SVS17 Mar 2011 08:43
Savills unveils new divi policy as profits boom
Date: Thursday 17 Mar 2011
LONDON (ShareCast) - Global property markets are bouncing back strongly judging by the results from international estate agent Savills, with Asia Pacific putting in an especially strong performance.
Group revenue for 2010 was up 21%, or 19% in constant currency (cc) terms to £677.0m from £560.7m in 2009.
Underlying profit before tax soared 88% (83% in cc terms) to £47.3m from £25.2m in 2009.
The company ended 2010 with net cash of £86.9m, up from £66.3m at the end of the previous year.
The full year dividend has been whacked up to 13p from 9p the year before, representing a change in dividend policy for the group.
“In future the board intends to recommend a progressive ordinary dividend broadly reflecting the growth in profits derived from our less volatile businesses,” revealed company chairman Peter Smith.
When profits from the cyclical Transaction Advisory business are strong, the board will consider and, if appropriate, declare a ‘supplemental’ interim dividend alongside the final ordinary dividend, as it has done this year.
“It is intended that, in normal circumstances, the combined value of the ordinary and any supplemental dividend payable in respect of any year is covered at least 1.5 times by statutory retained earnings and/or at least 2.0 times by underlying profits after taxation,” Smith explained.
The group saw a record performance from the Asia Pacific region, which now contributes 41% of group revenue, while it saw continued strength in prime London residential and commercial markets.
Things have not been so great on continental Europe of late but some markets on the European mainland are seeing a significant improvement.
“It was also encouraging to see conditions improve in the US and the key French and German markets, although the trend was not consistent across all of Continental Europe,” said Jeremy Helsby, chief executive of Savills.
“In the near term, it is unclear how markets will react to the recent catastrophic events in Japan, particularly at a time of unprecedented global economic and political change. For the markets of Mainland China, Hong Kong and Singapore these events come on top of government measures of the last twelve months to address property speculation,” Helsby noted.
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