Rates blamed

Savills profits plunge but outlook is brighter

Savills has seen a 64% fall in pre-tax profits (pic: Terry Murden)

Estate agency and property consultancy group Savills saw profits fall by two thirds as soaring interest rates dented the number of property deals.

Savills reported a pre-tax profit of £55.4 million last year, down 64% from £153.9m in 2022, on revenues 3% lower at £2.24 billion.

Property and facilities management saw profits rise 5% to £48.8m. But the transactional business saw profits plunge 94% to £4.3m.

The firm said it expected to see a recovery in the real estate market later this year.

Mark Ridley, chief executive, said: “Current economic and political conditions remain uncertain, and although we expect this to continue for some time, most markets appear to be past the moment of peak uncertainty.

“There are some early signs of underlying market improvements, which would set the course for a broader recovery during the second half of the year and into 2025.”

Deutsche Numis, which has a ‘buy’ recommendation on the stock, said: “In our view, Savills should be well-placed to capture any increase in transactional activity, given its stronger balance sheet has enabled it to maintain capacity in recent years, which has support market share gains and should lead to a healthy drop through margins when revenue increases.”

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