Savills Share Discussion Threads

[rupert1] 14/3/2006 14:28

Savills, like most commercial property agents are enjoying a bumper ride at the moment, on the back of exceptional performance in the commercial property sector. Their super profits are generated from the commercial investment market, and with yields still falling, the prospects for next year look good.

But when commercial values stop rising, and investors are less able to turnover their stock for a quick profit (transaction costs are over 5%), profits from their investment transactions will fall dramatically.

I don't agree with Questor. The current profit levels are unsustainable in a flat or falling commercial property market. In the cyclical world of commercial property, this is inevitable. A valuation at 16 times price earnings looks steamy, given the volatility of their profits.

The shares may rise from current values, but this is not the last time we will see £11.00 a share or less.

I have no holding in Savills shares; I am merely an industry observer. I wish all those with shares the very best of luck.

[grigor] 09/3/2006 20:17

Thanks Jock

Are there any Jocks that are not Scots?

[jockthescot] 09/3/2006 11:19

Grigor - SVS is also tipped in the Telegraph today under Questor:






Savills

Share price £11.87 +13p
Questor says Buy

The high level of staff bonuses at upmarket estate agent Savills shows the firm is serious about maintaining high performance. Its share price has almost tripled in the past 18 month, and it has positioned its business to make the most of commercial, European and Asian growth markets.

Investment into UK commercial property has hit record levels of late, particularly as overseas investors from Ireland, Israel and Germany have piled in. In Asia, where the company has a strong presence, the outlook is also promising.

Former group finance director Rob McKellar is now in charge and he's looking to capture strong demand from Chinese ex-pats buying at home.

In residential, the UK is coming back on form, and there is interest in European second homes. And with rapid growth from its fund management business and the prospect of further pay-outs for shareholders, Savill's shares - on a 16.3 price-earnings multiple - look fairly priced. In spite of that, and share price momentum, the shares look to have further to go.

[grigor] 09/3/2006 01:18

Analyst Nan Rogers of Arbuthnot pointed out it was still sitting on almost £100m. He said: "Some of the cash may be distributed by way of a special dividend. Given that the fund management business requires seed capital and taking into account expected acquisitions over the year, we estimate that the surplus cash could be about £40m or 70p per share."

[grigor] 28/2/2006 22:28

REITS legislation should be announced in the April Budget, allowing REITS to start in January 2007. This should be a bonanza for property agents and fund managers.

However, there may be limits on gearing and the size of shareholdings which could kill it at birth.

[cockneyrebel] 28/2/2006 18:18

DJ Cordea Savills CEO John Partridge Named Chairman >SVS.LN

Edited Press Release

LONDON (Dow Jones)--Cordea Savills, the property fund manager, said Tuesday that it has made some senior management changes in response to extensive corporate growth over the past year.

John Partridge, who was previously chief executive officer, has moved to the role of executive chairman. Promoted to the position of CEO is Justin O'Connor, who previously had responsibility for expanding the company's European presence as head of business development.

Aubrey Adams, group chief executive of Savills plc comments: "The internal changes are designed to help Cordea Savills exploit the current strong global demand for U.K. and European property funds and to ensure that it is well positioned as the industry develops into areas such as public market vehicles and derivatives."

CR

[blondviking] 27/2/2006 22:27

Results and big bonuses for staff next month, so more publicity about the successful business model they have. Can only be good news for the share price.

[cockneyrebel] 13/2/2006 10:32

cheers

CR

[jakleeds] 13/2/2006 10:30

It is going on CR, there's an article about it in the Homes section of yesterday's Sunday Times, and Savills gets a small mention

[cockneyrebel] 13/2/2006 10:27

Well as hard as it is to believe Gazzumping is back in London and the South East. Savill's prime territory for residential. We're looking to move - our estate agent said in the last fortnight they have had two people offer the full asking price and the seller pull out when they picked up an offer over the asking price. Have to view estate agents words as bullshot but I know one of the people that made the higher offer so it is going on imo.

CR

[sogoesit] 13/2/2006 10:05

Thanks CR.... does anyone think there is potential consolidation in this industry?
I'm not thinks of SVS being taken out but the reverse. Is it "just a people business" or, with global reach, are there good economies of scale (I would have thought so).
Will place some money in COL.
Dont think you will be disappointed in SVS Jock, but, do us a favour and if you notice a downturn in the property markets let us know...:-)?

[jockthescot] 13/2/2006 09:09

Well - after about 3 months of watching, I finally went long in both SVS and COL this morning.
Hope my timing is OK, althoguh I work in the industry so think we are in for a +ve 2006.

Jock

[Abuse team] 12/2/2006 21:02

Post removed by ADVFN

[cockneyrebel] 12/2/2006 20:21

Well I think the PE ratio for a start, they have said their results to Dec 05 will be ahead so I'm thinking 16p for the year gone and 2006 being upgraded to 18p expected come the year end results in a months time. I think they also have the scope to beat that significantly.

I suspect at the maximum COL are on a forward PE of 12 and pay a 2% yield.

250p looks easily achievable to me and they would still only be on a rating of 15 PE, lower than anything else in the sector.

If they do look like beating significantly next year then they should go a lot higher imo.

CR

[cockneyrebel] 12/2/2006 17:54

I think commercial property is taking off not declining in demand. I'll be amazed if 2006 forecasts are not upgraded strongly.

72p eps likely to be well on the cards for 2006.

£80m net cash or so on the balnce sheet - what bet on a special divi? Could easily give every share holder £1 a share and take on a bit of debt, 50p would be a doddle.

Or they could buy COL and boost pre-tax profits by £8m and about 15% with no earnings dilution.

CR

[blondviking] 12/2/2006 17:42

What price this time next year? Would £15 be a silly figure, perhaps not? Have just about doubled in last 12 months. Worth keeping them and buying a few more.

[cockneyrebel] 12/2/2006 14:11

Worth looking at COL too imo - trading on a forward PE of 11 and they have said they will be ahead - must be a bid target if the rest trade on 18 eventually, or a big riser imo.

CR

[sogoesit] 12/2/2006 14:09

Looks like it may now break-out above 1100 soon; what a star this share is!

[cockneyrebel] 12/2/2006 11:22

Great - cheers :-)

CR

[grigor] 12/2/2006 00:11

Savills, the upmarket estate agent, reports its preliminary figures early next month and they are likely to make cheering reading for shareholders.

Jones Lang LaSalle, a rival firm, recently reported very strong results with fourth quarter earnings up by more than 30 per cent and analysts expect Savills to have done just as well. JLL has a strong presence in America, where Savills is weaker, but that was not the key driver of growth.

Operations in Europe and the Far East were where the real action was for JLL and Savills is well represented in both those regions. With its shares at 1082.5p the company trades at a price to earnings ratio of 16.7 and has a strong balance sheet. The dividend yield is 2.1 per cent.

We believe that real estate consulting is now a global business and that Savills deserves to be rated on a similar basis to its US peers, meaning that the shares have further to go. Buy.