LONDON (ShareCast) - Weaker market conditions in the UK and Europe hammered profits at estate agent Savills during the first half.

Underlying profit before tax for the six months ended 30 June tumbled 41% to £19.2m from £32.5m in 2007. Revenue dropped to £278.1m from £284.2m.

Pre-tax profit including the £17m profit on the sale of Infinergy wind farm business grew 1% to £33.4m.

The firm said its transactional businesses in Asia continued to be more resilient notwithstanding the more challenging market conditions, while demand for its consultancy and property management services remained “good”.

A one-off cost of about £2m should result in savings of some £20m in 2008 as Savills axes staff and cuts marketing and travel costs. The full annualised benefit of these savings will be close to £25m.

“We have delivered a robust set of figures as a direct result of creating a more balanced business,” said chairman Peter Smith.

“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.”

The half year payout stays at 6p a share.

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