Savills’ profit has fallen by 18%, despite revenue increasing by 7%.
Announcing its preliminary results this morning, the firm said revenue was up to £2.3bn for 2022, from £2.15bn in 2021. Profit, though, had slipped to £164,6m, down from 2021’s £200m.
Transactional advisory revenue was up 4%, despite challenging market conditions, and particularly those in H2. Residential transaction revenue was down 2%.
Group chief executive Mark Ridley said: “Performance in 2022 was slightly ahead of our expectations despite challenging markets. More importantly, perhaps, the group’s performance was substantially ahead of the 2019 ‘pre-Covid’ comparative period.”
He added: “The strength of our less transactional businesses, primarily consultancy and property management, helped underpin the group’s performance overall.”
Transactions aside, which account for 60% of business, revenue was up 9%, with property and facilities management revenue rising by 13% and consultancy up 4%.
Savills Investment Management’s revenue rose by 1% as AUM increased from £21.9bn to £22.1bn.
Ridley added: “In the year ahead, challenging macro conditions are expected to continue with inflation and interest rates remaining in focus for some time. As a result, the speed at which individual investment markets adjust to the cost of debt is uncertain, although certain markets, such as the UK, are recalibrating faster than in the past, and will be helped by the lack of development supply and an overall trend to sustainability.”
The year ahead was still in flux, he said.
“We have started 2023 broadly in line with our expectations. However, it is clear that, at this stage, predictions for the full year are characterised by a wide range of possible outcomes.”
“We believe that H1 2023 will be more challenging than its 2022 comparative; however, we expect progressive improvement through the second half of the year. 2024 should see more positive conditions for real estate market activity and Savills is both retaining its bench strength and investing in advance of such recovery.”
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