MARKET REPORT: Savills shares are hot property as estate agent hikes dividend after profits more than double to £200m
Savills saw full-year profits hit record levels as it cashed in on the UK’s booming property market.
The estate agent’s profits more than doubled to £200.3million in 2021, while revenues surged 23 per cent to a record £2.15billion.
Savills’ total dividend for the year was also hiked to 61.4p per share from 17p in 2020.
Bumper results: Savills’s profits more than doubled to £200.3m in 2021, while revenues surged 23% to a record £2.15bn
Double-digit revenue growth was seen across the group’s transaction advisory business, with strong performances highlighted in the UK and Asia-Pacific regions as the global property sector bounced back from the pandemic.
The firm’s business handling prime UK residential property also notched up an ‘extremely strong’ showing during the year as wealthy buyers sought out spacious properties following lockdown.
Ongoing restrictions had also allowed the group to cut costs on items such as travel, events and entertainment, boosting its profit margins.
Meanwhile, boss Mark Ridley said the company was providing support for refugees fleeing the war in Ukraine both through charities and its business in Poland.
The chief executive also warned that it was ‘too early’ to predict the impact of the war on global property markets, although the company expected transaction numbers and spending to ‘normalise’ in the year ahead as countries continued to emerge from pandemic-related disruption.
Despite the unclear outlook, the bumper results sent the shares up 3.8 per cent, or 43p, to 1183p.
Analysts at broker Peel Hunt said the numbers were ‘even better’ than expected, while fellow broker Numis upgraded the stock to ‘buy’ from ‘add’, saying the figures had justified the company’s decision to invest during the pandemic.
Stock Watch – James Fisher & Sons
James Fisher & Sons tumbled after profits plunged by over a third.
Pre-tax profits for 2021 were down nearly 38 per cent at £19.7million following a ‘challenging and disappointing year’ that saw the marine engineer’s business disrupted by the pandemic.
Revenues fell by 4.7 per cent to £494.1million.
It blamed a slower than expected recovery in its markets as well as an underestimation of headwinds facing some of its businesses.
Shares fell 25.8 per cent, or 128.5p, to 370.5p.
The FTSE 100 dropped 1.3 per cent, or 91.63 points, to 7099.09 while the FTSE 250 was down 0.6 per cent, or 113.65 points, at 19955.55.
Wild swings in oil prices knocked investors off balance amid ongoing worries about the impact on the global economy and inflation as Russian sanctions began to bite.
‘From a Western perspective, the war in Russia is very much an economic one and the full ramifications may not be known for quite some time,’ said AJ Bell investment director Russ Mould.
Brent crude dropped by nearly 20 per cent early yesterday morning after an ambassador for the United Arab Emirates signalled that it may encourage other oil-producing nations to increase production to plug the gap left by bans on Russian oil imports.
However, prices partially recovered later in the day after the petro-state’s energy minister refuted the claim.
Shell shares dropped 2.4 per cent, or 48.7p, to 1955.8p as crude costs dropped while BP lost 2.7 per cent, or 10.15p, to 369.85p. Rio Tinto fell 1.8 per cent, or 104p, to 5783p after it became the latest group to sever its ties with Russia.
The mining giant has now started a process of ‘terminating all commercial relationships’ with Russian firms and is reviewing a joint venture with aluminium giant Rusal, founded by oligarch Oleg Deripaska.
Outsourcing giant Capita hailed the completion of its efforts to transform the business after reporting revenue growth for the first time in six years.
The FTSE 250 firm reported a 0.4 per cent increase in revenue to £3billion in 2021, while its profits soared to £93.5million from £5.4million the previous year.
Its performance was boosted by new contracts, the value of which jumped by 31 per cent year-on-year to £3.8billion. The shares dropped 7.1 per cent, or 1.56p, to 20.31p.
Troubled meal delivery group Parsley Box gained 16.7 per cent, or 3p, to 21p after unveiling plans to raise £7million through an offering of shares at 20p each, an 11pc premium to its previous closing price.