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    RMV   GB00BGDT3G23

RIGHTMOVE PLC

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Rightmove : Half Year Results 2021

07/30/2021 | 02:10am EDT

Embargoed until 7:00 on 30 July 2021

HALF YEAR ANNOUNCEMENT FOR RIGHTMOVE PLC - SIX MONTHS ENDED 30 JUNE 2021

Rightmove plc, the UK's largest property portal, today announces its unaudited results for the six months ended 30 June 2021.

Financial Highlights

H1 2021

H1 2020

H1 2019

Change vs 2020

Change vs 2019

Revenue

£149.9m

£94.8m

£143.9m

+58%

+4%

Operating profit

£114.9m

£61.7m

£108.2m

+86%

+6%

Underlying operating profit(1)

£117.1m

£61.4m

£111.0m

+91%

+5%

Interim dividend

3.0p

-

2.8p

-

+7%

Basic earnings per share

10.8p

5.7p

9.9p

+89%

+9%

Underlying earnings per share(2)

11.0p

5.7p

10.2p

+93%

+8%

  • Revenue up 58% on 2020, reflecting the growth in customer spending and ARPA over the first six months of 2021. Revenue is up £6m/4% on 2019, due to growth in Agency and Other revenues, partially offset by a decline in New Homes revenues
  • Operating profit of £114.9m, up 86% on 2020 (2020: £61.7m) and 6% on 2019 (£108.2m)
  • Underlying operating profit of £117.1m, up 91% on 2020 (2020: £61.4m) and 5% on 2019 (£111.0m)
  • Basic earnings per share up 89% to 10.8p (2020: 5.7p), underlying earnings per share 11.0p (2020: 5.7p). Compared to 2019, basic earnings per share up 9% from 9.9p, underlying earnings per share up 8% from 10.2p
  • Interim dividend for 2021 of 3.0p (2020: nil; 2019: 2.8p) per ordinary share
  • £128.3m of cash returned to shareholders through share buybacks and dividends in the first half of 2021 (2020: £30.1m; 2019: £54.0m)
  • Cash at the end of the period of £67.7m (31 December 2020: £96.7m)

Operational highlights

  • Average Revenue Per Advertiser (ARPA)(3) up 63% to £1,163 per month, our highest ever ARPA (2020: £712; 2019: £1,077)
  • Relative to June 2019, Agency ARPA is up by £107 (11%), driven primarily by product purchases
  • Strong uptake of our premium Optimiser 2020 package, with 16% of agents now subscribing to the package, up from 9% in December 2020
  • This strong growth in Agency ARPA has been slightly offset by the New Homes market, where high demand has reduced one-off marketing by developers
  • Membership numbers are broadly flat since the start of the year at 19,116; with 16,052 (+130) Agency branches and 3,064 (-211) New Homes developments (31 December 2020: 15,922 and 3,275; 31 December 2019: 16,347 and 3,462)
  • Rightmove's position as the place home-hunters turn to first was further strengthened, with market share of time on portals at 90% (4)
  • Time on site averaged 1.7 billion(5) minutes per month over the period (2020: 1.1 billion; 2019 1.1 billion), reflecting
    Rightmove's trusted brand and the strong property market. Site visits of 1.4 billion(5) (2020: 890 million; 2019: 845 million), up 56% year on year
  • Continuous innovation for customers with the launch of our Advanced Listings product for New Homes developers, which has already been taken-up by over 21% of New Homes properties on site
  • Our new Online Conditional Auction advertising product, which demystifies the conditional auction process for home- hunters, is now live. In response to the initiative, four additional auction providers will be integrated in Q3

1

  • Innovation to give home-hunters increased financial confidence earlier in their search process, through our online mortgage journey. Potential borrowers sent over twice as many mortgage leads in H1 2021 as H1 2020, which have converted into three times as many Decisions in Principle as H1 2020.
  1. Underlying Operating Profit is operating profit before the share-based payments, related NI charge and tax adjustments
  2. Underlying EPS is basic earnings per share calculated using underlying operating profit
  3. Average Revenue per Advertiser (ARPA) is calculated as revenue from Agency and New Homes advertisers in a given month divided by the total number of advertisers during the month, measured as a monthly average over the six-month period.
  4. Source: Comscore, June 2021
  5. Source: Google Analytics

Outlook

The first half of 2021 has delivered healthy ARPA growth, record low Agency churn and product innovation for both customers and home-hunters. Strong growth in Agency ARPA - up 11% vs H1 2019 - has been driven by our range of digital solutions enabling agents to compete effectively for new listings in the busy market. The buoyant New Homes market has temporarily softened New Homes ARPA, by 1% relative to H1 2019.

We expect the second half of the year to follow a broadly similar pattern, with good ARPA growth led by ongoing adoption of Optimiser 2020, broadly stable Agency branches and continued growth in our other businesses and the increased demand for properties continuing to impact the availability of New Homes development numbers.

Given the momentum in the first half, our catch-up investment in people following the recruitment pause in 2020 continues apace. While continuing lockdowns made recruiting more difficult than normal in the first half, we have now been able to increase the rate of recruitment - particularly in product development and sales - and this will be reflected in the H2 headcount.

With a strong pipeline of product delivery planned for the second half, a culture of continuous innovation and a commitment to continue to make home moving more digital for our customers and consumers, the Board is confident in delivering its expectations for the full year and beyond.

Peter Brooks-Johnson, Chief Executive Officer, said:

"The first half of 2021 brought further lockdowns, instilling in many a desire or motivation to move home, and the nation relied on us to help them to find their new life, with a record 10.4bn minutes spent searching and researching on Rightmove. The innovation we have delivered to help home-hunters find their happy, despite the restrictions, have been well used - with 200,000 video viewings and 160,000 rental viewing appointments made on the platform.

Our customers expect our platform to deliver the best exposure for their brand, extremely effective advertising, and to help them to grow their businesses. The strong take-up of our premium Optimiser 2020 package shows agents' continued belief in the Rightmove platform, as they invest in our digital products and innovative algorithms to help them to identify more opportunities to succeed.

Constantly innovating our platform and finding and developing the best people are at the heart of everything we do. We are committed to further increasing our diversity by promoting Rightmove roles to under-represented ethnic groups and the LGBTQ+ community, and we'll continue to support all our people through our mental health and wellbeing programme.

I'm excited about the range of our plans - including our new digital mortgage and rental journeys - as we continue to help to make home-moving easier in the UK."

The Company will publish a pre-recorded audio results presentation at 7.30am today, followed by an audio Q&A session for analysts and investors at 9.30am with Peter Brooks-Johnson, CEO, and Alison Dolan, CFO.

Enquiries:

Investor Relations

Investor.Relations@rightmove.co.uk

Rightmove Press Office

Press@rightmove.co.uk

2

Half Year Statement

While the pandemic is not yet over and its devastating impacts continue to be felt, Rightmove has emerged stronger from 2020, with our investments bearing fruit with both home-hunters and customers. Home-hunters have relied on Rightmove more than ever as the place they turn to research the property market and to find their next property. Our platform has generated record levels of engagement, with an average of over 1.7 billion minutes per month and a total of 1.4 billion site visits in the half year - both up 56% year on year. Continuing development of MyRightmove has led to an increase of 33% in new user registrations compared to H1 2020.

Our strategic focus to make home moving easier has continued unabated. Giving home-hunters the tools to quickly assess the suitability and affordability of the properties they view has been a priority in the first half of 2021. Of note in the period:

  • 200,000 property videos were sent to home-hunters, instantly saving time and, more importantly at the moment, reducing contact;
  • the mortgage affordability widget has helped home-hunters to assess what they can afford and has contributed to a doubling of mortgage-lender introductions in H1 2021 vs H2 2020;
  • to help home-hunters to navigate the changing stamp duty rates, we refreshed our stamp duty calculator.

Supporting our customers with unrivalled leads and products is at the heart of what we do. The strong sales market has focused our agent customers on winning the right to sell a home more effectively and more efficiently. The value our customers attribute to our products to help them to do this can be seen in the record numbers of Agency customers upgrading to our premium Optimiser 2020 package during H1 2021 and the high number of Agency customers purchasing products beyond their existing packages.

Agents and providers of online conditional auctions welcomed the announcement of our new product to demystify online auctions and to help them to create a new revenue stream. The first provider is now live on Rightmove, with four more scheduled to go live in Q3.

The strong demand from home-hunters has led to many New Homes developments being sold out completely off-plan, all but removing the requirement for developers to advertise. We have seen a reduction in development listings (although the number of developers advertising with us has remained constant) and reduced spend on digital marketing. Pleasingly, despite the strong demand for New Homes, 21% of New Homes developments have upgraded to our new Advanced Development Listings subscription package, launched in April, which helps them to market more efficiently, providing better engagement and lead generation.

Ongoing foreign travel restrictions impacted our Overseas listings business, but the other Breadth businesses have all performed strongly; particularly Data Services, where our unique ability to bring insight and clarity around property data and trends has been highlighted by the busier market; and Third-Party advertising growth, driven by our ability to reach a specific target audience at scale.

Our teams underpin everything that we do, and we continue to invest in the welfare of our employees and in ensuring that we support our people through the challenges of working from home and the impending return to the office environment. Initiatives have included a recent programme of wellbeing workshops called "How to Thrive"; enhanced benefits, including mental health support; and ensuring that all of our first aiders are trained in mental health triage. Our return to the office will be phased in and on-going there will be an enhanced flexible working policy.

We are proud that our board is gender balanced and we have surpassed the Parker Review targets, and we are committed to enhancing diversity and inclusion across our teams. To ensure our recruiting embraces all forms of diversity we are using specialist recruiting platforms to reach out to potential recruits with diverse backgrounds and the LBGTQ+ community. Recognising that we have a role to play in developing the next generation of talent and increasing social mobility we are delighted to be launching the Rightmove Generating Genius Scholarship for a university student.

3

Financial performance

Revenue

Revenue increased by £55.1m/58% year on year to £149.9m (2020: £94.8m), reflecting both the reversal of the 2020 covid discount and strong product and ARPA growth during the first half of 2021.

H1 2021

H1 2020

H1 2019

Change vs

Change vs

Change vs

£m

£m

£m

2020 £m

2020 %

2019 %

Agency

109.6

66.6

104.8

43.0

65%

5%

New Homes

25.3

17.3

27.8

8.0

46%

(9%)

Other

15.0

10.9

11.3

4.1

38%

33%

Total revenue

149.9

94.8

143.9

55.1

58%

4%

30 June

31 Dec

30 June

Change vs

Change vs

Change vs

2021

2020

2019

2020

2020 %

2019 %

Agency branches

16,052

15,922

16,768

130

1%

(4%)

New Homes devs

3,064

3,275

3,441

(211)

(6%)

(11%)

Total membership

19,116

19,197

20,209

(81)

0%

(5%)

Agency revenue increased by £43.0m year on year to £109.6m, as customers increased their spend, 2020's discounts reversed and we saw strong product purchase and package upgrades in response to the buoyant market. Agency ARPA(6) increased by £445 to £1,130 (June 2020: £685). Agency customer numbers increased by 130 branches in the first half of the year to 16,052 - mostly from new independent, single-branch agents.

New Homes revenue increased by £8.0m year-on-year to £25.3m, with the reversal of the 2020 discount, and New Homes ARPA(7) increased by £493 to £1,329 (June 2020: £836) per development per month. However, the New Homes market has been forward-sold for the entirety of the reporting period; some developers reduced discretionary spend on our suite of digital advertising products and development listings decreased by 211 developments in the first half, as developments sold out and did not need to be advertised.

Other revenue increased by £4.1m to £15.0m. Third Party increases were driven by the higher website traffic, which resulted in additional sold inventory; demand for Data Services products increased due to the activity in the property market, which drove higher volumes of our Surveyor Comparable Tool and Automated Valuation Model; Mortgage revenues were up due to the contractual year two price increase; Commercial revenues increased as customer numbers grew; and Overseas was broadly flat due to the adverse impact of the Covid travel restrictions.

Administration costs

Operating costs increased by £1.9m from £33.1m to £35.0m. This includes a credit in relation to the release of the £2.4m provision for the Van Mildert contingent consideration, as the possibility of meeting the threshold performance criteria within the remaining timescales, to the end of 2021, is remote.

Excluding the provision release, operating costs increased by £4.3m:

  • £2.5m was due to the higher share-based payments charge, reflecting the significant credits made in 2020 and new awards made in March 2021 for the annual PSP and DSP schemes;
  • The remaining £1.8m increase in costs is primarily due to higher headcount costs of £2.0m, from both (i) increased investment in product development and sales heads and (ii) the return to normal payroll levels, following the senior management salary savings made in H1 2020 and the timing of the Coronavirus Job Retention Scheme saving in H1 (which was repaid in H2). Technology costs also increased by £0.3m, as higher website traffic drove increased supplier costs, and other costs increased £0.7m due to investment in recruitment, training and the new mortgage proposition. The cost increases were partially offset by £1.3m of one-off Covid savings, as employees continued to work mostly at home, limiting travel and office maintenance costs.

4

Operating profit

H1 2021

H1 2020

H1 2019

Change vs

Change vs

£m

£m

£m

2020 £m

2019 £m

Revenue

149.9

94.8

143.9

55.1

6.0

Administration costs -underlying*

(32.8)

(33.4)

(32.9)

0.6

0.1

Underlying operating profit (1)

117.1

61.4

111.0

55.7

6.1

Share-based incentive charge/(credit)

(2.2)

0.3

(2.8)

(2.5)

0.6

Operating profit

114.9

61.7

108.2

53.2

6.7

*Admin costs-underlying are before the share-based incentives charge, related NI and tax adjustments

Operating profit increased by £53.2m to £114.9m (2020: £61.7m), with an operating profit margin of 77% (2020: 65%).

Underlying operating profit, before the impact of the share-based incentive charges, is £117.1m, with an underlying margin of 78% (2020: 65%). When also removing the impact of the one-off release of the Van Mildert contingent consideration provision of £2.4m, the adjusted underlying operating profit is £114.7m with an adjusted margin of 77%.

Earnings per share (EPS)

Basic EPS increased by 89% to 10.8p (2020: 5.7p; 2019: 9.9p), driven by the increase in year on year profit, together with the benefit of reinstating the share buyback programme - which reduced the weighted average number of ordinary shares in issue to 865.9m (2020: 871.7m; 2019: 888.2m).

Underlying Basic EPS (based on underlying operating profit) increased by 93% to 11.0p (2020: 5.7p; 2019: 10.2p)

Balance sheet

Summary consolidated statement of financial position

30 June

31 December

30 June

Change from

2021

2020

2020

Dec 2020

£m

£m

£m

£m

Property, plant and equipment

13.3

13.9

12.7

(0.6)

Intangible assets

21.6

22.1

22.3

(0.5)

Deferred tax asset

3.0

2.8

2.7

0.2

Trade and other receivables

22.0

23.5

12.8

(1.5)

Contract assets

0.1

0.3

0.4

(0.2)

Income tax receivable

0.1

1.2

-

(1.1)

Cash

67.7

96.7

50.3

(29.0)

Trade and other payables

(22.0)

(18.9)

(22.5)

(3.1)

Contract liabilities

(1.8)

(1.6)

(1.3)

(0.2)

Lease liabilities

(12.0)

(12.3)

(11.5)

0.3

Deferred tax liability

(1.0)

(0.9)

(1.0)

(0.1)

Provisions

(1.2)

(3.6)

(3.5)

2.4

Income tax payable

-

-

(0.9)

-

Net assets

89.8

123.1

60.5

(33.3)

Rightmove's balance sheet as at 30 June 2021 shows total equity of £89.8m (December 2020: £123.1m). The decrease in net assets from December 2020 reflects the strong trading position and the return of cash to shareholders by way of dividends and share buybacks in 2021.

Trade receivables of £18.2m, included within trade and other receivables, are in line with December 2020 (£18.3m). Debtor days have reduced and reverted to pre pandemic levels, as we have now fully returned to usual business terms and ended any extraordinary extensions to payment terms. Trade and other payables increased due to timing of accruals. Trade payments continue to be made in line with contractually agreed terms.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Rightmove plc published this content on 30 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2021 06:08:12 UTC.


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