Savills H1 profits slump due to Covid restrictions

(Sharecast News) - Real estate advisor Savills reported a 69% slide in first-half profit on Thursday as its business took a "significant" hit from the Covid-19 pandemic and subsequent lockdowns in the second quarter.

In the six months to the end of June, pre-tax profit fell to £7.7m from £24.7m in the first half of last year, with revenue down 7% to £55.6m. Basic earnings per share declined to 3.9p from 12.8p.

The company said lockdowns and the inability to travel or conduct viewings "significantly reduced" the volume of transactional activity that could be conducted in the half.

Commercial transaction revenue fell 23% overall, with Asia Pacific and North America particularly affected. Meanwhile, UK residential revenue fell 8%, reflecting significant reductions in transactional activity during lockdown, partially mitigated by a strong recovery in June.

Chief executive Mark Ridley said: "During this period, our less transactional businesses have provided a solid platform for the Group and our transactional business teams have partially mitigated the effect of significantly lower levels of trading activity by winning increased market share.

"Looking forward, 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."

Still, Ridley said there had been signs of recovery in residential markets and a number of commercial transaction markets in recent weeks.

"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."