viewRightmove PLC

Rightmove sees demand spike as people want to move home after lockdown

Demand for property sales and rentals were up 50% and 20%, respectively, in June and July, the FTSE 100-listed group said


Rightmove PLC (LON:RMV) has said demand for property sales spiked by 50% in June and July, while rentals were up 20% as the coronavirus (COVID-19) lockdown eased.

The online property portal said the boost reflected pent-up demand and also people wanting to move home after the experience of lockdown.

READ: Rightmove appoints former News UK top manager as new chief financial officer

The FTSE 100-listed firm said it remains cautious over prospects of recovery, in spite of the UK government's stamp duty holiday, as it is too early to forecast whether the positive momentum will continue in the current economic crisis.

Over the six months to June 30, 2020, Rightmove's revenue tumbled by 34% to £94mln impacted by the 75% discount support offered to customers in the second quarter.

The group's first-half profit before tax slumped by 43% to £61mln, while cash at year-end was £50mln. The group's board did not propose a dividend.

'Red flags'

Looking at the numbers, analysts at Liberum highlighted some red flags for longer-term growth, such as a 3.3% decline in membership numbers during the period.

"We are concerned that given Rightmove holds such high market share, this decline in agents will represent those who are dropping out of the market altogether due to macro weakness and will provide headwinds for growth year-on-year," the analysts pointed out in a note to clients.

"Second point is on the bounce-back of the property market and outlook... While this is, of course, welcome news and will help to keep some agents in the market who would have otherwise have failed, given the uncertain macroeconomic backdrop we would be cautious to argue that this will map down into increased average revenue per advertiser (ARPA) spending," the Liberum analysts continued.

"We have seen initial reductions in membership, and anticipate pulls on ARPA growth in a weak longer-term macro-environment, pockets of rebellion amongst estate agents and aggressive re-entry of Zoopla trying to take market share providing headwinds," they concluded.

Rightmove shares gained 4% to 601.4p in early trade on Friday.

-- Adds analyst comment, share price --

Quick facts: Rightmove PLC

Price: 621.8 GBX

Market: LSE
Market Cap: £5.43 billion

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