Rightmove’s raison d’etre is to make ‘home moving easier’ – but what people might not realise is that Rightmove has a pretty easy time of it too, a City analyst has said.
George Salmon, equity analyst at Hargreaves Lansdown, said: “That’s because Rightmove’s business, running a website, doesn’t cost a lot. As the group underwent huge expansion, costs were kept to a minimum, and as such margins are around 77%.
“That’s among the highest in the FTSE 100.”
Salmon goes on: “The other string to its bow is the fact it’s a must-have portal for traditional estate agents, which allows Rightmove to keep pushing its prices up.
“Last time we heard from the group, it was raking in £1,077 per branch, per month.
“That pricing power is particularly important, because it’s offsetting declines in the number of estate agents on the high street – down 3% at the half year.”
Salmon says that “if agents keep closing and are replaced by online competitors” the group may need to rethink its per-branch pricing although of course Rightmove does have a pricing structure for both online agents and for traditional agents who cover large areas from one branch.
Salmon concludes: “Still, it’s hard not to be impressed by Rightmove’s market domination . . . when all’s said and done, we think Rightmove is an impressively efficient business.”