Savills Regulatory News (SVS)

5 Sep 2006 07:04

Savills PLC05 September 2006 Strong performance in the first half Savills plc, the international property adviser, today announces interim resultsfor the six months ended 30 June 2006. • Group revenue for the six months was up 33% at £211.1m (2005 - £158.2m).• Group profit before tax increased 56% to £31.0m (2005 - £19.9m).• Underlying Group profit before tax* increased 27% to £25.6m (2005 - £20.2m).• Basic earnings per share increased 45% to 17.2p (2005 - 11.9p).• Adjusted underlying basic earnings per share* increased 15% to 13.9p (2005 - 12.1p).• Interim dividend increased 25% to 5.0p (2005 - 4.0p). * After adjusting for share based payments, amortisation of intangibles andimpairment of goodwill and profit on disposals. Peter Smith, Chairman of Savills plc, comments: 'We believe that recent volatility in stock markets continues to highlight thevalue of property as an asset class. Despite rising global interest rates, thegeneral economic outlook remains positive which should provide general supportfor property markets. On this basis we are confident of achieving a good result for the full year inline with our expectations.' *** Chairman's Statement and Interim Results follow *** Savills plc. Registered in England No. 2122174. Registered Office 20 Grosvenor Hill, Berkeley Square, London W1K 3HQ. For further information, contact: Savills 020 7499 8644Aubrey Adams, Group Chief Executive Citigate Dewe Rogerson 020 7638 9571Simon Rigby/Sarah Gestetner/George Cazenove CHAIRMAN'S STATEMENT RESULTS AND DIVIDEND We reported in our Trading Update, released on 3 July 2006, that the first halfhad seen strong investment markets especially in the UK and in key Europeanmarkets and this should ensure that commercial activity levels remained high in2006. Residential markets had been buoyant in the first half of 2006. I am delighted to announce that revenue increased by 33% to £211.1m (2005 -£158.2m). Profit before tax increased to £31.0m for the first six months to 30June 2006 (2005 - £19.9m) representing an increase of 56%, with underlyingprofit increasing 27% to £25.6m from £20.2m. Basic earnings per share for thesix months to 30 June 2006 increased to 17.2p (2005 - 11.9p). Adjustedunderlying earnings per share increased by 15% to 13.9p (2005 - 12.1p). TheDirectors have decided to increase the interim dividend to 5.0p (2005 - 4.0p) tobe paid on 27 October 2006. During the first half of the year, Savills continued to expand its internationaloperations with the acquisition of an initial 50% stake in Korean Asset Advisors(KAA) and BHP Korea (BHPK) for consideration of £8.4m and the acquisition ofHamilton Osborne King in Ireland for consideration of £39.6m. We also made anumber of smaller acquisitions in the UK. Our continued growth strategy and oursearch to recruit and retain the best people may give rise to some pressure onmargins in the short term. At our AGM on 10 May 2006, the shareholders passed a resolution that theexisting ordinary share capital of the Company be split; each existing 5 penceordinary share was divided into two new ordinary shares of 21/2 pence. Theshare split became effective on 11 May 2006. Relevant figures in the interimstatements have been adjusted to reflect this. Transactional Advice During the half year, revenue for the Transactional Advice businesses was £95.0m(2005 - £68.2m) and operating profit was £19.4m (2005 - £10.7m). Transactional income in the UK Commercial and Asian markets was ahead of thesame period last year with Europe carrying a strong pipeline. Leasing markets in London showed signs of recovery, particularly in the West Endwhere a shortage of space drove rents for prime space to record levels. In theCity, rents also rose, driven by increasing demand from the financial sector.Leasing markets outside of London remained stable. Tenant demand in the office and industrial sectors improved during the first sixmonths of 2006, reverting to long term average levels in many cases. Some keycity and prime markets have seen requirements rise to near record levels.Vacancy rates continued to fall in these markets and consequently rents on thebest quality space have started to rise, as has been seen in the recovery of theSouth East office markets. This in turn has spurred office developers to startschemes speculatively in anticipation of further strong upward rental growth. In the retail property market, tenant demand was still restrained in the face ofcontinuing low levels of consumer demand. However, retailers were still openingnew stores in well located shopping centres as there remained continuing retail/tenant demand. Investment in the UK and key European markets continued to remain strong despiteyields having fallen over the last six months in all asset classes. Despiteconcerns about rising interest rates there were no signs of any slowdown inthese investment markets and there was strong demand by both institutional andprivate investors for investment products with investors looking outside of themain cities due to lack of supply. All our investment teams across the UK andEurope have had a good six months with a number of transactions in the pipelinedue to complete within the second half of the year. In March, we acquired Blair Kirkman, a 26-strong team offering a full breadth ofretail and shopping centre services including agency, investment, developmentand professional/rent review consultancy, which enabled us to become a leadingforce in the UK property retail markets. The integration of Blair Kirkman withour existing Retail teams across the UK has gone well and since their arrival wehave already received some notable new instructions and are pitching for severalothers. Residential markets in the UK experienced a strong start to the year, incontrast to the much slower start in 2005. London in particular has benefitedfrom a buoyant market, which since the spring has spread through the southernpart of the country. However, markets in the Midlands and the North remainpatchy. The main constraint in the strong London market was the lack of supplyto meet demand. The new homes market has seen further improvement in 2006, followingstrengthening take-up throughout 2005. Having stabilised at the end of 2005,housing output has now slightly increased in England, with the South East seeingthe highest levels. This is unsurprising given the huge demand for housing inthis region. Large development sites are growing in importance, delivering newhousing supply to London and other cities. Despite the US interest rate hikes that have prevailed over the last year, thedemand for commercial real estate in Asia remains strong. However, there hasbeen some cooling in investor sentiment, especially in Hong Kong. Tenant demandfor space in Hong Kong and China was very strong and we continued to negotiateever-increasing rents for prime space. In Japan, the resurgent economy haspushed rents ahead of last year's levels giving rise to increased activity forour Tokyo office. Consultancy During the half year revenue for the Consultancy businesses was £37.7m (2005 -£30.1m) and operating profit was £6.0m (2005 - £4.9m). Our professional businesses continued to grow, in particular our CommercialValuation businesses across UK and Europe where income increased substantiallyover the first six months. Our UK Commercial Valuation business has experiencedsignificant growth on the back of increased lending in the investment markets. Residential Consultancy income increased in areas such as developmentvaluations, affordable housing and social housing, reflecting increased marketshare and growing activity in the housing market. Our Planning, Building andHousing Consultancy divisions have also experienced strong markets and we arecontinuing to recruit in all these areas. In Asia, following the recruitment of a valuation team last year, we have beensuccessful in capturing the majority of the REIT listing valuation andconsultancy services that have come to the Hang Seng market. Last year ourvaluation team were advisers on the Construction Bank of China listing, thelargest global IPO for 2005; and in 2006 they continue to be heavily involved inmany of the IPO listings that originated in China which require propertyvaluation and consultancy services. In Australia, our valuation team weresuccessful in securing many of the retail valuation portfolio annualappointments which are required by the Australian listed property trusts. Property and Facilities Management During the half year, revenue for the combined Property and FacilitiesManagement businesses was £63.1m (2005 - £47.1m) and operating profit was £3.8m(2005 - £3.4m). In Asia, property management revenues increased substantially over the 2005levels. We have continued our commitment to increase our market share in thisarea of real estate advice. New contracts were secured in Hong Kong and China.The addition of our Korean business has significantly increased our size andscope of services offered in this growing economy. In the UK, the Property Management business continued to win new contracts andwe are continuing to expand this business particularly in the regions. In Europe, we acquired a small Property Management business in Berlin which hasexperienced rapid growth due to the strong investment markets in Germany. Ourrecently acquired Property Management business in Paris has performed in linewith expectations, as has our team in Madrid. Fund Management During the half year, revenue for the Fund Management business was £2.6m (2005 -£2.3m) which resulted in a profit of £0.1m at the half year (2005 - £0.3m). Cordea Savills continued to develop its resources with the addition of staff inthe UK and Italy and a new office was opened in Germany to support ourinvestment and business development activities. During the first half, CordeaSavills closed Serviced Land No.1 LP, a vehicle involved in "enabling" land fordevelopment and had the first closing of the Cordea Savills Student Hall Fund.Other initiatives included the creation of a vehicle investing in opportunisticproperty situations in Italy and a second fund for charity investors, theAccommodation Investment Fund, which was the first charity common investmentfund focusing on property used for residential purposes. A proposed fund to invest in German property did not proceed because of a weakstock market. However, we are investigating other opportunities in the Germanmarket. £0.4m of abortive costs have been expensed in the period. Financial Services During the half year, revenue for the Financial Services businesses was £12.1m(2005 - £10.4m) and operating profit was £1.3m (2005 - £1.3m). SPF continued to trade well specifically in the high net worth mortgage brokingmarket. The Commercial Debt Broking division also made a significantcontribution. New offices have been opened in Chelmsford and Guernsey withfurther expansion planned in the second half of the year. OUTLOOK We believe that recent volatility in stock markets continues to highlight thevalue of property as an asset class. Despite rising global interest rates, thegeneral economic outlook remains positive which should provide general supportfor property markets. On this basis we are confident of achieving a good result for the full year inline with our expectations. Independent review report to Savills plc Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 June 2006 which comprises the consolidated incomestatement, the consolidated balance sheet as at 30 June 2006, the consolidatedstatement of cash flows and the consolidated statement of recognised income andexpense and related notes. We have read the other information contained in theinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the Directors. The Listing Rulesof the Financial Services Authority require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. This interim report has been prepared in accordance with the basis set out inNote 1. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the disclosed accounting policies havebeen applied. A review excludes audit procedures such as tests of controls andverification of assets, liabilities and transactions. It is substantially lessin scope than an audit and therefore provides a lower level of assurance.Accordingly we do not express an audit opinion on the financial information.This report, including the conclusion, has been prepared for and only for theCompany for the purpose of the Listing Rules of the Financial Services Authorityand for no other purpose. We do not, in producing this report, accept or assumeresponsibility for any other purpose or to any other person to whom this reportis shown or into whose hands it may come save where expressly agreed by ourprior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006. PricewaterhouseCoopers LLPChartered AccountantsLondon4 September 2006 SAVILLS plc CONSOLIDATED INCOME STATEMENT (unaudited) for the period ended 30 June 2006 Six months Six months Year ended to 30.06.06 to 30.06.05 31.12.05 Notes £'000 £'000 £'000Continuing operationsRevenue 2 211,077 158,154 373,866 Employee benefits expense (125,180) (95,010) (227,510)Depreciation expense (2,669) (2,109) (4,573)Amortisation of intangibles & impairment of goodwill (711) (588) (1,465)Other operating expenses (58,693) (41,885) (85,914)Profit on disposal of subsidiary & available for sale 4,459 - 455investmentsOperating profit 2 28,283 18,562 54,859 Finance income 2,170 1,607 3,940Finance costs (29) (202) (461)Net finance income 2,141 1,405 3,479 Share of post tax profit from associates & joint 37 (18) 329venturesProfit/(loss) on disposal of associates & joint ventures 540 - (88)Profit before tax 31,001 19,949 58,579 Income tax expense (including foreign tax of £1.6m, June 4 (9,727) (6,222) (17,799)2005 - £2.0m and December 2005 - £4.0m) Profit for the period from continuing operations 21,274 13,727 40,780 Discontinued operationsProfit/(loss) for the period from discontinued 3 360 - (504)operations Profit after income tax 21,634 13,727 40,276 Attributable to:Equity shareholders of the parent 21,330 13,700 39,974Minority interest 304 27 302 21,634 13,727 40,276 Earnings per shareFrom continuing and discontinued operationsBasic earnings per share 7 17.2p 11.9p 33.6pDiluted earnings per share 7 16.2p 11.1p 31.3p From continuing operationsBasic earnings per share 7 16.9p 11.9p 34.0pDiluted earnings per share 7 15.9p 11.1p 31.7p From discontinued operationsBasic earnings per share 7 0.3p - -0.4pDiluted earnings per share 7 0.3p - -0.4p Dividends per shareInterim dividend proposed 5 5.0p 4.0p -Dividends paid 5 8.0p 16.3p 20.3p SAVILLS plc CONSOLIDATED BALANCE SHEET (unaudited) at 30 June 2006 30.06.06 30.06.05 31.12.05 Notes £'000 £'000 £'000ASSETSNon-current assetsProperty, plant and equipment 15,712 12,827 14,679Goodwill 99,780 51,937 54,255Intangible assets 10,834 3,605 4,699Financial assets - available for sale investments 10,140 5,580 10,486Investments in associates and joint ventures 4,695 3,045 3,402Deferred income tax assets 21,438 18,240 23,892 162,599 95,234 111,413Current assetsAssets classified as held for sale - - 64,853Work in progress 3,442 3,127 3,180Trade and other receivables 116,559 89,097 115,336Cash and cash equivalents 63,064 77,254 99,921 183,065 169,478 283,290LIABILITIESCurrent LiabilitiesBorrowings 7,114 1,092 1,910Liabilities directly related to assets classified as - - 48,867held for saleTrade and other payables 111,834 80,485 136,102Current income tax liabilities 7,364 3,064 5,644Employee benefit obligations 2,636 1,614 1,739Provisions for other liabilities and charges 662 372 675 129,610 86,627 194,937Net current assets 53,455 82,851 88,353Total assets less current liabilities 216,054 178,085 199,766 Non-current LiabilitiesBorrowings 11,777 1,243 1,516Trade and other payables 1,035 2,169 989Retirement and employee benefit obligations 17,415 29,420 24,926Provisions for other liabilities and charges 2,450 2,454 1,708Deferred income tax liabilities 1,723 914 2,313 34,400 36,200 31,452Net assets 181,654 141,885 168,314 EQUITYCapital and reserves attributable to equityholders of the parentShare capital 9,10 3,344 3,315 3,325Share premium 10 81,358 80,665 80,885Other reserves 10 939 1,025 6,528Retained earnings 10 92,315 56,597 77,001Total shareholders' equity 177,956 141,602 167,739Minority interest 10 3,698 283 575Total equity 181,654 141,885 168,314 SAVILLS plc CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) for the period ended 30 June 2006 Six months Six months Year ended to to 30.06.06 to 30.06.05 31.12.05 Notes £'000 £'000 £'000CASH FLOWS FROM OPERATING ACTIVITIESCash generated from/(used in) continuing operations 8 40 (14,650) 44,859Interest received 2,167 1,607 3,829Interest paid (29) (202) (461)Income tax paid (6,535) (8,360) (15,564) Net cash (used in)/generated from operating activities (4,357) (21,605) 32,663 CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of subsidiary, net of cash disposed - - 120Proceeds from sale of property, plant and equipment 39 49 38Proceeds from sale of associates, joint ventures and 6,267 - 503available for sale investmentsDividends received 228 143 324Net loans to related parties (1,793) (290) (413)Acquisition of subsidiaries, net of cash acquired 9 (26,561) (4,694) (7,528)Sale/(acquisition) of assets held for resale 16,346 - (16,490)Purchases of property, plant and equipment (3,440) (2,772) (7,268)Purchases of intangible assets (646) (440) (872)Purchase of investment in associates, joint ventures (5,496) (41) (176)and available for sale investments Net cash used in investing activities (15,056) (8,045) (31,762) CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of share capital 492 37,845 38,075Proceeds from new borrowings 330 110 706Repurchase of own shares - (520) (520)Purchase of own shares for Employee Benefit Trust (4,987) - (4,158)Repayments of borrowings (1,031) (3,790) (4,322)Dividends paid (10,045) (18,092) (23,133) Net cash (used in)/generated from financing activities (15,241) 15,553 6,648 Net (decrease)/increase in cash and cash equivalents (34,654) (14,097) 7,549 Cash and cash equivalents at beginning of the year 99,921 89,919 89,919 Effect of exchange rate fluctuations on cash held (2,203) 1,432 2,453 Cash and cash equivalents at end of period 63,064 77,254 99,921 SAVILLS plc CONSOLIDATED STATEMENT OF RECOGNISED INCOME & EXPENSE (unaudited) for the period ended 30 June 2006 Six months Six months Year ended to 30.06.06 to 30.06.05 31.12.05 £'000 £'000 £'000Profit for the period 21,634 13,727 40,276 Revaluation of available for sale investments 373 778 6,582Actuarial gain/(loss) on defined benefit pension 6,440 (1,783) (7,301)schemeTax on items directly taken to reserves 482 3,482 9,574Foreign exchange translation differences (2,128) 1,016 2,702Net income recognised directly in equity 5,167 3,493 11,557 Total recognised income and expense for the period 26,801 17,220 51,833 Attributable to:Equity shareholders of the parent 26,497 17,211 51,621Minority interest 304 9 212 26,801 17,220 51,833 Effects of changes in accounting policiesAttributable to equity shareholders - increase in retained earnings due to revaluationofon adoption of IAS 32 & 39 - 960 960Attributable to minority interest - - - - 960 960 NOTES1. Basis of preparation The financial information comprises the unaudited consolidated income statement, consolidated balance sheet,consolidated statement of cashflows, consolidated statement of recognised income and expense and related notes asat 30 June 2006 and 30 June 2005, together with the audited consolidated balance sheet and consolidated incomestatement for the year ended 31 December 2005. This financial information has been prepared in accordance with the Listing Rules of the Financial ServicesAuthority. In preparing this financial information management has used the principal accounting policies as setout in the 2005 Annual Report and Accounts on pages 67 to 76. As permitted, the Group has chosen not to adopt IAS 34, 'Interim financial statements' in preparing its 2006interim statements, and therefore this interim financial information is not considered to be in compliance withIFRS. The 2005 Annual Report and Accounts, which are the Group's statutory accounts, have been filed with the Registrarof Companies. The auditors' report on these accounts was unqualified and did not contain a statement underSection 237(2) or Section 237(3) of the Companies Act 1985. 2. Segment analysis Six months to Trans-actional Consult-ancy Property & Fund Financial Unalloc-ated* Total30 June 2006 Advice Facilities Manage-ment Services Manage-ment £'000 £'000 £'000 £'000 £'000 £'000 £'000RevenueUnited Kingdom - Commercial 30,538 21,851 15,864 2,656 1,506 164 72,579 - Residential 40,320 9,539 3,870 - 10,612 296 64,637 70,858 31,390 19,734 2,656 12,118 460 137,216Rest of Europe 6,833 1,132 2,516 - - - 10,481Asia Pacific 17,277 5,205 40,898 - - - 63,380Total revenue 94,968 37,727 63,148 2,656 12,118 460 211,077 Operating profitUnited Kingdom - Commercial 5,927 3,617 1,020 127 304 (2,308) 8,687 - Residential 11,395 1,758 303 - 1,033 - 14,489 17,322 5,375 1,323 127 1,337 (2,308) 23,176Rest of Europe 711 94 60 - - (40) 825Asia Pacific 1,376 517 2,389 - - - 4,282Operating profit/ 19,409 5,986 3,772 127 1,337 (2,348) 28,283(loss)Net finance income 2,141Share of post tax profit from associates & joint ventures 37Profit/(loss) on disposal of associates & joint ventures 540Profit before income tax 31,001Taxation (9,727)Profit for the period from continuing operations 21,274 Six months to Trans-actional Consult-ancy Property & Fund Financial Unalloc-ated* Total30 June 2005 Advice Facilities Manage-ment Services Manage-ment £'000 £'000 £'000 £'000 £'000 £'000 £'000RevenueUnited Kingdom - Commercial 20,268 18,383 14,531 2,292 685 60 56,219 - Residential 25,565 7,382 3,197 - 9,724 - 45,868 45,833 25,765 17,728 2,292 10,409 60 102,087Rest of Europe 7,867 719 2,209 - - - 10,795Asia Pacific 14,528 3,576 27,168 - - - 45,272Total revenue 68,228 30,060 47,105 2,292 10,409 60 158,154 Operating profitUnited Kingdom - Commercial 3,510 3,328 971 319 (26) (2,088) 6,014 - Residential 3,072 1,003 143 - 1,330 - 5,548 6,582 4,331 1,114 319 1,304 (2,088) 11,562Rest of Europe 1,717 40 254 - - - 2,011Asia Pacific 2,421 509 2,059 - - - 4,989Operating profit/ 10,720 4,880 3,427 319 1,304 (2,088) 18,562(loss)Net finance income 1,405Share of post tax profit from associates & joint ventures (18)Profit before income tax 19,949Taxation (6,222)Profit for the period from continuing operations 13,727 The unallocated segment includes holding company costs, Group bonuses and other expenses not directlyattributable to the operating activities of the Group's business segments. *For the purpose of the segmental information above, and to assist in the comparison of segmentalinformation, the benefit arising from the amortisation of the share based payment charge as discussed inmore detail in note 6, is retained within the unallocated segment. 3. Discontinued operations Six months Six months Year ended to 30.06.06 to 30.06.05 31.12.05 £'000 £'000 £'000Revenue 1,092 - 149Expenses (391) - (869)Profit before tax 701 - (720)Income tax expense (341) - 216Profit after tax 360 - (504) The assets and liabilities of the Student Halls Long Lease 1 Unit Trust (the 'Fund') in which theGroup held a 100% interest at 31 December 2005 were disposed during the period. The Group's share ofthe Fund was diluted to a small holding of £1.0m, which is classified as an available for saleinvestment. The profit for the period includes a fair value gain of £1.4m arising on the mark to market valuationof two interest rate swaps taken out on loans secured on the properties within the Fund. All operatingresults are classified under discontinued operations. The discontinued operations all relate to theunallocated segment. 4. Income tax expense The income tax expense has been calculated on the basis of the underlying rate in each jurisdictionadjusted for any disallowable charges. Six months Six months Year ended to 30.06.06 to 30.06.05 31.12.05 £'000 £'000 £'000United Kingdom corporation tax (7,364) (2,339) (13,009)Foreign tax (1,635) (1,971) (3,964)Deferred tax (728) (1,912) (826) (9,727) (6,222) (17,799) Six months Six months Year ended5. Dividends to 30.06.06 to 30.06.05 31.12.05 £'000 £'000 £'000Amounts recognised as distribution to equity holders:Interim dividend of 4.0p per share - - 4,942Ordinary final dividend of 8.0p per share (2005 - 6.3p) 9,969 6,942 6,990Special dividend of nil per share (2005 - 10.0p) - 11,107 11,128 9,969 18,049 23,060 Proposed interim dividend for the six months ended 30 June 2006 6,208 - - The Directors have recommended an interim dividend for the six months to 30 June 2006 of 5.0p perordinary share (2005 - 4.0p). The interim dividend will be paid on 27 October 2006 to shareholders onthe register as at 29 September 2006. Following shareholder approval at the Annual General Meeting on 10 May 2006 a two for one share splittook place. The above quoted dividend per share figures have been adjusted to present comparablefigures following the split. 6. Underlying profit before tax Six months Six months Year endedFrom continuing operations to 30.06.06 to 30.06.05 31.12.05 £'000 £'000 £'000Reported profit before tax 31,001 19,949 58,579Adjustments:Amortisation of intangibles (excluding software) & impairment of 455 297 913goodwillShare based payment adjustment (817) - (1,934)Profit on disposal of associates, joint ventures & available for sale (4,999) - (367)investmentsUnderlying profit before tax 25,640 20,246 57,191 The Directors regard the above adjustments necessary to give a fair picture of the underlying results of theGroup for the period. The adjustment for share based payment relates to the transitional impact of IFRS 2. The annual bonus ispaid in a mixture of cash and deferred shares and the proportions can vary from one year to another. UnderIFRS the deferred share element is amortised to the income statement over the vesting period whilst the cashelement is expensed in the year. The adjustment above addresses this by deducting from profit the differencebetween the IFRS 2 charge and the value of the annual share award. 7. Basic and diluted earnings per share The following earnings per share calculations have been made as if the share split (see Note 5) had takenplace at 1 January 2005 so as to present comparable information. a. Basic and diluted earnings per share Earnings Shares EPS Earnings Shares EPSSix months to 30 June 2006 2006 2006 2005 2005 2005 £'000 '000 Pence £'000 '000 PenceFrom continuing and discontinued operationsBasic earnings per share 21,330 123,973 17.2 13,700 114,668 11.9Effect of additional sharesissuable under option - 7,526 (1.0) - 9,278 (0.8)Diluted earnings per share 21,330 131,499 16.2 13,700 123,946 11.1 From continuing operationsBasic earnings per share 20,970 123,973 16.9 13,700 114,668 11.9Effect of additional sharesissuable under option - 7,526 (1.0) - 9,278 (0.8)Diluted earnings per share 20,970 131,499 15.9 13,700 123,946 11.1 From discontinued operationsBasic earnings per share 360 123,973 0.3 - - -Effect of additional sharesissuable under option - 7,526 - - - -Diluted earnings per share 360 131,499 0.3 - - - Earnings Shares EPSYear to 31 December 2005 2005 2005 £'000 '000 PenceFrom continuing and discontinued operationsBasic earnings per share 39,974 118,900 33.6Effect of additional shares issuable under option - 8,836 (2.3)Diluted earnings per share 39,974 127,736 31.3 From continuing operationsBasic earnings per share 40,478 118,900 34.0Effect of additional shares issuable under option - 8,836 (2.3)Diluted earnings per share 40,478 127,736 31.7 From discontinued operationsBasic earnings per share (504) 118,900 (0.4)Effect of additional shares issuable under option - 8,836 -Diluted earnings per share (504) 127,736 (0.4) b. Adjusted underlying basic earnings per share Earnings Shares EPS Earnings Shares EPSSix months to 30 June 2006 2006 2006 2005 2005 2005 £'000 000 Pence £'000 000 PenceFrom continuing operationsBasic earnings from continuing operations 20,970 123,973 16.9 13,700 114,668 11.9Amortisation of intangibles (excluding 318 - 0.3 208 - 0.2software) and impairment of goodwill aftertaxShare based payment adjustment after tax (572) - (0.5) - - -Profit on disposal of associates, joint ( 3,530) - (2.8) - - -ventures & available for sale investmentsafter taxAdjusted underlying basic earnings per 17,186 123,973 13.9 13,908 114,668 12.1share Earnings Shares EPSYear to 31 December 2005 2005 2005 £'000 000 PenceFrom continuing operationsBasic earnings from continuing operations 40,478 118,900 34.0Amortisation of intangibles (excluding software) and impairment 639 - 0.5of goodwill after taxShare based payment adjustment after tax (1,354) - (1.1)Profit on disposal of subsidiary, associates, joint ventures & ( 257) - (0.2)available for sale investments after taxAdjusted underlying basic earnings per 39,506 118,900 33.2share Six months Six months Year ended8. Cash generated from continuing operations to 30.06.06 to 30.06.05 31.12.05 £'000 £'000 £'000 Profit for the year from continuing operations 21,274 13,727 40,780Adjustments for:Taxation 9,727 6,222 17,799Depreciation expense 2,669 2,109 4,573Amortisation of intangibles & impairment of goodwill 711 588 1,465Net finance income (2,141) (1,405) (3,479)Share of post tax (profit)/loss from associates & joint (37) 18 (329)ventures(Profit)/loss on disposal of associates & joint (540) - 88venturesProfit on disposal of subsidiary & available for sale (4,459) - (455)investmentsLoss on sale of property, plant and equipment 576 5 364Increase/(decrease) in provisions 973 (227) (833)(Decrease)/increase in employee and retirement obligations (1,042) 342 (9,574)Charge for share based compensation 1,906 649 1,913Provision against investments in associates and joint 14 8 18venturesOperating cash flows before movements in working capital 29,631 22,036 52,330(Increase) in work in progress (307) (437) (431)Decrease/(increase) in debtors 12,028 (804) (23,471)(Decrease)/increase in creditors (41,312) (35,445) 16,431Cash generated from/(used in) operations 40 (14,650) 44,859 9. Acquisitions On 13 June 2006, the Group acquired the businesses of Hamilton Osborne King (HOK) in Ireland forconsideration of £39.6m. Provisional goodwill on acquisition of £31.4m has been capitalised, subjectto the completion of the fair value exercise. Loan notes repayable over 3 years to the value of£11.8m were issued as part consideration for this acquisition. On 3 January 2006, the Group acquired an initial 50% share in each of Korean Asset Advisors and BHPKorea for a consideration of £8.4m. Goodwill and intangible assets totalling £8.4m have beencapitalised on acquisition. On 22 March 2006, the Group acquired Blair Kirkman LLP for £9.4m. Goodwill and intangible assetstotalling £9.4m have been capitalised on acquisition. Loan notes repayable over 4 years to the valueof £4.3m were issued as part consideration for this acquisition. 10. Statement of changes in equity Attributable to equity holders of the Group Minority Total interest equity Share Share Other Retained capital premium reserves earnings £'000 £'000 £'000 £'000 £'000 £'000Balance at 1 January 2006 3,325 80,885 6,528 77,001 575 168,314Total recognised income and - - (1,867) 28,364 304 26,801expense for the periodEmployee share option scheme:- Value of services provided - - - 1,906 - 1,906Issue of share capital 19 473 - 492Purchase of treasury shares - - - (4,987) - (4,987)Dividends - - - (9,969) (76) (10,045)Disposal of available for sale - - (3,722) - - (3,722)investmentsMinority interest share on - - - - 2,895 2,895acquisitionsBalance at 30 June 2006 3,344 81,358 939 92,315 3,698 181,654 Attributable to equity holders of the Group Minority Total interest equity Share Share Other Retained capital premium reserves earnings £'000 £'000 £'000 £'000 £'000 £'000Balance at 31 December 2004 3,026 43,114 (1,243) 58,609 190 103,696Adoption of IAS 32 and IAS 39 - - 672 288 - 960Balance at 1 January 2005 3,026 43,114 (571) 58,897 190 104,656Total recognised income and - - 1,591 15,620 9 17,220expense for the periodEmployee share option scheme:- Value of services provided - - - 649 - 649Issue of share capital 294 37,551 - - - 37,845Purchase of own shares (5) - 5 (520) - (520)Dividends - - - (18,049) (43) (18,092)Minority interest share on - - - - 127 127acquisitionsBalance at 30 June 2005 3,315 80,665 1,025 56,597 283 141,885 Attributable to equity holders of the Group Minority Total interest equity Share Share Other Retained capital premium reserves earnings £'000 £'000 £'000 £'000 £'000 £'000Balance at 31 December 2004 3,026 43,114 (1,243) 58,609 190 103,696Adoption of IAS 32 and IAS 39 - - 672 288 - 960Balance at 1 January 2005 3,026 43,114 (571) 58,897 190 104,656Total recognised income and expense - - 7,692 43,929 212 51,833for the periodEmployee share option scheme:- Value of services provided - - - 1,913 - 1,913Issue of share capital 304 37,771 - - - 38,075Purchase of own shares (5) - 5 (520) - (520)Purchase of treasury shares - - - (4,158) - (4,158)Dividends - - - (23,060) (73) (23,133)Disposal of available for sale - - (598) - - (598)investmentsMinority interest share on - - - - 246 246acquisitionsBalance at 31 December 2005 3,325 80,885 6,528 77,001 575 168,314 Copies of this statement are being sent to shareholders and are available from: Savills plc, 20 Grosvenor Hill, Berkeley Square, London W1K 3HQ Telephone: 020 7409 8844 Fax: 020 7491 0505 Email: mwatts@savills.com Contact: Mandy Watts In addition, with prior notice, copies in alternative formats i.e. large print, audio tape, braille are available if required from: Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6DA This information is also available on the Company's website at: www.savills.com End This information is provided by RNS The company news service from the London Stock Exchange