Savills chief executive Jeremy Helsby can mostly afford to grin at this morning's half year results. In the six months to June revenues are up £57m (23%) to £304m over the same period in 2009. Profits have recovered from a slim 100 000 to £14.4m. The business has £20m in the bank rather than a £400 000 overdraft. But the man who took the helm in May 2008 as property nosedived is worried that a milder version of The Crash may recur.
"Looking to the second half," says Helsby, "factors such as the Chinese Government's desire to contain overheating in the residential market, continued concerns over economic growth in many countries and prolonged low levels of debt availability indicate that the recovery is likely to flatten off during the coming months." So, staff wondering about next spring's bonus may be wise limit their expectations to a second hand set of new wheels or a cheaper new house
Meanwhile rivals will be more interested in those trading numbers which are broken down in refreshing detail. That £57m revenue rise was accompanied by a £43m cost increase - £37m of which was salaries and bonus. So every £1 increase in revenues cost about 75p. Not a bad conversion factor. But hidden in that are losses. Continental Europe continues to drag. Losses of £8.6m have been more than halved to £4m. But income is static at just £26m.
Asia Pacific revenues rose strongly from £95m to £128m, mostly on the back of transaction income which leapt from £20m to £45m. Profits rose from £4m to £13m. But perhaps of more interest is the UK. First half revenues rose 20% from £125m to £150m: but underlying profits rose only £1m, from £9m to £10m. A revenue/profit conversion factor that indicates the margin pressures that still exist in the UK market; pressures that may increase.
Geeks can delve further into the UK numbers, as Savills provides revenue and profits breakdown of residential and commercial activity by sector. Commercial revenues of £87m returned profits of £3.5m - 4%. By contrast ressi revenue of £63m earned £7m profit (11%). The majority of that (£5.4m) from came from transactions - more than double the profits (£2.5M) from commercial transactions. The message: fingers crossed for UK ressi and Asia.