In the same presentation yesterday at the Guild of Property Professionals conference, Anthony Codling also offered his view on the success of Rightmove and the growth in its profits, relative to the estate agents it serves.
Taking the example of estate agency group LSL, he said he was forecasting the firm’s profits to be 50% higher in 2017 than they were in 2007.
Over the same time period, its share price has risen around 30%, he said.
He then compared this to Rightmove’s profit growth over the same period and revealed, to gasps from the audience, that it had been 472%, while the value of its shares rocketed by 1,050%.
He said: “For every £1 you give Rightmove, it puts 76p in its back pocket as profit.
“Let’s say, and this might be a bit out there, the industry owned its own portal, and it had the same cost base as Rightmove, your costs would be £220 a month, not £900 a month, which is what the average agency pays Rightmove.
“I am not saying it is right or wrong — I am just an analyst and I am just showing you the figures.
“I happen to think Rightmove is the best business I have ever analysed.”
By contrast, he said he viewed the flotation of OnTheMarket later this month as a “missed opportunity”.
He asked: “How can a mutual have external investors and keep the costs low for you?
“If I were an investor I would be saying: ‘I will buy your shares and I look forward to seeing those 76% profit margins soon.’
“I wish them well but I think it was a missed opportunity for the industry.”
Anthony Codling’s firm Jefferies is the broker for Zoopla, with other clients including LSL and Countrywide.
Blood boiling news.
Time for a revolution.
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A little known fact –
What Mr Jeffries omitted from his article is the fact that Rightmove has been buying back its own shares on a daily basis (between 12,000 & 20,000 shares every week day since 2007) using the profits from agents’ subscriptions. Officially known as a “share buy back programme”.
The effect of this action on the resulting earnings per share (EPS) and share price is to send both in a northerly direction thus increasing the value of shareholdings for those owners and directors of the company who retain their shareholdings.
A typical announcement is as below, this one from 1st Feb 2018;
“Rightmove plc (“Rightmove”), the UK’s no. 1 property website, announces that today it purchased 16,600 of its 1p ordinary shares at a volume weighted average price paid per share of 4455,303p. The highest price paid per share was 4478.000p and the lowest price paid per share was 4428.000p. Rightmove purchased these shares through UBS Limited.”
The number of shares purchased represented 0.0182% of the voting rights attributable to the total ordinary shares in issue prior to such purchase. The purchased shares will be cancelled.
Rightmove has purchased to date 38,901,838 of its own shares since announcing a share buy-back programme on 28 December 2007.”
That’s 38.9m shares using agents’ money/profits.
“The total number of ordinary shares in issue (excluding treasury shares) following this announcement is 91,177,597. Rightmove holds 1,825,973 shares in treasury.
In accordance with Article 5(1)(b) of Regulation (EU) No 596/2014 (the Market Abuse Regulation), the schedule below contains detailed information about the purchases made by UBS Limited on behalf of the Company as part of the buyback programme.”
That’s what the subscriptions are being used for……
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Agents are now working in the realm of Rightmove.
Did you know that realm in German is REICH!
MMMM
Kind of catchy new nickname?
Perhaps we ought to call real-time communications ‘enigma’ as I feel sure that this allows them to do a lot more than upload your properties instantly!
Ever wondered why it was made mandatory and offered for ‘free’?
RM never, ever, do anything for ‘free’!
Interesting name real-time, says what it does on the tin.
Memo to Springate, if you tread on bigger snakes they will bite you unless you are smart enough to build a wall between you.
If you fail to build a wall, you can always press for a float before the venom from those two other snakes kills you?
Therefore, any exit plan must allow you to unfairly runoff far away first, that is unless those in the know, tie you up preventing you from doing so?
Can anyone explain to me what those OTM USA management share options actually mean?
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Mr Jefferies (SIC) was using Rightmove’s Operating Profit not Earnings Per Share so the number of shares in the analysis is irrelevant.
Share buy backs, rather than being a little known fact are a common way for companies to return profits to shareholders. US investors particularly like share buyback programs as they are more tax efficient than ordinary dividends. Rightmove’s cash return policy since IPO has been 1/3 dividend 2/3 share buyback. Whether paid out as dividend, used to buyback shares or left sitting in the bank, a company’s profits being to its shareholders, not its customers, unless of course it’s customers are its shareholders. (note to self clients as shareholders, thinky emoticon) Autotrader has a similar policy and Autotrader’s Chairman is apparently a former CEO of Rightmove.
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Obscene.
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Anyone who was surprised by these figures must have been asleep for the last 10+ years
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As the man says, we agents missed our opportunity with OTM Phase 1 to do something about it. Crying and spilt milk come to mind.
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Rightmove = Blood sucking leach. Time for change.
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Right Move should buy Countrywide before PB do. If you’re going to kill the “Golden Goose” you might as well become one?
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So, the broker for Zoopla has a pop at OTM. Maybe not entirely impartial?
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If you mean the broker for Z after analysis has a pop at OTM and then after analysis says that, comparatively in relation to profit growth, the sun shines out of RM’s nether regions, yes that is the broker for Z that you refer to who isn’t just a broker for Z. Is that the one you mean?
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Like lemmings, too many of us have listened to the doom-mongers about OTM yet have blithely ignored the ridiculous exploitative margins RM have foisted upon us. Throughout the recession, RM were able to set aside the difficulties we were all facing and hit us with offensive price hikes that none could avoid.
In my view RM shareholders have had their chance and done magnificently well in exploiting our shambolic resistance and reluctance to rally behind the only choice that OTM presented. We have only ourselves to blame that we cannot offer our clients genuine choice in marketing tools because of the disproportionate RM take from our advertising budgets.
If the lion’s share of ownership of OTM post-float enables us to fight back, to me that is a hope worth clinging to.
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There is an option for OTM that no one else appears to have thought of or said. I won’t on here because I want to see if I can make it happen but I will say……MGCBSAOMDIALPM
If anyone wants to take a flying guess email it to me at the Ideas Network in@agentv.co.uk
A clue is the A in each case stands for And….with each other letter the start of the word
BSOS23PC
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We started PrimeLocation, Ian Springett told us we should sell it – in fact he gave it away as everyone can now see.
Why would anyone trust him again?
My solution – buy shares in RM.
OTM with external shareholders is just another attempt to get this website off the ground and it’s sadly not going to work. We need a young kid who understand the internet not an ex banker.
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Rightmove also had a bit of creative accountancy before they floated.
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Is it time to form a mutual organisation for all of the independents to club together?
Sorry, I couldn’t resist
We have created the Goliath that is continuing to raise its fees at the expense of us – it provides little more than a shop window.
Rightmoves arrogance has no boundaries.
It’s premium products are a waste of money, and its bias towards the multiples and franchise outfits should be investigated by the competition authorities; they pay a fraction of the one man band agents; which gives the multiples an advantage.
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Is it time to form a mutual organisation for all of the independents to club together?
YES, YES, YES …….a few of us have already made a start of rallying together…… contact us at the Ideas Network in@agentv.co.uk
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Think of Rightmove whilst humming the Shaft Themetune – S H A F T
To the poster who commented earlier about Our Industry supporting OTM or NOT supporting OTM? ……don’t get me started! It’s the same Themetune – S H A F T!
How long does it actually take, how much money does it actually take for these self-proclaimed OTM Chief Bubbas to actually S T A R T delivering!
As a long, long suffering Day 1 Gold Member I have witnessed OTM’s monumental inactivity, monumental loss of focus/direction with the only constant being Dummies like me paying monthly for very little!
If I was to hazard a guess? … OTM V2 The Personal Chief Bubbas Reward Scheme WAS the plan all along!
No matter, our money has now been burned and OTM V2 now stand at the gates shouting “THIS TIME BABY”…… well, the sh*t talking time is up and it’s TIME TO DELIVER OTM.
Show us what you’ve got a) The Holy Grail or b) The Donkey’s Tail!
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Brilliant, Brilliant and MORE Brilliant with your comments on SHAFT!
I am sat here crying with tears of laughter and can’t get the theme tune out of my head.
All agents should create their own listing site
mmmm… me thinks this has been tried before
Perhaps someone should do this properly???
I know that some USA Realtors are making a good job of taking on Zillow amongst others!
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Rightmove make big profit, yet we have just been told our one office Rigtmove charges are increasing next month!! Complain as we do about OTM, something has to be done about these crazy costs? Competition should be the way forward, but strong.
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We are all too afraid to take the leap and create the new competition. We bleat about the problems, but we also put down alternatives and don’t give new entrants a chance. OTM problem was there was nothing differentiating it from the rest – no extra draw for us and none for the consumers so it was never going to win. Its the smaller offices that suffer. The bigger agencies get discounted rates and those selling £M+ properties don’t have a problem with the costs
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The response to this report clearly signals a call to arms.
Although the aims and ideals of OTM at the outset appealed, the ‘only one other portal’ put many firms off. There was no need for it, agents don’t like being told what to do.
Neither do estate agents like being taken for suckers. Rightmove have us over a barrel and they’re laughing all the way to the bank. I anticipate a similar, more carefully organised, ‘mutual’ would now, in the face of crass exploitation by RM, attract a mass following.
I haven’t got what it takes – please step forward someone who has.
I, and I anticipate the vast majority of others who baulked at the well intended but flawed membership criteria of the ‘original’ OTM will back it to the hilt.
As I said in the first post submitted to this article – Time for a revolution.
If crowdfunding can work so well, why can’t ‘agentfunding’? Funding themselves, not rip off portals!
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Property Ear….can you contact me at in@agentv.co.uk
We might have something you would be really really interested in !
BSOS23PC
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Agents hate each other to their own detriment and will not collaborate
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I don’t hate my local competitors…. I just try and be better than them. If I met them in the pub I would sit and have a drink with them. If they would I could work with all of them for the greater good.
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Would it be unreasonable to expect someone, anyone, from OnTheMarket to have come on here today and say ‘Hey, hang in there, the cavalry is on it’s way!’
Something, anything, to give a bit of pep to the idea that one day RM can be brought into check?
Instead, not a dicky bird. And that says it all, unfortunately.
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Too Right!
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Oh dear, just dropped by here!
it has and always will be the tail wagging the dog! RM and the rest have us right where they want us! Whilst we continue to pay their ridiculous fees, they will quite happily take it and continue to make their gigantic profits. So if anyone is to blame it is US. Sorry guys, but we can talk about it till we are blue in the face. Actions speak louder than words, and if we want any kind of change its us that have to drive it
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