REG - Savills PLC - Final Results
16/03/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230316:nRSP1297Ta&default-theme=true
RNS Number : 1297T Savills PLC 16 March 2023
16 March 2023
Savills plc
("Savills" or "the Group")
PRELIMINARY RESULTS FOR THE FULL YEAR ENDED 31 DECEMBER 2022
Group performance ahead of expectations despite challenging markets
Savills plc, the international real estate advisor, today announces its
preliminary results for the year ended 31 December 2022.
Key financial highlights
· Group revenue up 7% to £2.3bn (2021: £2.15bn)
· Underlying* profit before tax decreased 18% to £164.6m (2021:
£200.3m)
· Reported profit before tax decreased 16% to £153.9m
(2021: £183.1m)
· Underlying basic EPS down 19% to 94.9p (2021: 116.5p); reported
basic EPS down 17% to 87.0p (2021: 104.9p)
· Aggregate proposed final and supplementary interim dividends of
29.0p (2021: 28.35p, together with a one off special dividend of 27.05p)
· Net cash** £307.4m (2021: £340.7m)
* Underlying profit before tax ('underlying profit') is an alternative
performance measure used to assess the performance of the Group. It 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
· Transactional Advisory revenues up 4% despite challenging market
conditions, particularly in H2; Residential Transaction revenue down 2%.
· Less transactional businesses, in aggregate 60% of Group revenue,
continued to perform well with revenue up 9%.
· Property and Facilities Management revenue up 13%, Consultancy
revenue up 4%.
· Savills Investment Management revenue up 1%, Assets under
Management ('AUM') up marginally from £21.9bn to £22.1bn.
Commenting on the results, Mark Ridley, Group Chief Executive, said:
"Performance in 2022 was slightly ahead of our expectations despite
challenging markets. More importantly, perhaps, the Group's performance was
substantially ahead of the 2019 'pre-COVID' comparative period. The strength
of our less transactional businesses, primarily Consultancy and Property
Management, helped underpin the Group's performance overall.
"In the year ahead, challenging macro conditions are expected to continue with
inflation and interest rates remaining in focus for some time. As a result,
the speed at which individual investment markets adjust to the cost of debt is
uncertain, although certain markets, such as the UK, are recalibrating faster
than in the past, and will be helped by the lack of development supply and an
overall trend to sustainability. We would also expect that the release of
COVID restrictions in Greater China paves the way for progressive improvement
in real estate markets in the region.
"We have started 2023 broadly in line with our expectations. However, it is
clear that, at this stage, predictions for the full year are characterised by
a wide range of possible outcomes; we believe that H1 2023 will be more
challenging than its 2022 comparative; however, we expect progressive
improvement through the second half of the year. 2024 should see more positive
conditions for real estate market activity and Savills is both retaining its
bench strength and investing in advance of such recovery."
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 8030
Mark Ridley, Group Chief Executive
Simon Shaw, Group Chief Financial Officer
Teneo 020 7353 4200
Mark Burgess
William Palfreyman
Chairman's statement
Results
The Group traded well in 2022, against a backdrop of geopolitical, economic,
logistical (supply chain) and, in some locations, continued COVID-related
challenges. The Group's revenue increased by 7% to £2.3bn (2021: £2.15bn),
substantially driven by the performance of our property management business.
We had anticipated a reduction in profits compared with 2021 due both to the
progressive return of certain discretionary costs (travel, entertainment and
marketing events) as markets unlocked post-COVID, and as a result of staff
cost inflation. In the event, and despite significant challenges in many
transactional markets, underlying profit for the year decreased by 18% to
£164.6m (2021: £200.3m), reflecting an underlying profit margin of 7.2%
(2021: 9.3%). To put this into pre-COVID context, underlying profit was 15%
ahead of 2019 (£143.4m), which represented an underlying profit margin of
7.5% for that pre-pandemic year.
The Group's reported profit before tax decreased by 16% to £153.9m (2021:
£183.1m).
The Group continued to maintain a strong liquidity position with net cash
(cash and cash equivalents net of borrowings and overdrafts in the notional
pooling arrangements) of £307.4m at year end (2021: £340.7m).
Overview
Since the end of Q1 2022, real estate markets across the Globe have been
increasingly challenged by geopolitical events, macro-economic issues and the
associated policy responses. Despite this, the Group performed ahead of its
previous expectations for the year and substantially ahead of the 2019
'pre-COVID' comparative period. Overall, our Transaction Advisory revenue
increased 4% year-on-year and our less transactional businesses of Consultancy
and Property Management grew revenue by 4% and 13% respectively. Although not
immune from market volatility (particularly in respect of some Consultancy
service lines), these businesses performed well and their strength helped
underpin Savills performance overall.
In the Transactional businesses, the rapid rise in actual and anticipated debt
costs, through the second half of the year in particular, represented a
significant challenge to which commercial investment markets have had to
adjust. This, together with inflationary pressures globally, also reduced the
volume of leasing transactions, although in a number of markets the drive for
sustainability and improved amenity ensured that Grade A office activity, in
particular, remained relatively robust.
One highlight in the year was the relative strength of the prime residential
markets which, particularly in the UK, helped to mitigate the effect of volume
declines in commercial transaction activity.
The Investment Management business traded marginally ahead of our expectations
although deployment of capital was inevitably reduced, given the uncertain
market conditions, and valuation adjustments reduced performance fee income
year-on-year as anticipated. The majority of the effect of quarterly portfolio
valuation adjustments is, however, likely to be felt in 2023. Overall, we were
pleased with progress in the first full year of Savills Investment
Management's relationship with Samsung life Insurance and the consequent
launch of a number of new fund products in these market conditions.
Discretionary costs (travel, entertainment and marketing events), which
reduced significantly during the pandemic, increased overall in line with our
expectations as marketing activity, entertainment and travel normalised
post-pandemic. Meanwhile employment costs increased substantially as expected,
reflecting inflationary pressures. The combination of these factors resulted
in a decrease to the Group underlying profit margin to 7.2% (2021: 9.3%).
The impact of the above factors on the Group underlying profit margin
decreased reported profit before tax by 16% to £153.9m (2021: £183.1m),
representing a 6.7% reported pre-tax profit margin (2021: 8.5%).
Currency movements in the year increased revenue by £69.4m, underlying profit
by £1.7m and reported profit before taxation by £1.5m.
Market conditions
2022 started strongly in virtually all markets which had largely released
COVID-related restrictions. The war in Ukraine, inflation and the rising
interest rate cycle began to affect transaction markets in Q2, initially in
the smaller lot sizes of both capital and leasing transactions, as investors
and corporates began to factor inflation and rising debt costs into their
decisions.
As a consequence, the volume of global real estate investment activity
declined substantially in 2022, with the majority of the reduction occurring
in the final quarter as cumulative interest rate rises and wage inflation
began to bite. That said, in the UK especially, markets have been quicker to
recalibrate than has been the case historically. We anticipate that this will
continue with markets progressively normalising from the end of Q2 2023.
In the UK, the housing market remained stronger for longer than anticipated,
with the prime London housing markets particularly resilient. The
international nature of the prime London market, with lower dependence upon
mortgage financing relative to the wider markets and attractive valuations in
a global context, should partially mitigate the effect of further volume
reductions in the residential market overall.
In Europe, 2022 was characterised by a progressively reduced flow of capital
into real estate and weakening valuations due to the impact of interest rate
rises on historically low yields. In certain markets such as Germany, utility
inflation and weakened export markets (eg China) significantly reduced both
investment and corporate leasing demand during the period.
In the Asia Pacific region market conditions varied with the majority being
affected by rising interest rates. The major exception was Japan, where
continued low interest rates ensured a strong investment market. Finally, in
Greater China, COVID related restrictions significantly affected market
activity for the majority of the period.
In North America Q1 2022 showed strong volumes in capital and leasing
transactions. Thereafter the pace of interest rate increases significantly
dampened demand.
Sustainability in real estate
During 2022 the key focus for the Group continued to be minimising our impact
on the environment by delivering continuous improvement against our targets
relating to the nine material Sustainable Development Goals and reducing
carbon emissions.
During the year we remained committed to the Science-Based Targets Initiative
to deliver our carbon reduction goals, consistent with a no greater than
1.5°C temperature increase, to achieving Scope 1 and 2 net zero by 2030 and
net zero in our value chain (ie Scope 3, including assets under the Group's
discretionary control) by 2040. We have made tangible reductions in carbon in
2022 with our absolute Scope 1 and 2 'market-based' emissions totalling 6,679
tonnes CO2e, which is a 17.9% (1,454 tonnes CO2e) reduction against the 2019
base year. Across the Group we continue to implement practical initiatives to
improve the environmental performance of the workspaces we occupy, including
in the design of new offices, retrofitting of existing ones, and the active
management of the whole estate.
We have adopted a new green lease and fit-out guide as a basis for engagement
with the Group's landlords including a transition towards renewable energy
tariffs and the use of electric vehicles where market availability allows.
Looking forwards we aim to improve upon our Green House Gas ('GHG') data sets
for all three scopes, whilst also undertaking further tangible carbon
reduction actions consistent with our Net Zero Transition Plan. Following some
significant progress on the ESG agenda this year, we aim to enhance our
ability to support both our people and our communities in the year ahead.
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. We continuously
monitor opportunities to acquire complementary businesses, teams or
individuals to enhance our strong core business.
During the year we completed the acquisition of several businesses and
continued to undertake significant organic growth initiatives across the
business. The Group acquired workplace technology specialist BrickByte GmbH in
Germany, enhancing Savills ability to respond to increasing client demand for
technology-enabled workplace consulting in this market. In Indonesia, the
Group acquired a full service property business to bolster our offering in the
region. Savills Investment Management acquired Pitmore 1 Limited, a UK
development and build-to-rent specialist, and a majority interest in Simply
Affordable Homes LLP, a registered provider of affordable housing; both
transactions were part of the continued expansion of our European Living
Platform in Savills Investment Management. The Group also acquired a majority
interest in AMS Maintenance Services Pte Limited and Solute Pte Limited, a
facilities management group in Singapore, enhancing the property and
integrated facilities management platform in the region.
Focus on technology
Technology is an important focus for the Group, and we continue to benefit
from the investments we have made both internally and externally, through
Grosvenor Hill Ventures, across the world. As we build our insight and data
capabilities through our local, regional and global network of specialists,
this allows us to ensure that individual teams have the resources they require
to continue to deliver market leading advice to clients, while benefitting
from the network effect of centralisation driving innovation and efficiencies.
Workthere, our flexible office brokerage, continues to grow and had a record
year as occupiers sought increased flexibility. We continue to invest in both
brokerage and technology within the business to ensure ever increased
efficiency and data collection as we expand our footprint. Our digitally
enabled auction business within the UK continues to go from
strength-to-strength, taking significant market share during the year.
In February 2022 we acquired the trade and assets of Cureoscity Limited, the
tenant experience platform. This connects occupiers, asset owners and property
and facilities managers, primarily focused on multi-let office buildings.
Post-acquisition we have further deployed the technology into our own property
management portfolio, and on a stand-alone basis the business continues to win
new mandates from third party managed buildings.
Through Grosvenor Hill Ventures we have continued to support our portfolio
businesses and we also participated in the Series A funding round of ThirdFort
Limited, a platform which improves the customer experience by digitising many
aspects of the increasingly onerous compliance process in real estate
transactions.
Board
On 15 December 2022 Marcus Sperber was appointed to the Board as an additional
independent Non-Executive Director. I am delighted that Marcus has joined the
Board and we are already benefitting from his extensive global real estate
experience as we further grow our business.
In addition, having been Chairman since May 2016, I plan to retire from the
Board towards the end of this year. A search for a new Board Chair is underway
and we will update further in due course.
Dividends
An interim dividend of 6.6p per share (2021: 6.0p) amounting to £8.9m was
paid on 5 October 2022, and a final ordinary dividend of 13.4p per share
(2021: 12.75p) is recommended, making the ordinary dividend 20.0p per share
for the year (2021: 18.75p). A supplemental interim dividend of 15.6p per
share (2021: 15.6p) is declared, based upon the underlying performance of our
Transaction Advisory business. Taken together, the ordinary and supplemental
interim dividends comprise an aggregate distribution for the year of 35.6p per
share, representing an increase of 3.6% on the 2021 aggregate ordinary and
supplemental dividend of 34.35p. In 2021 we also declared a special dividend
of 27.05p.
Subject to Shareholder approval of the proposed final dividend at the AGM on
17 May 2023, the aggregate final and supplementary interim dividends of 29.0p
will be paid on 22 May 2023 to Shareholders on the register at 11 April 2023.
People
I would like to express my thanks to all our employees worldwide for their
hard work, commitment and continued focus on client service, which enable the
Group to deliver these results in such challenging times.
Summary and Outlook
Performance in 2022 was slightly ahead of our expectations despite challenging
markets. More importantly, perhaps, the Group's performance was substantially
ahead of the 2019 'pre-COVID' comparative period. The strength of our less
transactional businesses, primarily Consultancy and Property Management,
helped underpin the Group's performance overall.
In the year ahead, challenging macro conditions are expected to continue with
inflation and interest rates remaining in focus for some time. As a result,
the speed at which individual investment markets adjust to the cost of debt is
uncertain, although certain markets, such as the UK, are recalibrating faster
than in the past, and will be helped by the lack of development supply and an
overall trend to sustainability. We would also expect that the release of
COVID restrictions in Greater China paves the way for progressive improvement
in real estate markets in the region.
We have started 2023 broadly in line with our expectations. However, it is
clear that, at this stage, predictions for the full year are characterised by
a wide range of possible outcomes; we believe that H1 2023 will be more
challenging than its 2022 comparative; however, we expect progressive
improvement through the second half of the year. 2024 should see more positive
conditions for real estate market activity and Savills is both retaining its
bench strength and investing in advance of such recovery.
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
2022 2021 % growth 2022 2021 % growth
UK 956.3 925.6 3 118.1 129.5 (9)
Asia Pacific 669.7 626.5 7 41.4 59.2 (30)
CEME 335.0 301.2 11 17.3 15.4 12
North America 337.3 293.7 15 4.1 15.1 (73)
Unallocated - - n/a (16.3) (18.9) n/a
Total 2,298.3 2,147.0 7 164.6 200.3 (18)
On a constant currency basis Group revenue increased by 4% to £2,228.9m,
underlying profit decreased 19% to £162.9m and reported profit before tax
decreased by 17% to £152.4m. Our Asia Pacific business represented 29% of
Group revenue (2021: 29%) and our overseas businesses as a whole represented
58% of Group revenue (2021: 57%). Our performance by service line is set out
below:
Revenue £m Underlying profit/(loss) £m
2022 2021 % growth 2022 2021 % growth
Transaction Advisory 930.1 892.9 4 71.9 97.6 (26)
Property and Facilities Management 841.5 745.6 13 50.2 49.1 2
Consultancy 413.9 396.7 4 37.6 47.0 (20)
Investment Management 112.8 111.8 1 21.2 25.5 (17)
Unallocated - - n/a (16.3) (18.9) n/a
Total 2,298.3 2,147.0 7 164.6 200.3 (18)
Overall, our Commercial and Residential Transaction Advisory business revenues
together represented 40% of Group revenue (2021: 42%). Of this, the
Residential Transaction Advisory business represented 10% of Group revenue
(2021: 11%). Our Property and Facilities Management businesses continued to
perform well, growing year-on-year and representing 37% of Group revenue
(2021: 35%). Our Consultancy businesses represented 18% of revenue (2021:
18%). The Investment Management business increased revenue by 1% and
represented 5% of Group revenue (2021: 5%).
Transaction Advisory
Overall, our Transaction Advisory revenues increased by 4% (1% on constant
currency basis) to £930.1m (2021: £892.9m). Globally our commercial capital
transaction business revenue decreased by 1% and our leasing and occupier
focused transactional revenues grew by 11%. Our Global Residential business
revenue remained resilient against a strong comparative in 2021.
Underlying profits fell by 26% to £71.9m (2021: £97.6m), with an underlying
profit margin of 7.7% (2021: 10.9%), reflecting the impact of continued COVID
restrictions in Greater China on profits, and inflationary pressures on the
cost base, brought about by a combination of the pandemic, the war in Ukraine,
inflation and the consequential tightening of monetary policy around the
globe.
Asia Pacific Commercial
Revenue from the Asia Pacific Commercial Transactional business decreased by
5% to £145.3m (2021: £153.0m), a decrease of 7% in constant currency.
Despite this, revenue exceeded 2019 by 5%.
There were significant revenue reductions in Hong Kong, mainland China and
Australia, partially offset by stronger performances elsewhere in the region,
in particular Japan, Singapore and South Korea. In China the lockdowns which
remained in place during the first three quarters, coupled with a subsequent
surge in COVID cases after restrictions were eased in Q4, significantly
reduced market activity throughout the year. This had a material impact in
Hong Kong, which suffered from a lack of investment inflows from the mainland,
coupled with higher interest rates during 2022. Likewise in Australia,
increased interest rates caused reduced investment activity. With the yen at a
24-year low against the dollar, and interest rates remaining low, investment
transactions in Japan increased significantly, resulting in a 140% constant
currency increase in revenue. Elsewhere there was significant revenue growth
in Singapore and South Korea, the former driven by increased investment
activity and the latter driven by the Industrial teams, primarily through our
expertise in data centres. Leasing activity in the region also improved,
notably in Australia and Singapore, as corporates which had delayed making
longer-term lease decisions during 2021, began to commit to new leases.
Overall the Asia Pacific Commercial Transactional business experienced a 35%
reduction in underlying profit to £13.4m (2021: £20.6m) with a margin of
9.2% (2021: 13.5%).
UK Commercial
UK Commercial Transactional revenue grew by 3% to £118.9m (2021: £115.2m),
reflecting growth in both the investment and leasing sectors as a result of
their strong performance in the first half of the year.
Investment markets slowed considerably in the second half of 2022 resulting in
Capital Transaction related revenues for the UK regions and Central London
respectively, which had been up 59% and 88% at the half year, declining by 3%
and 5% respectively for the year as a whole. The final quarter saw
transactional activity drop to levels that have not been experienced since the
global financial crisis. The severity of this decline, however, appears to
have helped the UK market to recalibrate quicker than in the past.
Leasing markets fared somewhat better, although business confidence fell in
the final quarter of 2022. Take-up of office, retail and logistics space
across the UK was generally in line with or above long-term averages, with
Savills teams achieving year-on-year revenue growth of 21%. To a great extent
this was driven by corporate desire to improve the sustainability
characteristics of their leased estate.
Despite the increase in revenues, underlying profits fell by 5% to £20.4m
(2021: £21.5m), mainly as a result of higher staff costs and discretionary
spend increasing towards pre-pandemic norms. The margin reduced to 17.2%
(2021: 18.7%), still comfortably ahead of the 2019 pre-pandemic margin of
13.1%.
North America
Revenue from the North America Transactional business increased by 15% to
£303.5m (2021: £263.6m), an improvement of 4% in constant currency.
The overwhelming majority of North American revenue relates to occupier
leasing transactions which improved by 16% to £279.8m (2021: £240.6m).
Growth in the North East and southern regions offset significant declines in
activity in the Mid-Atlantic and West Coast regions as the corporate exodus
from markets such as San Francisco and the recalibration of growth
expectations in the technology sector took effect. These factors contributed
substantial losses compared with the prior year, which could not be completely
offset by growth in South Eastern and South Western markets.
Capital markets revenues improved by 3% to £23.7m (2021: £23.0m).
Profits were impacted by significant wage inflation in the salaried employee
base, investment and retention of individuals and teams, as well as the
anticipated increase in discretionary spend as marketing events and travel
returned towards pre-pandemic levels. All the above factors resulted in a
reduction in underlying profit to £2.3m (2021: £10.3m).
Continental Europe and the Middle East (CEME)
In CEME, transaction fee income increased by 4% to £129.8m (2021: £124.4m);
an improvement of 5% in constant currency.
The war in Ukraine and subsequent supply chain disruption, along with
inflation and rising interest rates reduced investor and occupier activity
levels, most notably in Germany and Poland. Across the region there was a
slowdown in Investment markets as a result of the higher cost of debt,
partially offset by more resilient leasing volumes within Office Agency and
Retail. We continued to grow market share in Spain together with stronger
performances from Ireland, France (particularly in Retail), Italy and the
Czech Republic.
Profitability was impacted primarily by the significant downturn in activity
causing losses in Germany and Poland together with investment in new teams in
France and Italy and new offices in Portugal. As a result the underlying loss
for the year was £2.7m (2021: £1.4m underlying profit).
UK Residential
UK Residential Transactional revenue decreased by 1% to £208.3m (2021:
£210.7m), which was significantly ahead of our expectations at the start of
the year.
Second-hand sales revenue declined by 5% with a reduction in the number of
exchanges of 17% to 6,124 (2021: 7,412), this was offset by an increase in the
average sales value by 14% to £1.68m (2021: £1.48m). Volumes in the regional
UK market declined significantly in line with our expectations, however
Central London volumes remained relatively robust.
New Homes revenues were up 8% year-on-year, reflecting a 17% increase in the
average value per exchange which more than offset the 4% reduction in the
number of exchanges (2022: 3,477 vs 2021: 3,609), this was primarily due to
growth in London, which helped to mitigate reduced demand in the regional
markets.
In the institutional residential business, multifamily and student housing
capital markets revenues were up 16%, driven by an increase in corporate
finance portfolio transactions.
Underlying profit reduced by 10% to £35.1m (2021: £38.9m), reflecting higher
staff costs, the return of discretionary spend, including resumption of
national promotional campaigns and higher utility costs in the branch network.
This performance represented an underlying profit margin of 16.9% (2021:
18.5%); underlying profits were 97% ahead of the pre-pandemic 2019 comparative
(2019: £17.8m).
Asia Pacific Residential
Revenue from the Asia Pacific Residential Transaction business decreased by 7%
to £24.3m (2021: £26.0m), a fall of 13% in constant currency.
With some 83% of revenues in this segment generated in Greater China,
lockdowns throughout the year and COVID resurgence on reopening in the last
quarter had a significant impact on the volume of transactions. In Hong Kong
and Australia, restrictions on travel coupled with high interest rates further
limited demand. In Singapore, revenues and profits were broadly flat
year-on-year with an increased contribution from Huttons, our mid-market
residential agency joint venture. As a result, underlying profits fell by
£1.5m to £3.4m (2021: £4.9m).
Property and Facilities Management
Our Property and Facilities Management businesses continued to perform well,
with revenues growing by 13% to £841.5m (2021: £745.6m); 9% in constant
currency. Savills total area under management increased by 1% to 2.47bn sq.
ft. (2021: 2.45bn sq. ft.). Underlying profit increased by 2% to £50.2m
(2021: £49.1m), a decrease of 1% in constant currency, primarily due to staff
cost inflation and the absence of receipts under the COVID-related employment
retention subsidies in Hong Kong and Singapore (2021: £5.1m).
Asia Pacific
In Asia Pacific, Property Management revenue was £404.9m, an increase of 14%
year-on-year (2021: £356.7m); a 5% increase in constant currency.
Facilities Management revenues were up 15% (2022: £164.8m vs 2021: £143.9m)
and Property Management up 13% (2022: £240.1m vs 2021: £212.8m). The revenue
growth in Property Management came mainly from new contracts won in Hong Kong,
Vietnam, Singapore and mainland China. The revenue growth in Facilities
Management was predominantly in Singapore, aided by the acquisition of
Absolute Maintenance Services Pte Limited and Solute Pte Limited ('AMS').
The absence of employment subsidies in 2022 (2021: £5.1m) reduced underlying
profits by 19% year on-year to £21.0m (2021: £25.8m) resulting in a more
normal margin of 5.2% (2021: 7.2%) for the Asia Pacific business as a whole.
UK
The UK Property Management business grew revenues by 9% to £327.4m (2021:
£300.6m) reflecting continued success with contract wins. We now have the
leading position in the management of landmark offices (four of the six
largest towers in City of London are managed by Savills).
Square footage under management increased by 1.5% (31 December 2022: 577.0
million sq ft, 31 December 2021: 568.7 million sq ft). Of the increase in
revenues, proportionately more came from the lower margin Facilities
Management ('FM'), which thus has a less beneficial effect on the overall
profitability of the business. During the year we continued to diversify our
FM business into new service lines, such as car park consultancy and secured
significant new FM mandates.
Our Residential Lettings business had a successful year, with revenues
increasing by 10%, reflecting strong tenant demand with reduced supply,
particularly within London.
The higher revenues, along with a continued drive to improve efficiencies,
increased underlying profit by 18% to £25.9m (2021: £22.0m).
Continental Europe and the Middle East
CEME Property Management revenues increased by 24% to £109.2m (2021:
£88.3m); the same on a constant currency basis.
In Germany revenues were up 40%, with significant new mandates won. In Spain
revenues were up 38%, including the full year impact of a new team hire during
2021. Revenue in Ireland grew as a result of new contracts won, with the
Middle East also improving significantly, reflecting contracts won in the
Saudi Arabian and Egyptian property management businesses. There was also
improvement in the Czech Republic in its third year of operation from a
standing start.
Area under management at 31 December 2022 was 265.4 million sq ft, up 43% on
last year (31 December 2021: 186.0 million sq ft), mainly as a result of the
new mandates in Germany and contract wins in the Netherlands and Poland.
Profitability and margins in the CEME businesses were benefited by improved
scale but were impacted by inflationary cost pressures. However, in aggregate
underlying profit increased by 154% to £3.3m (2021: £1.3m).
Consultancy
Global Consultancy revenue increased by 4% to £413.9m (2021: £396.7m); 2% on
a constant currency basis. Underlying profit decreased by 20% to £37.6m
(2021: £47.0m); 20% on a constant currency basis. Some of the reduction was
associated with market-related reductions in certain service lines such as
valuations, which are linked to transactional volumes, however the most
significant impact was salary inflation, particularly amongst professionals
below director level.
UK
The UK Consultancy businesses, comprising a broad range of advisory
activities, increased revenue by 2% to £248.4m (2021: £244.0m).
The main sources of revenue growth were the Housing, Business Projects &
Consulting ('BP&C') and Planning teams, partially offset by reductions in
Development, Energy & Projects, Hotels, Leisure & Trading ('HLT') and
Valuations.
Housing revenue growth was driven by high client demand particularly in
surveying, due to government initiatives on safety in the sector, BP&C
benefitted from significant year-on-year growth in both Scotland and the south
of England (mainly project management work), and Planning had a very strong
end to the year in both London and the regions.
Development revenues were down on 2021 reflecting a slowdown in house building
following the mini-budget, likewise the Valuations teams also suffered a
reduction in revenues as a result of subdued capital transactions in Q4.
Underlying profits were impacted by higher staff costs, which were due to a
combination of salary increases coupled with headcount growth. In addition
discretionary spend such as travel and entertainment increased, albeit still
well below pre-pandemic levels.
As a result underlying profit decreased by 15% to £28.0m (2021: £33.1m).
Asia Pacific
In the Asia Pacific Consultancy segment, revenues increased by 8% to £87.4m
(2021: £81.3m); 2% on a constant currency basis. The overwhelming majority of
revenues are earned in mainland China and Australia, both of which suffered
from reductions in valuation and research activity as a result of
COVID-related lockdowns and the impact of interest rates on capital
transaction volumes.
Project management increased revenue by 31% year-on-year, boosted by the
acquisition of Merx Holdings (SG) Pte Ltd ('Merx') at the end of 2021. The
business operates in Singapore and Hong Kong and generated revenue of £5.4m.
Asia Pacific Consultancy underlying profit was impacted by significant
reductions in activity and professional salary inflation in mainland China and
Australia, together with initial costs relating to the integration of Merx and
set-up costs in developing the project management offering across the region.
As a result, underlying profit decreased by 56% both at prevailing exchange
rates and on a constant currency basis to £2.9m (2021: £6.6m).
Continental Europe and the Middle East
Revenues increased by 7% to £44.3m (2021: £41.3m), at both prevailing rates
and on a constant currency basis.
Revenue growth was driven by growth in portfolio advisory work in Germany
supported by growth in advisory services in the Netherlands, Sweden and
Ireland.
Underlying profits grew by 96% to £4.9m (2021: £2.5m); 92% in constant
currency.
North America
This segment primarily comprises complex project management through Macro
Consultants LLC ('Macro'), a national project management consultancy business
and T3 Advisors, a workplace solutions advisory firm specialising in the life
science and technology sectors (acquired June 2021), as part of our strategy
to diversify our income streams by building up our Consultancy practices.
Revenues increased by 12% to £33.8m (2021: £30.1m), 2% on a constant
currency basis, primarily as a result of a greater volume of project work in
the Macro business. This was partially offset by the impact of reduced growth
expectations in the technology sector which affected the revenue of T3
Advisors after a very successful year in 2021.
The impact of the significant cost pressures in these sectors resulted in a
reduction in underlying profit of 63% to £1.8m (2021: £4.8m), 65% in
constant currency.
Investment Management
Savills Investment Management achieved revenue growth of 1% to £112.8m (2021:
£111.8m); 1% in constant currency.
The revenue growth was driven by the full year effect of 100% ownership of DRC
Savills Investment Management, the real estate debt investor whose remaining
75% partnership interests were acquired in May 2021. This was partially offset
by significantly lower performance fees as global markets cooled during 2022.
During 2022 transactions of circa £3.4bn (2021: £3.5bn) were executed,
including £1.3bn of disposals, £1.8bn of acquisitions and £0.3bn in debt
investments. Assets Under Management increased by 1% to £22.1bn (2021:
£21.9bn). Fund performance remained strong with 94% of funds exceeding their
five year benchmarks. In difficult market conditions the business raised
£1.6bn of new equity (2021: £2.5bn), supported by initial investments from
Samsung Life Insurance in the first 12 months of the relationship.
The cost base was impacted by an increase in headcount, inflationary pressures
on property and office costs and investments in the platform, including the
acquisitions of Pitmore 1 Limited (a UK development and build-to-rent
specialist) and a majority stake in Simply Affordable Homes LLP (specialising
in shared ownership and affordable and social rents).
In aggregate, primarily as a result of the reduction in performance fees
year-on-year, underlying profit reduced by 17% to £21.2m (2021: £25.5m); 16%
decrease on a constant currency basis.
Financial review
Profit margin
Underlying profit margin decreased to 7.2% (2021: 9.3%), see Note 3 to this
Preliminary Statement for further explanation of underlying profit measures.
This reflects the mix of business with reduced growth in higher margin
Transactional and Investment Management businesses. In addition, there was
higher staff cost inflation than for some years and a return to higher levels
of marketing, travel and entertainment/events-related expenses. This was
anticipated after the abnormally low levels of such expenditure in 2021 due to
the impact of COVID and remote working.
Reported pre-tax profit margin decreased to 6.7% (2021: 8.5%).
Taxation
The tax charge for the year decreased to £34.1m (2021: £36.4m), representing
an effective tax rate on reported profit before tax of 22.2% (2021: 19.9%).
The Group's effective reported tax rate is higher than the UK effective rate
of tax of 19% as a result of profits in higher tax jurisdictions and
permanently disallowed charges, including non-deductible transaction-related
costs.
The underlying effective tax rate increased to 20.5% (2021: 18.7%).
Transaction-related costs
During the year the Group recognised a total of £15.5m in transaction-related
costs (2021: £17.0m), these costs primarily represent liabilities for future
consideration payments which are contingent on the continuity of recipients'
employment at the time of payment (2022: £14.8m, 2021: £13.9m). The largest
individual component of this charge in 2022 related to the acquisition in 2021
of the 75% partnership interests in DRC Capital LLP, which the Group did not
already own.
These charges have been excluded from the calculation of underlying profit on
a consistent basis in line with Group policy.
Earnings per share
Basic earnings per share decreased 17% to 87.0p (2021: 104.9p), reflecting an
18% decrease in reported profit after tax. Adjusted on a consistent basis for
significant 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 significant fair value gains and losses,
underlying basic earnings per share decreased 19% to 94.9p (2021: 116.5p).
Fully diluted earnings per share decreased by 18% to 82.2p (2021: 99.8p). The
underlying fully diluted earnings per share decreased 19% to 89.8p (2021:
110.9p).
Cash resources, borrowings and liquidity
Cash and cash equivalents, net of overdrafts in notional pooling arrangements,
at year end decreased 5% to £467.1m (2021: £491.2m). This decrease reflected
the special dividend payment in the year and the value of treasury share
purchases offset by a robust trading performance and the positive impact of
exchange movements on cash held in foreign currencies.
Gross borrowings at year end increased to £159.7m (2021: £150.5m). These
principally comprise £150.0m (2021: £150.0m) of 7, 10 and 12 year fixed rate
notes which were issued in June 2018. The Group's £360.0m UK revolving credit
facility ('RCF') was undrawn at the end of the year (2021: undrawn), with a
total of £426.2m (2021: £422.2m) of undrawn borrowing facilities available
to the Group. At the year end, cash and cash equivalents net of borrowings was
£307.4m (2021: £340.7m).
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 £164.0m (2021: £302.7m). This reduction was
due to reduced profits year-on-year and the related increase in net working
capital.
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 0.1m (2021: 1.1m) new ordinary shares were issued on the
exercise of options by participants of the Group's SAYE schemes and 0.1m
(2021: nil) of new ordinary shares were issued to participants of the Group's
PSP 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 2022 was 144.4m (2021: 144.2m).
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 further during the
year with the increase in the yield on AA-rated corporate bonds, reducing the
value of the Scheme's liabilities. The plan was in a surplus position of
£22.3m at the year-end (2021: £17.4m surplus).
Net assets
Net assets as at 31 December 2022 were £805.3m (2021: £753.4m). This
movement reflects primarily the Group's trading performance and currency
translation gains, reflecting the weakening of sterling during the year,
offset by purchases of treasury shares and dividend payments.
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 £69.4m increase in revenue and a £1.7m increase 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, liquidity and/or pose a material reputational
risk. Further detail on these principal risks will be provided in the Group's
Annual Report and Accounts, which will be available on publication
at www.ir.savills.com (http://www.ir.savills.com) on 3 April 2023. The
identified principal risks are summarised below:
· Market conditions, macro-economic and geopolitical issues
· Achieving the right market positioning to meet 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 2022
2022 2021
Note £m £m
Revenue 2 2,298.3 2,147.0
Less:
Employee benefits expense (1,509.8) (1,413.1)
Depreciation (65.8) (63.4)
Amortisation of intangible assets (16.9) (14.2)
Impairment of intangible assets and goodwill - (5.2)
Other operating expenses (562.1) (465.2)
Decrease/(increase) in provision for expected credit loss 2.1 (4.0)
Other net gains 0.3 2.0
Share of post-tax profit from joint ventures and associates 12.1 12.6
Operating profit 158.2 196.5
Finance income 13.7 1.9
Finance costs (18.0) (15.3)
(4.3) (13.4)
Profit before income tax 153.9 183.1
Income tax expense 4 (34.1) (36.4)
Profit for the year 119.8 146.7
Attributable to:
Owners of the parent 119.4 146.2
Non-controlling interests 0.4 0.5
119.8 146.7
Earnings per share
Basic earnings per share 6(a) 87.0p 104.9p
Diluted earnings per share 6(a) 82.2p 99.8p
Supplementary income statement information
Reconciliation to underlying profit before income tax
Profit before income tax 153.9 183.1
- restructuring and transaction-related costs 15.6 17.3
- other underlying adjustments (4.9) (0.1)
Underlying profit before income tax 2 and 3 164.6 200.3
Savills plc
Consolidated statement of comprehensive income
for the year ended 31 December 2022
2022 2021
£m £m
Profit for the year 119.8 146.7
Other comprehensive income/(loss)
Items that will not be reclassified to profit or loss:
Remeasurement of defined benefit pension scheme and employee benefit 6.6 21.3
obligations
Changes in fair value of financial assets at FVOCI (10.9) (4.4)
Tax on other items that will not be reclassified (3.9) (5.3)
Total items that will not be reclassified to profit or loss (8.2) 11.6
Items that may be reclassified subsequently to profit or loss:
Currency translation differences 48.1 (8.9)
Tax on items that may be reclassified - (0.1)
Total items that may be reclassified subsequently to profit or loss 48.1 (9.0)
Other comprehensive income for the year 39.9 2.6
Total comprehensive income for the year 159.7 149.3
Total comprehensive income attributable to:
Owners of the parent 158.4 148.8
Non-controlling interests 1.3 0.5
159.7 149.3
Savills plc
Consolidated statement of financial position
at 31 December 2022
2022 2021
restated*
Note £m £m
Assets: Non-current assets
Property, plant and equipment 77.0 66.3
Right-of-use assets 223.8 232.6
Goodwill 449.4 411.6
Intangible assets 66.3 72.6
Investments in joint ventures and associates 37.0 32.8
Deferred income tax assets 38.6 36.1
Financial assets at fair value through other comprehensive income ('FVOCI') 5.7 16.7
Financial assets at fair value through profit and loss ('FVPL') 36.8 29.5
Defined benefit pension surplus 25.5 18.1
Contract related assets 2.4 3.4
Trade and other receivables 37.5 25.4
1,000.0 945.1
Assets: Current assets
Contract assets 7.4 9.3
Trade and other receivables 643.1 602.3
Income tax receivable 2.4 0.9
Derivative financial instruments 0.3 0.1
Cash and cash equivalents** 669.1 689.7
1,322.3 1,302.3
Liabilities: Current liabilities
Borrowings 10 10.6 2.1
Overdrafts in notional pooling arrangement** 202.0 198.5
Lease liabilities 53.2 48.0
Derivative financial instruments 1.0 0.9
Contract liabilities 14.0 14.5
Trade and other payables 744.3 738.5
Income tax liabilities 15.5 15.9
Employee benefit obligations 17.7 16.9
Provisions 9.2 9.2
1,067.5 1,044.5
Net current assets 254.8 257.8
Total assets less current liabilities 1,254.8 1,202.9
Liabilities: Non-current liabilities
Borrowings 10 149.1 148.4
Lease liabilities 224.4 237.0
Derivative financial instruments 6.7 2.6
Other payables 21.9 20.0
Employee benefit obligations 25.2 20.3
Provisions 20.6 20.0
Deferred income tax liabilities 1.6 1.2
449.5 449.5
Net assets 805.3 753.4
Equity:
Share capital 3.6 3.6
Share premium 104.9 104.4
Other reserves 112.8 76.2
Retained earnings 546.8 540.0
Equity attributable to owners of the parent 768.1 724.2
Non-controlling interests 37.2 29.2
Total equity 805.3 753.4
* See Note 1(b) and Note 9 for details on the prior year restatements.
** Included within cash and cash equivalents are cash balances of £205.0m (31
December 2021: £201.5m) that are operated within a notional cash pooling
arrangement together with overdraft balances of £202.0m (31 December 2021:
£198.5m) 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 2022
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 2022 3.6 104.4 76.2 540.0 724.2 29.2 753.4
Profit for the year - - - 119.4 119.4 0.4 119.8
Other comprehensive income/(loss):
Remeasurement of defined benefit pension scheme and employee benefit - - - 6.1 6.1 0.5 6.6
obligations
Changes in fair value of financial assets at FVOCI - - (10.9) - (10.9) - (10.9)
Tax on items taken to other comprehensive income/(loss) - - - (3.7) (3.7) (0.2) (1.7)
Currency translation differences - - 47.5 - 47.5 0.6 48.1
Total comprehensive income for the year - - 36.6 121.8 158.4 1.3 159.7
Employee share option scheme:
- Value of services provided - - - 29.6 29.6 0.8 30.4
- Tax on employee share option schemes - - - (2.6) (2.6) - (2.6)
Issue of share capital - 0.5 - - 0.5 - 0.5
Tax on other items taken to reserves - - - 0.3 0.3 - 0.3
Purchase of treasury shares - - - (49.0) (49.0) - (49.0)
Dividends - - - (85.5) (85.5) (0.4) (85.9)
Transfer between reserves - - 0.4 (4.0) (3.6) 3.6 -
Fair value of derivative financial instrument - - - (4.5) (4.5) - (4.5)
Transaction with non-controlling interest - - (0.4) 0.7 0.3 - 0.3
Additions through business combinations - - - - - 2.7 2.7
Balance at 31 December 2022 3.6 104.9 112.8 546.8 768.1 37.2 805.3
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):
Remeasurement of defined benefit pension scheme - - - 21.3 21.3 - 21.3
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
Savills plc
Consolidated statement of cash flows
for the year ended 31 December 2022
2022 2021
Note £m £m
Cash flows from operating activities
Cash generated from operations 7 210.9 348.3
Interest received 13.3 1.8
Interest paid (16.9) (14.0)
Income tax paid (43.3) (33.4)
Net cash generated from operating activities 164.0 302.7
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 0.2 1.0
Proceeds from sale of financial assets held at FVOCI and FVPL 1.6 1.7
Proceeds from sale of interests in joint ventures 0.1 0.7
Dividends received from joint ventures 7.1 6.6
Dividends received from associates 4.2 6.0
Dividends received from other parties 0.2 -
Repayment of loans by joint ventures 0.1 0.1
Repayment of loans by associates 0.4 -
Repayment of loans by other parties 0.7 -
Loans to joint ventures (0.1) (0.6)
Loans to associates (0.4) -
Loans to other parties (1.7) (7.4)
Acquisition of subsidiaries, net of cash and overdrafts acquired (14.9) (40.5)
Deferred consideration paid in relation prior year acquisitions (3.3) (5.9)
Purchase of property, plant and equipment (19.8) (18.6)
Purchase of intangible assets (7.0) (5.9)
Purchase of financial assets held at FVOCI and FVPL (8.8) (9.8)
Purchase of investment in joint ventures (0.4) (0.4)
Purchase of investment in associates - (0.3)
Net cash used in investing activities (41.8) (73.3)
Cash flows from financing activities
Proceeds from issue of share capital 0.5 7.2
Proceeds from transaction with non-controlling interest 7.9 63.7
Transaction costs incurred on transactions with non-controlling interest (0.2) (0.9)
Proceeds from borrowings 9.6 26.9
Repayments of borrowings (5.6) (38.2)
Financing fees paid (0.4) (0.5)
Principal elements of lease payments (51.4) (47.2)
Purchase of treasury shares (49.0) (49.0)
Dividends paid (85.9) (32.3)
Net cash used in financing activities (174.5) (70.3)
Net (decrease)/increase in cash, cash equivalents and bank overdrafts (52.3) 159.1
Cash, cash equivalents and bank overdrafts at beginning of year 490.0 338.2
Effect of exchange rate fluctuations on cash and cash equivalents held 26.6 (7.3)
Cash, cash equivalents and bank overdrafts at end of year 464.3 490.0
NOTES
1(a). Basis of preparation
The results for the year ended 31 December 2022 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 2022, 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.
Going concern
The Group has prepared its going concern assessment for the period to the end
of June 2024. As in prior years, the Board undertook a strategic business
review in the current year taking account of the Group's current position and
prospects, the Group's strategic plan, the Group's principal risks and the
management of those risks, and the Board's risk appetite. Sensitivity analysis
was also undertaken, including financing projections, to flex the financial
forecasts under several severe downside scenarios, which involved applying
different assumptions to the underlying forecasted revenues, costs and
underlying profits both individually and in aggregate. These scenarios assess
the potential impact from several macro-economic risks, including a severe
global economic downturn analogous to that experienced during the Global
Financial Crisis in 2008/09. The results of this sensitivity analysis showed
that the Group would retain liquidity and maintain significant available
facility and covenant headroom to be able to withstand the impact of such
scenarios over the period of the financial forecast, as a result of the
resilience and diversity of the Group, underpinned by a strong balance sheet.
Based on the Group's strong net cash position of £307.4m (cash and cash
equivalents less overdrafts in notional pooling arrangements and borrowings)
and undrawn £360.0m revolving credit facility at the year end, combined with
the assessment explained above, the Directors have formed the judgement at the
time of approving the financial statements, that there is a reasonable
expectation that the Group has adequate resources to continue as a going
concern for a period of at least 12 months from the date of the approval of
the financial statements until at least June 2024. For this reason, they
continue to adopt the going concern basis of accounting in preparing the
Consolidated Financial Statements.
1(b). Prior year restatement
Reclassification of financial assets held at FVPL
The Group's prior year Statement of Financial Position included financial
assets held at FVPL incorrectly classified as financial assets held at FVOCI.
Some financial assets had originally been classified as equity instruments,
with the Group making an irrevocable election for these to be classified as
FVOCI. In the current year, the Group made further investments and reassessed
the accounting treatment for all financial assets previously classified as
FVOCI. It was determined that some of these financial assets do not meet the
definition of an equity instrument under IFRS 9: 'Financial Instruments' and
as a result should be classified as financial assets held at FVPL with changes
in fair value recognised through the income statement. The 2021 fair value
gains and losses recognised in OCI and the cumulative fair value gains and
losses recognised in previous periods on these instruments are not material to
the Group.
These are correctly reflected in the current year's financial statements and
the prior period comparatives have been restated in accordance with IAS 8
'Accounting Policies, Changes in Accounting Estimates and Errors' to meet the
presentation requirements of IAS 1 'Presentation of Financial Statements'.
In addition, the Group's prior year Statement of Financial Position included
other financial assets appropriately held at FVPL which were included within
non-current trade receivables. As a consequence of the above correction of
prior year classification error, these financial assets have been included in
the financial asset held at FVPL line item in the Statement of Financial
Position to conform to the current year presentation, which also reflects the
nature of these instruments.
The tables below show the impact of the prior year restatement on the Group's
primary financial statements:
Statement of Financial Position
31 December 2021 Restatement 31 December 2021
reported £m restated
£m £m
Assets: Non-current assets
Financial assets at fair value through other comprehensive income ('FVOCI') 30.4 (13.7) 16.7
Financial assets at fair value through profit and loss ('FVPL') - 29.5 29.5
Trade and other receivables 41.2 (15.8) 25.4
Management has chosen not to present a third balance sheet as the error
impacts upon three financial statement line items within non-current assets.
As at 1 January 2021 the financial instruments which should have been
presented as at financial assets held at FVPL at 1 January 2021 was £17.3m,
of which £6.5m was included within financial assets held at FVOCI and £10.8m
was included within non-current trade and other receivables. This prior year
restatement does not have a material impact on the Group's Income Statement,
Statement of Cash Flows, Statement of Changes in Equity or Statement of
Comprehensive Income. The prior year restatement also does not have an impact
on the Group's net assets or net current assets.
2. Segment analysis
Transaction Advisory Consultancy Property and Facilities Manage- Investment Manage- Unalloc-ated Total
ment ment
Year ended to 31 December 2022 £m £m £m £m £m £m
Revenue
United Kingdom - commercial 118.9 202.0 278.7 53.3 - 652.9
United Kingdom - residential 208.3 46.4 48.7 - - 303.4
Total United Kingdom 327.2 248.4 327.4 53.3 - 956.3
CEME 129.8 44.3 109.2 51.7 - 335.0
Asia Pacific - commercial 145.3 87.4 404.9 7.8 - 645.4
Asia Pacific - residential 24.3 - - - - 24.3
Total Asia Pacific 169.6 87.4 404.9 7.8 - 669.7
North America 303.5 33.8 - - - 337.3
Revenue 930.1 413.9 841.5 112.8 - 2,298.3
Underlying profit/(loss) before tax
United Kingdom - commercial 20.4 21.8 21.2 8.7 (16.3) 55.8
United Kingdom - residential 35.1 6.2 4.7 - - 46.0
Total United Kingdom 55.5 28.0 25.9 8.7 (16.3) 101.8
CEME (2.7) 4.9 3.3 11.8 - 17.3
Asia Pacific - commercial 13.4 2.9 21.0 0.7 - 38.0
Asia Pacific - residential 3.4 - - - - 3.4
Total Asia Pacific 16.8 2.9 21.0 0.7 - 41.4
North America 2.3 1.8 - - - 4.1
Underlying profit/(loss) before tax 71.9 37.6 50.2 21.2 (16.3) 164.6
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
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, with the Investment Management business being managed
separately.
The operating segments are identified as the following regions: the UK,
Continental Europe and the Middle East ('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 a transaction-related call option in the current year,
fair value gain on associates/joint ventures and fair value loss on a
transaction-related call option 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 Group believe that the consistent presentation of underlying profit before
tax, underlying effective tax rate, underlying basic earnings per share and
underlying diluted earnings per share 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. The 'underlying' measures are 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.
2022 2021
£m
£m
Reported profit before tax 153.9 183.1
Adjustments:
Amortisation of intangible assets arising from business combinations 9.9 8.1
Impairment of goodwill and intangible assets arising from business - 5.2
combinations
Share-based payment adjustment (14.7) (10.8)
Profit on disposal of joint ventures - (0.4)
Restructuring costs 0.1 0.3
Transaction-related costs 15.5 17.0
Fair value gain on step acquisitions of subsidiaries previously classified as - (4.0)
associates/joint ventures
Fair value (gain)/loss on transaction-related call option (0.1) 1.8
Underlying profit before tax 164.6 200.3
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 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, providing additional information on the Group's performance over
time with respect to profitability.
There have been no impairments of goodwill and intangible assets arising from
business combinations recognised in the current year. Impairment of goodwill
in the prior year relates to the Indonesia and Sweden cash-generating units.
Impairment of intangible assets arising from business combinations in the
prior year relate to property management contracts in South Korea and Japanese
investment management contracts relating to closed funds.
In the prior year, profit on disposal recognised primarily in relation to the
disposal of holdings in joint ventures in China.
Restructuring costs includes costs of integration activities in relation to
significant business acquisitions. Restructuring costs in the current and
prior year relate primarily to the ongoing IFRS 2: 'Share-based Payment'
charge for deferred shares, with a five-year vesting period, issued in
relation to the restructuring upon acquisition of Aguirre Newman SA ('Aguirre
Newman') in 2017.
Transaction-related costs includes a £14.8m charge for future consideration
payments which are contingent on the continuity of recipients' employment in
the future (2021: £13.9m). In the current year, a significant portion of the
charge related to the acquisition of DRC Capital LLP ('DRC') in 2021. In the
prior year, the largest individual components of this charge related to the
acquisition of DRC and the acquisition of Macro Consultants LLC in 2020. In
the current year, transaction-related costs also consist of £1.4m of
professional advisory transaction fees (2021: £1.1m) and £0.3m of interest
on deferred consideration and non-current future payments in relation to
business acquisitions that are linked to employment (2021: £0.6m). In the
current year, transaction-related costs included a £0.6m (2021: £1.4m)
charge relating to prepaid amounts issued as part of business acquisitions
that are linked to continued active engagement in the business. 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
current year, transaction-related costs also consist of a £1.6m credit (2021:
£nil) for fair value changes to contingent deferred consideration not related
to continuity of employment.
In the prior year, a fair value gain was recognised on the remeasurement 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.
In the current year, a fair value gain of £0.1m 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 (2021: fair value loss of
£1.8m).
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.
2022 2021
£m £m
United Kingdom
- Current tax 18.7 21.7
- Deferred tax (1.5) (6.8)
Foreign tax
- Current tax 23.1 23.8
- Deferred tax (6.2) (2.3)
Income tax expense 34.1 36.4
5. Dividends
2022 2021
£m £m
Amounts recognised as distribution to equity holders in the year:
In respect of the previous year
Ordinary final dividend of 12.75p per share (2020: 17.0p) 17.6 23.6
Supplemental interim dividend of 15.6p per share (2020: £nil) 21.6 -
Special dividend of 27.05p per share (2020: £nil) 37.4 -
In respect of the current year
Interim dividend of 6.6p per share (2021: 6.0p) 8.9 8.3
85.5 31.9
The Group paid £0.4m (2021: £0.4m) of dividends to non-controlling
interests.
The Board recommends a final dividend of 13.4p per ordinary share (amounting
to £19.3m), alongside the supplemental interim dividend of 15.6p per ordinary
share (amounting to £22.5m), to be paid on 22 May 2023 to Shareholders on the
register at 11 April 2023. These financial statements do not reflect this
dividend payable.
The total paid and recommended ordinary and supplemental dividend for the 2022
financial year comprises an aggregate distribution of 35.6p per ordinary share
(2021: 61.4p per ordinary share, which included a 27.05p special dividend per
ordinary share).
6(a). Basic and diluted earnings per share
2022 2022 2022 2021 2021 2021
Earnings Shares EPS Earnings Shares EPS
Year to 31 December £m million pence £m million pence
Basic earnings per share 119.4 137.3 87.0 146.2 139.4 104.9
Effect of additional shares issuable under option - 7.9 (4.8) - 7.1 (5.1)
Diluted earnings per share 119.4 145.2 82.2 146.2 146.5 99.8
6(b). Underlying basic and diluted earnings per share
2022 2022 2022 2021 2021 2021
Earnings Shares EPS Earnings Shares EPS
Year to 31 December £m million pence £m million pence
Basic earnings per share 119.4 137.3 87.0 146.2 139.4 104.9
- Amortisation of intangible assets arising from business combinations after 7.6 - 5.5 6.5 - 4.7
tax
- Impairment of goodwill and intangible assets arising from business - - - 5.4 - 3.9
combinations after tax
- Share-based payment adjustment after tax (11.9) - (8.7) (9.0) - (6.5)
- Profit on disposal of joint ventures and associates after tax - - - (0.4) - (0.3)
- Restructuring costs after tax 0.1 - 0.1 0.4 - 0.3
- Transaction-related costs after tax 15.3 - 11.1 15.5 - 11.1
- Fair value gain on step acquisition of subsidiaries previously classified as - - - (4.0) - (2.9)
joint ventures/associates after tax
- Fair value (gain)/loss on transaction-related call option (0.1) - (0.1) 1.8 - 1.3
Underlying basic earnings per share 130.4 137.3 94.9 162.4 139.4 116.5
Effect of additional shares issuable under option - 7.9 (5.1) - 7.1 (5.6)
Underlying diluted earnings per share 130.4 145.2 89.8 162.4 146.5 110.9
7. Cash generated from operations
2022 2021
£m £m
Profit for the year 119.8 146.7
Adjustments for:
Income tax (Note 4) 34.1 36.4
Depreciation 65.8 63.4
Amortisation of intangible assets 16.9 14.2
Impairment of goodwill and intangible assets arising from business - 5.2
combinations
Fair value gain on joint ventures and associates - (4.0)
Fair value (gain)/loss on derivative financial instrument (0.1) 1.8
Loss on disposal of property, plant and equipment, intangible assets and 1.1 0.9
leases
Impairment of property, plant and equipment 0.8 -
Gain on disposal of joint ventures and associates - (0.4)
Net finance cost 4.3 13.4
Share of post-tax profit from joint ventures and associates (12.1) (12.6)
Dividends from other parties (0.2) -
Increase in employee and retirement obligations 2.6 6.7
Exchange movements and fair value movements on financial instruments in 0.6 (2.5)
operating activities
(Decrease)/increase in provisions (4.7) 5.4
Charge for share-based compensation 30.4 23.7
Operating cash flows before movements in working capital 259.3 298.3
Increase in trade and other receivables and contract assets (7.3) (90.1)
(Decrease)/increase in trade and other payables and contract liabilities (41.1) 140.1
Cash generated from operations 210.9 348.3
Foreign exchange movements resulted in a £37.3m increase in current and
non-current trade and other receivables (2021: £0.3m increase) and a £43.8m
increase in current and non-current trade and other payables (2021: £5.9m
increase).
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 2022, the notional
cash pooling arrangement included cash balances of £205.0m presented in cash
and cash equivalents (December 2021: £201.5m) and overdrafts of £202.0m (31
December 2021: £198.5m) presented in current liabilities. This represents as
at 31 December 2022 surplus pooled credit cash balances of £3.0m (31 December
2021: surplus pooled credit cash £3.0m).
For the purpose of the Statement of Cash Flows, cash and cash equivalents net
of overdrafts comprise the following:
31 December 2022 31 December 2021
£m £m
Cash and cash equivalents 669.1 689.7
Overdrafts in notional pooling arrangement (202.0) (198.5)
Bank overdrafts (2.8) (1.2)
464.3 490.0
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
AMS Pitmore Other Total
£m
£m
£m
£m
Non-current assets: Property, plant and equipment 5.2 - 0.2 5.4
Right-of-use asset 2.2 - 0.5 2.7
Intangible assets 0.2 1.1 2.2 3.5
Financial assets held at FVPL - 0.1 - 0.1
Current assets: Trade and other receivables 9.5 0.3 0.3 10.1
Cash and cash equivalents 0.3 0.2 0.6 1.1
Current liabilities: Borrowings (2.8) - - (2.8)
Lease liabilities (0.6) - (0.2) (0.8)
Contract liabilities - - (0.1) (0.1)
Income tax liabilities - (0.1) (0.1) (0.2)
Trade and other payables (4.9) (0.1) (0.4) (5.4)
Employee benefit obligations (0.2) - - (0.2)
Provisions (1.6) - - (1.6)
Non-current liabilities: Borrowings (0.4) - - (0.4)
Lease liabilities (1.6) - (0.3) (1.9)
Other payables (0.2) - - (0.2)
Employee benefit obligations - - (0.1) (0.1)
Provisions (1.5) - - (1.5)
Deferred tax liabilities - (0.3) - (0.3)
Net assets 3.6 1.2 2.6 7.4
Non-controlling interest share of net assets (2.6) - (0.1) (2.7)
Net assets acquired 1.0 1.2 2.5 4.7
Goodwill 6.6 2.2 4.6 13.4
Purchase consideration 7.6 3.4 7.1 18.1
Consideration satisfied by:
Cash paid 7.6 3.4 5.0 16.0
Deferred consideration < 1 year - - 1.8 1.8
Loan novation - - 0.3 0.3
7.6 3.4 7.1 18.1
Absolute Maintenance Services Pte Limited and Solute Pte Limited ('AMS')
On 31 August 2022, the Group acquired 60% of the equity interest in AMS, a
facilities services group in Singapore. The acquisition expands and enhances
the property and integrated facilities management platform in the region.
Total acquisition consideration is provisionally determined at £7.6m, all of
which was settled on completion.
Acquisition-related costs of £0.1m have been expensed as incurred to the
income statement and classified within other operating expenses.
Goodwill of £6.6m has been determined. Goodwill is attributable to the
experience and expertise of key staff members and is not expected to be
deductible for tax purposes.
The acquired business contributed revenue of £7.3m and profit of £0.6m to
the Group for the period from the date of acquisition to 31 December 2022. Had
the acquisition been made at the beginning of the financial year, revenue
would have been £19.4m and a loss of £2.6m would have been recognised.
The fair value of trade and other receivables is £9.5m, £7.4m of which
relates to trade receivables. The gross contractual amount for trade
receivables is £7.4m, all of which is expected to be collectible.
Pitmore 1 Limited ('Pitmore')
On 30 July 2022, the Group acquired 100% equity interest in Pitmore, a UK
development and build-to-rent ('BTR') specialist. The acquisition will assist
the continued expansion of the Savills IM's European Living Platform and is a
pivotal part of plans to grow the UK residential and BTR platform.
Total acquisition consideration is provisionally determined at £3.4m, all of
which was settled on completion.
In addition to the above, an earn-out is payable in the first quarter of 2029
and is measured against income targets. 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.
Acquisition-related costs of £0.7m have been expensed as incurred to the
income statement and classified within other operating expenses.
Goodwill of £2.2m 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 £1.1m of investment management contracts.
The acquired business contributed revenue of £0.6m and a loss of £0.5m to
the Group for the period from acquisition to 31 December 2022. Had the
acquisition been made at the beginning of the financial year, revenue would
have been £1.5m and the loss would have been £0.8m.
The fair value of trade and other receivables is £0.3m, £0.1m of which
relates to trade receivables. The gross contractual amount for trade
receivables is £0.1m, all of which expected to be collectible.
Other acquisitions
The Group acquired 60% of the UK-based Simply Affordable Homes LLP on 8
September 2022, to continue the expansion of Savills IM's European Living
Platform and a UK residential platform; 100% of the equity interest in
BrickByte GmbH on 1 June 2022, a technology-enabled workplace services and
consulting start up in Germany to further enhance our existing offering and
complementary areas of client service in that market; and 100% of SRS Lease
Administration LLC on 31 December 2022, a US-based lease administration
business, further building out this service in North America. In addition, on
22 June 2022 the Group acquired 60% of the equity interest in PT CB Advisory;
70% of the equity interest in PT Cakrawala Baswara Cemerlang; and 60% of the
equity interest in PT Cakrawala Baswara Indonesia, a full service property
business in Indonesia, complementing our existing services and supporting
further Indonesia expansion. The Group also acquired the trade and assets of
Cureoscity Limited on 2 February 2022, a UK web-based management portal to
enhance our property management business; James A Baker on 7 September 2022, a
UK-based specialist advisor in licensed property to broaden the UK offering in
this area; and the trade and assets of a property management company based in
Poland on 30 September 2022.
Cash consideration for these transactions amounted to £5.0m. The remainder of
the acquisition consideration relates to deferred consideration of £1.8m,
payable within one year of the reporting date, and £0.3m of loan novation.
Goodwill of £4.6m 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.
2021 acquisitions
In the year ended 31 December 2021 the Group acquired the remaining 25% equity
interest in DRC Capital LLP ('DRC'), 100% of the equity interest in T3
Advisors ('T3'), the remaining 51% of Cluttons Saudi Arabia Company Limited
(previous 49% ownership equity accounted for as a joint venture), the
remaining 49% economic interest in the Savills Indonesia business (previous
51% economic ownership equity accounted for as a joint venture) and 60% of
Merx Holdings (SG) Pte Ltd ('Merx Group').
During the year, the provisional fair values for the above transactions were
finalised resulting in a £0.3m decrease in the value of accrued income
acquired as part of the acquisition of the remaining 51% of Cluttons Saudi
Arabia Company Ltd. This adjustment is considered a measurement period
adjustment in accordance with IFRS 3 and as a result the prior period
comparatives have been restated by increasing goodwill arising on the
acquisition by £0.3m, with a corresponding decrease in trade and other
receivables.
There were no changes to the provisional fair values in respect of the other
acquisitions as reported in the Group's 2021 Annual Report.
10. Borrowings
Movements in borrowings are analysed as follows:
£m
Opening amount as at 1 January 2022 150.5
Additional borrowings, net of transaction costs paid* 10.8
Repayments of borrowings (including overdraft movement)* (5.6)
Addition through business combination (Note 9) 3.2
Amortisation of transaction costs 0.6
Foreign exchange 0.2
Closing amount as at 31 December 2022 159.7
* 2022 includes a £1.5m increase in overdraft balances and £0.3m of
transaction costs paid within additional borrowings. 2021 includes £0.1m
decrease in overdraft balances within repayments of borrowings and £0.5m of
transaction costs paid within additional borrowings.
2022 2021
£m £m
Current
Bank overdrafts 2.8 1.2
Unsecured bank loans due within one year or on demand 4.0 0.9
Loan notes due within one year or on demand 3.8 -
10.6 2.1
Non-current
Unsecured bank loans 0.5 -
Loan notes 150.0 150.0
Transaction costs (issuance of loan notes and RCF arrangement fees) (1.4) (1.6)
149.1 148.4
159.7 150.5
The Group holds a £360.0m multi-currency revolving credit facility ('RCF'),
which includes a £90.0m accordion facility. In June 2022 the Group extended
the maturity date of the RCF by a further year to June 2026. As at 31 December
2022 none (2021: none) of the RCF was drawn.
The unsecured bank loans reflect a £0.9m working capital loan in Thailand,
which is repayable on demand and denominated in Thailand baht (2021: £0.7m),
a £0.3m working capital loan in Indonesia which is repayable on demand and
denominated in Indonesian rupiah (2021: £0.2m) and £3.3m of loans in
Singapore, denominated in Singapore dollar (2021: £nil). Of the loans in
Singapore, £2.3m relates to property loans (£1.9m repayable within one year
and £0.4m repayable in 2025), a £0.6m factoring facility maturing within one
year and a £0.3m bridging loan expiring within one year. The remaining £0.1m
of loans in Singapore are bank loans maturing between 2023 and 2024.
The loan notes due within one year or on demand reflects working capital loans
in Singapore, which are repayable within one year or on demand and denominated
in Singapore dollars. These loans are payable to a non-controlling interest
holder in one of the Group's subsidiaries.
Non-current loan notes reflect the £150.0m of long-term debt held by the
Group 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:
2022 2021
Fixed Floating Total Floating
£m £m £m £m
Expiring within 1 year or on demand 1.1 64.9 66.0 61.2
Expiring between 1 and 5 years 0.2 360.0 360.2 361.0
1.3 424.9 426.2 422.2
11. Related party transactions
As at 31 December 2022, there were £0.2m of loans receivable from joint
ventures and £1.7m of loans receivable from associates (2021: £0.2m of loans
receivable from joint ventures and £1.5m of loans receivable from
associates).
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.
12. Annual report and accounts
Copies of the Annual Report and Accounts for the year ended 31 December 2022
will be circulated to shareholders on 3 April 2023 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:
· that the consolidated financial statements, prepared in
accordance with UK-adopted international accounting standards give a true and
fair view of the assets, liabilities, financial position and profit of the
parent company and undertakings included in the consolidation taken as a
whole; and
· the Annual Report, including the Strategic Report, includes a
fair review of the development and performance of the business and the
position of the company and undertakings included in the consolidation taken
as a whole, together with a description of the principal risks and
uncertainties that they face.
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 2022, 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
16 March 2023
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
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR FLFEDVIIELIVRecent news on Savills
See all newsREG - Savills PLC - Total Voting Rights
AnnouncementREG - Savills PLC - Director/PDMR Shareholding
AnnouncementREG - Savills PLC - Director Declaration
AnnouncementREG - Savills PLC - Director/PDMR Shareholding
AnnouncementREG - Savills PLC - Director/PDMR Shareholding
Announcement