Rush to avoid higher stamp duty lifts estate agent Savills’ profits
ESTATE agent Savills has hiked its profit guidance for 2014 after changes to stamp duty came into effect at the end of last year, sending shares surging 7.3 per cent.
Revenue and profit exceeded forecasts in December after a sales boost from the rise in stamp duty for properties priced over £937,000 introduced in chancellor George Osborne’s Autumn Statement.
“The rise in Stamp Duty on high value UK residential transactions caused a short-term increase in trading volumes,” the property firm said. Wealthy buyers scrambled to complete deals on 3 December, the day of the statement, to avoid being charged at the higher rate.
The full-year upgrade was also driven by “a number of sizeable transactions” in the UK and European commercial markets. The earlier close of its Nordic Logistics Fund also helped bring forward revenue previously expected in the first quarter of 2015.
Analysts at Numis said they now expect pre-tax profit of £99m, up from previous estimates of £90m.
Underlying profit for the year to 31 December will now be “well ahead” of previous expectations, the property firm said. However, it remained cautious over its outlook for the year ahead.
“For 2015, we retain our cautious stance particularly on the performance of the UK residential market in the first half of the year, as a result of continued uncertainty around the UK General Election, and the timing of a sustainable recovery in Hong Kong,” the company said.
It is due to report its full-year results on 19 March.