Savills restores payout after climbing back into the black: Estate agent reports doubling of residential sales in London

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SAVILLS, the upmarket estate agent, bounced back into the black last year after two years of losses, and announced a dividend for the first time since 1990.

George Inge, chairman, said the payout represented a 'fairly significant vote of confidence', although the market remained cool, marking the shares down 1p to 55p.

The company's residential division sold twice as many London houses in the six months to April as a year earlier, with an average sale price 15 per cent higher at pounds 405,000.

Mr Inge said that the country house market had lagged before picking up in March. Both markets had lost momentum since the Newbury by-election, and he expected a 'period of fits and starts'.

There had also been an improvement in the commercial market, where despite continuing oversupply of offices and depressed rental values, overseas buyers and institutions were once more showing interest. UK funds had bought property worth pounds 200m in the first quarter of 1993 after pounds 65m of disposals at the end of last year.

There had been an increase in agency work for clients buying space in the West End and the City. Appeals on council tax bills and advisory work for banks owning large property portfolios had also kept the company busy.

Mr Inge agreed with estimates that about pounds 7bn had been earmarked by institutions and property companies for investment in the sector. 'The mood is improved on a year ago.'

Agricultural land prices picked up during the period for the first time in 10 years, thanks to the impact of last year's devaluation of the green pound. Savills handles 30 per cent by value of all farm sales in the UK and was seeing an upturn in business from farmers adding to their acreage.

Group pre-tax profits were pounds 1.44m in the 12 months to April compared with last time's pounds 2.86m loss, struck on a 7 per cent improvement in sales to pounds 25.3m.

Mr Inge said that a pounds 1m reduction in the cost base had contributed. Cuts had included a 9 per cent reduction in the workforce. He estimated that costs had been reduced by more than pounds 5m since 1990 but said that Savills planned to double its recruitment of graduates this year.

Savills has no gearing and net cash at the year-end was about pounds 4.5m. Earnings per share emerged at 2.2p (6.5p loss). There was a 1p dividend.

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