Savills Share Discussion Threads

[dasv] 03/1/2008 15:07

Lower down the food chain, yourmove is downsizing as transaction volumes fall by a third this year:-



Looking at level 2 today, 76k Bid, 67k Offer at 267.75-268

tradewise we have 874k buys and 632k sells.

Therefore strange to see a price tumble of this extent.

However looking at technical indicators, MACD is pointing to sell. Again strange at these oversold levels that MACD is still negative. Perhaps the hedgies are still out in force gunning for blood. They will only go long once they can see the whites of their eyes...

[jockthescot] 02/1/2008 10:48

Is anyone in touch with the owner of this thread. Would be really useful to get a couple of charts at the top.

Jock

[handycam] 02/1/2008 09:40

What are you waiting for? £4?

[cerrito] 02/1/2008 09:03

I have to say caught off guard by this morning's rise but will wait to buy

[fillipe] 29/12/2007 15:58

bv - should also be a good divi from 2007!

[blondviking] 28/12/2007 23:10

Should be a good set of results from 2007!

[dasv] 24/12/2007 09:19

Cerrito - Great research. Many thanks.

[cerrito] 23/12/2007 12:31

DASV
On my watch list and doing work on this but it seems to me better to wait, as I do not think reached its bottom yet.
If you go to the interims you will see a good breakdown of revenue and op profit by both geography and product line.
You will see that in H107 UK agency/commercial agency/investment business -ie the transaction business- contributed one third of revenue and half operating profit; indeed in 3 of the 4 biggest product lines UK margins were the higest except for facilities management where Asia/Pac margins were highest.
Facilities Management is one assumes the most stable even if loss making in Europe and contributed 9%(of which Asia 7%) of op profit.
Ignoring 07 acquisitions I would factor in a 10% revenue decline H108 compared to H107 reflecting lower UK transaction revenue. Indeed for the next 2/3 years h107 will be seen as the boom semester.
If you go to the slide presentation given to the City(which is on their website) following the interims and indeed the 06 Full year you get excellent figures on the breakdown of personnel costs. In H107 of the total 168m, £100m were core staff costs £4m pensions and the rest commission/bonus/share payments. For calender 06, of the total staff costs of £306m, £130m were bonus,commission and share payments.
This does suggest that they do have a high level of variable staff costs but of course as we all know there will no doubt be bonuses paid that were not earned to keep key people-ok I guess if paid in shares.
The other issue is their cash balances; £40m at 607 depleted by £20m odd for the cash payable for the US acquisition and £7m forH2 dividend payment; one hopes that the mystery current asset-held for sale of £26m is now cash.
Interesting to see that private shareholders are 6% of total

[dasv] 23/12/2007 10:05

I have been arguing a similar position on this thread to the article above. The story makes sense - international diversification, high end residential (still foreign buyers around snapping up prime residential).

I don't think the brokerage services argument holds much weight - I suspect transaction volume will slow, as the only people shopping for new mortgages will be those forced to do so (early exits will diminish).

The real worry for me is commercial property: I can see the credit squeeze killing a lot of commercial property ventures. I'd like to see a break-down of how much SVS makes from each area - and each geography. Perhaps it's in the annual report?

Remember it was the Telegraph which tipped this as a buy in summer 2007 when the share price was 600p:-



Questor also tipped SVS in summer 2006.

Looking at the chart you might expect technical indicators to point to at least a short term rise. I was surprised to note that MACD still points to a sell and RSI is neither buy or sell.

I think there is a case for putting money on this stock still, but personally I am in no hurry to wade in - let the shorters have their fun before dipping toes. [edit: having said all this - no doubt the share price will rocket ;)

[jockthescot] 19/12/2007 16:11

Mike - Sorry but that's rubbish!
If HIPS have any effect at all they will stifle supply as people don't want to put they're property on the market due to the extra cost, but realistically it doesn't make that much difference (£400 ish). There hasn't been the rush of property on the market to escape HIPS either.
Quite simply it is the banks reigning in on their lending criteria and papers selling 'house price crash' stories that have led to negative sentiment which has led to potential buyers holding back for sunnier days (in London that is anyway)

Sector is negative, but it's not due to HIPS! (I'm not a fan of them by the way)

Jock

[dasv] 19/12/2007 10:16

Aubrey Adams' retirement looks well timed in retrospect.

[nickcduk] 19/12/2007 10:13

In early September market conditions were still ok on the whole. BLND actually reported an increase in NAV for the quarter to end Sept. Markets have nose dived since. Property values have fallen 15% or so since then and the debt markets have all but closed up. 4th quarter commercial property transactions were down over 60% versus Q3. Not sure whether SVS were in a position to forsee this. The outlook doesn't look any brighter either so I expect conditions to get worse before they get better for SVS.

The residential side is also in freefall at the moment. Transaction volumes are down sharply and even the top end of the market is now being affected. Bankers are wary of splashing the cash and thats unlikely to change for a while yet either. Hard hats time im afraid.

[dasv] 19/12/2007 10:04

nickcduk - I agree about gearing however SVS's outlook in the autumn was "cautiously confident" and results are likely to be at expectations: They must have known about market sentiment when the announcement was made, so either it was irresponsible lying to investors, incompetence or they are telling the truth and the market is treating the share price unfairly. We will find out in due course.

[jockthescot] 19/12/2007 09:59

Sentiment is just woeful, and when key competitors come out with results like DTZ did today, Sentiment will continue to push Savills southwards IMO.

[nickcduk] 19/12/2007 09:12

dasv - Operational gearing works both ways. Transactions have collapsed and that isn't likely to improve any time soon. Wouldn't surprise me if they report a loss at some point in the next few set of results.

[dasv] 19/12/2007 08:59

profits down 25% - but with SVS's PE at 5.71 a profit drop of 50% for SVS is already priced into the share price Is this likely considering international exposure of the group?

I have dilligently held onto 10% of my original holding (sold out at 480 or so a while back) and suspect this fall is an overshoot of the group's value. Sentiment will continue to hold this puppy underwater for a good while.

[cockneyrebel] 19/12/2007 08:04

DTZ - results dreadful - I think SVS will fall over here.

CR

[the councillor] 11/12/2007 20:59

'Lack of pragmatism' sees Savills sale suffer
11:11 | 11.12.07

A chasm between what buyers want to pay and what sellers want to sell for saw success rates suffer at the Savills auction yesterday, as the company posted 60% success rate.

By Mike Phillips

The auction raised £11.7m, with 18 of the 30 lots on offer selling in the room. This represents an improved success rate from Savills' October sale, when just 54% of the lots on offer sold in the room. However, the October sale raised £35m, with the equivalent sale in 2006 raising £38.5m.

False expectations

Auctioneer James Cannon said that a lack of pragmatism on the part of vendors and difficulty for buyers in obtaining finance were behind the disappointing figures.

'Those people who were pragmatic succeeded in selling, but for those who had expectations above the market, people weren't even undertaking due diligence on the lots,' Cannon said.

'We also had one client who decided to raise the reserve price on eight lots that we were selling for them, without any evidence that the market was there for the change, so we decided to withdraw them, as we can't be seen to misrepresent prices.


'That had a big effect, as if they had been included at the original guide price I think we would have sold all of them,' he said.

Fragile market

Cannon said that despite last week's drop in base rates, it was still difficult for private investors to fund purchases. 'The market is very volatile and fragile at the moment,' he said.

'Interest rates and swap rates have fallen, but LIBOR is still high, and bidders are having funding difficulty.

'Smaller lots are still going well, as people are still trading in cash and perhaps refinancing later.'

[kristini2] 11/12/2007 15:44

frank Knights comments today relating to a global slow down reflected in their global property index was possibly the reason for the sudden drop today.

[kristini2] 11/12/2007 15:24

interesting price dip and recovery today.
i've seen these type of dips in advance of a price fall in stocks many times. May increase the short position based on today's voliatility.

[slogsweep] 11/12/2007 11:33

SVS are selling agents not property owners, aren't their sales people on commission so even with a fall in prices and may be a knock on effect on volumes I can't see their profit falling as much as share price slide suggests (60%) divi is more than 2x covered and at this price nearly 6%. On a medium term (1-3 years) they seem a steal, but then what do I know I've been getting it wrong for 3 months.