results for the six months to 30 june 2010 - savills · 2017. 1. 18. · 2010% chg transactional...
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Savills plcResults for the six months to 30 June 2010
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Disclaimer
Forward-looking statements
These slides contain certain forward-looking statements including the Group’s financial
condition, results of operations and business, and management’s strategy, plans and
objectives for the Group. These statements are not guarantees of future performance and
are subject to risks, uncertainties and other factors, some of which are beyond the
Group’s control, are difficult to predict and could cause actual results to differ materially
from those expressed or implied or forecast in the forward-looking statements. These
factors include, but are not limited to, the fact that the Group operates in a highly
competitive environment. All forward-looking statements in these slides are based on
information known to the Group on the date hereof. The Group undertakes no obligation
publicly to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
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Leading International Real Estate Advisors
Presentation TeamPresentation Team
Jeremy HelsbyGroup Chief Executive
Simon ShawGroup Chief Financial Officer
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Key Themes
Resilient performance – diversified business model (geographical / service)
Strong performance in UK Residential and Asia Pacific transaction advisory
businesses
Improved performance in Continental Europe
Small acquisitions (Cordea minority, Incoll-Australia)
Strong balance sheet
Currently trading well but caution over H2 2010
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Revenue up 23% to £304m (H1 2009: £248m) – (22% in constant currency)
Underlying PBT recovered in H1 to reach to £17.2m (H1 2009: £2.5m)
Transaction Advisory revenue recovered; 57% growth on H1 2009
Consultancy revenue grew 12%
Property and Facilities Management revenue growth of 8%
Strong net cash position at period end of £20.1m (H1 2009: net debt £0.4m)
Dividend maintained at 3p per share (H1 2009: 3p)
Results Highlights
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Summary Underlying Results
6 months ended June (£ millions) 2010 2009 % chg
revenue 304.4 247.6 22.9%
underlying profit before tax 17.2 2.5 588%
underlying PBT margin 5.7% 1.0%
underlying basic earnings per share 9.6p 1.3p 638%
net assets 179.5 183.1 (2.0)%
net cash 20.1 (0.4) n/a
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Summary Cash flow
Period ended 30 June (£ millions) 2010 2009
Cash at start of period 80.9 75.3
cash used in operations (12.4) (30.2)
investments, acquisitions (incl. minorities) and capex (18.1) (5.6)
EBT share purchases (9.7) (2.1)
dividends (8.1) (4.6)
F/X movement 3.4 (6.5)
Net new borrowings 13.9 7.8
cash and overdrafts at period end 49.9 34.1
borrowings at period end (29.8) (34.5)
net cash at period end 20.1 (0.4)
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Underlying PBT Reconciliation
6 months ended June (£ millions) 2010 2009
reported profit before tax 14.4 0.1
goodwill/intangible/investment impairments and amortisation 1.4 1.4
share based payment adjustment 1.4 1.0
underlying PBT 17.2 2.5
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FX Effect on Underlying Results
588%17.2-2.517.2underlying PBT
16%(284.5)(2.7)(245.1)(287.2)underlying costs
22%301.72.7247.6304.4revenue
Constant currency variance
Constant currency
actual
FX gain/ (loss)
June 2009
actual
June 2010
actual
6 months ended June
(£ millions)
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Global Revenue and Underlying PBT
11.1%3.64.012.2%54.260.8total consultancy
22.9%
(1.2)%
(9.3)%
7.9%
57.4%
% chg
2.5
(0.2)
1.6
(2.1)
7.2
(7.6)
2009
247.6
8.5
5.4
105.4
74.1
2009
6 months ended June
(£ millions)
Revenue
2010
PBT
2010 % chg
total transactional 116.6 9.4 n/a
total property management 113.7 7.1 (1.4)%
financial services 4.9 (0.9) 57.1%
fund management 8.4 1.5 (6.3)%
holding co / unallocated (3.9) n/a
Total 304.4 17.2 588%
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Transactional Business
1150%
56.3%
n/a
(53.8)%
0.2
(8.0)
(1.6)
(1.3)
2.5
(3.5)
7.0
(2.0)
38.1%
17.3%
119%
(40.0)%
13.9
10.4
20.5
2.0
19.2
12.2
44.8
1.2
- UK
- Europe
- Asia Pacific
- America
transactional commercial
57.4%
43.6%
% chg
(7.6)
3.1
2009
74.1
27.3
2009
6 months ended June
(£ millions)
Revenue
2010
PBT
2010 % chg
transactional residential
- UK 39.2 5.4 74.2%
Total transactional 116.6 9.4 n/a
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Non-transactional Business
(19.4)%
(100)%
16.3%
3.1
(0.2)
4.3
2.5
(0.4)
5.0
15.4%
(15.0)%
8.5%
29.2
11.3
64.9
33.7
9.6
70.4
- UK
- Europe
- Asia Pacific
property management
(1.4)%7.27.17.9%105.4113.7Total property management
8.2%
(1.2)%
(9.3)%
12.2%
9.7%
(4.9)%
29.3%
% chg
10.3
1.6
(2.1)
3.6
3.0
(0.4)
1.0
2009
173.5
8.5
5.4
54.2
40.2
4.1
9.9
2009
6 months ended June
(£ millions)
Revenue
2010
PBT
2010 % chg
consultancy - UK
- Europe
- Asia Pacific
44.1
3.9
12.8
3.4
(0.1)
0.7
13.3%
75.0%
(30.0)%
Total consultancy 60.8 4.0 11.1%
financial services 4.9 (0.9) 57.1%
fund management 8.4 1.5 (6.3)%
Total 187.8 11.7 13.6%
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Operational Review
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H1 Geographic Revenue Diversification
UK£149.5m49.1%
Asia£128.0m42.1%
Europe£25.7m8.4%
America£1.2m0.4%
America£2.0m0.8%
Europe£25.8m10.4%
Asia£95.3m38.5%
UK£124.5m50.3%
2010 2009
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Business Stream Diversification
Property &FacilitiesMgmt. £105.4m42.6%
Transactional£74.1m29.9%
Consultancy£54.2m21.9%
FundMgmt.£8.5m
3.4%
Financial Services£5.4m2.2%
Fund Mgmt.£8.4m2.8%
Consultancy£60.8m20.0%
Transactional£116.6m38.3%
Property &FacilitiesMgmt. £113.7m37.3%
FinancialServices£4.9m 1.6%
2010 Revenue 2009 Revenue
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Improvement in UK as anticipated; primarily London focused
Improvements in Paris, but Europe still weak; Halved losses through restructuring
Strong H1 in Asia Pacific region (primarily Hong Kong)
US market recovering slowly; deal pipe-line improved
Commercial Transaction Advisory Business
65.3%
38.1%17.3%119%
(40.0)%
% chg
(10.7)
0.2(8.0)(1.6)(1.3)
2009
46.8
13.910.420.52.0
2009
n/a4.077.4Total transactional
1150%56.3%
n/a(53.8)%
2.5(3.5)
7.0(2.0)
19.212.244.81.2
- UK- Europe- Asia Pacific- America
transactional commercial
% chg
PBT 2010
Revenue2010
6 months ended June (£ millions)
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UK Commercial Investment volumes – 2000 – Interim 2010
Source: Property Data
£0
£10
£20
£30
£40
£50
£60
£70
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Bill
ion
Q1 Q2 Q3 Q4
18
UK Prime Yields
Source: Savills
3.0
4.0
5.0
6.0
7.0
8.0
9.0
City offices West end offices M25 offices Regional offices Standard shops Shoppingcentres
Industrial
%
Jul-10 Long Term Average Jun-09
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China’s impact on global investment market
Source: RCA, Savills Research & Consultancy
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
08Q1 08Q2 08Q3 08Q4 09Q1 09Q2 09Q3 09Q4 10Q1 10Q2
2008 2009 2010
Millions All Others China
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Very strong first quarter followed by general election and budget slowdown
Lead indicators (e.g. applicants vs instructions) have turned down
Higher stock levels and more cautious buyers
UK Residential Transaction Advisory Business
43.6%
% chg
3.1
2009
27.3
2009
74.2%5.439.2- UKtransactional residential
% chg
PBT 2010
Revenue2010
6 months ended June (£ millions)
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Prime Residential Market Forecasts
8.75%
9.75%
7.5%
2013
5.25%
7.5%
3.0%
2012 2014201120102009 (Actual)
Forecasts(as at July 2010)
6.0%-0.25%-1.75%1.5%All prime Regional
4.75%0.5%-1.0%8.75%Prime Central London
7.0%-1.0%-2.5%3.25%Mainstream
Source: Savills Research Dept August 2010
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Property Management represents 37% of group revenue (H1 2009: 43%)
Area under management continues to grow: strong overseas performances in China and
Vietnam
Continued revenue growth in UK
Europe restructuring well under way; now focused on growth opportunities
Property Management
(19.4)%(100)%16.3%
3.1(0.2)
4.3
2.5(0.4)
5.0
15.4%(15.0)%
8.5%
29.211.364.9
33.79.6
70.4
- UK- Europe- Asia Pacific
property management
7.2
2009
105.4
2009
(1.4)%7.17.9%113.7Total property management
% chgPBT 2010
% chgRevenue2010
6 months ended June (£ millions)
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Consultancy
13.3%75.0%
(30.0)%
3.0(0.4)
1.0
3.4(0.1)
0.7
9.7%(4.9)%29.3%
40.24.19.9
44.13.9
12.8
- UK- Europe- Asia Pacific
Consultancy
3.6
2009
54.2
2009
11.1%4.012.2%60.8Total Consultancy
% chg
PBT 2010
% chg
Revenue2010
6 months ended June (£ millions)
On target overall growth in the business
Global valuation income increases, but continued fee pressure
Strong performance from UK Housing consultancy
In Asia a number of large fees due in H2 for work ongoing in H1
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March acquisition of 40% of the business owned by staff
Successfully restructured leveraged Funds in Italy
New UK Income and growth fund in 2009 fully invested
Transaction fees down year on year; primarily timing difference on acquisitions
Funds under management of £2.6bn (2009: £2.5bn)
Continued inflows into core funds (eg European Commercial Fund & Charities Property Fund)
Fund Management
1.6
2009
(1.2)%
% chg
(6.3)%1.58.58.4fund management
% chg
PBT 20102009
Revenue2010
6 months ended June (£ millions)
25
Losses in Savills Private Finance substantially reduced through 2009 restructuring activities
Mortgage market remains thin
Savills Capital Advisers restructured during the period
Financial Services
(2.1)
2009
(9.3)%
% chg
57.1%(0.9)5.44.9financial services
% chg
PBT 20102009
Revenue2010
6 months ended June (£ millions)
26
Summary and Outlook
Strong H1 2010 Group Performance, but continued caution over H2
Performance driven by Asia Pacific and UK prime residential markets
Continued to make selective Investments in the business
Continued conservative approach to financing
Focus on retention of key employees and selective team / individual recruitments
Well placed to take advantage of business opportunities as they arise
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Appendix I
28
Increasing UK Investment Inflows in H1 2010
Source: Investment Management Association
-600
-400
-200
0
200
400
600
800
Jan
05
Apr 0
5
Jul 0
5
Oct
05
Jan
06
Apr 0
6
Jul 0
6
Oct
06
Jan
07
Apr 0
7
Jul 0
7
Oct
07
Jan
08
Apr 0
8
Jul 0
8
Oct
08
Jan
09
Apr 0
9
Jul 0
9
Oct
09
Jan
10
Apr 1
0
£ m
illio
ns
Net retail flows Net institutional flows
29
UK Rental growth is still negative –but pockets of recovery are emerging
Source: Investment Property Databank
-20%
-15%
-10%
-5%
0%
5%
10%
15%
Jan
00
May
00
Sep
00
Jan
01
May
01
Sep
01
Jan
02
May
02
Sep
02
Jan
03
May
03
Sep
03
Jan
04
May
04
Sep
04
Jan
05
May
05
Sep
05
Jan
06
May
06
Sep
06
Jan
07
May
07
Sep
07
Jan
08
May
08
Sep
08
Jan
09
May
09
Sep
09
Jan
10
May
10
Ann
ual %
cha
nge
Retail Office Industrial
30
Trend in new UK enquiries consistently below new instructions
-80
-60
-40
-20
0
20
40
60
80
100
May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10
net b
alan
ce in
stru
ctio
ns/ e
nqui
ries
-80
-60
-40
-20
0
20
40
60
80
100
Stoc
k pe
r sur
veyo
r offi
ce
Unsold stock New Enquiries New Instructions
Source: RICS
31
Asia Office Yields
0
1
2
3
4
5
6
7
8
9
Seoul Hong Kong Sin gapo re Tokyo Sha ngha i Bei jing Ta iwan
Q2/09 Q2 /10
Source: Savills Research & Consultancy
%