Savills Regulatory News (SVS)

17 Dec 2008 07:00



17 December 2008

SAVILLS PLC

("Savills" or "the Company")

Trading Update 

Savills, the international property adviser, publishes its trading update for the year ended 31 December 2008 prior to entering the close period before the announcement of full year results, which is scheduled for release on 11 March 2009.

Since our Interim Management Statement on 17 October 2008, our Transactional businesses world-wide have continued to operate in challenging markets. Whilst some deals are completing, we are not seeing the seasonal pick up in activity we have grown to expect. Many pipeline transactions, which were at an advanced stage, have either been delayed or are not proceeding.

Our Consultancy businesses are continuing to trade well but are starting to see the effects of the challenging market conditions with a slowdown in new instructions.

The Property Management businesses continue to experience good demand for their services.

Fund Management is benefiting from its contracted revenue streams, but, given the current economic climate, fund raising during the year has been modest and transaction fees have been lower than planned.

Financial Services, which is predominately UK Mortgage broking, has seen market conditions deteriorate further. 

Overall, our main UK Residential, UK Commercial and Asian businesses are performing as expected during the last quarter of 2008. However, our businesses in Europe and the US and our mortgage broking business, which are all very heavily dependent on transactions, have experienced a significant fall off in expected 2008 volume. 

December is an important trading month and billing is still taking place. However, we now expect our underlying profit before tax for 2008 to be significantly below the current range of analyst forecasts.

In these challenging markets, our robust balance sheet and committed bank facilities until 2011 are a major strength. The Board will consider its dividend policy in light of the full year result for 2008 and trading in the early part of 2009.

A return to higher levels of transactional activity will depend on how quickly confidence returns to financial markets. The steps that we continue to take to reduce costs and our successful strategy of reducing dependence on transactional income will continue to serve us well in these uncertain times. 

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