit/(loss) £m
2021 2020 % growth 2021 2020 % growth
Transaction Advisory 892.9 667.2 34 97.6 19.4 403
Property and Facilities Management 745.6 681.9 9 49.1 44.8 10
Consultancy 396.7 320.6 24 47.0 31.5 49
Investment Management 111.8 70.8 58 25.5 14.8 72
Unallocated - - n/a (18.9) (13.9) n/a
Total 2,147.0 1,740.5 23 200.3 96.6 107
Overall, our Commercial and Residential Transaction Advisory business revenues
together represented 42% of Group revenue (2020: 38%). Of this, the
Residential Transaction Advisory business represented 11% of Group revenue
(2020: 10%). Our Property and Facilities Management businesses continued to
perform well, growing year-on-year and representing 35% of Group revenue
(2020: 39%). Our Consultancy businesses represented 18% of revenue (2019:
19%). The Investment Management business had a strong performance, with
revenue increasing by 58%. It represented 5% of Group revenue (2020: 4%).
Transaction Advisory
Overall, our Transaction Advisory revenues increased by 34% (38% on constant
currency basis) to £892.9m (2020: £667.2m). Globally our Commercial Capital
Transaction business revenue increased by 44% and our Leasing and Occupier
focused transactional revenues grew by 30%. Our Global Residential business
revenue increased by 31%.
Underlying profits grew 403% to £97.6m (2020: £19.4m), with an increased
underlying profit margin of 10.9% (2020: 2.9%), as a result of the upturn in
activity across most of our key markets.
Asia Pacific Commercial
Revenue from the Asia Pacific Commercial Transactional business increased by
47% to £153.0m (2020: £103.9m), an increase of 51% in constant currency, and
exceeding 2019 revenues by 10%.
Investment markets recovered in the majority of our key markets, notably Hong
Kong, Australia, Singapore and Japan as investors started to deploy capital
after the slow-down in 2020. The exceptions were in Mainland China and South
Korea where demand remained somewhat subdued. In China, both continued
pandemic-related restrictions and the impact of recoverability of the bonds
issued by certain major developers, affected investor sentiment. In South
Korea by contrast, 2021 represented a reversion to more normal levels of
activity after an unusually strong performance in 2020.
Leasing activity in the region also improved, notably in Australia and
Singapore, as corporates which had delayed making longer term lease decisions
during 2020, began to commit to new leases.
Overall the Asia Pacific Commercial Transactional business resulted in an
underlying profit of £20.6m, more than six times higher than the previous
year (2020: £3.3m) with a margin of 13.5% (2020: 3.2%).
UK Commercial
UK Commercial Transactional revenue grew by 44% to £115.2m (2020: £79.8m),
reflecting improvement in both the investment and leasing sectors.
Our capital markets revenues increased by 53%, representing a combination of
market share gains and overall market recovery; UK commercial property
investment volumes in 2021 were approximately £65bn, being 38% higher than
the same period in 2020. Retail warehousing and industrial sectors experienced
the strongest recovery, sectors in which Savills enjoys strong market
positions. Our leasing revenues grew by 36% on 2020 (13% growth on 2019), with
growth across our sector specialisms including Retail.
Improved revenue allied to significantly reduced discretionary costs in
comparison with normal market conditions, combined to improve Underlying
profit by 126% to £21.5m (2020: £9.5m 2019: £12.3m) representing a
significant increase in margin to 18.7% (2020: 11.9%).
North America
Revenue from the North America Transactional business increased by 28% to
£263.6m (2020: £205.2m), an improvement of 36% in constant currency.
Being mainly a transactional business focused primarily on occupiers, the
business recovered as anticipated from the impact of Covid in 2020. The
overwhelming majority of North American revenue relates to occupier leasing
transactions and improved by 27% to £240.6m (2020: £190.1m). This compares
favourably with the overall leasing volume in the US market, which increased
20% over 2020.
Capital markets revenues improved by 52% to £23.0m (2020: £15.1m).
In addition, during the period discretionary expenditures such as travel and
entertainment were suppressed, helping to deliver a recovery to underlying
profit of £10.3m (2020: loss of £7.5m)
Continental Europe and the Middle East
In CEME, transaction fee income increased by 27% to £124.4m (2020: £98.2m);
an improvement of 30% in constant currency. Our Investment revenues grew
year-on-year by 25%, with significant recovery across the region, most notably
in Ireland and Spain, whilst investment volumes in EMEA (excluding UK) reached
€261bn in 2021, 4% above the previous five year average. Leasing revenues
also recovered in 2021, with all three of our principal sectors up
year-on-year (office by 18%, industrial by 41% and retail by 14%).
Our three largest contributors in this segment are Ireland, Germany and Spain.
Ireland recovered significantly, having fallen by 65% in 2020, reaching 88% of
the 2019 pre-pandemic level. The majority of this improvement derived from
capital transactions where Savills is clear market leader. Revenues in Germany
were down 2%, but up 1% on a constant currency basis, with reductions in
Investment and Office leasing offset by growth in Industrial transactions. On
a constant currency basis, revenues in Germany were 3% higher than in 2019,
having been one of the few global locations to have achieved revenue growth in
2020. The 12% increase in revenues in Spain was also principally due to
improved investment markets. In general transactional activity, particularly
in respect of investment, progressively recovered across the rest of CEME
region which collectively delivered revenues of approximately 98% of 2019
pre-pandemic levels.
As a result underlying profit increased to £1.4m (2020: £12.3m loss, 2019:
£5.4m profit).
UK Residential
UK Residential Transactional revenue grew by 38% to £210.7m (£153.2m), with
significant improvement in second hand agency revenues (up 48% year-on-year),
supported by robust performances in both new homes and our Private Rented
Sector (PRS) capital markets teams.
The UK housing market performed strongly in 2021 delivering double digit house
price growth and the highest level of transactional activity since 2007. The
prime housing markets performed particularly strongly with activity levels
remaining buoyant despite the end of the extended stamp duty holiday, although
there were reduced levels of available stock by the end of the year. Prime
transactions were more heavily weighted to the regional markets outside
London, as buyers continued to reassess their housing needs in the search for
space. The prime central London market continued to be predominantly driven by
UK resident buyers and activity was resilient; indeed sales in the £5m+
market exceeded £5.5bn for the first time since 2014. Overall Savills saw
transaction levels increase by 45% on 2020, with exchanges of 7,412 in 2021
(2020: 5,128). The strong housing market underpinned sales of new homes
which, in turn, fed strong demand for consented and strategic development
land.
Revenue in the New Homes business increased by 13% in 2021. The Regional
business outperformed 2020 with revenue increasing by 27% and London revenues
remained stable. The Regional teams recorded 3,208 (70%) of the total
reservations; a 24% improvement on 2020. In the London new homes market sales
activity outside the central zone enjoyed similarly robust market conditions
as the UK generally. However, in the more central prime locations, which are
more dependent upon international buyers, activity continued to be relatively
subdued as a result of international travel restrictions during much of the
year.
Underlying profit increased by 69% to £38.9m (2020: £23.0m) reflecting a
pre-tax margin of 18.5% (2020: 15.0%).
Asia Pacific Residential
Revenue from the Asia Pacific Residential Transaction business decreased by 3%
to £26.0m (2020: £26.9m), a fall of 1% in constant currency. Whilst there
was revenue growth in many of our markets including Mainland China and
Australia, and an increased contribution from our joint venture in Singapore
(Huttons), this was more than offset by reductions in activity in Hong Kong,
where fewer prime transactions with mainland buyers took place during the
period.
Underlying profits grew by £1.5m to £4.9m (2020: £3.4m) supported by the
higher profit contribution from Huttons, our residential joint venture agency
in Singapore, and the benefit of cost reductions across the region.
Property and Facilities Management
Our Property and Facilities Management businesses continued to perform well,
with revenues growing by 9% to £745.6m (2020: £681.9m); 12% in constant
currency. Savills total area under management increased by 4% to 2.45bn sq.
ft. (2020: 2.35bn sq. ft.). Underlying profit increased by 10% to £49.1m
(2020: £44.8m), 13% in constant currency.
Asia Pacific
In our Asia Pacific Property Management segment, revenues were £356.7m, a
decline of 3% year-on-year (2020: £368.3m); a 1% increase in constant
currency. There was 10% revenue reduction in facilities management (40% of the
total revenue in this segment) as a result of certain contracts not being
renewed in Hong Kong and South Korea, which was partially offset by a 2%
increase in property management (which accounts for the other 60% of revenue
in this segment). In Singapore, our investment in 2020 resulted in trading
ahead of our expectations in 2021.
Underlying profits in 2021 were affected by the removal of 2020's COVID-19
employment subsidies comprising a net year-on-year reduction of approximately
£5m. The trail effect of 2020 subsidies meant that the underlying profit
margin for the region continued to be the top end of the normalised margin
range of 7.2% (2020: 7.5%) for this service line. In absolute terms, profit
declined by only £1.9m (£0.7m on a constant currency basis) to £25.8m.
UK
The UK Property Management business grew revenues by 23% to £300.6m (2020:
£245.0m) reflecting significant contracts won in 2021 and the full year
effect of contracts won in 2020. The Residential Property Management Lettings
team, which is also included in this segment, had a successful year, with
revenues increasing by 10%, primarily as a result of the number of managed and
tenanted properties increasing by 11% and 9% respectively.
The higher revenues, along with a continued drive to improve efficiencies,
increased underlying profit by 28% to £22.0m (2020: £17.2m).
Continental Europe and the Middle East
In the CEME Property Management business revenues were up by £19.7m (29%) to
£88.3m (2020: £68.6m); 33% on a constant currency basis. During August 2020
we acquired a German property management business, OMEGA Immobilien Management
GmbH and OMEGA Immobilien Service GmbH ('Omega'), which contributed £11.5m of
revenue to this segment in 2021 (2020: £3.6m). There was also revenue growth
in the Middle East, following expansion in Egypt and an increase in ownership
of the business in Saudi Arabia (previously a joint venture interest).
Elsewhere, contract wins in Ireland, Spain and the Netherlands, and the full
year effect of 2020 wins in France all contributed to the growth in this
segment.
The Building and Project Consultancy platform, which is included in this
segment at this early stage of its development, continued to expand with
recently created teams in Italy, France, Poland and Sweden supplementing the
significant growth in the Middle East.
As a result of the above factors underlying profit increased to £1.3m (2020:
underlying loss of £0.1m).
Consultancy
As clients across the Globe sought advice through the pandemic and in
preparation for recovery, global Consultancy revenue increased by 24% to
£396.7 (2020: £320.6m); 25% on a constant currency basis. Underlying profit
increased by 49% to £47.0m (2020: £31.5m); 52% on a constant currency basis.
UK
The UK Consultancy businesses, comprising a broad range of advisory
activities, increased revenue by 19% to £244.0m (2020: £205.8m). Our Housing
teams saw significant revenue growth through the impact of Government
legislation on the sector and increased post lockdown access to housing stock
for survey work, which had been delayed from 2020. The remaining principal
Consultancy services (Building Consultancy, Planning, Development and
Valuations) all registered increased revenue through the progressive recovery
in general activity and increased focus on ESG in all aspects of Real Estate.
This element of our advisory service, which is addressed by a suite of
services branded "Savills Earth" now comprises c. 120 professionals and is
becoming a significant driver of Real Estate decisions across all sectors.
Underlying profit increased by 41% to £33.1m (2020: £23.5m).
Asia Pacific
In the Asia Pacific Consultancy segment, revenues increased by 18% to £81.3m
(2020: £69.1m); 19% on a constant currency basis. Three of our largest
businesses in the region (China, Hong Kong and Singapore) experienced
increased market demand, whilst in Australia where we currently offer the
broadest suite of services in the region, pandemic restrictions were
significant throughout the period and revenues increased by 2%, with growth in
Valuations being offset by reductions in Project Management due to
COVID-19-related contract delay and/or cancellations.
Cost increases and the impact of an internal re-organisation between segments
in China, restricted profitability overall with underlying profit increasing
by 2% (6% on a constant currency basis) to £6.6m (2020: £6.5m).
Continental Europe and the Middle East
Revenues increased by 10% to £41.3m (2020: £37.5m), 14% on a constant
currency basis.
In Spain, which represents approximately 25% of CEME Consultancy, revenue
increased by 14%, whilst in Germany, lower volumes of transactional related
valuation work led to a 21% decline in revenue year-on-year. All other
countries collectively registered good growth in revenue.
Underlying profits grew by 4% on a reported basis to £2.5m (2020: £2.4m);
13% in constant currency.
North America
As part of our strategy to diversify our income streams by building up our
Consultancy practices, in March 2020 we announced the acquisition of Macro
Consultants LLC, a national project management consultancy business, and in
June 2021 we acquired T3 Advisors, a workplace solutions advisory firm
specialising in the life science and technology sectors.
As a result of a strong performance of these two acquisitions, the North
America Consultancy revenues were £30.1m (2020: £8.2m) with an underlying
profit of £4.8m (2020: underlying loss of £0.9m).
Investment Management
Our Investment Management business achieved revenue growth of 58% to £111.8m
(2020: £70.8m); 60% in constant currency. Base Management fees (representing
70% of revenue) increased by 30% year on year including the benefit of the
acquisition of the remaining partnership interests in Real Estate Debt
investor, DRC Capital LLP (May 2021). These were supplemented by a 12%
increase in transaction fees and a supernormal increase of over 90% in
performance fees.
During the year we announced the strategic relationship with Samsung Life
Insurance of South Korea ('SLI), The transaction completed on 31 December 2021
involving the sale of 25% of Savills Investment Management to SLI and the
latter's commitment to invest at least $1bn, predominantly seed capital, into
funds managed by Savills Investment Management through the initial 5 year term
of the agreement.
Assets under management at 31 December 2021 increased by 14% to £21.7bn
(2020: £19.0bn) and £2.5bn of capital was raised during the year (2020:
£1.7bn).
Underlying profit, which was enhanced by the supernormal level of performance
fee income increasing profit margin to 22.8%, grew 72% to £25.5m (2020:
£14.8m); 75% in constant currency.
Financial review
Profit margin
Underlying profit margin increased to 9.3% (2020: 5.6%), reflecting the
significantly higher levels of transactional activity and the abnormally low
levels of discretionary expenditure in respect of travel, entertaining and
marketing events in particular.
Reported pre-tax profit margin increased to 8.5% (2020: 4.8%).
Taxation
The tax charge for the year increased to £36.4m (2020: £15.2m), representing
an effective tax rate on reported profit before tax of 19.9% (2020: 18.3%).
The Group's effective reported tax rate is marginally higher than the UK
effective rate of tax of 19% as a result of profits in higher tax
jurisdictions and non-deductible transaction-related costs.
The underlying effective tax rate increased to 18.7% (2020: 18.5%).
Transaction-related costs
During the year the Group recognised a total of £17.0m in transaction-related
costs (2020: £5.0m). This increase reflects a higher volume of business
development activity year-on-year. These costs primarily relate to future
consideration payments, associated with acquisitions, which are subject to a
future service condition (2021: £13.9m, 2020: £4.0m). The largest individual
components of this charge in 2021 relate to the acquisition of DRC Capital LLP
and the acquisition of Macro Consultants LLC in 2020.
These charges have been excluded from the calculation of underlying profit in
line with Group policy.
Earnings per share
Basic earnings per share increased 114% to 104.9p (2020: 49.0p), reflecting a
116% increase in reported profit after tax. Adjusted on a consistent basis for
exceptional restructuring, transaction-related costs, profits and losses on
disposals, certain share-based payment adjustments, amortisation and
impairment of intangible assets arising from business combinations,
impairments of goodwill and exceptional fair value gains and losses,
underlying basic earnings per share increased 105% to 116.5p (2020: 56.8p).
Fully diluted earnings per share increased by 108% to 99.8p (2020: 47.9p). The
underlying fully diluted earnings per share increased 100% to 110.9p (2020:
55.5p).
Cash resources, borrowings and liquidity
Cash and cash equivalents, net of overdrafts in notional pooling arrangements,
at year end increased 45% to £491.2m (2020: £338.3m). This increase
reflected: strong trading results, the higher cash outflows associated with
corporate acquisition activity and the reinstatement of dividend payments in
the year, together with the cash proceeds received from the sale of the
Group's 25% interest in Savills Investment Management.
Gross borrowings at year end decreased to £150.5m (2020: £160.6m). These
principally comprise £150.0m (2020: £150.0m) of 7, 10 and 12 year fixed rate
notes which were issued in June 2018, in 2020 borrowings also included £11.4m
drawn under a revolving credit facility in North America. The Group's UK
revolving credit facility ('RCF') was undrawn at the end of the year (2020:
undrawn), with a total of £422.2m (2020: £397.2m) of undrawn borrowing
facilities available to the Group. At the year end, cash and cash equivalents
net of gross borrowings was £340.7m (2020: £177.7m).
Cash is typically retained in a number of subsidiaries in order to meet the
requirements of commercial contracts or capital adequacy. In addition, cash in
certain territories is retained to meet future growth requirements.
The Group's net inflow of cash is typically greater in the second half of the
year. This is as a result of seasonality in trading and the major cash
outflows associated with dividends, profit related remuneration payments and
related payroll taxes in the first half. The Group cash inflow for the year
from operating activities was £302.7m (2020: £241.4m).
With a large proportion of the Group's revenue typically being transactional
in nature, the Board's strategy is to maintain low levels of gearing, but
retain sufficient credit facilities to enable it to meet cash requirements
during the year and finance the majority of business development opportunities
as they arise.
Capital and Shareholders' interests
During the year 1.1m (2020: 8,504) new ordinary shares were issued on the
exercise of options by participants of the Group's SAYE schemes. The total
number of ordinary shares in issue (before the impact of shares held by the
Savills plc 1992 Employee Benefit Trust and the Savills "Rabbi" Trust) at 31
December 2021 was 144.2m (2020: 143.1m)
Savills Pension Scheme
The funding level of the defined benefit Savills Pension Scheme in the UK,
which is closed to future service-based accrual, improved substantially during
the year primarily as a result of the increase in the yield on AA-rated
corporate bonds. The plan was in a surplus position of £17.4m at the year-end
(2020: £2.6m liability).
Net assets
Net assets as at 31 December 2021 were £753.4m (2020: £581.6m). This
movement reflects the Group's trading performance alongside the actuarial gain
on the defined benefit pension plans and proceeds from the sale of the Group's
25% interest in the Savills Investment Management group to Samsung Life in
December 2021.
Foreign currency
The Group operates internationally and is exposed to foreign exchange risks.
As both revenue and costs in each location are generally denominated in the
same currency, transaction related risks are relatively low and generally
associated with intra Group activities. Consequently, the overriding foreign
currency risk relates to the translation of overseas profits and losses into
sterling on consolidation. The Group does not actively seek to hedge risks
arising from foreign currency translations due to their non-cash nature.
The net impact of foreign exchange rate movements during the year represented
a £49.8m decrease in revenue and a £4.1m decrease in underlying profit.
Principal risks and uncertainties
The Directors have carried out a robust assessment of the principal risks
facing the Company - including those that would threaten its business model,
future performance, solvency or liquidity. Further detail on these principal
risks will be provided in the Group's Annual Report and Accounts 2021, which
will be available on publication at www.ir.savills.com
(http://www.ir.savills.com) on 4 April 2022. The identified principal risks
are summarised below:
· Business conditions, general economy and geopolitical issues
· Achieving the right market positioning in response to the needs
of our clients
· Recruitment and retention of high-calibre staff
· Reputational and brand risk
· Legal risk
· Failure or significant interruption to IT systems causing
disruption to client service
· Operational resilience/Business continuity
· Business conduct
· Changes in the regulatory environment/regulatory breaches
· Acquisition/integration risk
· Environment and sustainability
Savills plc
Consolidated income statement
for the year ended 31 December 2021
2021 2020
restated*
Note £m £m
Revenue 2 2,147.0 1,740.5
Less:
Employee benefits expense (1,413.1) (1,153.7)
Depreciation (63.4) (64.3)
Amortisation of intangible assets (14.2) (9.6)
Impairment of intangible assets arising from business combinations and (5.2) -
goodwill
Other operating expenses (465.2) (419.1)
Impairment losses on financial assets (4.0) (8.7)
Other net gains 2.0 0.7
Share of post-tax profit from joint ventures and associates 12.6 10.2
Operating profit 196.5 96.0
Finance income 1.9 3.4
Finance costs (15.3) (16.2)
(13.4) (12.8)
Profit before income tax 183.1 83.2
Income tax expense 4 (36.4) (15.2)
Profit for the year 146.7 68.0
Attributable to:
Owners of the parent 146.2 67.6
Non-controlling interests 0.5 0.4
146.7 68.0
Earnings per share
Basic earnings per share 6(a) 104.9p 49.0p
Diluted earnings per share 6(a) 99.8p 47.9p
* See Note 1(b) for details on the prior year restatement.
Supplementary income statement information
Reconciliation to underlying profit before income tax
Profit before income tax 183.1 83.2
- restructuring and transaction-related costs 17.3 6.5
- other underlying adjustments (0.1) 6.9
Underlying profit before income tax 2 and 3 200.3 96.6
Savills plc
Consolidated statement of comprehensive income
for the year ended 31 December 2021
2021 2020
£m £m
Profit for the year 146.7 68.0
Other comprehensive income/(loss)
Items that will not be reclassified to profit or loss:
Re-measurement of defined benefit pension scheme and employee benefit 21.3 6.5
obligations
Changes in fair value of equity investments at FVOCI (4.4) (6.9)
Tax on other items that will not be reclassified (4.3) (1.2)
Total items that will not be reclassified to profit or loss 12.6 (1.6)
Items that may be reclassified subsequently to profit or loss:
Currency translation differences (8.9) 1.8
Tax on items that may be reclassified (1.1) (0.3)
Total items that may be reclassified subsequently to profit or loss (10.0) 1.5
Other comprehensive income/(loss) for the year 2.6 (0.1)
Total comprehensive income for the year 149.3 67.9
Total comprehensive income attributable to:
Owners of the parent 148.8 67.5
Non-controlling interests 0.5 0.4
149.3 67.9
Savills plc
Consolidated statement of financial position
at 31 December 2021
2021 2020
restated*
Note £m £m
Assets: Non-current assets
Property, plant and equipment 66.3 64.9
Right of use assets 232.6 252.8
Goodwill 411.3 379.4
Intangible assets 72.6 49.8
Investments in joint ventures and associates 32.8 51.8
Deferred income tax assets 36.1 42.8
Financial assets at fair value through other comprehensive income ('FVOCI') 30.4 27.4
Retirement benefit surplus 18.1 -
Contract assets 3.4 1.4
Trade and other receivables 41.2 31.8
944.8 902.1
Assets: Current assets
Contract assets 9.3 8.0
Trade and other receivables 602.6 496.6
Income tax receivable 0.9 1.9
Derivative financial instruments 0.1 0.4
Cash and cash equivalents** 689.7 547.4
1,302.6 1,054.3
Liabilities: Current liabilities
Borrowings 11 2.1 12.2
Overdrafts in notional pooling arrangement** 198.5 209.1
Lease liabilities 48.0 45.2
Derivative financial instruments 0.9 0.3
Contract liabilities 14.5 10.8
Trade and other payables 738.5 604.9
Income tax liabilities 15.9 10.2
Employee benefit obligations 16.9 19.2
Provisions 9.2 8.3
1,044.5 920.2
Net current assets 258.1 134.1
Total assets less current liabilities 1,202.9 1,036.2
Liabilities: Non-current liabilities
Borrowings 11 148.4 148.4
Lease liabilities 237.0 259.0
Derivative financial instruments 2.6 0.6
Other payables 20.0 10.5
Retirement and employee benefit obligations 20.3 14.9
Provisions 20.0 15.6
Deferred income tax liabilities 1.2 5.6
449.5 454.6
Net assets 753.4 581.6
Equity:
Share capital 3.6 3.6
Share premium 104.4 97.2
Other reserves 76.2 90.0
Retained earnings 540.0 390.1
Equity attributable to owners of the parent 724.2 580.9
Non-controlling interests 10 29.2 0.7
Total equity 753.4 581.6
* See Note 1(b) for details on the prior period restatement.
** Included within cash and cash equivalents are cash balances of £201.5m
(2020: £242.0m) that are operated within a notional cash pooling arrangement
together with overdraft balances of £198.5m (2020: £209.1m) presented above
in current liabilities. See Note 8 for further details.
Savills plc
Consolidated statement of changes in equity
for the year ended 31 December 2021
Attributable to owners of the parent
Share capital Share premium Other reserves Retained earnings Total Non-controlling interests Total equity
£m £m £m £m £m £m £m
Balance at 1 January 2021 3.6 97.2 90.0 390.1 580.9 0.7 581.6
Profit for the year - - - 146.2 146.2 0.5 146.7
Other comprehensive income/(loss):
Re-measurement of defined benefit pension scheme and employee benefit - - - 21.3 21.3 - 21.3
obligations
Changes in fair value of financial assets at FVOCI - - (4.4) - (4.4) - (4.4)
Tax on items taken to other comprehensive income/(loss) - - - (5.4) (5.4) - (5.4)
Currency translation differences - - (8.9) - (8.9) - (8.9)
Total comprehensive (loss)/income for the year - - (13.3) 162.1 148.8 0.5 149.3
Employee share option scheme:
- Value of services provided - - - 23.7 23.7 - 23.7
- Tax on employee share option schemes - - - 4.7 4.7 - 4.7
Issue of share capital - 7.2 - - 7.2 - 7.2
Tax on other items taken to reserves - - - 0.6 0.6 - 0.6
Purchase of treasury shares - - - (49.0) (49.0) - (49.0)
Disposal of financial assets at FVOCI - - (0.3) 0.2 (0.1) - (0.1)
Dividends - - - (31.9) (31.9) (0.4) (32.3)
Transaction with non-controlling interest - - - 39.3 39.3 28.2 67.5
Transfer between reserves - - (0.2) 0.2 - - -
Additions through business combinations - - - - - 0.2 0.2
Balance at 31 December 2021 3.6 104.4 76.2 540.0 724.2 29.2 753.4
Attributable to owners of the parent
Share capital Share premium Other reserves Retained earnings Total Non-controlling interests Total equity
£m £m £m £m £m £m £m
Balance at 1 January 2020 3.6 97.2 95.5 306.2 502.5 0.7 503.2
Profit for the year - - - 67.6 67.6 0.4 68.0
Other comprehensive income/(loss):
Re-measurement of defined benefit pension scheme and employee benefit - - - 6.5 6.5 - 6.5
obligations
Changes in fair value of financial assets at FVOCI, net of tax - - (6.9) - (6.9) - (6.9)
Tax on items taken to other comprehensive income/(loss) - - - (1.5) (1.5) - (1.5)
Currency translation differences - - 1.8 - 1.8 - 1.8
Total comprehensive (loss)/income for the year - - (5.1) 72.6 67.5 0.4 67.9
Employee share option scheme:
- Value of services provided - - - 19.8 19.8 - 19.8
Purchase of treasury shares - - - (8.3) (8.3) - (8.3)
Disposal of financial assets at FVOCI - - (0.4) (0.2) (0.6) - (0.6)
Dividends - - - - - (0.4) (0.4)
Balance at 31 December 2020 3.6 97.2 90.0 390.1 580.9 0.7 581.6
Savills plc
Consolidated statement of cash flows
for the year ended 31 December 2021
2021 2020
restated*
Note £m £m
Cash flows from operating activities
Cash generated from operations 7 348.3 282.6
Interest received 1.8 3.4
Interest paid (14.0) (15.0)
Income tax paid (33.4) (29.6)
Net cash generated from operating activities 302.7 241.4
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 1.0 0.1
Proceeds from sale of equity investments 1.7 1.9
Proceeds from sale of interests in joint ventures 0.7 0.7
Dividends received from joint ventures 6.6 5.7
Dividends received from associates 6.0 5.1
Repayment of loans by joint ventures 0.1 -
Repayment of loans by associates - 0.1
Loans to joint ventures (0.6) (1.4)
Loans to other parties (7.4) (5.5)
Acquisition of subsidiaries, net of cash and overdrafts acquired (40.5) (11.2)
Deferred consideration paid in relation prior year acquisitions (5.9) (8.1)
Purchase of property, plant and equipment (18.6) (12.8)
Purchase of intangible assets (5.9) (5.3)
Purchase of equity investments (9.8) (5.0)
Purchase of investment in joint ventures (0.4) -
Purchase of investment in associates (0.3) (0.5)
Net cash used in investing activities (73.3) (36.2)
Cash flows from financing activities
Proceeds from issue of share capital 7.2 -
Proceeds from transaction with non-controlling interest 63.7 -
Transaction costs incurred on transactions with non-controlling interest (0.9) -
Proceeds from borrowings 26.9 46.1
Repayments of borrowings (38.2) (67.3)
Financing fees paid (0.5) -
Principal elements of lease payments (47.2) (47.7)
Purchase of treasury shares (49.0) (8.3)
Dividends paid (32.3) (0.4)
Net cash used in financing activities (70.3) (77.6)
Net increase in cash, cash equivalents and bank overdrafts 159.1 127.6
Cash, cash equivalents and bank overdrafts at beginning of year 338.2 209.8
Effect of exchange rate fluctuations on cash and cash equivalents held (7.3) 0.8
Cash, cash equivalents and bank overdrafts at end of year 490.0 338.2
* See Note 1(b) for details on the prior period restatement.
NOTES
1(a). Basis of preparation
The results for the year ended 31 December 2021 have been extracted from the
audited financial statements. The financial statements have been prepared in
accordance with UK adopted international accounting standards.
The financial statements are prepared on a going concern basis and under the
historical cost convention as modified by the revaluation of loans receivable,
equity investments and derivative financial instruments held at fair value.
The financial information in this statement does not constitute statutory
accounts within the meaning of s434 of the Companies Act 2006. The statutory
accounts for the year ended 31 December 2021, on which the auditors have given
an unqualified audit report, have not yet been filed with the Registrar of
Companies.
The preparation of financial statements in conformity with IFRS requires the
use of estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Although these
estimates are based on management's best knowledge of the amount, event or
actions, actual results ultimately may differ from those estimates.
1(b). Prior year restatement
Notional cash pooling arrangement
For internal cash management purposes, the Group maintains a notional cash
pooling arrangement with Barclays Bank PLC, whereby credit cash balances
(cash) and debit cash balances (overdrafts) for the participating bank
accounts are notionally offset. There is no overdraft cost or charge
associated with any pooled overdraft that is offset by pooled cash balances.
Refer to Note 8 for further details.
While the Group has legal right of offset of these balances in the
arrangement, it was determined that the cash pooling arrangement did not meet
the requirements for offsetting in accordance with IAS 32: "Financial
Instruments: Presentation" for each period presented and the pooled cash and
pooled overdraft balances within the notional pooling arrangement cannot be
presented net in the statement of financial position. Accordingly, the
presentation has been amended to show these balances on a gross basis
separately on the statement of financial position as at 31 December 2021 in
accordance with IAS 32. The prior period comparative has been restated in
accordance with IAS 8: "Accounting Policies, Changes in Accounting Estimates
and Errors" to meet the presentation requirements of IAS 32. The change in
presentation increases cash and cash equivalents within current assets and
increases current liabilities with the overdraft balances in the notional
pooling arrangement but does not have an impact on the reported net assets,
net current assets, profit for the period, the statement of cash flows or cash
and cash equivalents net of overdrafts disclosed by the Group.
The table below shows the impact of the prior period restatement on the
primary financial statements:
31 December 2020 Restatement 31 December 2020
reported £m restated
£m £m
Statement of financial position
Cash and cash equivalents 338.3 209.1 547.4
Assets: Current Assets 845.2 209.1 1,054.3
Overdrafts in notional pooling arrangement - 209.1 209.1
Liabilities: Current Liabilities 711.1 209.1 920.2
As at 1 January 2020, the value of cash and cash equivalents and overdrafts in
the notional pooling arrangement that were offset totalled £160.8m.
Accordingly, the adjustment resulted in an increase in cash and cash
equivalents from £209.9m to £370.7m and the separate presentation of
overdrafts within the notional pooling arrangement of £160.8m. The adjustment
therefore increases the total current assets from £790.1m to £950.9m and
total current liabilities from £723.6m to £884.4m as at 1 January 2020.
Presentation of deferred consideration linked to continuing employment within
the Statement of Cash Flows
In accordance with the requirements of IAS 7: "Statement of Cash Flows", the
Group's policy is to classify payments of deferred/contingent consideration in
relation to historic business acquisitions that are linked to continuing
employment within cash flows used in operating activities and all other
payments of deferred/contingent considerations under IFRS 3: "Business
Combinations" are classified as cash used in investing activities. Following a
review prompted by an enquiry carried out by the Financial Reporting Council
('FRC') on the Group's 2020 Annual Report & Accounts, it was noted that
certain cash flows relating to employment linked deferred consideration
payments were incorrectly classified as an investing activity as opposed to an
operating activity in the Group's consolidated Statement of Cash Flows. This
has been corrected in this Annual Report and Accounts, with prior year
comparatives for the period ended 31 December 2020 represented accordingly in
accordance with IAS 8.
The scope of the review performed by the FRC was to consider the Group's
compliance with UK reporting requirements. Due to their inherent limitations
these reviews are not intended to provide assurance that corporate accounts
are correct in all material aspects. The FRC's review does not benefit from a
detailed knowledge of the business or an understanding of the underlying
transactions entered into. The FRC's letters are written on the basis that the
FRC accepts no liability for reliance on them by the Company or any third
party.
The table below shows the impact of the prior year restatement on the Group's
Statement of Cash Flows and Note 7 - Cash Generated From Operations:
31 December 2020 Restatement 31 December 2020
reported £m restated
£m £m
Statement of cash flows
Cash generated from operations 289.8 (7.2) 282.6
Net cash generated from operating activities 248.6 (7.2) 241.4
Deferred consideration paid in relation to prior year acquisitions (15.3) 7.2 (8.1)
Net cash (used in)/generated from investing activities (43.4) 7.2 (36.2)
Note 7 - Cash Generated From Operations
Increase in trade and other payables and contract liabilities 18.6 (7.2) 11.4
Cash generated from operations 289.8 (7.2) 282.6
This prior year restatement does not have an impact on reported profit,
earnings per share, assets, liabilities or the overall net cash flows
disclosed by the Group and relates solely to classification within the
Statement of Cash Flows.
Presentation of share of post-tax profit from joint ventures and associates
within the Income Statement
Following a review of the Group's share of post-tax profit from joint ventures
and associates and the presentation of this in the Group's Income Statement,
management have determined that the Group's joint ventures and associates are
an integral part of the business and the share of post-tax profit from joint
ventures and associates should have been included within operating profit,
consistent with IASB's view in IAS 1.BC56. This position has been corrected in
the current year and prior period comparatives have been restated in
accordance with IAS 8.
The table below shows the impact of the prior year restatement on Group's
Income Statement:
31 December 2020 Restatement 31 December 2020
reported £m restated
£m £m
Income statement
Operating profit 85.8 10.2 96.0
This prior year restatement does not have an impact on reported profit after
tax, earnings per share, the Statement of Financial Position or the Statement
of Cash Flows.
2. Segment analysis
Transaction Advisory Consultancy Property and Facilities Manage- Investment Manage- Unalloc-ated Total
ment ment
Year ended to 31 December 2021 £m £m £m £m £m £m
Revenue
United Kingdom - commercial 115.2 193.6 256.4 55.1 - 620.3
United Kingdom - residential 210.7 50.4 44.2 - - 305.3
Total United Kingdom 325.9 244.0 300.6 55.1 - 925.6
CEME 124.4 41.3 88.3 47.2 - 301.2
Asia Pacific - commercial 153.0 81.3 356.7 9.5 - 600.5
Asia Pacific - residential 26.0 - - - - 26.0
Total Asia Pacific 179.0 81.3 356.7 9.5 - 626.5
North America 263.6 30.1 - - - 293.7
Revenue 892.9 396.7 745.6 111.8 - 2,147.0
Underlying profit/(loss) before tax
United Kingdom - commercial 21.5 24.6 17.9 14.0 (18.9) 59.1
United Kingdom - residential 38.9 8.5 4.1 - - 51.5
Total United Kingdom 60.4 33.1 22.0 14.0 (18.9) 110.6
CEME 1.4 2.5 1.3 10.2 - 15.4
Asia Pacific - commercial 20.6 6.6 25.8 1.3 - 54.3
Asia Pacific - residential 4.9 - - - - 4.9
Total Asia Pacific 25.5 6.6 25.8 1.3 - 59.2
North America 10.3 4.8 - - - 15.1
Underlying profit/(loss) before tax 97.6 47.0 49.1 25.5 (18.9) 200.3
Transaction Advisory Consultancy Property and Facilities Manage- Investment Manage- Unalloc-ated Total
ment ment
Year ended to 31 December 2020 £m £m £m £m £m £m
Revenue
United Kingdom - commercial 79.8 164.1 204.9 26.9 - 475.7
United Kingdom - residential 153.2 41.7 40.1 - - 235.0
Total United Kingdom 233.0 205.8 245.0 26.9 - 710.7
CEME 98.2 37.5 68.6 36.4 - 240.7
Asia Pacific - commercial 103.9 69.1 368.3 7.5 - 548.8
Asia Pacific - residential 26.9 - - - - 26.9
Total Asia Pacific 130.8 69.1 368.3 7.5 - 575.7
North America 205.2 8.2 - - - 213.4
Revenue 667.2 320.6 681.9 70.8 - 1,740.5
Underlying profit/(loss) before tax
United Kingdom - commercial 9.5 17.6 13.8 5.6 (13.9) 32.6
United Kingdom - residential 23.0 5.9 3.4 - - 32.3
Total United Kingdom 32.5 23.5 17.2 5.6 (13.9) 64.9
CEME (12.3) 2.4 (0.1) 7.8 - (2.2)
Asia Pacific - commercial 3.3 6.5 27.7 1.4 - 38.9
Asia Pacific - residential 3.4 - - - - 3.4
Total Asia Pacific 6.7 6.5 27.7 1.4 - 42.3
North America (7.5) (0.9) - - - (8.4)
Underlying profit/(loss) before tax 19.4 31.5 44.8 14.8 (13.9) 96.6
Operating segments reflect internal management reporting to the Group's chief
operating decision maker, defined as the Group Executive Board ('GEB'). The
GEB primarily manages the business based on the geographic location in which
the Group operates.
The operating segments are identified as the following regions: the UK, CEME,
Asia Pacific and North America. The Savills Investment Management business is
also considered a separate operating segment. The reportable operating
segments derive their revenue primarily from property-related services. Within
the UK and Asia Pacific, both commercial and residential services are
provided. Other segments are largely commercial-based.
The GEB also reviews the business with reference to the nature of the services
in each region. Therefore, the Group has presented its segment analysis below
in a matrix with the primary operating segments based on regions in which the
Group operates.
The GEB assesses the performance of operating segments based on a measure of
underlying profit before tax which adjusts reported pre-tax profit by
profit/(loss) on disposals, share-based payment adjustment, significant
restructuring costs, significant transaction-related costs, amortisation and
impairment of intangible assets arising from business combinations, impairment
of goodwill and other items that are considered non-operational and material
(fair value gain on associates/joint ventures and fair value loss on a
transaction-related call option in the current year, GMP equalisation charge
in the prior year).
A reconciliation of underlying profit before tax to reported profit before tax
is provided in Note 3.
3. Underlying profit before tax
The Directors believe that the consistent presentation of underlying profit
before tax provides additional useful information to Shareholders on the
underlying trends and comparable performance of the Group over time by
excluding significant non-operational costs/income from the GAAP measures.
This 'underlying' measure is also used by the Group for internal performance
analysis and incentive compensation arrangements for employees.
These terms are not defined terms under IFRS and may therefore not be
comparable with similarly-titled profit measures reported by other companies.
They are not intended to be a substitute for, or superior to, GAAP measures.
The non-GAAP measures may be materially higher or lower than GAAP measures and
should not be regarded as a complete picture of the Group's financial
performance.
2021 2020
£m
£m
Reported profit before tax 183.1 83.2
Adjustments:
Amortisation of intangible assets arising from business combinations 8.1 4.9
Impairment of goodwill and intangible assets arising from business 5.2 -
combinations
Share-based payment adjustment (10.8) 1.2
(Profit)/loss on disposal of joint ventures and associates (0.4) 0.1
Restructuring costs 0.3 1.5
Transaction-related costs 17.0 5.0
Fair value gain on step acquisitions of subsidiaries previously classified as (4.0) -
associates/joint ventures
Fair value loss on transaction-related call option 1.8 -
GMP equalisation charge - 0.7
Underlying profit before tax 200.3 96.6
The adjustment for share-based payments relates to the impact of the
accounting standard for share-based compensation. The annual bonus is paid in
a mixture of cash and deferred shares and the proportions can vary from one
year to another. Under IFRS, the deferred share element is amortised to the
income statement over the vesting period whilst the cash element is expensed
in the year. The adjustment above addresses this by adding to or deducting
from profit the difference between the IFRS 2: "Share based payments" charge
in relation to outstanding bonus-related share awards and the estimated value
of the current year bonus pool to be awarded in deferred shares. This
adjustment is made to align the underlying staff cost in the year with the
revenue recognised in the same period.
Impairment of goodwill in the year relates to the Indonesia and Sweden cash
generating units. Impairment on intangible assets arising from business
combinations relate to property management contracts in South Korea and
Japanese investment management contracts relating to closed funds.
Profit on disposal recognised primarily in relation to the disposal of
holdings in joint ventures in China. In the prior year, loss on disposal was
recognised in relation to disposal of a portion of the Group's holding in a
joint venture in China, which is now treated as an FVOCI equity investment,
and a part disposal of an associate in Singapore.
Restructuring costs includes costs of integration activities in relation to
significant business acquisitions. Charges in the current and prior year
primarily relate to the ongoing cost of deferred shares, with a five year
vesting period, issued in relation to the restructuring upon acquisition of
Aguirre Newman in 2017.
Transaction-related costs primarily relate to provisions for future payments
in relation to business acquisitions, which are expensed through the income
statement to reflect the requirement for the recipients to remain engaged
actively in the business at the payment date (2021: £13.9m charge, 2020:
£4.0m charge). The largest individual components of this charge in 2021
relate to the acquisition of DRC Capital LLP and the acquisition of Macro
Consultants LLC in 2020. These costs are employee benefits expenses. In
addition, transaction-related costs include a £1.4m charge relating to
prepaid amounts issued as part of business acquisitions that are linked to
continued active engagement in the business (2020: £2.5m), £0.6m of
unwinding of interest on deferred consideration and non-current future
payments in relation to business acquisitions that are linked to employment
(2020: £0.3m) and £1.1m of professional fees incurred on transactions (2020:
£0.7m). Of these items, prepaid amounts that are linked to active engagement
in the business are recorded as employee benefits expenses in the income
statement, unwinding of interest is recorded as a finance cost in the income
statement and all other charges/(credits) are recorded within other operating
expenses. In the prior year, transaction-related costs also included a £1.8m
credit relating to the re-measurement of contingent deferred consideration
payments and a £0.7m credit in relation to a working capital adjustment on
the Cluttons Middle East acquisition in 2018.
In the current year, a fair value gain was recognised on the re-measurement of
the Group's holding in its associate, DRC, and a joint venture in Indonesia,
prior to the Group's acquisition of the remaining equity interest in these
businesses (refer to Note 9 for further details on the acquisition of DRC and
the Indonesian business). In addition, a fair value loss was recognised on the
fair value measurement of the Samsung Life call option, which gives Samsung
Life the right to purchase up to an additional 10% shareholding in the Savills
Investment Management group subject to the quantum of capital it has invested
in SIM products during the initial 5 year term.
Guaranteed Minimum Pension ('GMP') equalisation charge in the prior year
reflects the past service cost on the UK defined benefit pension scheme, which
is the estimated cost of equalising GMPs for historic transfers-out of the
scheme; this follows a High Court ruling issued on 20 November 2020.
4. Income tax expense
The income tax expense has been calculated on the basis of the underlying rate
in each jurisdiction adjusted for any disallowable charges.
2021 2020
£m £m
United Kingdom
- Current tax 21.7 13.3
- Deferred tax (6.8) (4.4)
Foreign tax
- Current tax 23.8 13.2
- Deferred tax (2.3) (6.9)
Income tax expense 36.4 15.2
5. Dividends
2021 2020
£m £m
Amounts recognised as distribution to equity holders in the year:
In respect of the previous year
Ordinary final dividend of 17.0p per share (2019: £nil) 23.6 -
In respect of the current year
Interim dividend of 6.0p per share (2020: £nil) 8.3 -
31.9 -
The Group paid £0.4m (2020: £0.4m) of dividends to non-controlling
interests.
The Board recommends a final dividend of 12.75p (net) per ordinary share
(amounting to £18.4m), alongside the supplemental interim dividend of 15.6p
per ordinary share (amounting to £22.5m) and a special dividend of 27.05p
(amounting to £39.0m), to be paid on 17 May 2022 to Shareholders on the
register at 8 April 2022. These financial statements do not reflect this
dividend payable.
The total paid and recommended ordinary, supplemental and special dividend for
the 2021 financial year comprises an aggregate distribution of 61.4p per
ordinary share (2020: 17.0p per ordinary share).
6(a). Basic and diluted earnings per share
2021 2021 2021 2020 2020 2020
Earnings Shares EPS Earnings Shares EPS
Year to 31 December £m million pence £m million pence
Basic earnings per share 146.2 139.4 104.9 67.6 138.0 49.0
Effect of additional shares issuable under option - 7.1 (5.1) - 3.1 (1.1)
Diluted earnings per share 146.2 146.5 99.8 67.6 141.1 47.9
6(b). Underlying basic and diluted earnings per share
2021 2021 2021 2020 2020 2020
Earnings Shares EPS Earnings Shares EPS
Year to 31 December £m million pence £m million pence
Basic earnings per share 146.2 139.4 104.9 67.6 138.0 49.0
- Amortisation of intangible assets arising from business combinations after 6.5 - 4.7 3.3 - 2.4
tax
- Impairment of goodwill and intangible assets arising from business 5.4 - 3.9 - - -
combinations after tax
- Share-based payment adjustment after tax (9.0) - (6.5) 1.1 - 0.8
- (Profit)/net loss on disposal of joint ventures and associates after tax (0.4) - (0.3) 0.1 - 0.1
- Restructuring costs after tax 0.4 - 0.3 1.5 - 1.1
- Transaction-related costs after tax 15.5 - 11.1 4.1 - 3.0
- Fair value gain on step acquisition of subsidiaries previously classified as (4.0) - (2.9) - - -
joint ventures/associates after tax
- Fair value loss on transaction-related call option 1.8 - 1.3 - - -
- GMP equalisation charge after tax - - - 0.6 - 0.4
Underlying basic earnings per share 162.4 139.4 116.5 78.3 138.0 56.8
Effect of additional shares issuable under option - 7.1 (5.6) - 3.1 (1.3)
Underlying diluted earnings per share 162.4 146.5 110.9 78.3 141.1 55.5
7. Cash generated from operations
2021 2020
restated*
£m £m
Profit for the year 146.7 68.0
Adjustments for:
Income tax (Note 4) 36.4 15.2
Depreciation 63.4 64.3
Amortisation of intangible assets 14.2 9.6
Impairment of goodwill and intangible assets arising from business 5.2 -
combinations
Fair value gain on joint ventures and associates (4.0) -
Fair value loss on derivative financial instrument 1.8 -
Loss on disposal of property, plant and equipment and intangible assets 0.9 0.8
(Gain)/loss on disposal of joint ventures and associates (0.4) 0.1
Net finance cost 13.4 12.8
Share of post-tax profit from joint ventures and associates (12.6) (10.2)
Increase in employee and retirement obligations 6.7 3.4
Exchange movements and fair value movements on financial instruments in (2.5) 2.4
operating activities
Increase in provisions 5.4 0.5
Charge for share-based compensation 23.7 19.8
Operating cash flows before movements in working capital 298.3 186.7
(Increase)/decrease in trade and other receivables and contract assets (90.1) 84.5
Increase in trade and other payables and contract liabilities 140.1 11.4
Cash generated from operations 348.3 282.6
* See Note 1(b) for details on the prior period restatement.
Foreign exchange movements resulted in a £0.3m increase in current and
non-current trade and other receivables (2020: £0.3m decrease) and a £5.9m
increase in current and non-current trade and other payables (2020:
£2.3m decrease).
8. Notional pooling arrangement
For internal cash management purposes, the Group maintains a notional cash
pooling arrangement with Barclays Bank PLC, whereby credit and debit cash
balances for the participating bank accounts are notionally offset. There is
no overdraft cost or charge associated with any pooled overdraft that is fully
offset by pooled credit cash balances. As at 31 December 2021, the notional
cash pooling arrangement included cash balances of £201.5m presented in cash
and cash equivalents (December 2020: £242.0m) and overdrafts of £198.5m (31
December 2020: £209.1m) presented in current liabilities. This represents as
at 31 December 2021 surplus pooled credit cash balances of £3.0m (31 December
2020: surplus pooled credit cash £32.9m).
For the purpose of the Statement of Cash Flows, cash and cash equivalents net
of overdrafts comprise the following:
31 December 2021 31 December 2020
£m £m
Cash and cash equivalents 689.7 547.4
Overdrafts in notional pooling arrangement (198.5) (209.1)
Bank overdrafts (1.2) (0.1)
490.0 338.2
9. Acquisition of subsidiaries
The fair values of the assets acquired and liabilities assumed as part of the
Group's acquisitions in the year are provisional and will be finalised within
12 months of the acquisition date. These are summarised below:
Provisional fair value to the Group
DRC T3 Other Total
£m
£m
£m
£m
Non-current assets: Property, plant and equipment 0.2 - 0.1 0.3
Right-of-use asset - 0.6 0.1 0.7
Intangible assets 27.3 5.2 0.1 32.6
Deferred income tax assets - - 0.2 0.2
Contract assets 2.0 - - 2.0
Trade and other receivables - 0.1 - 0.1
Current assets: Trade and other receivables 0.6 2.7 5.0 8.3
Contract assets 0.1 - - 0.1
Cash and cash equivalents 2.8 0.1 3.0 5.9
Current liabilities: Borrowings - - (1.6) (1.6)
Lease liabilities - - (0.1) (0.1)
Trade and other payables (5.3) (1.2) (9.4) (15.9)
Non-current liabilities: Lease liabilities - (0.5) (0.1) (0.6)
Other payables - (0.2) - (0.2)
Employee benefit obligations - - (0.4) (0.4)
Deferred tax liabilities (6.4) - - (6.4)
Net assets/(liabilities) 21.3 6.8 (3.1) 25.0
Non-controlling interest share of net assets - - (0.2) (0.2)
Net assets/(liabilities) acquired 21.3 6.8 (3.3) 24.8
Goodwill 27.8 5.8 7.0 40.6
Purchase consideration 49.1 12.6 3.7 65.4
Consideration satisfied by:
Cash paid 31.3 12.6 1.3 45.2
Fair value of associate/joint venture holding, prior to acquisition 17.8 - 2.0 19.8
Deferred consideration - - 0.4 0.4
49.1 12.6 3.7 65.4
DRC Capital LLP ('DRC')
On 28 September 2018, the Group acquired a 25% equity interest in DRC, a
commercial real estate debt investment manager. This transaction included a
call option to acquire the remaining 75% equity interest of the business on
the 28 September 2021. The call option date was accelerated and exercised on
28 May 2021.
Total acquisition consideration is provisionally determined at £49.1m,
£17.8m of which relates to the fair value of the initial 25% investment
(equity accounted as an associate) and £31.3m was settled on completion.
In addition to the above, an earn-out is payable in September 2024 and is
measured against income targets. The maximum earn-out payment under the
agreement caps the total consideration for DRC at £80.0m. The earn-out
consideration is deemed to be linked to continued active engagement with the
business. As required by IFRS 3 (revised), the expected value of these
payments will be expensed to the income statement over the relevant period of
engagement.
Transaction-related costs of £0.5m have been expensed as incurred to the
income statement and classified within other operating expenses.
Goodwill of £27.8m has been determined. Goodwill is attributable to the
experience and expertise of the team and the strong industry reputation. It is
not expected to be deductible for tax purposes. Intangible assets recognised
on acquisition include £17.7m of investment management contracts, £6.7m of
customer relationships and £2.9m in relation to the brand.
The acquired business contributed revenue of £16.6m and profit of £7.6m to
the Group for the period from 28 May 2021 to 31 December 2021. Had the
acquisition been made at the beginning of the financial year, revenue would
have been £23.3m and profit would have been £11.9m. Prior to acquisition,
the Group recognised its share of profits from DRC as an associate of £1.1m
in the income statement and also recognised a fair value gain of £2.8m within
Other gains / income in the income statement in relation to the carrying value
of its investment in DRC, prior to DRC becoming a wholly owned subsidiary of
the Group.
The fair value of trade and other receivables is £0.6m, all of which relates
to trade receivables. The gross contractual amount for trade receivables is
£0.7m, of which £0.1m is expected to be uncollectible.
T3 Advisors ('T3')
On 11 June 2021, the Group acquired 100% of the equity interest in T3, a real
estate advisor and consultant for life sciences and technology sectors in the
US.
Total acquisition consideration is provisionally determined at £12.6m, all of
which was settled on completion.
In addition to the above, further fixed payments, retention bonuses and
earn-out payments (contingent on revenue and operating margin targets) are
payable in June 2024 up until June 2028. The maximum value of these payments
total £8.7m and are deemed to be linked to continued active engagement with
the business. As required by IFRS 3 (revised), the expected value of these
payments will be expensed to the income statement over the relevant period of
engagement.
Transaction-related costs of £0.6m have been expensed as incurred to the
income statement and classified within other operating expenses.
Goodwill of £5.8m has been determined. Goodwill is attributable to the
experience and expertise of key staff members and is deductible for tax
purposes over a 15 year period. Intangible assets recognised on acquisition
include £5.2m of customer relationships.
The acquired business contributed revenue of £12.6m and profit of £0.9m to
the Group for the period from 11 June 2021 to 31 December 2021. Had the
acquisition been made at the beginning of the financial year, revenue would
have been £17.0m and profit would have been £1.8m.
The fair value of trade and other receivables is £2.7m, all of which relates
to trade receivables. The gross contractual amount for trade receivables is
£2.7m, all of which is expected to be collectible.
Other acquisitions
During the year, the Group acquired the remaining 51% of Cluttons Saudi Arabia
Company Limited (previous 49% ownership equity accounted for as a joint
venture) and the remaining 49% economic interest in the Savills Indonesia
business (previous 51% economic ownership equity accounted for as a joint
venture). In addition, the Group acquired 60% of Merx Holdings (SG) Pte Ltd
('Merx Group'), a project management consulting firm operating in Asia.
Cash consideration for these transactions amounted to £1.3m. The remainder of
the acquisition consideration relates to deferred consideration of £0.4m,
payable within one year of the reporting date, and £2.0m relates to the fair
value of the initial investment in both Saudi Arabia and Indonesia (previously
equity accounted for as joint ventures).
Goodwill of £7.0m has been provisionally determined. Goodwill is attributable
to the experience and expertise of key staff and strong industry reputation
and is not expected to be deductible for tax purposes.
10. Transactions with non-controlling interests
Under IFRS 10, transactions with non-controlling interests must be accounted
for as equity transactions. During the year, the Group undertook the following
transactions with non-controlling interests:
Effective holding (disposed)/acquired Total effective holding at 31 December 2021
Savills IM Holdings Ltd (25%) 75%
Part disposal of interests in subsidiaries
In December 2021, the Group disposed of 25% of the shares in Savills IM
Holdings Ltd ('Savills IM Group') to Samsung Life Company Ltd for
consideration of £71.7m, of which £63.7m was received in cash on completion.
This takes the Group's shareholding to 75%. The carrying amount of the Savills
IM group net assets on the date of disposal was £112.7m. The Group recognised
an increase in non-controlling interest of £28.2m. The amount recognised as a
profit to retained earnings in respect of this transaction was £39.3m, which
is net of transaction-related costs of £4.2m.
2021
£m
Carrying amount of non-controlling interests disposed of (28.2)
Consideration paid by non-controlling interest holder 71.7
Transaction-related costs (4.2)
Excess of consideration received recognised in parent's equity 39.3
11. Borrowings
Movements in borrowings are analysed as follows:
£m
Opening amount as at 1 January 2021 160.6
Additional borrowings, net of transaction costs paid 26.4
Repayments of borrowings (including overdraft movement) (38.3)
Additions through business combinations (Note 9) 1.6
Amortisation of transaction costs 0.5
Foreign exchange movement (0.3)
Closing amount as at 31 December 2021 150.5
2021 2020
£m £m
Current
Bank overdrafts 1.2 0.1
Unsecured bank loans due within one year or on demand 0.9 12.1
2.1 12.2
Non-current
Loan notes 150.0 150.0
Transaction costs (issuance of loan notes and RCF arrangement fees) (1.6) (1.6)
148.4 148.4
150.5 160.6
The Group holds a £360.0m multi-currency revolving credit facility ('RCF'),
which includes a £90.0m accordion facility. In June 2021 the Group extended
the maturity date of the RCF by a further year to June 2025. As at 31 December
2021 none (2020: none) of the RCF was drawn. The unsecured bank loans reflect
a £0.7m working capital loan in Thailand, which is repayable on demand and
denominated in Thailand baht (2020: £0.7m) and a £0.2m working capital loan
in Indonesia, which is repayable on demand and denominated in Indonesian
Rupiah (2020: none). The prior year unsecured bank loans also included a
£11.4m utilisation of a revolving credit facility in North America for
working capital purposes, which was repayable within one year and denominated
in US dollars (2021: none).
The Group holds £150.0m of long term debt through the issuance of 7, 10 and
12 year fixed rate private note placements in the US institutional market,
which were issued in June 2018.
The Group has the following undrawn borrowing facilities:
2021 2020
£m £m
Floating rate
- expiring within 1 year or on demand 61.2 36.1
- expiring between 1 and 5 years 361.0 361.1
422.2 397.2
12. Related party transactions
As at 31 December 2021, there were £0.2m of loans receivable from joint
ventures and £1.5m of loans receivable from associates (2020: £4.1m loans
receivable from joint ventures and £0.7m of loans receivable from
associates).
Refer to Note 9 for information with respect to full acquisition of joint
ventures and associates in the year.
There were no other material related party transactions during the period. All
related party transactions take place on an arm's-length basis under the same
terms as those available to other customers in the ordinary course of
business.
13. Annual report and accounts
Copies of the Annual Report and Accounts for the year ended 31 December 2021
will be circulated to shareholders on 4 April 2022 and will also be available
from the investor relations section of the Company website at
www.ir.savills.com or from:
Savills plc, 33 Margaret Street, London, W1G 0JD
Telephone: 020 7499 8644
Directors' responsibilities in respect of the financial statements
We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole; and
· the Strategic Report includes a fair review of the development and
performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face. We
consider the annual report and financial statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the Company's position and performance, business model
and strategy.
The contents of this announcement, including the responsibility statement
above, have been extracted from the annual report and accounts for the year
ended 31 December 2021, which will be available on publication
at www.ir.savills.com. Accordingly, this responsibility statement makes
reference to the financial statements of the Company and the Group and the
relevant narrative appearing in that annual report and accounts rather than
the contents of this announcement.
On behalf of the Board
Mark Ridley
Group Chief Executive
Chris Lee
Group Legal Director and Company Secretary
10 March 2022
Forward-looking statements
The financial information contained in this announcement has not been audited.
Certain statements made in this announcement are forward-looking statements
and are therefore subject to risks, assumptions and uncertainties that could
cause actual results to differ materially from those expressed or implied
because they relate to future events. These forward-looking statements
include, but are not limited to, statements relating to the Company's
expectations.
END
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