Savills, the International property adviser, is pleased to announce a trading update for the year ending 31 December 2003, prior to the announcement of the preliminary results on 2 March 2004.
When we released our results for the six months ended 30 June 2003 on 3 September 2003 the Chairman reported that the Group remained cautiously confident about the outlook for the full year as our broad base of international business made us well placed to meet the challenges of 2003. Since then market conditions have generally improved.
Main Business Streams
Despite continuing weaknesses in leasing markets in London and the South East there are signs of renewed tenant interest. There is still good demand for well located out of town retail schemes.
Investment markets remain active with yields hardening; our international client base has allowed us to take full advantage of these excellent market conditions. In Asia there has been a marked upturn in market activity, particularly in Hong Kong, where we are a leading Investment advisor.
After a very slow start to the year activity levels in prime residential have recovered strongly. Sales of new homes have also increased with continuing interest from investors.
Our consultancy business continues to make excellent progress across the board as we constantly recruit new teams and individuals.
Income from our Property Management business is very steady and we are looking to expand this area of activity further. In Asia we are well established as market leader.
The Hong Kong based facilities management business is again producing an excellent performance, with a stable high quality income stream. Losses at our associate Trammell Crow Savills have been reduced with the focus now on blue-chip corporate clients.
Following the sale of The Mill Discount Department Store in June we have now completed the sales of three further properties (two of which were held in joint venture with co-investors); these will produce in excess of ÃÂ£3.5 million trading profit.
Savills Private Finance is having an outstanding year and is performing well ahead of plan.
In view of the strong trading performance of the business and the substantial cash balances the Board expects to recommend a significantly increased final dividend.
With generally improved confidence in the UK economy and little impact so far of increased interest rates, property markets, after a slow start, have performed better in the second half of the year than expected. On this basis the Board believes that the full year profits will materially exceed current market expectations.
Source: FPD Savills