Rightmove shares fell sharply yesterday after it told the stock market of its deferred payment scheme for agents.
Analysts at Jefferies criticised the move, saying that it could damage “Rightmove’s fragile relationship with agents”.
In yesterday’s announcement to the stock market, Rightmove described “our plans to help support our customers given the current backdrop”, saying that some agents would have cash flow concerns.
Agent numbers do not appear to have fallen at Rightmove so far this year, said the statement: the portal yesterday said that numbers were “in line with commentary made in our recent 2019 full year results”, and said traffic to the portal has continued to be strong.
Rightmove also sought to reassure the City, saying that while it is too early to give guidance on this year’s financial results, “we have a highly cash generative model”.
Rightmove also revealed that all its employees are now working remotely.
CEO Peter Brooks-Johnson said in the update: “At Rightmove we are doing everything in our power to rise to the challenges of COVID-19.
“Our focus, first and foremost, is on protecting the welfare of our employees and our customers.
“We also continue to run the business with a view to delivering long-term sustainable success and remain focused on the interests of all our stakeholders.”
Despite yesterday’s fall in Rightmove’s share price on the announcement, City analyst William Packer of BNP Exane Paribas described the deferred payment scheme as sensible.
In a note to investors, he said that coronavirus was likely to result in a “big hit” to estate agency.
He added: “We think the move to give a payment deferral to agents is a sensible one, prioritising the long-term relationship with agents and helping them through any cash crunch.
“We expect today’s announcements to weigh on Rightmove investor sentiment. That said, we see Rightmove as well placed within a sector context and reiterate our outperform rating. The group is net cash, high margin, defensive subscription models and well placed to prosper once the COVID-19 hit recedes.”
However, Jefferies changed its mind, first welcoming the scheme and then issuing another statement saying “We were too quick on the draw”. It had apparently initially thought that the scheme was a fee cut, not a deferment.
Jefferies analysts said that “what has actually emerged is something more damaging to Rightmove’s fragile relationship with agents”.
Jefferies added: “Rightmove had the opportunity to reset its relationship with agents at this critical moment of national unity: its chosen act of largesse, we think, will have the opposite effect.”
It also said that the qualifying criteria would “raise some hackles”.
Rightmove’s shares fell by more than 17% on the announcement, but recovered to end the day 7% down at 468p. In early trading today, the shares were down again, by 3.8% to about 451p, but by this afternoon had recovered to put on about 1.2% over the day.
We’re giving notice to RM today as are a number of other agents have already done in our region (Coventry & Warwickshire). The beginning of the end for Rightmove, they’ve made a huge mistake and will suffer the consequences now.
I’d encourage all other business owners to now consider their position carefully.
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“Our focus, first and foremost, is on protecting the welfare of our employees and our customers”
Fixed that for you –Our focus, first and foremost, is on protecting the wealth of the shareholders
ARPA of £1088 is only that low because the subscription paid by mid size regional agent and smaller independents is higher than £1088. the large agents and non geograpgic agents pay less.
If say a large non geographic agent and a large corporate agency suddenly stopped advertising with Rightmove the ARPA would increase. that would then look like Rightmove are giving independent agents a right old seeing to.
I can’t see how they will put this genie back in the bottle other than by giving it away for free with no clawback and no strings
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Be assured it’s the first thing on my agenda today. Single office in the New Forest paying £1500 a month but every cancellation will hurt the bastards. First thing I did this morning was to check their share price and first thing to put a smile on my face in days. Promise I shall be professional in my notice. Let’s bring this monster down!
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Don’t think of it as just £1500, they are losing just 1 fixed cost but about £15,000 of profit from your one branch alone.
Monthly sub less (estimated) £231 x 12
yours and every subscription they lose is coming of the bit their shareholders love the most the profits
Well done Jacko!
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Just given RM notice.
Enough is enough.
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Also leaving Rightmove!
Have sent a notice email, with no response as yet.
Now is the time people…without us and our content, RM is worth nothing and we really don’t need RM to do our job!
Believe in yourselves!
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******** -Johnson needs to recall a painful moment in corporate history
Gerald Ratner and the billion dollar speech loss
We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, ‘How can you sell this for such a low price?’ I say, because it’s total ****.
He went on to say that some of the earrings sold by the Ratner Group were
cheaper than an M&S prawn sandwich but probably wouldn’t last as long.
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City note..,damage is done and agents (rightly) are giving notice in their droves.
Beyond belief how senior Rightmove executives have misread their customers and treated them with such disdain. They have 24 hours to wake up, although it will cost them a damn sight more, as they have to repair the damage done for a start.
All downhill for Rightmove shareholders now for sure as this is the beginning of the end.
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EVERY CONVEYANCER in the country should – and I will – immediately inform their clients (those still on the market too) that Rightmove are in very big trouble and that THE house selling portals must be seen as OTM and Zoopla.
The public need to know this when selecting an estate agent for their sale now and in the future.
An agent not with Rightmove is a good business decision – if anything, they are an estate agent I would want on my side, as they are on the pulse, and I want an agent on the pulse when selling my house.
Conveyancers have influence, get those emails out to your clients (as we are all updating clients on a weekly basis now with Covid19), and ALSO put the same comments in your closing letters and property reports when acting for clients from today onwards.
Rightmove is no longer to be a necessity with a selling Agent.
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Rightmove clowns to the left of me. BNP jokers to the right…
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Investors, dump those Rightmove shares. You’ll be lucky if you can sell them faster than agents are leaving.
I’m off and feeling liberated already.
OTM is making some attractive offers and is showing more empathy in the global crisis than snug Rightmove.
How can Rightmove justify sitting on a 75% profit margin when we’re looking at maybe a as long as 3 or 4 months where people may not want strangers coming into their homes to value or view them? We may even be forbidden to do so.
The government are spending a fortune on resources and offering £330 billion in support. Rightmove have distanced itself from their customers and the whole of society by failing to do their bit.
I think any agent with moral fibre should leave this leech on the property industry. Make the saving and move to On The Market. If we get behind that portal with our content, it will be profitable and won’t need to spend millions on advertising to drive traffic, our clients’ properties will help it leave Rightmove in the shadows.
Who else has left? Is anyone keeping count of the number of agency branches they’ve lost already?
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We left RM a year ago – and TBF I was worried that it would have serious implications on our bottom line – it did!! As a small single office we saved the extortionate £36k a year we were paying to RM and our Net profit went up…. We use roughly £12k a year of the saving from RM to promote with accuracy on IG & FB, and my negs are now much more diligent and productive with the applicants we have.
We haven’t lost a single instruction due to NOT advertising on RM, and we have let and sold everything we would expect to…. don’t drink poison and expect the other person to die… 100% all of us independents do not need them – let the big boys who we subsidize pay the shareholders when you all leave… We were once their captives but realized we actually held the gun … take aim – shoot and leave.. you will never look back — and the worst that can happen — is you go back if you want.
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Agents dithering today – please take Club61’s comments and MOST IMPORTANTLY, their experience on board when coming to the obvious conclusion that you must quit Rightmove.
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ANYONE with shares in RM and a modicum of common sense should sell them today -BEFORE LUNCHTIME
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…..just this one phrase from Rightmove
” Rightmove also sought to reassure the City, saying that while it is too early to give guidance on this year’s financial results, “we have a highly cash generative model”. “
It’s like a modern day scene from Oliver ….Rightmove out there picking the pockets of their Agents ……despite knowing that they face poorer times.
RICHmove? ……Robbing from the Poor to keep for The Rich!
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Sent my cancellation notice at 8am this morning and just had the rightmove rep on the phone at 9.40am. Can I explain why I’m leaving and we have to appreciate they have a business to run too. Yes whilst we all have a business none of us are lucky enough to operate with a 75% profit and even if they halved their monthly fee’s and only made a 25% profit, a) its still a profit and b) a bl**dy good one at that. Apparently I was the first call of the day to an agent, I couldn’t help but chuckle, bigger lies than the estate agent and Brexit committee can make together! I have pondered on this for far too long but its now done and sincerely hope others will do the same. Countrywide shares have hit the floor again and with the LSL rescue now off the cards whats the opinion of others as to their longevity and survival?
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This comment from Rightmove “we have a highly cash generative model” is the most insensitive thing I have ever heard of, from a company that is bleeding its customers dry. RM board meeting must have gone something like this! Lets take as much money as we can from them, and then when the s**t really hits the fan we will rub their noses in it by saying we have loads of money! Disgraceful. We left RM over six months ago and have never regretted a thing.
Agents are having a genuinely hard time at the moment and all they offer is a deferred load.
Do the right thing and leave these leeches today!
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Notice given
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