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.”