TIDMSVS
RNS Number : 4025Y
Savills PLC
12 May 2021
12 May 2021
SAVILLS PLC
("Savills" or "the Company")
Trading update
Ahead of its "virtual" Annual General Meeting (AGM) to be held
at 12 noon today at Savills, Finsbury Circus House, 15 Finsbury
Circus, London EC2M 7EE Savills plc, the international real estate
advisor issues the following trading update:
-- Our Less Transactional businesses have continued to perform
well with progressive recovery in a number of transactional markets
becoming evident. The strategy of retaining staffing levels through
2020 has positioned the Group well for recovery
-- For the year to date, the Group has traded better than
anticipated and comfortably ahead of the prior equivalent period.
Residential markets, particularly in the UK and China have
continued strongly; the Commercial Transaction business has
benefited both from improving sentiment in many markets and from
the completion of transactions which were postponed or delayed
during the lockdowns of Q4 2020
-- Subject to the impact of further waves of COVID infections,
the Board is confident in its expectations for the full year
Mark Ridley, Chief Executive, commented:
"I am delighted that our strategy of maintaining full client
service through the pandemic continues to prove successful and
improving sentiment has enabled much of the business development
activity undertaken before and during 2020 to begin to bear fruit.
We have a strong balance sheet and are focused on continuing to
develop our global businesses through the recovery period, keeping
our staff and visitors safe and maintaining a first class service
to our clients.
"Our Less Transactional businesses of Consultancy and Property
Management have continued to perform well to date as clients have
begun to review longer term strategies once more and management
contracts won in 2020 have begun to translate into revenue.
"Our Transactional businesses have benefited from improving
sentiment in most markets, although travel restrictions still
represent an obstacle to cross-border capital deployment. In
summary, the combination of solid trading in the less transactional
service lines, improving transactional markets (including the
completion of previously delayed transactions) and continued cost
containment, has resulted in a markedly improved performance
compared with the same period last year."
Trading Update
In the Asia Pacific region, recovery has been most evident
throughout the period in Greater China. More recently we have seen
significant improvements in Australia, Singapore and Korea,
accelerated in part by business development activity undertaken
pre-pandemic, and have a healthy near-term pipeline in Japan.
Throughout the period, our substantial Property and Facilities
Management business in the region performed well.
In the UK, our performance has been very strong, driven
primarily by the continued high levels of activity in the
residential markets (both private and institutional), our strength
in less transactional service lines and signs of recovery in
development markets. We have also benefited from a number of
transactions which were delayed during lock down.
In Continental Europe and the Middle East, where Savills is more
dependent upon transactional activity, performance has improved
compared with the prior period with recovery now evident in the
Middle East, Ireland, Germany and France in particular. The current
outbreaks of COVID-19 in parts of the region mean that the
trajectory of recovery remains less clear.
In North America, where the Group is substantially dependent
upon leasing activity by corporate occupiers, our business
performance was in line with our expectations but has not yet
reached the levels of the same period last year. Given the strong
national vaccination programme, pre-transaction activity levels
indicate that corporates are beginning to give serious
consideration to their longer term real estate needs, which is a
precursor to improved transaction levels. We continue to anticipate
progressive recovery through H2 2021.
Savills Investment Management has performed ahead of our
expectations, albeit in an environment which remains challenging
for the deployment of equity capital. Debt markets are more
positive for alternative lenders, such as DRC Capital, as the
traditional bank lenders have widened margins and tightened LTV
covenants and investors seek increasing exposure to this asset
class.
Outlook
Our Less Transactional businesses continue to provide a solid
platform for the Group and our residential businesses have shown
strong recovery, albeit that we expect activity to return to more
normal levels, particularly in the UK, during the second half of
the year compared with an unusually strong comparative period in
2020. Internationally, commercial investment markets are showing
varying speeds of recovery and, subject to further pandemic
outbreaks, we expect this trend to continue through the year,
although cross-border activity will depend upon how soon travel and
quarantine restrictions can be eased.
We are confident in the Group's position both to benefit from
progressive recovery in transactional markets and to continue to
execute our growth strategies. The Board remains confident in its
expectations for 2021 as a whole.
We anticipate announcing the Group's Half Year Results for the
six months to 30 June on 5 August 2021.
For further information, contact:
Savills 020 7409 8934
Mark Ridley, Group Chief Executive
Simon Shaw, Group Chief Financial Officer
Tulchan Communications 020 7353 4200
David Allchurch
Elizabeth Snow
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END
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