Savills has reported a huge uptick in profit, although its investment management arm suffered last year on high interest rates.
The FTSE 250-listed firm told the market this morning that revenue increased by seven per cent in the year ended December 31, reaching £2.4bn from £2.24bn in 2023.
Underlying profit before tax rose 38 per cent to £130.4m, while reported profit before tax rose 59 per cent to £88.3m.
Underlying basic earnings per share increased by 31 per cent to 66.2p.
Savills’ investment management arm reported a revenue drop of 11 per cent, which the company said was in line with expectations given valuation adjustments during the year, with “the raising and deployment of capital inevitably more challenging during a period of interest rate and price volatility”.
Savills share price dropped more than five per cent this morning, continuing a month-long slide. Its share price has fallen by more than 15 per cent since mid-February.
Despite the share price drop, Peel Hunt analysts said that Savills “remains a quality business” and is “poised for a healthy recovery as commercial transition activity returns to normal.”
“We continue to like the business model and believe it remains an attractive investment,” analysts Clyde Lewis and Sam Cullen said. Peel Hunt maintained its target price of 1,100p, as well as its ‘Add’ rating.
Mark Ridley, Chief executive of Savills, said: “Savills improved performance in 2024 reflects the robust earnings provided by our less transactional businesses together with the effect of our inherent operating leverage in the early recovery of transactional markets.
“Most markets were in recovery as we entered 2025 and, whilst uncertainty continues, there remains the expectation of reductions in the cost of capital during the year.
“We expect re-financing driven activity and the trend towards corporates requiring greater office attendance for staff to continue to be positive for transaction volumes. Savills remains well positioned to deliver against the Group’s strategic objectives of broadening our offering to clients across geographies and service lines, supported by a strong balance sheet and thus driving profitability as market recovery continues.”