REG - Savills PLC - Year End Trading Update

SavillsAnnouncement

12/01/2022 07:00

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RNS Number : 1290Y  Savills PLC  12 January 2022

 

 

12 January
2022

SAVILLS PLC

("Savills" or the "Group")

 

Year-End Trading Statement

 

Full year performance very significantly ahead of expectations - FY22 outlook
currently unchanged

 

 

Savills plc, the global real estate advisor, publishes the following trading
statement in respect of the year ended 31 December 2021.

 

Since the trading update on 9(th) November 2021, the Group has experienced an
extraordinarily strong final trading period, particularly in the UK and Asia
Pacific regions alongside improved performances in Continental Europe and the
Middle East ("CEME") and North America; both of which have more than
eliminated the losses of 2020. All Savills businesses have exceeded their
forecasts notwithstanding the impact of renewed pandemic-related restrictions
in many locations. In particular, commercial capital transactions and Prime
Residential Agency experienced much stronger completion volumes than
previously anticipated. Our Less Transactional businesses have also
outperformed their previous expectations.

 

In addition, as previously disclosed, the Group has benefited from
substantially lower levels of discretionary expenditure in respect of travel,
entertaining and marketing events in particular. These are expected to revert
to more normal levels over the course of 2022.

 

As a result of this strong trading performance coupled with the benefit of
abnormally low levels of discretionary expenditure, the Group expects
Underlying Profit Before Tax ("UPBT") for 2021 to be very significantly ahead
of the upper end of its previous range of expectations.

 

Despite the backdrop of pandemic-related uncertainty in 2021, the UK performed
exceptionally well across all business lines. There were notably strong
performances from the Transactional Business lines, albeit Commercial office
leasing volumes remained below historic averages in the majority of markets.
Savills' strengths in both logistics and retail warehousing, both of which
enjoyed significant volume increases year-on-year, also contributed to our
overall outperformance. The UK prime residential market continued to perform
exceptionally strongly through the last quarter and volumes in the Prime
Central London market clearly began to improve. Currently there is a definite
shortage of sale stock, so despite outperformance in 2021, our expectation of
a moderation of activity in 2022 remains intact.

 

Our commercial investment activities benefited from significant increases in
trading volumes, indeed the last quarter of 2021 saw volumes in EMEA exceed
the five year average. This was partly due to an unwinding of pandemic driven
delays as capital, which would ordinarily have been invested earlier, but for
pandemic-related uncertainty, was increasingly deployed through 2021.

 

Our Asia Pacific business as a whole performed well ahead of our expectations.
Hong Kong sales activity and market share remained strong through the period
and Australia, Singapore and Japan also enjoyed strong trading activity in the
final quarter.

 

Savills Investment Management outperformed its expectations with the benefit
of the acquisition of DRC Capital from the end of May in strong markets for
real estate debt investment, together with new fund launches and strong
investment performance from the majority of our products. The latter in
particular gave rise to higher than anticipated performance fees in the final
quarter.

 

Looking to the year ahead, the Group's previous expectations remain unchanged
at this early stage. Inflationary pressures in many markets will result in
employment costs increasing at the highest rate for many years and we
anticipate that discretionary costs will progressively normalise. In respect
of trading revenues, at this stage, we anticipate some normalisation of
commercial capital transaction volumes and a moderation of levels of activity
in some residential markets, particularly in the UK.

 

Savills intends to report 2021 full year results on 10 March 2022.

 

This announcement contains inside information. The person responsible for
arranging for the release of this announcement on behalf of the Company is
Chris Lee, Group Legal Director & Company Secretary.

 

 

 

 

For further information, contact:

Savills    020 7409 8934

Mark Ridley, Group Chief Executive

Simon Shaw, Group Chief Financial Officer

 

Tulchan Communications    020 7353 4200

Elizabeth Snow

Mark Burgess

 

Forward looking statements

Certain statements in this announcement are forward-looking statements
relating to the Group's operations, performance and financial position based
on current expectations of, and assumptions and forecasts made by,
management.  They are subject to a number of risks, uncertainties and other
factors which could cause actual results, performance or achievements of the
Group to differ materially from any outcomes or results expressed or implied
by such forward-looking statements. The Group's principal risks are described
in the 2020 Savills plc Annual Report which can be viewed online at
http://www.savills.com (http://www.savills.com) . Such forward looking
statements should therefore be construed in light of such risks, uncertainties
and other factors and undue reliance should not be placed on them. They are
made only as of the date of this announcement and no representation,
assurance, guarantee or warranty is given in relation to them including as to
their accuracy, completeness, or the basis on which they are made.  No
obligation is accepted to publicly revise or update these forward-looking
statements or adjust them as a result of new information or for future events
or developments, except to the extent legally required. Nothing in this
Statement should be construed as a profit forecast.

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