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Savills Private Finance reveals modest profit

Savills has released its results for 2008, showing a profit of just under £500,000 for its Savills Private Finance arm, compared to £5m last year.

Overall the company reported an underlying profit before tax of £33.2m, compared to £85.5m in 2007.

If its one-off and exceptional items and impairment charge are taken into account, the group’s profits convert into losses of £7.7m.

The results say it expects 2009 to be a challenging year in mortgage broking with further contraction in the UK lending market, particularly for the residential mortgage and commercial debt markets, anticipated.

It says: “We are looking to drive other service areas in order to reduce our reliance on residential mortgage broking services for delivering profitability in order to ensure our continued success.”

Its revenues fell to £568.5m from £650.5m, with UK residential transactional revenues down 44% to £64.2m and profits for the division off 84% at £2.8m.

Jeremy Helsby, group chief executive of Savills plc, says: “This is a resilient performance in unprecedented global property markets. Today’s results demonstrate the strength of our business model and ability to deliver value for shareholders in both strong and weak markets.

“With 2009 looking to be another challenging year, our robust balance sheet and committed bank facilities until October 2011 are a major strength. The steps we are taking to reduce costs combined with our strategy of reducing dependence on transactional income will continue to serve us well.

“We remain alert to the challenges ahead and will continue to focus on cost discipline, prudent capital management and, most importantly, providing the very highest service to our clients.

“Globally, markets have continued to deteriorate and in the light of these difficult conditions the Board is adopting a very cautious outlook for 2009.

“A return to higher levels of activity will depend on how quickly confidence returns to the financial markets. However we remain well positioned to seize opportunities as, and when, they arise.”

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