Rightmove this morning announced a 10% rise in revenue along with an 7% increase in operating profits for the first half of the year, driven it says by “the resilient and growing customer demand for its products and services”.
The latest financial update from the property portal, issued this morning, reveals that revenue increased by 10%, from £16.8m to £179.5m, as more agents increased their use of the platform’s products and upgrades their subscription packages.
This was the the highest revenue growth in a first half period since 2018.
Estate agency investment in Rightmove packages and products resulted in agency revenue and average revenue per advertiser (ARPA) from this cohort both growing by 6%.
Agency ARPA increased by £79 to £1,341.
Here is the statement issued to investors a few minutes ago:
|
Financial Highlights |
H1 2023 |
H1 2022 |
Change vs 2022 |
% Change vs 2022 |
|
Revenue |
£179.5m |
£162.7m |
£16.8m |
10% |
|
Operating profit |
£129.5m |
£121.3m |
£8.2m |
7% |
|
Underlying operating profit(1) |
£133.2m |
£122.4m |
£10.8m |
9% |
|
Interim dividend |
3.6p |
3.3p |
0.3p |
9% |
|
Basic earnings per share |
12.1p |
11.7p |
0.4p |
3% |
|
Underlying earnings per share(2) |
12.5p |
11.8p |
0.7p |
6% |
· Revenue up £16.8m/10% to £179.5m, as customers increased their use of our digital products and continued to upgrade their packages: the highest revenue growth in a first half period since 2018
· Operating profit of £129.5m, up 7% (2022: £121.3m)
· Underlying operating profit(1) of £133.2m, up 9% (2022: £122.4m)
· Basic earnings per share up 3% to 12.1p (2022: 11.7p); underlying earnings per share(2) up 6% to 12.5p (2022: 11.8p) – lower growth reflects the impact of the corporation tax increase in 2023
· Interim dividend up 9% to 3.6p per ordinary share (2022: 3.3p)
· £97.6m of returns to shareholders through share buybacks and dividends in the first half of 2023 (2022: £100.3m); 10 million shares (1.2% of outstanding share capital) cancelled in the first half of the year (2022: 9.8 million)
· Cash and cash equivalents, including money market deposits, of £43.2m (31 December 2022: £40.1m)
Operational highlights
· Average Revenue Per Advertiser (ARPA) up 9% to £1,411 per month (30 June 2022: £1,290)
· Highest New Homes ARPA growth in any reporting period to date, up £330 (23%), and strong Agency ARPA growth, up £79 (6%), both driven by increased product and package purchases and customer contract renewals
· Membership numbers stable: up 1%/102 since the start of the year at 19,116 (Dec 22: 19,014), with 16,093 Agency branches and 3,023 New Homes developments (31 December 2022: 15,932 and 3,082)
· Time on site averaged 1.4 billion(5) minutes per month over the period (2022: 1.5 billion), reflecting 2023’s slower property market; 27% above pre- pandemic levels (June 2019: 1.1 billion)
· Strong market share continues at 86%(5) (2022: 85%) as Rightmove remains the trusted site that home-hunters turn to first to search for properties and to inform themselves about the housing market
· Penetration of the top Estate Agency package, Optimiser, increased to 36% (Dec 22: 34%) and significant upgrades to the New Homes top package, Advanced, up to 49% (Dec 22: 42%)
· Continued product innovation, including: the launch of Joint Application Mortgages in Principle; Enquiry Manager – our qualification product for Lettings customers; and Track A Property for consumers
· Other business units, now representing 10% of revenues, have grown strongly, up 11%
· SBTi targets validated and renewed focus on green homes initiatives; the second edition of our annual Greener Homes report is published today.
Summary and Outlook
The strength and resilience of Rightmove’s business has remained apparent throughout the first half of 2023. Agents and developers have continued to use our products to win new mandates and to drive their businesses forward, and home-movers have continued to trust our sites to allow them to see the whole of the property market, helping them to make informed decisions. This has allowed us to deliver strong results, despite the backdrop of higher mortgage rates and the increased cost of living.
ARPA growth was strong in the first half: new homes developers used our Advanced Development Listing and Native Search Adverts products to market their developments, while our agent customers used products such as Featured Agent and Sold By Me to differentiate their brands on our sites to win new vendor mandates. As a result, first half ARPA growth has given us real momentum to deliver full year ARPA towards the top end of our previous guidance range of £95-£105.
Consumers turned to our Mortgage in Principle journey in increasing numbers during the first half to help them to understand their borrowing capacity and mortgage affordability, especially amidst the prevailing interest rate uncertainty. We expect this to continue in the second half and therefore for the revenues in this area of our business, which we earn in partnership with Nationwide, to increase on 2022’s revenues. We expect the remaining Other business units to continue to perform in line with first-half performance and to maintain their year on year growth for the full year.
Disciplined cost management remains a key feature of our business model. Underlying operating margin for the reporting period was 74%. We expect costs to be slightly higher in the second half, as is the usual weighting across the year, and expect a full year operating margin of 73%, in line with previous guidance.
Our performance in the year to date, the clear value of our products to customers and consumers alike, and the outlook for the second half, mean the Board is confident that the Group will deliver in line with its previous expectations for the full year.
As we look further out, it is clear there are significant opportunities available across all our business units. To maximise our ability to take advantage of these opportunities, we will modestly increase our investment in the business to drive organic growth, while maintaining an underlying profit margin of 70 – 72%. We expect this investment to result in double digit revenue and profit growth in the medium term and beyond.
We will host an Investor Day at our London offices on Monday 27 November 2023, where we will set out our strategy for medium term investment to accelerate growth. Further details will be issued closer to the date.
Johan Svanstrom, Chief Executive Officer, said: “This has been another period of strong financial and strategic progress for Rightmove. These results clearly illustrate that Rightmove continues to be the property portal that consumers turn to first and engage with the most, and that our customers continue to use our innovative products and services to support their businesses in both slower and faster housing markets. Our performance against the backdrop of a challenging interest rate environment demonstrates yet again that Rightmove isn’t materially impacted by the property cycle.
“I have been very impressed by what I have seen in my first five months as Rightmove’s CEO and would like to extend my thanks to the team for delivering so strongly. This is a business which has performed consistently well over an extended time-period, and I am excited by the growth opportunities that I see over the long term in the wider UK property market. From here, our aim is to expand our platform, our products and our data, for both customers and consumers, to further digitise the sector, both in our core business and in newer growth areas. We also want to play an active role in facilitating the much-needed green transition of the real estate market, leveraging our vast pool of data and insight to do so.”
Rightmove defends 17% fee hikes as estate agent says ‘no option’ but to pay
https://news.google.com/rss/articles/CBMiWGh0dHBzOi8vcHJvcGVydHlpbmR1c3RyeWV5ZS5jb20vcmlnaHRtb3ZlLWFubm91bmNlcy1tYWpvci1yaXNlLWluLXJldmVudWUtYW5kLXByb2ZpdHMtMi_SAQA?oc=5
2023-07-28 06:12:16Z
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