Savills LON: SVS reported higher first-half revenue and profit as improving transaction markets, market-share gains and cost-saving measures supported earnings, while the property advisory group completed its acquisition of Eastdil Secured at the end of July.
Group CFO Nick Sanderson said revenue rose 8.7% to more than £1.2 billion, driven predominantly by organic growth. Underlying EBITDA increased 32% to almost £74 million, while underlying profit before tax climbed 47% to £34.3 million, or nearly 49% on a constant-currency basis.
Underlying earnings per share were stated at £0.179, and the company raised its interim dividend 5.4% to 7.8 pence per share. Sanderson said the dividend increase remained consistent with Savills’ policy of progressively growing the ordinary dividend, supported by less transactional earnings and supplemental distributions.
Transaction activity and market-share gains
Management said the performance came despite uneven market conditions across the regions in which Savills operates. Global investment-market volumes rose 18% in the first half, with the U.S. market accounting for much of the recovery after growing 24%. However, Savills had “next to no exposure” to the U.S. capital-transactions market before the Eastdil deal, Simon said.
Commercial transaction revenue rose 19%, including a 22% increase in capital-transactions revenue. In the U.K., capital-transactions revenue increased 17% even as market volumes declined 12%, which management attributed to market-share gains. The company also cited improving activity in Australia and a more positive market backdrop in Greater China, albeit from a low base.
Occupier advisory revenue increased 23%, led by North American leasing. Sanderson said larger office leasing deals increased in the U.S. and that pipelines for the second half were strong across office and industrial properties.
Residential revenue rose 3% overall, although U.K. residential revenue declined 9%. Sanderson attributed the decline principally to a one-time negative income-recognition effect tied to the U.K. Renters’ Rights Act. On a like-for-like basis, he said the U.K. residential leasing business grew.
Management said secondary residential sales rose 2%, supported by market-share gains in transactions above £5 million. Middle East revenue rose 34%, reflecting a strong first quarter, though escalating conflict constrained new-development sales from the second quarter. Simon said the company had not seen evidence of expatriate repatriation from the region.
Less transactional businesses support margins
Less transactional revenue increased 6% to £776 million, representing 63% of total group revenue. Management described these operations, including property and facilities management, consulting and investment management, as an important source of resilience and recurring client relationships.
First-half profit from less transactional activities rose 28% to £42.2 million. Consultancy profit increased 74%, helped by restructuring completed in China last year and improved progress in North America. Property and facilities management delivered what Sanderson called another resilient performance.
Savills Investment Management increased revenue 8%, despite what management described as a challenging capital-raising market in Europe, the Middle East and Africa. Higher transaction and asset-management fees drove the increase. The business has made management changes in Europe and Asia and is developing its next five-year plan.
Across the group, management said prior cost-saving initiatives aided margin improvement. Savills recorded £7.2 million of restructuring costs in the first half, including roughly £3 million related to the prior year’s program. A similar amount is expected in the second half as the company completes restructuring and incurs some Eastdil integration costs. Full-year restructuring and integration costs are expected to be about half of last year’s £30 million charge.
Eastdil acquisition expands U.S. advisory presence
Savills completed the acquisition of Eastdil Secured on July 31. The acquired business did not contribute to Savills’ first-half operating performance, although Savills recognized acquisition costs before the period end.
Eastdil generated first-half revenue of £225 million and EBITDA of £38.4 million, according to figures presented by Savills. On an illustrative basis after conversion to IFRS and other adjustments, Savills estimated Eastdil’s underlying profit before tax at £37.8 million, representing a 17% margin.
Eastdil’s revenue mix was approximately 60% equity-related and 40% debt-related. Management highlighted debt advisory as a more recurring component of its transactional activities. Eastdil’s U.S. revenue rose 33% during the first half and European revenue increased 23%; it also ranked first in the U.S. public M&A market-advisory league table during the period.
Sanderson said an illustrative pro forma combination of Savills and Eastdil, including expected initial financing costs, would have increased first-half underlying profit before tax by £21 million to £55 million, a 60% uplift. Savills expects Eastdil’s five-month contribution in 2026 to be broadly similar to its first-half profit performance, though management noted the timing risk associated with larger transactions.
The acquisition was financed initially with an $800 million bridge facility. Savills has refinanced £450 million through a term loan and expects to refinance the remaining £350 million within 12 months through U.S. private-placement notes. The combined facilities are expected to carry an all-in cost of between 5.5% and 6%.
Management expects the enlarged group’s net debt-to-EBITDA ratio to be 1.5 times or less at year-end 2026 and about one time at the end of 2027, assuming other conditions remain unchanged.
Outlook unchanged despite timing uncertainty
Simon said the company entered the second half with significant pipelines, but cautioned that converting opportunities into completed transactions remained difficult to predict in current markets. He also cited uncertainty surrounding the U.K. political environment ahead of the October budget.
Still, supported by the performance of its less transactional businesses and current transaction pipelines, Savills said its expectations for the full year remain unchanged. Management said its near-term priority is to generate mutual benefits from the Eastdil combination while continuing targeted bolt-on investments and expansion in areas including debt advisory, data centers, data curation and digital tools.
About Savills (LON:SVS)
Founded in the UK in 1855, Savills is one of the world's leading property agents. Our experience and expertise spans the globe, with 600 offices across the Americas, Europe, Asia Pacific, Africa and the Middle East.
Our scale gives us wide-ranging specialist and local knowledge, and we take pride in providing best-in-class advice as we help individuals, businesses and institutions make better property decisions.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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