Rightmove this morning announced another set of bumper results with revenue up 10% and operating profits up 12% for the six months to the end of June. One City analyst, Anthony Codling, said the results “defy gravity”.
It had revenue of £131.1m, compared with £119.5m for the same period last year, and operating profits of £98.2m, up from £87.6m, making its profit margin 77%, up from 76.2%.
Shareholders will be delighted with an interim dividend of 25p, compared with 22p a year ago.
Average revenue per advertiser was also up £76 with the average agent and new homes developer paying £987 per month. Rightmove said it expects its customers to be paying £80 more this full year, compared with last.
Altogether, Rightmove has 20,450 agents and developers using the site. Agents are spending an average of £940 per office per month, but some are spending more: as at June 30, there were nearly 1,500 branches spending £1,250 or more per month.
Despite speculation that agency numbers will have dropped in light of market conditions, this was not so: the number of agency branches subscribing to Rightmove was broadly unchanged at 17,585.
Agents delivered to Rightmove the lion’s share of its income, at £99.3m, up £8.7m year on year.
Rightmove also said site traffic is up 5% year on year, averaging 139m visits per month.
CEO Peter Brooks-Johnson said: “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.”
In this morning’s report to the City, Rightmove said it keeps investing to “deliver the most engaging experience for home movers” and said it had a “culture of restlessness”.
Rightmove also announced plans to sub-divide its shares: a general meeting to be held on August 22 will be asked to approve plans to sub-divide the company’s ordinary shares of 1p each into ten new shares of 0.1p each. Rightmove says this will be good for smaller investors, including its employees who are members of the share scheme.
City analyst William Packer of Exane BNP Paribas, who had been forecasting a 1% decline in membership, said today’s results were “solid”. He said the one small negative was a 6% reduction in enquiries, although this could improve the quality of leads.
Anthony Codling, of Jefferies, said the results defy gravity – again.
He said: “Once again Rightmove has demonstrated the power of its business model.
“Whilst estate agents are facing challenging markets and tightening their belts, Rightmove has raised average prices by £76 to £987 per month and generated underlying operating margins of 77% (which means for every £100 spent by customers, Rightmove generates £77 of underlying profits) and in the face of housing transactions falling and house prices softening, Rightmove is on track to deliver full year price growth of £80 per month.”
Warm and fuzzy, but well done again RM.
We had our chance, so no complaints please.
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Congrats to on the market… I wish you did giffs on here. I would have a runway with a massive plane missing it and falling into the sea.. FAIL
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Not so much hats off, more trousers down and bend over, parasites
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The mathematics of this mean agents are giving Peter Brooks-Johnson £760 profit each month before they are putting a single fork full of food in their own mouth, that is obscene and exploitative, it needs to stop.
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Totally Agree !!
The “Dick Turpins” of the property industry. At least Dick had the decency to wear a mask before he politely robbed “his customers.”
This lot are bare faced about it and what’s really surprising is the customers moan and groan but every year go down Rightmove Highway to be robbed again.
Perverted or what?
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Imagine posting a thumbs down to this comment. Morning Dom, morning John.
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If ever there was a case of ‘Biting the hand that feeds you’………………..
Whilst the very industry that props these guys up is going through hardship these boys are having it away and simply laughing in our faces. I long for the day that OTM pulls its digit out and becomes a viable alternative as there will be very little loyalty towards RM, it is an obscene set of figures in the current housing market climate!
It’s the greatest trick the devil ever played, if that’s not too dramatic?
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It was viable if we had all joined and filled its shelves – Granted the OOPR was a tricky one for some BUT now the OOPR is gone, do we not simply all join and then decide stick with all 3, just 2 or just 1 and if 1 which 1?
You only need to find the magic balance where agents who ONLY display on OTM makes it no.1… and I would imagine that number is not that far away. (Forget Branches “Signed up” we are talking “properties to be seen”)
But for the fear of being drawn in to the old OTM -v- RM -v- Z debate… lets crack on as we are…. moan when it’s bad and forget when it’s good.
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”You only need to find the magic balance where agents who ONLY display on OTM makes it no.1… and I would imagine that number is not that far away. (Forget Branches “Signed up” we are talking “properties to be seen”)”
IMHO that would only serve create the same issues (that have been discussed at length) in terms of pricing. One portal, seen as the ‘darling’ of the industry (for a time); Once one gains the majority of agent listings, their power to increase pricing at will, becomes assured.
Possibly akin to leaving an abusive relationship with an armed robber, only to move-in with a fraudster?
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Going head to head with Rightmove to knock them off their perch is going to prove fruitless with a similar business model. You have to offer agents and home movers something different to really get traction, gain market share and break people away from what they are used to. It will be interesting to see what OTM have up their sleeve that really sets them apart and makes them a genuine contender and alternative.
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Fair pricing and that feeling that you are not being r@%&£ each month.
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It is like a dog that one feeds until it reaches such a massive size that it becomes uncontrollable.
Well done RM
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Google considered taking on these guys, but decided they had other fish to fry. But this is a new day – all the attention has gone to social. Let’s see how this lot fare when social media ads really get going.
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Agreed. I think agents are becoming increasingly aware digitally, or aware enough to employ someone who is. Rightmove products are frankly guff playing on agents insecurities, but of course you don’t stand out in a crowd if everyone has the same bells and whistles. I’m cutting our RM spend to the bare minimum to divert to other things and giving serious consideration to canning RM in a year (still the one everyone is on in my patch). I’m frankly staggered that any agent would have now made the call to list on 3 portals, but I see a number have. Bonkers in my view, better off sponsoring a school fete or some such thing.
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Try putting some of that saved money on targetted facebook advertising, you could be surpised by the improved ROI.
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It’s difficult to criticise Rightmove for simply taking the money of Estate Agents committed to advertising in the arena that most of the buyers and tenants are looking in, what I think is worthy of condemnation however is with their own statistics showing property stocks have fallen, property is not selling as easily and fees are dropping, THEY still increase their rates.
That I’m afraid isn’t good business, its just extortion and buys no customer loyalty.
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Rightmove are fully aware how unliked they are by their customers. They have nothing to lose.
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I don’t think they care how disliked they are. Why? Because everyone keeps paying their fees, regardless of increase, month after month, year after year. Until that stops and agents walk away from them it will continue I’m sorry to say.
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We need to take stock away from the RM monster and take it to OTM for the time being. In order to keep it in check
We also need to have another forward plan in place, where agents actually nominate a team to have a non profit making portal. Where a % is paid from our industry to a charity nominated by all agents. This way we also do our bit for the community and take control of our outgoing portal cost.
We need to do it now before too many good agents close.
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I am not sure I agree with all of the OTM sentiment.
It failed to deliver what it promised, and will only go the way of RM eventually. Of that there is no doubt.
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I think its been mentioned before but the idea of a register of agents who have expressed a wish to terminate RM contracts could be compiled and when it hits a certain number, say 500 a ‘ class action ‘ notice is served along the lines… We the undersigned give you RM notice to..
Its a job for Propertymark if they could be bothered….. they could have a nice little section on the website with a counter totting up the numbers as the agents join ( sorry my imagination is running away with me )
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I’m up for destroying some shareholder value, how to speak with one voice?
Seems to me that the impossible task is consensus and the will to see it through, call it collective purchasing / unionising / class action whatever, there are half a million people in our industry of which maybe 20,000 are decision makers, the destruction of a £5B PLC would make headlines well outside our industry and give pause to hopeful imitators, Brits used to be good at tall poppy syndrome
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The secret is to create something that offers all of the leadership of a corporation yet is whose destiny is controlled by the stakeholders in our industry’s case that is House builders, Corporate and Independent agents.
It is pointless destroying Rightmove; Rightmove is a good service that simply charges too much. I would suggest that is about to change. Someone who is well respected and totally independent of anything I have done assessed Rummage4.property yesterday. “Robert you have managed to eat the elephant, I now understand what all the fuss is about”
I have created something that compliments OTM and quite happily runs independently of it. Rightmove won’t be destroyed it will be bridled.
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Then for Gods sake man, bring it
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We are in final stages of stress testing our preparedness to deal with the sort of volume we’re expecting. Russell (Rummage4_sales) on twitter is beginning to collate early adopters but is deliberately restricting sales bumpf that will give Miles or Alex a clear view of what were up to.
We have built something a bit different, and the roll out will take a while but we have a strong case study that has been running for 30 months that shows what we’ve built works.
Follow and DM Russell as an an initial contact so we can translate monikers into Agent names without taking advantage of Eye ahead of Suzanne doing an official release.
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Thank you Robert, I’ll do precisely that
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Thank you
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“Agents are spending an average of £940 per office per month, but some are spending more”. Just in case we didn’t know what ‘average’ means.
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Surprised to know some are spending less. The entry level package was quoted just over that.
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Around £5 million a week income, around £4 million of it profit. Probably around £5000 a week to keep the website running, the rest salaries and bonuses.
A monopoly.
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I Repeat my request;
NAEA to get a group account under PropertyMark brand, same scenario as PB. We big discount, propertymark gets known.
As usual NAEA do nothing for members…… but please tackle this
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“Shareholders will be delighted with an interim dividend of 25p, compared with 22p a year ago.”
“agency branches subscribing to Rightmove was broadly unchanged at 17,585.”
Now I’m no shares analyst but…………..
How the fudge are PB shares worth anything?
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Can’t blame rightmove for behaving like this. They stretch the elastic band and, when it doesn’t pop, they continue to stretch it. When exactly is breaking point here people? How many agents are paying rightmove their extortionate fee every month then having to fund their business through overdrafts, loans and credit cards? Can anyone name any other industry where just ONE supplier has such control over the marketplace? I don’t find a 77% profit margin admirable, I’d call it abusive and exploitative. Whatever the monopolies commission has morphed into needs to take a close look here.
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I’m well documented on PIE re my immense dislike of Rightmove and fervent support & subsequent dislike of OTM. Zoopla don’t feature as they are a non runner in my location.
Every year we howl at Rightmove’s results, nothing changes. Every year we howl at increased annual Rightmove Fees, nothing changes …..and so the record plays on. Noting I have NEVER paid one £1 more than the basic Rightmove package, NEVER any extras! So, my business hasn’t bloated the RM Monster, merely gave it what I had to.
Until clients stop expecting to see their property on Rightmove, until OTM becomes viable? or another portal storms onto the horizon folks we will be sucking up Rightmove’s Annual Showboat!
In the meantime, get your fingers out and focus on your business, your clients, your service, your market etc etc…. tough times may be ahead however moaning about portals won’t drive your business? You have to drive your business.
If OTM or another portal ever secure No 1 slot and dethrone Rightmove and your clients scream only for that portal, then you can say goodbye to Rightmove ……in the meantime, suck it up ….agents are good at talking about how they will rebel, however history shows that we don’t actually rebel.
Focus on your business & your clients, that’s what delivers your income …..for now, Rightmove and others are a service that we are expected by clients to use. Sad, but that’s the truth.
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Probably the first/only sensible post on this page.
I often go a few weeks without looking at PIE because all I see most of the time is a bunch of disgruntled moaners moaning. That’s not to say I enjoy high RM fees, but I also wish I paid less in petrol, business rates, mortgage, etc. At some point we just need to take responsibility for our own decisions – after all using RM is optional – and get on with business and increasing market share.
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The CMA will only act if enough people shout.
I filed a formal complaint about abuse of a dominant market position about three years ago and have emailed them further every year when the results come out. Another email has gone to them this morning.
I know I’m wasting my time. But, if 100 Agents all filed a complaint, and then a 1000, then eventually they would have to look at it.
Its easy enough to do and just takes a couple of minutes on their website.
Why not do it.
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Do they not respond? If they do what do they say? I presume it would be a case that there is sufficient competition and that you are welcome to cease using them.
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The last response was a ‘holding’ one.
Dear
Thank you for contacting us again on 23rd February 2018. I confirm this additional information has been forwarded to our pipeline intelligence team for consideration. I am sorry if you felt our earlier responses did not answer your enquiry.
I can assure you that the Pipeline and Intelligence Team will review what you have sent to us. All the information we receive is useful as it can potentially aid our work on our current projects or help with the development of new projects and programmes of work.
In seeking to target both our resources and enforcement strategy, we use our prioritisation principles to consider a range of factors including impact on consumers, strategic significance, risks and resources. However, we are not generally able to correspond with people who contact us about our decisions on whether we will give detailed consideration to this matter. As I mentioned in my previous reply, even where we do not immediately take up a case, the information you provide to us is valuable in helping us to build up a fuller picture of how markets are working and may in time lead to us taking some further action.
Thank you again for contacting us
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So about as useful as the ASA confronting PB
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In 2006 .. the average invoice for an agent using Rightmove was £183 pm
Today, its £940 pm ( a rise of 413.6%)
If it had risen by inflation (40.5%) …… it would only be £257 pm.
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