Savills PLC SVS Interim Management Statement

  Savills PLC (SVS) - Interim Management Statement

RNS Number : 1674R
Savills PLC
15 November 2012




15 November 2012

                                 SAVILLS PLC

                         ("Savills" or the "Company")

                                      

                         Interim Management Statement

                                      





Savills plc, the  international real estate  advisor, publishes the  following 
Interim Management Statement (IMS) for the period from 1 July 2012 to date.



Summary and Overview



Since June Savills  has continued to  perform ahead of  our expectations.  Our 
Prime London Residential and Asia  Pacific businesses have continued to  trade 
well; our  UK  Commercial  business  has  increased  market  share;  our  Fund 
Management and US businesses have performed in line with our expectations; and
our business in Continental Europe, which  continues to operate in very  tough 
markets, has increased revenues and reduced losses.



As we  enter the  final weeks  of the  year, when  a significant  part of  the 
Group's annual profit is  typically earned, it is  clear that there are  still 
significant economic  issues  facing  individual countries,  regions  and  the 
global economy.  Despite the  prevailing  lack of  credit, the  World's  Prime 
Residential  and  Commercial  property   markets  continue  to  benefit   from 
investors' global search for secure yield. To date our prime market  strength 
in many of the world's  key cities has not only  sheltered the Group from  the 
reduction in activity in  mainstream markets but has  led to further  business 
growth. We have seen a reduction  in volumes in some transaction markets,  but 
this is currently tempered by  improvements elsewhere and continued growth  in 
our strong non-transactional Consultancy and Property Management businesses.



Property Management



Our Property Management business  has continued to  perform well showing  good 
growth over the same period last year. UK Property Management has continued to
benefit from contract  wins and strong  growth continues in  Asia Pacific.  In 
Continental Europe,  we  have  grown  revenues  and  stabilised  much  of  the 
business.



Consultancy



Our Consultancy services  have continued to  show good growth  in revenue  and 
maintained profit growth.  Our Building Consultancy,  and Housing  Consultancy 
businesses have shown strong growth in  revenue and profit and our  valuations 
business has continued  to improve  its performance in  both the  UK and  Asia 
Pacific regions.



Transactional Advice



Commercial

In the UK,  investment activity has  continued strongly in  the Prime  Central 
London market but largely remains subdued elsewhere. Savills has  successfully 
increased its market share of both buy and sell side instructions during  this 
period  as  much  of  our  expansion  and  recruitment  of  recent  years  has 
progressively started  to  deliver  results. Occupier  markets  have  remained 
reasonably resilient despite cutbacks in the financial services industry  with 
some large insurance  and TMT-related instructions  underpinning overall  City 
take-up.



Despite an overall reduction of 16%  in market volumes in Asia Pacific  during 
the 3^rd quarter, our  own transactional activity in  the Asia Pacific  region 
has been strong  through the period  with Hong Kong,  Macau, Taiwan and  Korea 
driving improved  performance  together  with  strong  growth  in  Japan.  The 
aggregate impact  of Government  measures to  control residential  markets  in 
Greater China has  been broadly  positive for  commercial investment  markets, 
albeit in lower lot sizes.



Despite a  significant  reduction transaction  volumes  in many  markets,  our 
Continental European teams have  increased transaction revenues  year-on-year, 
particularly in Ireland, France and  the Netherlands. However macro  economic 
issues  have  adversely   affected  activity  in   many  countries.  We   have 
restructured the  senior team  in Germany  and  recruited a  new head  of  the 
business. We have also continued to  invest in the development of our  leasing 
teams in  Germany, France  and Poland,  with revenue  improving  substantially 
year-on-year.



In the US we have completed a  restructuring of the business, which will  take 
effect by the end of  this year, the fifth  anniversary of the acquisition  of 
Granite Partners.  This will  change the  leadership, reduce  cost and  better 
align remuneration to business performance  from 2013 onwards. We continue  to 
see some improvement in the US markets and increasing cross border interest in
US opportunities. We are progressively positioning our business to  capitalise 
on these improvements.



Residential

Our UK Residential Agency business has  continued to perform well since  June, 
with a  resilient  performance  from  the  prime  London  market  despite  the 
imposition of substantial fiscal change  on overseas and corporate  ownership. 
Overall, the effect of slightly lower volumes in London has been substantially
offset by volume improvement in a  number of the commutable areas outside  the 
capital. Furthermore, London has continued to experience strong  international 
demand for development stock in key locations.



In the Asia Pacific  region, cumulative control  measures, culminating in  the 
recent imposition  of  substantial stamp  duty  charges on  overseas  citizens 
buying Hong  Kong  residential property,  have  had a  significant  effect  on 
residential sales volumes. However, many  investors have turned to  commercial 
assets instead. Our Prime Residential Agency business has slowed significantly
in Hong Kong and Vietnam but we  have seen recent signs of improvement in  the 
key cities of mainland China.



Fund Management



Cordea Savills is performing in line  with our expectations. The business  has 
made good headway during the period,  and we have undergone the transition  of 
some key management roles  to new recruits. Our  open ended funds continue  to 
attract equity inflows and we have  recently launched our first fund aimed  at 
the high net worth community in the Asia Pacific region.



Internal Restructuring Activities



In addition to  the activities in  Continental Europe and  the US, during  the 
period we  have finalised  plans  to combine  our  two UK  trading  businesses 
(Savills (L&P) Limited and Savills Commercial Ltd) into one business,  Savills 
(UK) Limited comprising 2900 employees, from  1 January 2013. As part of  this 
integration, we will be combining the two individual London head offices  into 
one new  building during  the first  half  of 2013  and streamlining  the  top 
management structure  of Savills  UK. In  addition  to the  costs of  the  new 
building prior to its  occupation, these activities will  result in small  net 
restructuring charges in 2012 and 2013 and will position us to improve  client 
service across the organisation and generate synergies in future periods.



Financial position and outlook



We continue to maintain a strong balance sheet with a net cash position.

Looking forward, Savills is well placed in the prime property markets of  many 
of the World's key cities and much of the recruitment and business development
work of  the  last few  years  is beginning  to  bear fruit.  Considering  our 
performance to date and the expected conditions  for the rest of the year,  we 
currently anticipate that our overall underlying result for the full year will
be slightly ahead of our original expectations.





For further information, contact:



Savills 020 7409 8934

Jeremy Helsby, Group Chief Executive

Simon Shaw, Group Chief Financial Officer



Tulchan Communications 020 7353 4200

Katharine Wynne/Martha Kelly



Forward looking statements

Certain information included within this  statement is forward-looking and  by 
its nature involve risks  and uncertainties because it  relates to events  and 
depends on circumstances that will occur in future.



Forward-looking statements include,  without limitation, projections  relating 
to results  of  operations and  financial  conditions, market  estimates,  the 
Company's  plans  and  objectives  for  future  operations,  including  future 
revenues, financial plans and expected expenditures and divestments.



There  are  a  number  of  factors  which  could  cause  actual  results   and 
developments to differ  materially from  those expressed or  implied by  these 
forward looking statements including a number of factors outside the Company's
control.  All  forward-looking  statements  in  this  report  are  based  upon 
information known to the Company on the date of this IMS. The Company gives no
undertaking to update forward  looking statements whether as  a result of  new 
information, future events or otherwise.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IMSEAPFLFFNAFFF -0- Nov/15/2012 07:00 GMT
 
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