London prices help to boost Savills profit

GLOBAL economic and social problems could hit property broker Savills, its chief executive warned yesterday, despite seeing values for the best properties hold up in London and Asia.

Jeremy Helsby shrugged off the commercial impact of the recent riots on Savills and said the firm had won new work for London properties worth more than £5m. The capital’s prime market has strengthened, creating a two-tier Britain, he added.

Speaking the week after riots devastated parts of London, Birmingham and Manchester, Helsby warned that the firm would not completely escape the impact of the unrest, here or overseas.

“We currently see no material change in the outlook for our business although the potential effects of the current economic and social volatility are likely to have some impact on both commercial and residential transaction markets across our regions.”

Values for the best property in Hong Kong and Singapore were also resilient, the company said. Profit before tax for the six months to 30 June rose 39 per cent to £20m, which meant a 20 per cent rise to £20.6m on an underlying basis. Turnover rose by ten per cent to £335.8m.

Analysts at Numis wrote: “Savills’ first half results are strong and ahead of expectations. However, we are leaving estimates unchanged to reflect the uncertain outlook.”

Yesterday the firm said fee income at Cordea Savills, its fund management arm, rose 25 per cent to £10.5m.

Savills employs around 20,000 people in 200 offices in more than 40 countries.

It has long had a reputation for upmarket residential work and last year it enjoyed a £4m boost from marketing the Candy brothers’ One Hyde Park flats.