by Erica Billingham
Savills’ staff are in line for bumper bonuses this year after the quoted agent unveiled a 49% hike in pretax profit to £11.3m.
Eight hundred and seventy staff will share £14.6m – an average of £16,800 each. But the lion’s share will go to the top fee earners, who could receive up to £500,000.
Managing director Aubrey Adams said the bonus system helped keep a lid on basic salary rises and tied the costs of wages to the company’s profits. Staff are expected to get a 4% basic pay increase this year.
Group turnover was up 32% to £72.1m, but Adams stressed that the rise was not at the expense of profit margins. FPDSavill’s Commercial performed the best, with margins up from 16.8% to 18.2% – the highest of all the quoted agents.
The only disappointment was a £700,000 operating loss in Savills’ financial services arm, which reflected the cost of its abandoned Housing Investment Trust.
Savills’ broker, ABN Amro Hoare Govett, forecasts £14.2m pretax profit for 1999.
Adams said Savills intends to double the amount of its own money that it invests alongside its clients this year.
He said: “We believe that coinvestment will become increasingly accepted as the norm, particularly for overseas clients.”
Adams said that Savills could have up to £15m of equity invested alongside clients by the end of the year.
Savills is also planning to buy majority stakes in up to six European agents, which will trade under the FPDSavills banner following its tie-up with Hong-Kong-based First Pacific Davies last year.
Adams said Savills hopes to sign off deals with firms in France, Germany and Spain in the next six weeks.
But a deal with a US property adviser to complete the FPDSavills network is much further off. Savills and FPD started to look for a US partner late last year but have so far been unable to find the right deal.
“We’re in touch with one or two firms and hope we’ll be able to do something by the end of the year,” Adams said.
- Fletcher King has posted a 48% rise in pretax profit to £404,000 for the year to April. Turnover was up 25% to £5.7m. Operating margins improved slightly from 5% to 6% – but were way behind the level reported by larger rival Savills.
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Savills: How the figures break down |
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|
Commercial |
Land and Property |
Financial Services |
|
|
Turnover (£m) |
27.1 |
41.9 |
3.1 |
|
Operating Profit/ Loss (£m) |
4.9 |
5.0 |
(0.7) |
|
Pretax Profit (£m) |
5.2 |
5.1 |
0.5 |
Source: Savills results for year to April 1998
