Rightmove issues update after takeover collapse
The portal says membership numbers are not growing as quickly as forecast, just a month after REA Group's takever bid failed.
Rightmove has released an update on its financial position just over a month after a takeover bid by Australian portal group REA Group failed.
REA withdrew after four failed cash and shares offers for Rightmove and a war of words between the two parties.
The Rightmove board accused the Aussie portal firm of undervaluing the company and being opportunistic.
Membership forecast down
Now, the board has released a statement revealing revenue of approximately £390 million (within previous guidance of 7-9% growth).
There have been one-off costs of approximately £10 million, Rightmove says. The portal revealed earlier this year that it spent £3 million buying an 8% share of conveyancing platform Coadjute.
Membership numbers are expected to grow by around 1% on 2023, which is down from the 2% forecast issued in the summer. Rightmove says this is due to “a slower-than-expected recovery in new homes developments”.
Share fall
It reports Average Revenue Per Advertiser (ARPA) growth of £85-£95 on 2023’s £1,431, higher than previous guidance of £75-£85, “reflecting the successful sales and migration to the Optimiser Edge package for estate agents, as well as product uptake across both estate agent and new homes partners”.
Rightmove’s shares have fallen 3.4% over the last month since the REA takeover bid collapsed.
In its latest half year results, released in July, revenue was up 7% to £192.1 million of which £100 million was returned to shareholders via dividends and share buy-backs.
Its market share remained steady at 86% and average revenue per agent increased by 6% to £1,497, with 36% of agents now using its prime Optimiser package.
This has been another period of strong progress for Rightmove.”
Johan Svanstrom, CEO of Rightmove, says: “This has been another period of strong progress for Rightmove, and it’s pleasing to see our product development and sales delivery generating increased uptake from consumers and partners.
“As a result, we remain confident in achieving meaningful strategic and financial growth in 2024. We see continued momentum building product depth across our platform – driving revenue growth in the core business and within our strategic growth areas,” he says.
Industry reaction
Anthony Codling, MD of Equity Research at RBC Capital Markets, says: “Rightmove’s trading update today is testament to the strength, stability and robustness of its business model.
“Whilst its customers (housebuilders and estate agents) often have to negotiate choppy seas and deal with troubles at the mill, Rightmove has a canny knack of charting calm waters and keeping its ship in good order and is upping rather than reducing guidance today.
“Rightmove shares our view that conditions in the UK housing market are improving and that this won’t be derailed by Budget bumps and turns, and its agents and housebuilders appear to be putting their ARPA where their mouth is, therefore the path of the housing market, and it seems for Rightmove to, is heading towards the sunny uplands of recovery.”
