Rightmove PLC (LSE:RMV) shares crashed over 21% to 514p after the property selling platform unveiled plans to accelerate investment in artificial intelligence and technology, warning that higher spending would slow profit growth in the short term.
The property portal said it would increase research and development, re-platform its operations, and expand its AI-powered search and data tools to “build an even stronger platform” and drive longer-term growth.
Chief executive Johan Svanstrom said: “AI is now becoming absolutely central to how we run our business and plan for the future… we are investing to accelerate our capabilities, which we are confident will create an even stronger platform and higher-growth business over time.”
While Rightmove reaffirmed its 2025 targets, it guided for underlying profit growth of 3-5% next year as a result of the additional £12 million in spending.
The company expects margins to recover from 2027 as the investment begins to pay off.
It said recent examples of AI-driven innovation include tools that let users search listings by smart tags such as 'river views' or 'exposed brick', digital valuation estimates for vendors, and an AI-powered 'opportunity manager' that predicts which homeowners are most likely to sell.
Analyst Sean Kealy at Panmure Liberum said it looked like around a 7-10% cut to consensus earnings in 2026.
He said nervousness from shareholders on this topic had been sensed earlier in the year and "we had thought the company would do this at FY results in March rather than now.
"Worth noting that much of the investment they announced in 2023 will simply have alleviated some of the upward pressure on wages seen by the company in '22 and '23."