The international property company Savills has stated its second profits warning in just two months, warning that this year’s profit would be much lower than analysts have predicted.
Although the upmarket estate agent and surveyor had announced that it was “trading well in difficult markets” only six weeks ago, Savills has now reported that it experienced a steep decline in business over the past couple of months.
As the housing market is pummeled by sinking house prices, banks’ reluctance to lend and the low confidence of buyers, the admission from Savills that it has had a “sharp reduction in transaction volumes” is a mere sign of the times. However, investors were taken by surprise at the announcement and yesterday the company’s shares had fallen by 24p to 266p.
December is commonly seen as an important trading month for estate agents, many of whom rely on City bonuses to boost sales, but Savills has said that the seasonal peak in activity has been absent this year.
The group said it would “consider its dividend policy” at a February board meeting with regard to recent trading.
Savills concluded that: "A return to higher levels of transactional activity will depend on how quickly confidence returns to financial markets."
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