UK estate agent Savills has seen its share price soar after it lifted profit guidance for 2021 amid an “extraordinarily strong” trading period.
In an end of year trading statement Savills revealed that all of its businesses have beaten profit forecasts for the 2021 financial year, with trading particularly strong in the UK and Asia Pacific regions.
As a result of this strong trading performance Savills said that it expects underlying profit before tax for 2021 to be “very significantly ahead of the upper end of its previous range of expectations.” On the back of the news share price closed up 7.95 per cent today to stand at 1,405 pence per share.
“Despite the backdrop of pandemic-related uncertainty in 2021, the UK performed exceptionally well across all business lines,” the trading update said, referencing difficulties in the business environment caused by labour shortages and supply chain disruption.
“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,” the update continued, warning that a shortage in sale stock which could impact activity in 2022.
As a result of ongoing uncertainty Savills said that group expectations for the upcoming financial year remain unchanged at this 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,” the statement read.
“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,” it continued.
Savills said that its annual results will be published in full on 10 March 2022.