Rightmove PLC (LON:RMV), today announced half year results for the six months ended 30 June 2018
Financial Highlights
· Revenue up 10% year on year driven by continued growth in our Agency and New Homes businesses
· Underlying operating profit(1) up 11% and operating profit up 12%
· Underlying basic earnings per share(2) up 13% and basic earnings per share up 14%
· £76.9m (2017: £72.0m) of cash returned to shareholders through dividends and share buybacks in the period
· Interim dividend increased by 3.0p to 25.0(3)p (2017: 22.0p) per ordinary share, up 14%
Operational Highlights
· Stable membership numbers with Agency and New Homes customers up slightly since the start of the year to 20,450 (31 December 2017: 20,427)
· 1.2 million UK residential properties advertised on Rightmove which is a significant stock advantage compared to any other UK portal
· Continued traffic growth with visits up 5% year on year, averaging 139 million(4) visits per month and time on site up 4% year on year and averaging 1.1 billion(4) minutes per month
· Average revenue per advertiser (ARPA) up £76 on the same period a year ago to £987(6) per month
· Our tenant passport proposition is in trial, in line with our strategy of providing more solutions to deliver efficiency savings for our customers
Guidance and outlook
· Full year ARPA growth expected to be around £80 year on year, with ARPA growth more weighted to the second half of the year than in 2017 due to the timing of 2018 pricing activities.
· Confident in delivering the Board’s expectations for the full year.
Peter Brooks-Johnson, Chief Executive Officer, said:
“In the first half of 2018 a record 1.1 billion minutes per month were spent on Rightmove. Home hunters continue to turn to us first to search and research in the only place you can see virtually the whole of the UK property market. Our restless innovation delivers the fastest and easiest way to ‘find your happy’ from the 1.2 million UK residential properties on Rightmove leading to consumers sending over 22 million enquiries in the period.
We’re focused on helping our customers succeed by delivering the most significant and effective exposure for their properties and brands and also by being the largest source of high quality leads. In addition, Rightmove helps them drive operational efficiencies through software, tools and support which leverage our unique data and insight across the UK property market.
The continued stable membership numbers and our subscription advertising model, together with the strength of the Rightmove offer for both customers and consumers, give us confidence in delivering expectations for the current year despite muted sentiment towards the UK property market.”
Half Year Statement
Our strategy and operating priorities
Our aim is to be the place where people turn to first and engage with most when searching, researching and moving home; to make it easy for them; and to provide the most significant and effective exposure for our customers’ brands and properties. By combining our commitment to innovative software, data analysis capability and our unique view of the whole market, we also help our customers drive operational efficiencies and inform their business decisions.
Our brand building continues to be focused on national TV, through our partnership with Channel 4, augmented with highly targeted outdoor media, 400 branded taxis and continued partnerships with the Evening Standard and Time Out in London.
In the first half of the year Rightmove attracted a record 830(4) million visits, resulting in home hunters spending 6.5(4) billion minutes on our platforms. Our market share of traffic across both desktop and mobile was 74%(5) with the mobile component even higher.
Rightmove keeps investing to deliver the most engaging experience for home movers and our culture of restlessness continues to drive improvement and innovation. In addition to the hundreds of updates to our platforms released each month, recent improvements and innovations include: ‘Keyword sort’, which allows home hunters to prioritise those properties which meet their diverse needs from the 1.2m homes for sale or rent listed on Rightmove and the alpha launch of our tenant passport, which aims to make the process of renting a property faster and more efficient by enabling potential tenants to collate in advance all the information needed for the process of applying for a tenancy.
We also continue to create innovative tools and products for our customers to help them be more efficient. The number of leads from our instruction lead products, Local Valuation Alert and Rightmove Discover, in the first half of 2018 increased by nearly 30% compared to the first six months of 2017 following the launch of Rightmove Discover in July 2017. Rightmove Discover uses predictive analytics to identify the most likely potential sellers in a local area within the next six months and markets to them on behalf of an agent.
The roll out of the latest version of the market leading Surveyors Comparable Tool has begun. The tool is used by surveyors to support their valuations in the majority of all successful mortgage applications. The tool searches over 72m records to find comparable properties and is used 200,000 times per month. The tool now supports our surveyor customers’ increasingly mobile ways of working both on and offline giving them flexible access to key data and allowing them to have more choice on where and when they work.
Looking forward we have begun early trials of a new tool to help customers become more efficient, ‘Opportunity Manager’, which analyses behavioural data combined with advanced agent training to help agents prioritise leads to make the most of the enquiries they already receive. Using our proprietary Data Services models, the tool allows agents to market to the high priority leads utilising an indicative valuation range.
In addition to the support customers receive from their dedicated Rightmove Account Manager we continue to help our customers with training. The first six months saw our webinar and seminar series augmented with sessions dedicated to helping customers prepare for the recently introduced GDPR regulations, in addition to our range of webinars covering diverse topics such as “How to create the ultimate listing”, “Sales Progression” and “Cyber Security for agents”. Our webinars and seminars were attended by nearly 11,000 agents in the first half of 2018. We now have over 10,000 agents registered on “The Rightmove Hub”, our video on demand platform offering both the ability to catch up with seminars and events and live streaming of selected industry events such as The Property Ombudsman conference.
Evidencing the value property professionals see in our products and services, despite a subdued property market, they continued to increase their spend on Rightmove products and packages to help drive and support their business ambitions resulting in half year ARPA increasing by £76 to £987(6) per month.
Agency
Agency ARPA was up £75 year on year at £940(7) (2017: £865) per office per month as a result of further adoption of additional advertising products and price increases to over half of our customers. Revenue increased across our range of additional advertising products with good adoption of our Enhanced package, launched in the second half of 2017. At 30 June 2018 nearly 1,500 branches were Enhanced members, spending a minimum of £1,250 per month. The number of Agency offices was broadly unchanged, at 17,585
(31 December 2017: 17,626) since the start of the year.
New Homes
New Homes ARPA increased by £76 year on year to £1,286(8) (2017: £1,210) per development per month with the growth being driven by the sale of additional advertising products, including email campaigns, and by increases to core membership prices. The number of developments was up 2% since the start of the year at 2,865 (31 December 2017: 2,801).
