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Rightmove said average revenue per advertiser (ARPA) was up 10% to £922

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Mon 26 Feb 2018

Rightmove said average revenue per advertiser (ARPA) was up 10% to £922

Some 200 traditional branches have quit Rightmove but hybrid/online agents have more than made up the slack.

That’s one of the findings to have emerged from a Rightmove briefing of analysts following results for last year announced on Friday morning.

At the briefing it was confirmed that around 200 physical agent branches left Rightmove in 2017.

The loss accounted for about 1% of the total number of Rightmove branches.

However, growth among hybrid agents more than filled the vacuum, analysts heard.

Despite concerns expressed by some analysts about the “consolidation potential” of new hybrid players like Purplebricks reducing the number of agents in the marketplace, Rightmove argued that it was in a good position to cope with structural change, and said it expected the sector to remain competitive.

However, it does not expect a growth in agency numbers this year.

Rightmove also told the analysts of the level of discount offered to large agents, which it said averaged 20-30%.

The analysts also heard that Rightmove does not anticipate any issues when the new data protection rules (GDPR) come in this May, as it does not sell different products across its customer base.

In the results, Rightmove said average revenue per advertiser (ARPA) was up 10% to £922 per month, with a record number of 20,427 customers – mainly agents.

Analyst Liberum Capital predicted that Rightmove could increase ARPA by another 9.2% this year, as it forecast 10.6% revenue growth for the year ahead.

In a broker’s note issued on Friday, Liberum’s Ian Whittaker and Annick Maas said Rightmove was an “excellent company” and that it would be “hard to dislodge it from its market leading position”.

They made a “buy” recommendation with a target price of 5000p.

Their view was echoed by analysts Jessica Pok and Malcolm Morgan at Peel Hunt.

Maintaining their “hold” recommendation, they said: “We do not believe there is a threat to Rightmove’s position in the market.”

Meanwhile, Rightmove said in its results that it enjoyed “significant free cashflow”, which is likely to explain the £140.4m of cash it returned to shareholders in 2017 through dividends and share buybacks.

Rightmove’s shares start today at 4,482p, having risen 4% on Friday on the back of its results. Its market capitalisation is now just under £4bn.