Rightmove has published its interim results for the six months to 30th June 2020.
This period was of course dominated by the Covid crisis, lockdown, and the 75% discount that Rightmove gave its customers – after a major backlash towards its original offer of a deferred payment period.
Revenue was down 34% to £94.8m
Profits were down 43% to £61.7m against the same period of 2019 but that means Rightmove is still showing 65% profit before tax.
ARPA (average revenue per advertiser) dropped 34% to £712 (£1,077 in H1 2019)
Rightmove says membership numbers are down 3.3% since the start of the year to 19,158 (31 December 2019: 19,809) reflecting a 3.5% decline in Agency branches, together with a 2.1% fall in New Homes developments.
Q2 saw a decelerating trend in branch closures with Agency branches and New Homes developments being net positive in June.
However, compared to branch numbers in June 2019, Rightmove has actually lost 1,oo1. In June 2019 they had 16,768 agency branches, as of June 2020 they have 15,767, a 6% reduction year on year.
The company says: We confirm our commitment to our long established policy of returning all free cash flow to shareholders through a mix of dividends and share buy backs as soon as prudent.
Peter Brooks-Johnson, CEO, says:
“In recent months Covid-19 has disrupted the lives of everyone across the UK. Our customers have shown incredible resilience and ingenuity to continue to trade through this exceptional period. I am grateful for both their continued support and also their proactive engagement to ensure that home hunters have been well informed and protected. I’m also immensely proud of the Rightmove team for the unerring dedication which has seen Rightmove operate seamlessly throughout this challenging period and offer unprecedented support to the industry through discounts and accelerated innovation.
“Following the reopening of the housing market on 13 May housing market activity is at record levels, with evidence of new home hunters coming into the market with changing needs as they reassess their priorities and further incentivised by the temporary stamp duty holiday. Rightmove has extended its lead as the place home hunters turn to first for their move. It’s quite incredible that 65 of our record days have been since 13 May. I’m pleased that our customers are choosing to invest in our digital solutions to take advantage of this record demand.
“Despite the current strong market we’re mindful that potential economic challenges and further Covid restrictions in the second half of the year make it hard to predict how sustained the increase in activity will be.
“Rightmove’s purpose is to make home moving easier in the UK and the restrictions placed on our daily lives because of Covid have shown the value of the innovations we are delivering to better enable this.”
Rightmove will pay back the money it has received from the furlough scheme.
It says: “With the reopening of the property market, we had returned all employees from furlough by the end of 31 July 2020. ‘Doing the right thing’ is central to the Rightmove culture and as the immediate uncertainty of the crisis passes and given our resilience in the year to date we intend to repay the grant from the Coronavirus Job Retention Scheme (CJRS) and we will not be taking the furlough bonus in January next year. We believe that repaying the CJRS grant of £0.7m supports both our brand and our responsibilities to the wider community.”
As for some indication of a reaction to the pressure groups such as Say No To Rightmove…not a word. It is abundantly clear that Rightmove is completely untroubled by their presence.
In response, the Say No To Rightmove campaign told EYE this morning that:
“At the moment Rightmove have not declared their long term approach to servicing and tariffs levied on their member agents. Therefore the campaign is far from decided!!”
So, the trading statement issued on 23rd June showed they had lost 620 EA branches.
By the end of June that has become 580 EA branches – still on course to beat 2019 number of leavers, but a little surprising in light of all the anger generated by their “Ratner-style” PR handling of Covid !
What RM are not reporting is how many of the EA branches are physical offices and how many are virtual (hybrid) offices – they are claiming the 580 lost branches is 300 physical plus 280 virtual 😉
Perhaps P.I.E. can ask – how many physical EA branches advertise on RM ?
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How many of the 280 virtual offices were PB?
That would explain some of the £6 million saving in marketing costs PB made to April 2020.
RM will be looking to recover that in the next 6 months 🙂
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From what I can see Bricks still have the same 21 ‘branches’ listing on Rightmove they have had for the last 3+ years, Ostrich17.
Of course, that number could be very different to what Rightmove put down as ‘branches’ in their figures if done on the listings-per-branch’ scale they operate.
Bricks average total listings were down about 8.2% over the 6-month period vs 2019, which may have resulted in some savings YoY – but I can’t imaging it adding up to much of the £6 million differential you mention.
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“Agency customer numbers declined by 580 branches, of which 280 related to a reduction in branch equivalents, being virtual branches based on average property stock levels, and typically applying to hybrid agencies.”
RM seem to charge hybrid/online agents on a stock basis – as PB stock levels were down considerably, it would explain their reduced marketing spend.
I could be wrong and, unless RM publish the number of physical offices v virtual offices, we won’t know for sure.
N.B. 280 virtual offices is approx. 17% of hybrid presence on RM (“Over 90% of our agents are branch based agents…”)
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“Rightmove will pay back the money it has received from the furlough scheme” Good!
They didn’t need the money, it is embarrassing and abhorrent they were offered it and took it.
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They have read the guidance from HMRC and realised that if they do not return it they will be in breech of the ‘20 Finance Act. Wait until HMRC come after the big boys who have built cash reserves at the tax payers expense…. not only will much of it have to be returned, but the fines could be significant?
https://www.gov.uk/guidance/if-youve-claimed-too-much-or-not-enough-from-the-coronavirus-job-retention-scheme
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That and the realisation they have 160 staff too many. What furlough has done is shown Rightmove they’re simply overstaffed. If they can manage perfectly well without those staff there surely has to be a review of staffing levels. Perphaps the enforced efficiency could bu used to fund a permanent reduction in ARPA?
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Lovely attitude towards the brittish workforce…
No matter your feelings for where people work to provide for thier families you should NEVER encourage redundancies…
I’ve never made one and never will!
Petty and horrid attitude
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I ran the numbers 3 years ago that showed 5000 small agents had registers that did not support their portal spend, agent owners were using their own homes as a means of paying for advertising they couldn’t afford or justify.
Several agents I know have closed their doors permanently and made their staff redundant as a result of the reduction of competition that was created when FAP, & PL were rolled into ZPG
I’m not encouraging redundancies but pointing out that a CMA sanctioned duopoly has created an situation where it is possible for one firm to employ too many staff and still enjoy a 79% profit margin.
If Rightmove’s staff are more important than yours and your fellow agents’ staff and Duopoly profit more important than your own that’s for you to decide but they have run for 3 months with 160 less staff and have managed. That won’t have gone unnoticed by the CFO- all I’m doing is making a case that the savings they will inevitably make should be passed on to you (if you are an agent)
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On a personal level I would like to thank the Say No To Rightmove and other campaigns for being vocal particularly at the start of the lockdown.
Without your intervention Rightmove never have offered the 75% discount and potentially many agents/jobs wouldnt be here now.
You have helped a lot of people ….even if many seem oblivious to it.
Ironically indirectly you may have even saved Peter Brooks-Johnson his job after his initial total misreading of the situation. He could have destroyed large numbers of RM independent agents customer base. Agree with Ostrich17 above…..quote “Ratner-style” PR handling of Covid !
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Suspect the numbers are being manipulated – have the virtual offices been re-defined as blocks of 25 listings = 1 VO ?
RM have never reported Physical v. Virtual (hybrid) offices before – by changing the criteria for VO they can artificially inflate the number of EA Branches advertising on RM.
PB alone could have over 1000 Branch Office equivalents 😉
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Wow 37/25 means a massive hike is subscriptions for non-geographic agents, what used to cost them £23/property will now cost £11 more, £34. Ouch!
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‘We confirm our commitment to our long established policy of returning all free cash flow to shareholders through a mix of dividends and share buy backs as soon as prudent‘
Translation: We confirm our commitment to our long established policy of increasing rates annually by double digit percentages
‘….accelerated innovation‘
Where?
‘Rightmove’s purpose is to make home moving easier….the value of the innovations we are delivering to better enable this‘
Give that copywriter a bonus.
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The trouble with companies that have dementia is that they don’t know they have it……………..
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