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Rightmove keeps revenue and profit chugging along despite fall in agency numbers

Published: 09:07 26 Jul 2019 BST

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Transaction numbers were down 4.6% year-on-year and agency membership numbers were down 1% since the start of the year

The UK’s largest property website Rightmove PLC (LON:RMV) reported continued solid revenue and underlying profits in the first half of the year, despite a fall in transaction numbers.

Revenues of £143.9mln were generated in the six months to 30 June, continuing the 10% growth seen last year, with underlying operating profit also up 10% to £111mln.

Average revenue per advertiser (ARPA) grew more strongly than anticipated, to £1,077 per month up £90 or 9.1%compared to the same period a year ago.

Underlying earnings per share grew 12% to 10.2p and the interim dividend was lifted by the same proportion to 2.8p.

Brooks-Johnson also announced the £16mln cash acquisition of Van Mildert, a profitable provider of tenant referencing services and rent guarantee insurance products, with the price that could increase by £4mln depending on revenue performance.

Agency numbers falling

One downside for Rightmove has been that, while a record 845mln visits were recorded to the site, transaction numbers were down 4.6% year-on-year and agency membership numbers were down 1% since the start of the year as it said some smaller estate agency branches were hit by a lengthening in completion times, leading to a 3% decline in agency branches using the service.

Chief executive Peter Brooks-Johnson said this has been offset as new homes developers and agents increasingly take up digital solutions with market leader Rightmove.  

But agency-backed rival OnTheMarket.com PLC (LON:OTMP) put out an opportunistic press release on Friday, claiming that a number of estate and letting agents who have moved their properties away from Rightmove are "getting more in terms of quality leads for less money", with some suggesting the lettings fee ban will force more agents to come away from Rightmove.
 
OnTheMarket CEO Ian Springett said: “It’s pleasing to see the tide is turning within the portals market as we see more agents not only migrating away from Rightmove but also feeling they’re not missing out. Until very recently, this would have been considered impossible by many agents.
 
“We undercut Rightmove’s enormous profit margin with sustainable fair pricing for agents, while providing an exceptional user experience” a strategy he said has accelerated momentum for OnTheMarket.

Rightmove shares were down 0.4% to 509.5p on Friday morning, while OnTheMarket was up 2.5% to 98.89p.

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