A shares analyst has strongly tipped both Rightmove and OnTheMarket.
Rupert Hargreaves, a regular writer for Motley Fool, says that Rightmove’s “operating profit margins are through the roof”.
Over the last five years it has made an average margin of 72%, making it one of the most profitable companies on the London stock exchange.
Shareholders, he says, have “benefited tremendously from the company’s outrageous profitability”.
Someone who invested £1,000 ten years ago would find it worth £20,000 now.
He says he expects Rightmove’s market-smashing performance to continue.
Of OnTheMarket, Hargreaves says that while it is not yet profitable, he is optimistic that the business can grab a large chunk of the market.
He says: “With traffic growing exponentially, I’m highly optimistic about the prospects for OnTheMarket.
“According to current forecasts, profitability is still some way away, but analysts believe revenue will more than double by 2020.
“Losses are expected to grow as the company reinvests earnings back into the business, which I think is a sensible course of action for this growth stock.
“As the company uses the same fee-based business model as Rightmove, I am confident that when it finally switches out of growth mode, OnTheMarket will be a highly profitable enterprise.
“It might be sensible to take advantage of this opportunity before the rest of the market realises the opportunity here.”
On Friday, OnTheMarket’s share price went down 2.3% to finish at 145p. Rightmove’s shares went down 2.85% to finish at 452.5p.
https://uk.finance.yahoo.com/news/forget-buy-let-bargain-property-095020899.html
I disagree, Rightmove is getting old and lugging around all those profits means the investors won’t allow it to change. It’s success is also it’s biggest handicap.
What Mr. Hargreaves probably hasn’t accounted for is that over 1/4 of it’s subscribers can’t really afford to pay the basic subscription to Rightmove and hope to remain in business without digging into their savings or borrowing from the banks, family or friends.
Quite a lot of it’s subscribers are angered by the way Rightmove treat them as customers. The high handed confidence of believing they can say or do as the please means I am apparently pushing against an open door if “you’re going to take them down a peg or two”
I have invested quite heavily in my belief things can be changed and because of the way things are going I am fairly confident Mr Hargreaves might be shown to have forgotten to factor in everything that allows Rightmove to abuse it’s customer base.
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Your comments are so accurate…
The reign of Rightmove is coming to an abrupt end though in my eyes…if On The Market can pull off their business plan successfully within the next 12months, Rightmove and their dominant market position will falter and many agents who are just trying to stay in business will look to cancel their subscriptions. Bearing in mind the vast majority of RM clients are independent, this will hit then hard. The main thing is, getting as many agents on board with the On The Market proposal and help get their name out there through the co-branding scheme.
Fingers crossed anyway. Rightmove are taking liberty with what they have created and abusing their position.
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Rightmove are a business and their job is to make money for their owners/directors/investors. That might sound harsh, but that is the way it is. As smaller businesses we have the ability to change this, but having belief that OTM is the answer is naive. OTM want to be the same as Rightmove, they arent interested in us and our future, they are a PLC and want as much money as we can give them. They want Rightmove to fail, so that they can succeed in their place.
If only there was another way………
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Rightmove is a generation 3 system, windows 98, oooow shiney colour digital photographs and oooooweee… the internet, get you Mr fancy pants! a time when investing and trading Beenie Babies on Ebay was the go!
Called me a heretic but most of us have moved on. I remember posting in the October TDPG referred itself to CMA ahead of the merger with Zoopla that the duoplopy that would be created if the deal went ahead would see Rightmove subs increase to £1000, The archive of EAT that evidences that post has been selectively cleared but several remember it. There isn’t a problem with a good service supplier charging a lot of money IF the cost is justified, but as the cost of the service has gone up the average number of transactions has fallen and continues to fall.
Plotting the fee increase since the crash in 2008 Rightmove have increase their subscriptions by about 436%. in the same time property prices are now about 31% higher than they were.
If the service received hasn’t changed, the volume of sales has fallen and the subscriptions have risen 3x the rate of property price inflation I would love one of the very confident reps to explain how any subscription is justified. Perhaps those who are being visited by reps could ask on my behalf and post the answer for the whole industry to see?
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Over the years, I did use all yours words above to the rep. The answer as to why therefore they were going up?
“But you get all these flashy bells and whistle add ons.”
“We don’t want any of those, just the basic package.”
“Ok, but that’s the same price.”
“So why are the prices going up?”
“They just are.”
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ArthurHouse02 that’s where you’re wrong…the majority of OTM is owned by independents. Their business plan is to remove the need for excessive pricing that Rightmove currently has. They are abusing their power, it’s actually naive to think otherwise. From a business perspective they have been investigated numerous times under the competition laws.
OTM shares are restricted by the current majority and that won’t change – granted they may have an exit plan but the fact is, it will need to retain it’s current ethos or it will fail (agents will just pull the plug on them)
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if On The Market can pull off their business plan successfully within the next 12months
sorry pal that train left the station 3 years ago with more then enough members to kill rightmove….. theyre only plan was to get on the stock market.
Greatest showman springs to mind.
I dont hear any talk of rightmove strikes?? weird becuase they managed top get all the agents to sit in a room together when they launched and not even discussed the next part of the plan to kill rightmove..
we should be getting together as agents to sue on the market.
YOU HAVE UNTIL FEBRUARY OMAKET…………………….
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Wildly inaccurate.
The reason OTM stopped trading was due to being tied up in litigation and this was under their old business model and directorship.
Last year they totally reinvented the business and are now building the foundations for an incredibly successful portal. My agency is right behind them, as are over 8000 others and that number is just increasing daily.
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>I have invested quite heavily in my belief things can be changed and because of the way things are going I am fairly confident Mr Hargreaves might be shown to have forgotten to factor in everything that allows Rightmove to abuse it’s customer base.
Robert, I was just looking at your position in Google for the search term “property valuation in blyth” which is a zero traffic term and easy to get a position for in the search engine results. Your site is listed 13th.
A far cry from your claim “R4 pulls the legs of SEO and PPC almost instantly and at almost no cost.” found here https://www.propertyindustryeye.com/agent-who-complained-about-portal-juggling-by-competitor-sent-round-the-houses-by-regulators/
A term that does generate a little bit of traffic is “estate agents in blyth” but you are nowhere to be seen for this term and even if you were Agents could easily get above it by getting a few Google reviews.
Are you nor worried about getting a Google penalty for your own site as well as those who list with you? Google typically don’t like sites that try and sell positions in the search engines because of course this is how they make their money.
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I am not selling seo, I am not selling position. I have told you that on twitter but you are now repeating stuff you know to be incorrect.
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On a slightly different tack. We are now getting far more OTM leads than we ever had and RM may just be heading toward pricing themselves out of the market. Not because OTM may finally be coming up with a viable alternative by giving it away for free but because the property business is fast becoming about survival.
There is nothing more likely to determine whether a customer pays for a service than having the ability to pay for it. The way RM have a blatant disregard for it’s customer base is astounding and I am surprised it has taken this long for it’s customers to realise that and fewer are willing (or financially unable) to adopt the position.
The end is nigh.
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I think Rupert Hargreaves is making the typical analysts mistake of extrapolating results without acknowledging the RM business model needs to change radically.
We visited an Essex town on Friday to pitch our free (forever) property portal with integrated social network. 13 agents visited, 7 signed up on the day, and were hopeful the other 6 will come aboard this week.
Whlist we weren’t surprised at the take up of our offering, the abuse many of these agents directed at RM in our conversations was shocking. RM is choking it’s own customer base and they’re keen, and in many cases desperate for change.
Agents keep your heads up. Get behind OTM by all means (but remember this has a similar dated business model) but look for new solutions too.
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I think the arrogance and ruthlessness of Rightmove makes them the most disliked “support” tool of every agent and disgraceful behaviour by them in times when the industry in Lettings and Sales is at a struggling point. Rightmove had the opportunity to help businesses by decreasing their fees and making their ridiculous pricing model more realistic in the current environment, that would have given them respect and won long term support. They chose however to continue to turn the screws into their long term customers and continue to milk their cash cow business. Clearly clients are just a commodity to them and they don’t care about anything apart from the £££ signs.
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They could make even bigger profits if they got rid of all their field reps telling you the price is going up, just email or add it to your login.
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Rightmove disgust me to the core.
As a small independent, we rang them and pleaded for a reduction in their fees. A week later they sent us a letter to say they’re increasing our fees by £1,200 a year.
i rang them once again to plead with them, only for a cocky account manager to tell me that ‘Rightmove isn’t for everyone’ so he’ll put the cancellation through.
They don’t give a **** that we are just trying to survive, trying to put food on the table for my kids!!
The sooner they crash and burn the better for Estate Agency!!!!
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What is your rep called? As I begin the the recruitment process I’d like to have a note of people whose CV might say one thing but their day to day interaction with Agents means they’re unsuitable for a job as a service supplier to the property industry.
The North Devon agents will remember the trouble we had with such a character in 1991/2. the bloke destroyed the property section of the North Devon Journal and with it his reputation and respect
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I would be keen to know more of this legend who single handedly wiped out an entire property section.
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Mr Boni!…decided he was going to jack up the prices on everyone so we all withdrew or listings, (not a single strike breaker) The 100 page journal shrank to 74 pages and has never properly recovered.
He tried to wooo the agents back offering deals to the likes of Webbers but Webbers stood by their smaller competitors and stayed out.
We didn’t see much of Mr Boni after that, to this day the agents fairly much do one week in, one week out.
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Lol, epic and the name doesn’t disappoint either, Mr Boni, we had something similar in 08 where the local MD of a trinity group rag got us all in a hotel and told us that it was tough, his hands were tied by commercial reality and they really couldn’t help, turnover at that publications property section is probably 50% of what it could of been with a more conciliatory approach, aside from R4 do you have any, and I mean any, idea how to collectively corral agents?
I’ve made the point before but Eye claim to distribute their newsletter to 20k inboxes but this place is like Cheers, mainly regulars with contributions ad hoc from friend and knob(s)
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Ouch18,
This is the main reason for us dropping RM.
We carefully looked at the cost per lead and viewing as they generated noting in terms of valuations despite paying more for them to generate valuations !
We finally bit the bullet and dropped RM to return to Z and continue with OTM.
Never looked back. Viewings and enquiries are both up month on month.
I also read that a number of other agents are finding the same. I hope this continues as I am saving over £1500 per month !
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the problem is we as an industry do not stand together on such things, if we do we create a cartel ( and we cant do that its against the Law!!!!!!! ) rightmove needs to be told where to get off. without us they neither have a product or a platform…………… its not rocket science.
we have become to reliant on the very product that was originally started by agents for agents back in the day i remember some saying it will never work …Hahahaha.
If only
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Completely agree with the comment regarding this industry not standing together on such things. In all my years I’ve never seen us as an industry stand absolutely together and united on anything at all, especially within local markets. Someone will always break rank to try and get one upmanship on their competitors for short term gain, rather than sticking together for the benefit of everyone.
Until we get our heads out of our arses and put all the pettiness aside and realise that we need to stand together to achieve a result for everyone, then I’m afraid to say that we are doomed.
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Reverse psychology Ouch…I trust you followed through with their threats and pulled your subscription. If they terrified you into paying, whilst the attitude is disgusting, for now they’ve won! Teach them a ****** lesson , if enough do it they will learn! Be a leader not a follower and do not fall for the millennial disease FOMO!
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I can also confirm that 7 months on from dropping rightmove I couldn’t be happier. Still no drop off in business. As for the comment from that rep, he’s right, it’s not for everyone, especially if you want to run a profitable business. The profits in Estate Agency nationwide are being shipped directly to rightmove on a monthly basis. The bottom line is as a single office independent rightmove has ceased to be a cost effective marketing tool. Zoopla is currently cost effective and while they remain so I’ll continue to use their services. OTM aren’t producing much but while it’s free I’ll stick with it.
We all have choices and I have made mine and have no regrets.
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“Outrageous profits” – hardly surprising as since February 2017, Rightmove has increased my monthly subscription by an AMAZING 42% !!!!!!!!!!!!!
I receive no additional services and when I asked what the reasoning behind the increases were I am told that someone will call me back … they never have !!!
Mine is only a small company and during an average month we may need to advertise between 5 & 10 properties – we pay £700 PCM just for Rightmove. It is not sustainable and we are going to cancel the subscription – we have found that we get more leads through Zoopla for less than half the cost, In fact, I will also try On the Market with their free trial and if that works then we can advertise on two website for the price of one – goodbye Rightmove … you’re just too greedy for me !!!
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“Shares analyst says Rightmove’s ‘outrageous profitability’ is set to continue”
Outrageous fortune eh !
RM will not change their stance unless they actually have to.
The only way is by moving away from the old (as mr may said above) to something new and by that I don’t mean OTM or Z. Something shockingly different. It’s not far away neither.
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I really don’t understand why all of the uk estate agents havent simply started up their own portal. Anyone?
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Agents just can’t afford to pay anymore, agents will and have started to leave.
Time for agents to get together and take down Rightmove and start their own.
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