Review of Operations

Group Chief Executive's review

Underlying pre-tax profits increased from£ 75.0m to £85.5m and reported IFRS pre-tax profits increased from £84.4m to £85.9m. In the UK, acquisition and organic expansion continued to bring new teams and new expertise into all parts of the business. Commercial investment transactions slowed in the second half following the effect of the credit squeeze and the anticipation of yields moving out. On the residential side, prime markets held up well, but showed some signs of slowing towards the end of the year. Our Consultancy teams produced a strong performance.

In Europe, investment markets remained firm and we expanded our range of services.

Asia Pacific saw strong growth in revenues, with a significant increase in profitability. This was largely attributable to organic growth in our businesses in Hong Kong, China, Australia and Singapore.

I am delighted that Jeremy will be taking over from me and will continue to develop and grow the business in line with our stated strategy.

Group Chief Executive (Designate’s) message

In my first message to shareholders I would like to thank Aubrey for his huge contribution to the success of Savills over the last 18 years. I take over from Aubrey at a time when we announce another set of record results for Savills. However, looking forward we are experiencing unsettled and volatile market conditions in many of the markets in which we operate across the globe. Making accurate predictions for Savills’ future trading therefore is difficult. I hope that with the benefit of my 28 years at Savills and of my experience of working for different Savills subsidiaries in many different markets and countries, that I am well placed and have the experience to guide the Group successfully through these challenging times.

I strongly believe that Savills’ unique culture will be its greatest asset in the times ahead. This culture is embodied in the Savills brand and sets us apart from our competitors. Our clients understand that the Savills brand represents the best people, a premium service that is creative and entrepreneurial, and one that is dynamic and distinctive. This culture combined with the very high quality of Savills staff across the globe, our strong financial position and emphasis on cost control will ensure that we are well placed to take advantage of the opportunities that might arise in the months ahead as a result of the volatile financial markets.

The challenge will be to prioritise all these opportunities to maximise shareholder value in both the short and long term. Our strategy will be to continue to grow globally but also to build on the significant acquisitions and recruitment that we have made over the last two years. Our aim is to continue to diversify our income earnings globally to reduce our reliance on the UK market, which currently represents a significant percentage of our earnings.

My vision for Savills for 2008 and beyond is for the Savills brand to be the market leader. We have a brand that is the envy of our competitors and one I am determined to grow, nurture and expand across the globe. I have a passion for Savills, a passion that is shared by all who work for Savills, from our graduates, where for the second year running we were voted the ‘Graduate Employer of Choice for Property 2007’ by The Times, right up to our Executive Board, whose loyalty and passion is evidenced by the Board’s extensive experience at Savills.

Our clients deserve and expect the best from Savills. I am committed to ensuring that they will receive the high level of professionalism, drive, creativity, entrepreneurialism, honesty and quality that is synonymous with the Savills brand. I am excited by the new challenges ahead of me and my aim is to ensure that Savills continues to build and grow its global business for the benefit of its clients, staff and shareholders.

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