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Savills shares soar after firm says profits will be ahead of expectations

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 yesterday’s 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.

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