Upmarket real estate agency Savills plc unveiled plans for a special dividend of 20p per share as it announced its profits for the year finishing at the end of this month will be 'more than 10%' ahead of expectations.
The announcement confirms a prediction made at the half-year stage that while interest rate increases would eventually have an impact on the UK property market, this would be more than offset by increasing tenant demand and strong investment markets.
'Whilst we believed that residential volumes could fall we reported that we expected no material impact on profitability,' the company said in a trading update, adding: 'That confidence was justified'.
The group said that while rising interest rates have hit the mainstream property market, the higher end of the market in which Savills mainly operates has been less affected.
'After a slower August and September, there has been a marked upturn in activity in the last quarter and although our under offer book is ahead of this time last year, we expect buyers to continue to demonstrate caution,' it said.
But the group also said the commercial property markets continue to be very active, particularly due to strong demand for investment properties.
The group´s results for the year will be announced on March 2.
The 20 pence special dividend comes from profits from the group´s property trading business.
The company has now completed the sale of the remaining properties held within its property trading and investment division, which over the last two years has generated total pretax profits of 15 mln stg.
'We intend to pass the post tax benefits of these profits to shareholders by way of a special dividend of 20p per share payable with the final dividend,' it said.
Savills also said that from Jan 1 its subsidiaries will no longer include the prefix ´FPD´.
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Source: Freeman
