Property consultancy Savills reported a 30% rise in half-year underlying profit to £21.2 million as it benefited from the early stages of recovery in a number of areas of the world.
In the UK, capital transactions remain largely focused on lot sizes below £100m with £20bn of commercial property investments traded, 8% lower than the same period in 2023.
However, this is 6% higher than the second half of last year, supporting the sentiment that the market is beginning to recover.
Reported profit before tax increased by 48% to £8.9m (H1 2023: £6m) and the group continues to maintain a strong balance sheet with net cash of £34m at 30 June 2024 (H1 2023: £12.8m – restated).
UK Commercial Transaction fee income increased by 3% to £38.8m (H1 2023: £37.5m), as a result of improved leasing activity, primarily retail, mitigating a slight reduction in overall investment volumes, particularly in Q1, compared with the prior period.
The UK Residential business performed strongly in difficult market conditions with revenue up 7% to £76.8m (H1 2023: £71.6m). This was driven by 10% growth in re-sales agency, which mitigated declines in both new development sales and the Private Rented Sector (‘PRS’) businesses.
In the re-sales agency, Savills overall transaction volumes exchanged were up 4%. The average value of London and regional residential property sold by Savills in the period was lower in London at £2.0m (H1 2023: £2.3m) reflecting a greater share of the “core” market (covering properties with values up to c.£1.5m) and slightly reduced volumes traded in the higher value market. Outside London the average value traded was stable at £1.3m (H1 2023: £1.3m).
Revenue from the sale of new homes declined 22% on H1 2023. This reflected reduced activity in the higher value London market and the continuation of low trading volumes outside London.
The Operational Capital Markets business, which advises on the PRS, student and other institutional residential markets, saw a 3% decline in revenue period-on-period as a result of transactional timing.
Underlying profits in the UK residential transaction business improved by 11% to £5.2m (H1 2023: £4.7m).
Mark Ridley, group chief executive, said: “Our improved performance in the first half reflects the positive effects of early recovery phases in a number of our markets, as well as the robust and growing earnings provided by our less transactional businesses.
“Whilst we have seen resilience in prime commercial leasing markets, global capital transaction volumes remain subdued, although activity is recovering in certain markets.