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Saville sees 12% drop in underlying profit as investment expenditure, reduced activity weigh

Real estate firm Savills reported a 12% drop in Group underlying profit in the first half of 2018 to £42.4m as investment expenditure and reduction in activity on key commercial markets weighed, but anticipated that full-year performance would still be in line with expectations.

Group revenue rose 2% in the six months to 30 June 2018 to £727.8m despite declines in the North America (3%) and Asia Pacific (5%) areas.

"At the beginning of the year, we anticipated some tempering of the strong transaction volumes of recent times and this was evident in the UK and certain Asian commercial markets in H1 2018," said Group Chief Executive Jeremy Helsby.

"However, a resilient performance in our UK residential transaction business and robust organic growth in the Continental European business, including the benefits of recent business acquisitions (primarily Aguirre Newman), underpinned a better-than-anticipated performance in the first half of the year," he added.

"In line with our overall growth strategy, we have continued to invest across the business, which has affected profits in the short term," said Helsby.

Furthermore, continued growth in the firm's less transactional businesses, significant overseas earnings and strong shares in many of its most important transactional markets positioned Savills well to weather fluctuations in markets and to capitalise on the opportunities which they expected to emerge over time.

"We have a robust pipeline of activity for the second half, despite an environment of escalating political and economic uncertainty, and we continue to anticipate that our performance for the full year will be in line with the Board's expectations," the Chief Executive said.

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