The Property Management businesses continue to experience good demand for their services.
Fund Management is benefiting from its contracted revenue streams, but, given the current economic climate, fund raising during the year has been modest and transaction fees have been lower than planned.
Financial Services, which is predominately UK Mortgage broking, has seen market conditions deteriorate further.
Overall, Savills’s main UK Residential, UK Commercial and Asian businesses are performing as expected during the last quarter of 2008. However, businesses in Europe and the US and Savills’s mortgage broking business, which are all very heavily dependent on transactions, have experienced a significant fall off in expected 2008 volume.
December is an important trading month and billing is still taking place. However, Savills now expects underlying profit before tax for 2008 to be significantly below the current range of analyst forecasts.
In these challenging markets, Savills’s robust balance sheet and committed bank facilities until 2011 are a major strength. The Board will consider its dividend policy in light of the full year result for 2008 and trading in the early part of 2009.
A return to higher levels of transactional activity will depend on how quickly confidence returns to financial markets. Savills said that the steps that it continued to take to reduce costs and its successful strategy of reducing dependence on transactional income would continue to serve it well in these uncertain times.
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