Savills pretax profit drops on falling property market

LONDON (Reuters) - Underlying pretax profit at international property broker Savills dropped 41 percent after falling property investment volumes led to a drop in demand for some of its highest fee-earning services.

In figures for the first six months to June 30, the London-listed consultancy said underlying group pretax profit fell to 19.2 million pounds from 32.5 million pounds in the corresponding period in 2007, reflecting weaker real estate market conditions in Britain and Europe.

Group revenues for the period dipped to 278.1 million pounds from 284.2 million pounds last year.

"2008 continues to be a challenging year for the real estate industry worldwide," Savills Chairman Peter Smith said in a statement.

"Our strategy over the past few years of reducing our dependence on transactional income by growing our consultancy, property management and fund management businesses has served us well in these unsettled markets," Smith said.

Notwithstanding contagion from the European and U.S economic slowdown, Savills said good demand for its consultancy and property management services throughout Asia had helped to shore up group revenues.

Basic earnings per share rose 30 percent to 23.2 pence. The company said it would pay an interim dividend of 6 pence, as previously targeted.

(Reporting by Sinead Cruise, editing by Will Waterman)

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