International property advisers Savills has reported a rise in pre-tax profit for the year to 31 December 2007 to £85.9 million from £84.4 million a year earlier.

The group said the strong performance reflects the benefits of its business and geographical diversification. Shares were up 18p, or 5.5% to 351.3 pence.

The board recommended a 12 pence final dividend for a total payout of 18 pence, up from 16 pence in 2006.

Chief executive Aubrey Adams, who is to retire in May this year, said 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, he said prime markets held up well, but showed some signs of slowing towards the end of the year. Savills' consultancy teams produced a strong performance, Adams added.

In Europe, investment markets remained firm and the group expanded its range of services. Asia Pacific saw strong growth in revenues, with a significant increase in profitability, largely attributable to organic growth in Hong Kong, China, Australia and Singapore.

Jeremy Helsby, who will succeed Adams in May, added that Savills is well placed to take advantage of the opportunities that might arise in the months ahead as a result of the volatile financial markets.

In further comment, non-executive chairman Peter Smith said 2008 will be a challenging year for the property industry worldwide. But he said that with its broad range of services, its high quality staff and its geographic spread Savills is well placed.

The outlook for Savills' UK and US Commercial Capital Markets businesses and its UK Residential and Mortgage Broking businesses, continues to depend on how quickly confidence returns to financial markets, he said. He added that the group's Transactional businesses in Europe and Asia continue to be more resilient.