Rightmove announces massive slump in revenue and profits in latest results

Rightmove has just issued its annual results to the City.

Rightmove has reported a sharp drop in both revenues and profits in its annual financial report for last year, as it offered discounts to estate agents to help them through the Covid crisis, while membership numbers continue to fall.

Revenues were £205.7m, down from £289.3m the year before.

Operating profits were £135.1m, down from £213.7m.

Average revenue per agent (ARPR) listing properties with Rightmove – a closely watched metric – fell 28% to £778 a month, the company said, but it did increase 2% year-on-year in December to £1,103 – a rising trend that is expects to continue.

Rightmove predicts that ARPA will increase from the December 2020 level at a rate of growth towards that seen in 2019.

Traffic to the Rightmove website was up 31% to 2.1 billion visits over the course of the year, with collective time on site over the year at 15.9 billion minutes, up from 12.1 billion 2019.

The number of estate agency branches and new homes developments listing with Rightmove fell year-on-year.

Membership numbers dropped 3% to end the year at 19,197, down from 19,809, with 425 fewer agency branches and 187 fewer new homes developments listing with the website. 

Rightmove says that there were over one million UK residential properties advertised on the portal during 2020, up 11% on the previous year.

Peter Brooks-Johnson, chief executive officer, said: “All of our lives were upended in 2020. Looking back at how our teams dealt with a multitude of challenges and adapted to help our customers respond to new regulations, becoming a key information hub and responding with accelerated innovation to the record home hunting activity that followed, makes me immensely proud. I’m also extremely impressed by the incredible resilience and adaptability of our customers, and I’d like to thank them for their support.

“In a year when we stayed in our homes more than ever before, people continued to turn to Rightmove for their next move and for real-time information, helping us to extend our lead in the market. The record traffic and enquiries that followed the reopening of the market led to us sending 51 million property leads to our customers. Strong activity has continued into 2021 and we recorded our busiest ever January for traffic.

“Digital solutions emerged as even more important to our customers as they navigated the different restrictions and invested in our tools to help them handle the record interest in property from home hunters.

“We remain mindful that 2021 may bring further Covid-related challenges, but we will continue to deliver our strategy to help make home moving easier, delivering the best solutions to our customers and the most engaging experience for our users.”

Rightmove declared a final dividend of 4.5 pence a share, having cancelled its 4.4 pence a share the previous year to conserve cash.

It says £30.1m of cash returned to shareholders through share buybacks in 2020, with the share buyback programme resuming in March 2021. This is down from £148.8m a year earlier.

Rightmove’s share price currently stands at 606.4p.

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7 Comments

  1. Anonymous Agent

    If only this happened again next year and the year after…

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  2. MarkJ

    I havent “found my happy” here.
    I’d like to know if they spent the £30.1m of cash buying back their own shares before or after they paid back their Furlough scheme claims.
     
    As I thought….. their profit was just massive ….not the usual obscene.
     
    When we talk about mental health it perplexes me that something like this is so detrimental to a lot of peoples mental health but it endures year after year. Shame we cant rely on the Govt apparatus to do whats its meant to do….
     
    If the Competition and Markets Authority dont take a look at this market now….theres no hope!  
    Heads need to roll at the CMA….. 
     

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  3. JWVW

    Still a 60% profit margin – a staggering level in any business. RM must be thanking their lucky stars that Estate Agents were able to remain operating for most of 2020, and to the Chancellor his help-to-buy and stamp duty holiday. The headline in this article is quite wrong.

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  4. Neil Robinson

    It’s difficult to have sympathy for Rightmove, here, I’m afraid.

    I admire any business who gets themselves into a position of necessity, where the perception is (generally) that you can’t survive without it. The burn here is that it literally is only perception – by no means do all our buyers come from Rightmove, but vendors THINK they do, a bit like the local rag before it. I’m sure every agent thinks the same.

    And that admiration would continue if you felt they were on your side. Some hope.

    No, that admiration disappears when you’re made to feel like your knackers are in a vice, and every year, the turn gets a little tighter. You get no thanks, no contact, no appreciation, no innovation. The nearest you get to conversation with these guys is a shrug of the shoulders and the option to leave if you want.

    Yeh, it’s nice that agents were helped out during lockdown, but again, that only came because of a backlash, didn’t it?

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  5. WatchingwithInterest

    I would like to see them engage more with agents and give trust to us they offer value for money.

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  6. scruffy

    The reality is that as a supplier, RM has created and (so far) successfully maintained its position as one of necessity.

    But any business owner looking at its marketing overheads will soon surely realise that as the web and portals in particular have now driven local print media almost to a point of irrelevance, savings needed to meet these rising costs will not be met by rising property values. This was often cited in the past as justification for rate increases.

    So where do the savings have to come from ?  Inevitably, these have to be met in some way by compromising the service we can offer our clients; ultimately RM’s bread and butter. We have all learnt leaner means of operating in the last year, but as the market and activity resets to normal levels, can anyone realistically afford not to take a stand against this 21st century highwayman ?

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  7. Ostrich17

    The backlash from EA in March came as a big shock to RM and they had to backtrack.

    Some of the detail in the results indicate that there may have been a significant cost attached to that decision(over and above the temporary discount period).

    At H1 prelim announcement RM were indicating that the number of EA Branches was 15727 at the end of May – this recovered to 15767 EA Branches when the final H1 results were published. RM were desperately trying to stop a mass exodus of members.

    Fast forward to today and there were 15922 EA Branches at the end of 2020, however December 2020 ARPA is only £1103 compared to Dec 2019 of £1083 – a sign that RM has been recruiting members below the expected rates or revising existing fees.

    You can be sure Connells will be negotiating lower fees to match what C/Wide were paying, and pressure from Boomin’ and others means it will not be easy for RM to maintain the usual rate of profit growth.

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