Revenue and profits fell sharply at Savills during the first half of 2023. Group profit before tax plummeted 88% to £6m from £50.4m in the first half of 2022 and its revenue was down 2.5% to £1,011.4m.
Transaction advisory revenues fell 20% and revenue at Savills Investment Management was down 4%. However, consultancy revenue remained stable, and its property and facilities management revenue rose 16%.
Mark Ridley, group chief executive of Savills, said: “During 2023, global real estate markets have faced the obvious challenges associated with inflation and the related steep rise in interest rates. Different regions have varied in the pace of their adjustment to current conditions and all have experienced a material decline in trading volumes during that adjustment process. Market participants, whether investors or occupiers, seek greater certainty on the trajectory of interest rates over the next 18 months, something which has become somewhat clearer in recent weeks than for much of the period.
“Savills has weathered both the inflationary cost conditions and reduced transaction volumes well, increasing market share and, supported by our strong balance sheet, continuing to undertake selective business development activities to further the group’s long term growth strategy.
“We are seeing some positive signs in markets such as the UK and continued strength in certain Asia Pacific markets including Japan; in Continental Europe and mainland China we now expect reduced market volumes to continue through much of the year. In many locations we are carrying very strong capital transaction pipelines awaiting the market conditions for launch.
“In prolonged uncertain conditions, it remains challenging to predict accurately the timing of individual market recoveries. Accordingly, our range of expectations for the year as a whole has reduced somewhat. We do, however, continue to anticipate a significant improvement in volumes of activity through the balance of the year, and into 2024.”
The company has also announced that Stacey Cartwright will succeed Nicholas Ferguson as chair of Savills when he retires from the board effective 31 December 2023. Cartwright has been an independent non-executive director of Savills since October 2018, and senior independent director since January 2021.
Ridley said: “On behalf of everyone at Savills I thank Nicholas for his leadership of the board since 2016 and for the huge contribution he has made to the development of the company over the past seven years. We wish him all the best for the future. I am delighted that Stacey will be Savills next chair. I greatly look forward to her continued contribution and guidance as we seek to deliver the group’s long-term strategic objectives.”
Ferguson added: “I am delighted that Savills has appointed Stacey Cartwright to succeed me as chair. Over the last seven years, the group has made huge progress and I am proud of the strong platform for future growth that we have built.”
