Savills' share price has fallen this morning as it posted sluggish sales and profit growth in the UK.
The estate agents reported UK revenue growth of three per cent for 2016, up from £560.1m to £578.3m. Underlying profit was up by one per cent, from £71.7m to £72.1m.
The business as a whole was boosted by its growth in Europe and Asia Pacific, where underlying profits jumped 52 per cent and 25 per cent respectively.
This brought the total profit for the group to £135.8m for the year, up 12 per cent on the year before. Total sales hit £1.45bn, up 13 per cent.
At time of writing, Savills' share price was down 2.83 per cent.
Why it's interesting
Trends in the UK property market have been weighing on investor sentiment when it comes to estate agents. Prices have fallen on high-end homes in central London, and, crucially, transactions rates have dropped off. A research note from Jefferies yesterday said London transactions were down 25 per cent in the year, and in inner London transactions have plummeted by as much as 47 per cent.
This means dramatically reduced pools of housing sales from which estate agents can draw fees, hitting profits at estate agents. At Foxtons, profits more than halved last year, and although Savills' is a more diversified business, clearly investors are not too positive about its prospects.
What Savills said
Jeremy Helsby, group chief executive, said: "Overall, Savills delivered another record performance in 2016 despite the geopolitical distractions in some of our markets. We benefited from the scale of our operations across the globe, which have grown substantially over recent years, as well as a highly resilient performance in the UK."
What analysts said
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Savills has delivered growth despite the turmoil in the UK property market, which is testament to the face that it's a lot more than a high end UK estate agent these days.
"UK operations have proven surprisingly resilient so far, thanks to foreign investors picking up a bargain in Savills' core London market as a result of sterling's weakness."