Operating profits increase at Savills as firm benefits from post-covid bounce

The company entered into a new lease agreement relating to a change of office in Cork and the initial annual rent on the 15-year lease is €117,000.

Operating profits at Savills main Irish unit last year increased by 26% to €6.89m, as the property firm benefited from a post-pandemic bounce.

New accounts filed by Savills Commercial (Ireland) Ltd show the business recorded the increase in operating profits as revenues rose by 12pc rising from €36.44m to €40.83m.

Numbers employed increased from 248 to 284 as staff costs rose from €27.12m to €29.66m.

The company last year paid out dividends of €7m and this followed a dividend payout of €14.5m in 2021.

According to the directors, “the company experienced continued post-covid trading recovery in 2022 despite real estate markets in Ireland and globally being challenged by geopolitical events, macro-economic issues and the associated policy responses”.

They add “notwithstanding this, most business lines experienced a significant uplift in activity during the year with year-on-year revenue increasing by 12%”.

They say “the company’s overall performance was supported by the strength of its less transactional sectors, particularly property management and residential leasing”.

The firm operates across a range of real estate advisory services covering all the key elements of office, retail, industrial, hotel, residential property and mixed-use development schemes.

The directors say the company started 2023 against a backdrop of ongoing increases in actual and anticipated debt costs and this, together with inflationary pressures, is expected to adversely impact on transitional activity from which the company earns a substantial percentage of its revenue.

They say: “Nonetheless, it is estimated that the first half of 2023 will be more difficult than its 2022 comparison, but a gradual recovery through the second half of the year is anticipated and the business is expected to be profitable in 2023 and 2024.” 

The accounts — signed off on November 9 — show the firm’s pre-tax profits for last year at €6.94m were down 16% on the pre-tax profits of €8.27m for 2021.

However, the 2021 pre-tax profits of €8.27m were skewed by an exceptional gain of €2.83m concerning the write-back of a historical provision against an amount due from a fellow subsidiary.

A breakdown of numbers employed show headcount in sales rose from 97 to 115, while numbers employed in administration increased from 151 to 169.

The company’s employment costs of €29.66m for last year included €252,311 in share-based payments and €86,094 in severance and redundancy costs.

Pay to directors last year increased from €1.59m to €1.6m comprising remuneration of €1.24m, long-term incentive scheme benefits of €208,616 and pension contributions of €151,995.

The profit also took account last year of non-cash depreciation costs of €229,599 and lease costs of €759,846.

The firm last year recorded post tax profits of €6.02m after incurring a corporation tax charge of €921,061. 

At the end of December last, the firm was sitting on shareholder funds of €12.6m that included accumulated profits of €9.44m. The company's cash funds increased from €14.36m to €16.32m.

In a post-balance sheet event, the directors say in 2023, the company entered into a new lease agreement relating to a change of office in Cork and the initial annual rent on the 15-year lease is €117,000.