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Rightmove crisis: portal cancels its dividend payment to shareholders

The dramatic move by Rightmove is to cut costs and reinforce its financial position ahead of the portals' 75% cut to estate agency listings fees.

Nigel Lewis


The decision by Rightmove to cut its fees to all agents and developers during the Coronavirus crisis by 75% has cost its shareholders dearly after the portal this morning announced it is to cancel its proposed final dividend payment of 4.4p per share for 2019.

This follows a torrid few weeks for the company’s share price, dropping since February from a high of £6.35 per share to a low of £4 a few days ago. So far some £1.27 billion has been wiped off its value, although its share price has since rallied in recent days.

This morning’s announcement, which will save the company £38 million, means one of the City’s most reliable and lucrative shares has not paid a dividend for the first time since they were launched in 2006.

Rightmove’s shares are one of the wonders of the London Stock Exchange and to a certain extent the global financial system and its share price fluctuations are discussed around the world.

Rightmove says the move is part of a package to contain its costs and ‘reinforce our financial position’.

Other measures include suspending its share buy-back scheme which has seen it spend millions every week re-acquiring its own stock, and looking at the size of its future dividend payments.

“In this period of unprecedented uncertainty, we are unable to quantify the impact of COVID-19 on our financial and trading performance at this stage,” Rightmove says.

“Accordingly, the Group is suspending all existing financial guidance for 2020. The Board is confident that the Company has the financial capacity to withstand this challenging period.”

Read more: Rightmove admits its ‘got it wrong’ over its initial fees cut offer to agents.


March 27, 2020

One comment

  1. In the past week I have had communication with or from over 500 property professionals, CEO’s, sole traders, men and women in the front line of the business, tech companies, other analysts, you name them I have been talking with them. As many know I have for some time said that the real estate relationship with Rightmove has become a toxic, abusive and one sided, and that a major fault line was pushing the two parties wider and wider apart.

    For sure since 2006 when Rightmove became a quoted stock, the share price had until a few weeks ago rocketed by 1,500%, and in February 2020 hit 691p a share, but now at 470p a share with a likely revenue hit of 75M plus, shareholders and the c-suite of Rightmove might realise that the gravy train has just hit the buffers.

    Many that I spoke to say that with over 130M visits a month to the Rightmove website, the brand strength and the public’s pre-occupation with ‘Property Porn’ means that as the Property Portal heavyweight, nothing can stop it. Well Covid-19 just has, faced with a long journey ahead agents looking at their fixed cost model of agency, suspiciously eye the large ticket cost of Rightmove, often in the top three of a branches costs after salaries.

    Agents now realise that with the proliferation of ‘free to list’ portals, their £1,100 plus as an average branch spend, is in fact nowhere near its true price point. The other thing that everyone talking to me says is ‘Rightmove has itself never moved’ in that it has no evolved, it is just digital shelves rammed with goods/listings supplied by the agents.

    How will it end? Well in Janurary 2016 the share price was 402p, and in the following years it was 390p, 450p,474p and in 2020 642p (peaking at 691p a month later) so an adjustment to 470p was likely at some time in 2020 anayway. Now though – agents are going to leave Rightmove, and those that stay are not going to want to pay anywhere near £1,100 a branch.

    Luckily I am neither a shareholder or in the Rightmove c-suite, but if I was on the management team the first thing I would do is what I do … listen and engender debate, find out what your customer wants and needs and provide it – do not put your fingers in your ears and keep putting up the prices. Or people like Kristjan Byfield who is the kindest and gentlest and most considerate and well respected property and proptech professional will give you your P45.

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