Savills’ share price soared over 14% yesterday after it said that profits for last year “will be meaningfully ahead of our previous expectations”.
The shares jumped 97.50p, or 14.12%, to finish at 788p – up from a starting price of 690.50p.
In contrast, this morning Countrywide put out a trading update saying that while total group income for last year was modestly up – from £734m in 2015 to £737m last year – income for the final quarter of 2016 had dropped from £196m in the same period in 2015 to £179m.
Countrywide said it expects transactions for the year to have been down 6% on 2015 levels.
Alison Platt, CEO, said: “It is pleasing to report modest full year revenue growth against the backdrop of a challenging residential sales market.
“Our Retail and London divisions were impacted by the lower market volumes which were partially offset by a strong performance from our Lettings business. It is encouraging to note that both Financial Services and Surveying reported profit growth notwithstanding the external environment.
“We continue to focus on delivering cost and productivity efficiencies across our business which will mitigate the impact of a 2017 sales market which is expected to show a reduction on 2016 volumes.
“The roll-out of our digital proposition remains on track and we continue to see performance in line with our expectations. As set out on 15 December 2016, we are currently underway with a strategic review of our Lambert Smith Hampton business and further announcements will be made as appropriate.”
Meanwhile, in marked contrast, in its trading update, Savills said it had experienced a strong finish to last year, with the completion of “significant volumes of commercial and residential transactions in a number of our businesses around the world and benefited from further sterling devaluation”.
It went on: “In the UK, we saw increased market share in commercial investment transactions, primarily as a result of the post-referendum interest emanating from overseas.
“In addition, notwithstanding a slower December, our UK residential business performed rather better than anticipated, with the top end of the market showing similar currency-related drivers of investment activity from international buyers. These factors largely mitigated the anticipated reduction in transactional activity during the year.”
Broker Numis said: “This is an exceptional performance against a very variable global economic and political backdrop.”
There was also very favourable comment on investor websites, saying that Savills was doing all the right things and was head and shoulders above the competition.
Savills is due to issue its full-year results for 2016 in March.
The firm did however strike a cautious note for this year: “Against the backdrop of heightened uncertainty over global economic prospects and rising bond yields, we expect a tempering of the strong transaction volumes of recent times in many markets.”
The trading update from Savills – a well diversified global business – was in marked contrast to that of London-centric Foxtons, which said both revenue and profits crashed last year.
Comments (10)
Very impressive results. Experience matters !
Savills also only generate 8% of their revenue from property sales…they are a global business with commercial, consultancy and fund management which are all very lucrative. They have a big exposure to the Far East which is going great guns and they have increased their new homes offering which has helped. Their management are clever and have created a very broad business, which Countrywide have done as well, but based on squeezed margins and massive staff turnover…the killer of any business.
Good post!
As a comparison Countrywide reported today that revenue was flat for 2016 (£737m) 2015 (£734m). Q4 fallen from £196m to £179m in 2016 Considering they were still on the expansion trail in 2016 buying revenue the fall off is greater than what it seems
Financial services being the star turn in the pack
Savills are a classa act head and shoulders above their listed peers. A set of BODS which includes seasoned property professionals amongst business heavy weights.unlike CWD. Grown their business organically and incrementally not flashing the cash Promotes from within and offers their star players a career path to the top with a great reputation
Completely different model . Most their income comes from managing commercial buildings.
Countrywide getting a hard time i think. They work in the real world not the London bubble.
what was their Yopa Judas income?
Yes different model indeed thats why they are so successful . Their revenue flows from many sources home and away of which commercial property management is probably not at the top of the list Investment broking knocking out £300m City office buildings and taking £3m fees is where its at
“Countrywide getting a hard time I think .They work in the real world”
They do but unfortunately for the hard working staff the BODS work with their heads in the clouds Flawed strategy now fuly exposed Cranking up ove r£220m of debt buying turnover in a total scattergun approach which is fast disappearing out the back door . They bought 6 new businesses in 2016.A If you werean agent all you have had to do was ask! John Francis 21 branches joined in Nov 2015as well and total group revenue for 2016 hardly budged an inch The debt now is hocked to a bucketful of sand One thing is for sure Savils will be standing this time year I can see a situation where CWD will be a diffeernt animal broken up into pieces Hard done by – the clueless BODS deserve it
CWD are heavily exposed to the London bubble..Hamptons, John D Wood & Co, Faron Sutaria, GPees Alan de MAid and LSH
P-Daddy if I were you I would be interested in her statement ‘It is encouraging to note that both Financial Services and Surveying reported profit growth notwithstanding the external environment’.
So on reduced transactions these services have growth potential?
Mmmm lets go loss leading hybrid then?
You may agree that it is not that easy unless you have the direct marketing support of a very large portal?
If you want to know how to counter this unfortunate situation email me.