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Rightmove issues its half year results to investors – profits and revenue both up 10%

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Sat 27 Jul 2019

Rightmove issues its half year results to investors – profits and revenue both up 10%

Rightmove reported strong results this morning with revenue and profits up 10%, despite a 3% drop in agency numbers in the first half of this year.

Its revenue for the six months to the end of June was £143.9m, up from £131.1m in the same period last year.

Pre-tax profit stood at £108.1m, up from £98m.

Average revenue per advertiser (ARPA) “grew more strongly than anticipated”, up £90 per advertiser per month.

Average monthly cost per advertiser on Rightmove was over £1,000, standing at £1,077 per branch per month. The monthly average cost per agency branch was £1,023. Overall revenue from agents in the first half of this year was £104.8m, a rise of 6%.

However, overall membership numbers were down 1% since the start of the year, reflecting a 3% drop in what Rightmove described as low-stock agency branches. The number of agency branches was 16,768 at the end of June, compared with 17,328 at the start of the year.

The drop in agency numbers was offset by growth in new homes developers.

There was continued traffic growth, with visits up 2% year on year, averaging nearly 141m visits per month.

CEO Peter Brooks-Johnson said: “A 4.6% drop in transactions compared to 2018 has put pressure on some low-stock agency branches and created opportunity for others.

“We’re focused on helping all our customers succeed by delivering the most significant and effective exposure for their properties and brands to compete to win home sale instructions and also by being the largest source of high quality leads.

“We’ve seen strong adoption of our new digital solutions and existing packages by new homes developers and agents as they recognise the value of the UK’s largest property audience and Rightmove’s unique data insight.”

This morning Rightmove also announced the acquisition of tenancy referencing company Van Mildert. The acquisition is  subject to FCA approval and due to complete at the end of October. The price is an initial £16m with up to a further £4m to come.

Brooks-Johnson said:  “We’re looking forward to welcoming Van Mildert, a highly respected tenant referencing company, to the Rightmove family which will augment our Rightmove Tenant Passport in our quest to make renting a property faster, easier and more efficient for tenants, landlords, and agents alike.”

Yesterday, Rightmove share prices were stable at around 512p.

Meanwhile Foxtons has endured a miserable first half to the year, this morning reporting a pre-tax loss of £3.2m – up from £2.5m in the same period last year.

In the six months to the end of July, its revenue declined by 3.5% to £51.1m.

Lettings brought in £31.7m while sales revenue was down 10% to £15.4m. There was mortgages revenue in its Alexander Hall business of £4m, down 3% on the previous year.

Foxtons said there will be no interim dividend.

Chief executive Nic Budden said: “The prolonged downturn in the London sales market and continued political uncertainty continues to impact our results.

“The lettings business remains our priority and continues to deliver stable results underpinned by strong structural drivers of demand. We believe our excellent service offering and compliance culture, combined with our decision not to increase fees for landlords following the implementation of the tenant fee ban, will continue to differentiate us from the competition.

“Low consumer confidence combined with challenging market conditions means selling or finding a property is more challenging than ever before, and we believe this creates even more relevance for our high service sales model.

“In lettings, our professional approach mitigates legal risk for landlords and provides them with reliable tenants who trust us to provide the biggest range of high-quality rental accommodation.

“Looking ahead, we expect conditions to remain challenging and have effectively positioned the business to reflect this. In lettings, we expect our ongoing commitment to landlords in light of the tenant fee ban to improve further our proposition and we are confident this will continue to drive market share.

“In the longer term, our strong balance sheet and leading market position in London will allow us to capitalise on any recovery, in what remains one of the world’s most desirable cities and dynamic property markets.”