Savills Plc V
Total Page:16
File Type:pdf, Size:1020Kb
S Registrars a Contents Savills plc v Lloyds TSB Registrars i l l The Causeway s Worthing p West Sussex BN99 6DA l 01 c Introduction Auditors R PricewaterhouseCoopers LLP e p 1 Embankment Place o London WC2N 6RH r t a n d 01 Our Focus A 02 Financial Highlights c c Solicitors o u Savills plc ashurst n t Broadwalk House s Report and Accounts 5 Appold Street 2 2006 London EC2A 2HA 0 04 0 Our Business Financial Advisers 6 Dresdner Kleinwort 06 Group Profile 30 Gresham Street 08 Chairman’s Statement London EC2P 2XY 13 Group Chief Executive’s Review of Operations and Financial Review 46 Risks and Uncertainties Facing the Business 48 Our People 52 Our Social Responsibilities Design and production Stockbrokers Radley Yeldar Hoare Govett Limited 250 Bishopsgate Photography London EC2M 4AA Edward Hill, Steve Stephen, 56 3D Architects and George Brooks Principal Bankers Our Governance Print Barclays Bank Plc Granite 1 Churchill Place London E14 5HP 58 Board of Directors 60 Directors’ Report This report is printed on Dutchman paper which is certified by SGS under certificate number 62 Corporate Governance Report SGS-COC-1868 as being made with a minimum 66 Remuneration Report of 50% Forest Stewardship Council certified pulp 76 Directors’ Responsibilities from mixed sources. The mill that produces the paper is ISO 9001 and ISO 14001 certified. 77 Independent Auditors’ Report Savills plc 20 Grosvenor Hill Berkeley Square London W1K 3HQ 78 Tel: +44 (0)20 7499 8644 Fax: +44 (0)20 7495 3773 Our Accounts www.savills.com 80 Consolidated Income Statement Registered in England No. 2122174 81 Balance Sheets 82 Statements of Cash Flows 83 Statements of Recognised Income and Expense TT–COC–2238 84 Notes to the Financial Statements 128 Savills’ UK and International Offices S Registrars a Contents Savills plc v Lloyds TSB Registrars i l l The Causeway s Worthing p West Sussex BN99 6DA l 01 c Introduction Auditors R PricewaterhouseCoopers LLP e p 1 Embankment Place o London WC2N 6RH r t a n d 01 Our Focus A 02 Financial Highlights c c Solicitors o u Savills plc ashurst n t Broadwalk House s Report and Accounts 5 Appold Street 2 2006 London EC2A 2HA 0 04 0 Our Business Financial Advisers 6 Dresdner Kleinwort 06 Group Profile 30 Gresham Street 08 Chairman’s Statement London EC2P 2XY 13 Group Chief Executive’s Review of Operations and Financial Review 46 Risks and Uncertainties Facing the Business 48 Our People 52 Our Social Responsibilities Design and production Stockbrokers Radley Yeldar Hoare Govett Limited 250 Bishopsgate Photography London EC2M 4AA Edward Hill, Steve Stephen, 56 3D Architects and George Brooks Principal Bankers Our Governance Print Barclays Bank Plc Granite 1 Churchill Place London E14 5HP 58 Board of Directors 60 Directors’ Report This report is printed on Dutchman paper which is certified by SGS under certificate number 62 Corporate Governance Report SGS-COC-1868 as being made with a minimum 66 Remuneration Report of 50% Forest Stewardship Council certified pulp 76 Directors’ Responsibilities from mixed sources. The mill that produces the paper is ISO 9001 and ISO 14001 certified. 77 Independent Auditors’ Report Savills plc 20 Grosvenor Hill Berkeley Square London W1K 3HQ 78 Tel: +44 (0)20 7499 8644 Fax: +44 (0)20 7495 3773 Our Accounts www.savills.com 80 Consolidated Income Statement Registered in England No. 2122174 81 Balance Sheets 82 Statements of Cash Flows 83 Statements of Recognised Income and Expense TT–COC–2238 84 Notes to the Financial Statements 128 Savills’ UK and International Offices 01 Savills plc Report and Accounts 2006 With over 160 offices and associates around the world, Savills is one of the leading international property advisors. A unique combination of entrepreneurial flair and sector knowledge give clients access to real estate expertise of the highest calibre, across the UK, Continental Europe, Asia Pacific and Africa. Our Focus 02 Savills plc Report and Accounts 2006 Financial Highlights The figures speak for themselves. In the last five years, Savills revenue has increased from £268.3m to £517.6m and underlying profit before tax has risen from £29.3m to £75.0m. Underlying pre-tax profits 02 £29.3m £75.0m +31%* 03 £32.5m 04 £43.9m 05 £57.2m 06 £75.0m Underlying revenue 02 £268.3m £517.6m +38%* 03 £272.7m 04 £316.6m 05 £373.9m 06 £517.6m Underlying basic earnings per share 02 15.7p 40.8p +23%* 03 18.9p 04 27.5p 05 33.3p 06 40.8p Figures for 2002 and 2003 were not prepared under IFRS. *Percentages are from 2005. 03 Savills plc Report and Accounts 2006 Financial Highlights Five year total shareholder returns 02 61% 898% 03 350% 04 174% 05 506% 06 898% Full year dividend 02 5.1p 16p +33%* 03 6.8p 04 9.25p 05 12.0p 06 16.0p Figures for 2002 and 2003 were not prepared under IFRS. *Percentages are from 2005. 04 Savills plc Report and Accounts 2006 Contents 06 Group Profile 08 Chairman’s Statement 13 Group Chief Executive’s Review of Operations and Financial Review 46 Risks and Uncertainties Facing the Business 48 Our People 52 Our Social Responsibilities 05 Savills plc Report and Accounts 2006 The commercial and residential markets remain strong and in the absence of a global economic downturn we are confident that we will make good progress in 2007. Our Business 06 Savills plc Report and Accounts 2006 Our Business Group Profile Savills plc Transactional Advice Consultancy Provision of a wide range of professional Provision of a wide range of professional property services, including: property services, including: Services: Services: Commercial agency and investment Valuation Residential agency, letting and investment Building consultancy Development Housing consultancy Auctions Affordable housing and student accommodation Farm and estate agency Landlord and tenant Retail and leisure Rating Hotels and healthcare Planning Institutional Strategic projects Purchasing advice Research New homes Staff 15,844* *Average for year ended 31 December 2006. Group revenue Segment revenue Segment revenue 1. 1. 1. £517.6m £247.2m £98.8m 3. 3. 2. Geographic split (£m) Geographic split (£m) Geographic split (£m) 1. UK 175.0 1. UK 82.0 1. UK 335.0 3. 2. Rest of Europe 48.1 2. Rest of Europe 32.6 2. 2. Rest of Europe 5.3 3. Asia Pacific 134.5 3. Asia Pacific 39.6 3. Asia Pacific 11.5 2. 07 Savills plc Report and Accounts 2006 Our Business Group Profile Property and Facilities Management Financial Services Fund Management Management of commercial, residential and Mortgage broking, financial planning and Investment management of commercial agricultural property for owners. corporate finance advice. and residential property portfolios for institutional and retail investors, on a pooled Provision of a comprehensive range of or segregated account basis. services to occupiers of property, ranging Services: from strategic advice through project Residential mortgage broking services management to all services relating to Services: a building. Commercial debt broking services Property investment products Insurance services Discretionary and advisory portfolio management Services: Financial planning services Facilities management Commercial management Land and farm management Segment revenue Segment revenue Segment revenue £137.2m 1. £26.9m 1. £7.2m 1. Geographic split (£m) Geographic split (£m) Geographic split (£m) 1. UK 43.6 1. UK 26.9 1. UK 7.2 2. Rest of Europe 10.2 2. Rest of Europe – 2. Rest of Europe – 3. Asia Pacific 83.4 2. 3. Asia Pacific – 3. Asia Pacific – 3. 08 Savills plc Report and Accounts 2006 Our Business Chairman’s Statement 2006 was an excellent year for Savills and I am pleased to report an outstanding set of results following strong performances from our operating businesses. Underlying results Underlying Group profit is calculated by adjusting reported profit before tax to deduct profits on disposals of £5.1m (2005 – £0.4m) and share-based payment adjustment of £6.1m (2005 – £1.9m) and add back amortisation of intangibles and impairment of goodwill of £1.8m (2005 – £0.9m). – Underlying Group profit before tax up 31% to £75.0m (2005 – £57.2m). – Underlying revenue up 38% to £517.6m (2005 – £373.9m). – Underlying basic earnings per share from continuing operations (based upon underlying Group profit) up 23% to 40.8p (2005 – 33.3p). Reported results – Revenue up 38% to £517.6m (2005 – £373.9m). –Group profit before tax up 44% to £84.4m (2005 – £58.6m). – Basic earnings per share 46.3p (2005 – 33.6p). –Proposed final dividend up 38% to 11p per share (2005 – 8p). – Shareholders’ funds £212.8m (2005 – £168.3m). – Cash and cash equivalents £124.1m (2005 – £99.9m). Dividends In the five years to 31 December 2006 reported earnings have increased by an average of 33% per annum and dividends by an average of 27% per annum. This year the Board has recommended an increase in the final dividend of 38% to 11p per share to those shareholders on the register on 13 April 2007, payable on 15 May 2007. This gives a total ordinary dividend for the year ended 31 December 2006 of 16p (2005 – 12p), in line with our current progressive dividend policy. Major acquisitions During 2006, we continued to grow our range of services through the hiring of individuals and acquisition of businesses in the UK, Europe and Asia Pacific as highlighted on page 44. Of particular importance was the acquisition of a 55% holding in Korea Asset Advisors and BHP Korea, which reinforces our position in this region. We also acquired Hamilton Osborne King in Ireland which was later rebranded as Savills Hamilton Osborne King, opening a new market to Savills as well as reinforcing links with Irish investors.