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(Alliance News) - Savills PLC on Thursday said its earnings for the first half of 2020 were hurt by restrictions introduced to curb the spread of Covid-19, which hindered its ability to conduct property viewings.
The real estate agent said pretax profit for the six months ended June 30 was down 69% year-on-year to GBP7.7 million from GBP24.7 million. This was as revenue fell to GBP791.4 million, down 6.7% from GBP847.0 million.
Savills said Covid-19 hurt its performance as commercial transaction revenue fell 23%, with Asia Pacific and North America particularly affected. UK Residential revenue fell 8% reflecting significant reductions in transactional activity during lockdown, and Savills Investment Management revenue declined 6% as a result of lower performance fee income.
Basic earnings per share was 3.9p, down from 12.8p.
No interim dividend was declared due to economic uncertainty. An interim dividend of 4.95p was declared last year.
Looking ahead, the company said it is unclear how quickly trading will return to pre-Covid levels but noted that low interest rates are favourable for the sector.
"As a consequence of Covid-19, the economic environment remains highly uncertain, chiefly in respect of expected recovery trajectories across the world and the occurrence of second wave outbreaks causing further lockdowns. In addition, it is unclear how significantly the longer term economic impact of Covid-19 will weigh on corporate and investor sentiment. That said, the wider context for real estate investment is largely positive with the expectation of low interest rates for longer and continued, or enhanced, investor demand for income reflected in increased allocations to real asset-backed strategies," said Chief Executive Mark Ridley.
"In recent weeks we have seen signs of recovery in residential markets and a number of commercial transaction markets around the world. Clearly, our performance in the second half of 2020 will be highly dependent upon the extent to which such signs become a sustained recovery for the markets in which we operate," he added.
Net cash as at June end was GBP9.4 million.
Shares in Savills were trading 0.2% lower at 769.00 pence each on Thursday morning in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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