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Cautious optimism for 2017

Record year for Savills as Edinburgh shines

Nick PennyProperty agent Savills enjoyed a record year as Edinburgh’s office market was a highlight of the Scottish business.

Nick Penny, head of Savills Scotland, said: On the residential side of the business we have seen some very high values achieved in the past year, in hotspots around Edinburgh and Glasgow and the major centres.

“Whilst the uncertainly around Brexit and the noise about a possible Indy Ref2 has made the commercial property market slightly more challenging, investment into Edinburgh’s office market in 2016 reached heights not seen since 2006 with £426 million of transactions, 73% above the 10 year annual average (£246 million).

“Meanwhile, comparative value for money continued to drive demand for rural land in Scotland.

“I am cautiously optimistic about Scotland’s property sector in 2017.” 

 Key financial highlights

  • –  Group revenue up 13% to £1.445.9 billion (£1.355.3bn in constant currency, 2015: £1,283.5m)
  • –  Underlying profit up 12% to £135.8m (£126.8m in constant currency*, 2015: £121.4m)
  • –  Group profit before tax up 1% to £99.8m (2015: £98.6m)
  • –  Underlying profit margin stable at 9.4% (2015: 9.5%)
  • –  Underlying basic EPS up 15% to 72.5p (2015: 63.2p)
  • –  Total dividends for the year up 12% to 29.0p per share (2015: 26.0p)
  • –  Total ordinary dividend up 21% to 14.5p and supplementary dividend up 3.6% to 14.5pKey operating highlights

    The strength of the key commercial market positions, growth in Investment Management and the resilience of the residential businesses led to an improved performance for Savills in 2016.

  • –  Transaction Advisory revenues up 7% driven by market share gains in Asia Pacific, particularly China, and strong growth in Continental European markets
  • –  52% growth in profits in Continental Europe following improved market conditions, improved Investment Management performance and the benefit of business development activity in recent years
  • –  Further consistent growth from less transactional services – Property Management revenue up 21%; Consultancy revenue up 4%
  • –  Savills Investment Management revenues and profits up over 60% in first full year of ownership of the former SEB Asset Management businessJeremy Helsby, group chief executive, said: “Overall, Savills delivered another record performance in 2016 despite the geopolitical distractions in some of our markets. We benefited from the scale of our operations across the globe, which have grown substantially over recent years, as well as a highly resilient performance in the UK.

    “Our less transactional businesses, particularly Property Management and Investment Management grew strongly while our global Transaction Advisory business produced a solid performance despite variable conditions in many markets.

    “We entered 2017 with a continuation of global macro-economic concerns, rising bond yields, uncertainty over the impact of Brexit negotiations in the UK and Continental Europe and a new administration in the US.

    “Savills is a strong and diverse global firm and we continue to look at opportunities to develop our business. We have started the year well and our expectations for the full year remain unchanged.”

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