Savills halts payout as losses continue
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Your support makes all the difference.SAVILLS, the upmarket estate agent and surveyor, has made losses for the second year running and is again passing its dividend, another victim of the depressed property market.
With turnover down 15.3 per cent to pounds 23.7m in the year to April as its residential, agricultural and commercial business all suffered, the firm has had to slash costs. A further 50 staff have been shed on top of the 105 made redundant in 1990-91.
The 560 who are left have been squeezed as far as possible into smaller offices and the surplus space leased, even though in some cases the firm has only been able to get tenants to pay half the rent it is itself paying.
A pounds 1.6m exceptional charge due to the cost of subletting and a smaller write-off relating to the revaluation of freehold property and investments meant reduced operating losses of pounds 1.3m ( pounds 1.7m) were overshadowed by raised pre- tax losses of pounds 2.86m ( pounds 1.7m).
The brighter side is that Savills is cash-positive to the tune of around pounds 1.1m - the losses are the result of a depreciation charge relating to investment in computer systems during the boom - and has no borrowings. At the end of the year it had cash balances of pounds 1.94m, up from pounds 827,000 last year.
George Inge, chairman, said he expected property markets to remain difficult. Savills is pinning its hopes on boosting its professional activities in rating, investment and valuation. Banks are said to be increasingly asking for their own valuations before lending.
Aubrey Adams, managing director, said he did not expect further staff cuts but they could not be ruled out. 'We always look at staffing levels and we could take on people,' he said. 'We have areas that are growing, but I think generally staff numbers will stay broadly what they are now.'
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