Savills profit up but Asia could drag

Marion Dakers
REAL ESTATE consultant Savills posted an 88 per cent rise in pre-tax profit to £47.3m yesterday but warned that transactions in Asia are likely to fall this year in the wake of the Japanese disaster.

The firm has evacuated all but one of its 70 Tokyo staff to the west of the country but said Japanese business, which makes up around one per cent of its Asia Pacific sales, would continue from other offices.

Savills posted a 21 per cent rise in global revenues for 2010 to £677m, largely from strong growth in Asia and parts of continental Europe.

It said it expects growth in London and Europe to offset any decline in Asian sales this year, which made up 41 per cent of the group’s revenues in 2010, to deliver largely flat profits in 2011.

“If I have to pick one country in Asia, with the caveat of what we have just been talking about [Japan], we are probably going to see the biggest growth in China this year,” chief executive Jeremy Helsby said.

In the UK, revenue from commercial transactions rose 35 per cent to £48.2m, helped by a £4m boost from marketing the One Hyde Park luxury flats.

Savills’ underlying profit margin jumped from 4.5 per cent to seven per cent in the year as the firm focused on transaction advisory work and pared losses in Europe.

The firm has raised its dividend to 13p for the year and said its shareholder pay-outs would be linked to less volatile parts of the business to buffer against more cyclical operations.

Its earnings per share rose 92 per cent to 27.9p, from 14.5p.

Savills shares closed down 1.2 per cent to 369.47p yesterday, suffering from some ongoing jitters in the market surrounding Japan.