A record half-year profit at Savills was greeted less than warmly by shareholders, who sent the FTSE 250 agency’s shares down by almost 9% despite its management team striking a bullish note on the outlook for the real estate market.
Shares in the firm closed at 1,027p, down by 8.6% over the day and hitting their lowest value since early July.
That fall was the sharpest in the FTSE 250, which closed 0.26% lower at 20,245.
Savills said this morning that revenue over the first half of the year broke the £1bn milestone for the first time, although profit dropped on higher costs.
Nonetheless, with rival agencies already talking about cost cuts and limited hiring, chief financial officer Simon Shaw told EG the firm believes it is in a better position that more heavily indebted rivals “when things get tricky”.
“Historically, we’ve always taken advantage of those moments to take on good people and benefit in the recovery phase,” he said.
“We are not talking about a world in which there is massive speculative over-development. We’re not talking about a world in which there is the structural level of over-leverage that we have seen in some circumstances in the past. We’re talking about a world where the investment markets are adjusting to an increase in the risk-free rate.
“As far as we’re concerned, we’re going to plough on with continued growth and if we have to take a bit of a margin hit over the next quarter or next half a year, that’s OK. We can withstand that. We always come out stronger at the other end.”
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