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Rghtmove has announced its half year results to 30 June 2024.
The headlines are as follows: During the investment period, we achieved strong financial performance due to continued demand for our products and services from real estate agents and new home developers.
Financial highlights include:
· Revenue increased by £12.6m/7% to £192.1m as estate agents and new build developers renewed contracts, upgraded packages and invested in additional product.
Operating profit £131.6m, up 2% (2023: £129.5m)
Underlying operating profit(1) of £135.1 million, up 1% (2023: £133.2 million)
Basic earnings per share up 2% to 12.4 pence (2023: 12.1 pence); underlying earnings per share(2) up 2% to 12.8 pence (2023: 12.5 pence)
Operating profit and underlying operating profit include one-off acquisition costs of £0.6 million relating to our strategic long-term investments in HomeViews and Coadjute and a one-off charge of £3.0 million relating to our investment in Coadjute. Adjusted to exclude the impact of these charges, operating profit was £135.2 million (up 4%), underlying operating profit was £138.7 million (up 4%) and underlying EPS was 13.2 pence (up 6%).
Interim dividend increased by 3% to 3.7 pence per ordinary share (2023: 3.6 pence)
Return £100.2 million to shareholders through share buybacks and dividends in the first half of 2024 (2023: £97.6 million). Cancel 10.1 million shares (1.2% of issued share capital) by 30 June (2023: 10.0 million shares).
Cash and cash equivalents, including money market deposits, of £28.1 million (31 December 2023: £38.8 million)
Semi-Annual Report
Throughout the first half of 2024, partner demand for our products and services has remained strong, and we have continued to invest and innovate to expand our business and significantly accelerate both revenue and profits over the next few years.
The housing market recovery so far this year has been choppy. Mortgage rates have eased slightly but remain high, and home transactions have been slow and take an average of seven months from initial listing to closing. Yet our partners remain focused on winning new vendor mandates and delivering value to their customers (our consumers), and they continue to rely on our products to help them do so.
Investment by estate agents in our packages and products has led to an increase of 7% in agency revenue and 6% in agency ARPA to £1,417 (23rd June: £1,341). Over 36% of our agency partners are now using our top package, Optimiser (December 2023: 35%). Vendor-led products such as Local Valuation Alert increased by 8% and we saw record growth in the number of new Lettings partners (a net increase of almost 350 in June 2023).
The acquisition of HomeViews, which offers the UK’s largest community of verified home reviews of property developments, is a valuable addition to an already strong property listing proposition for rental operators.
New home developers continue to face a tough market with competition from the second-hand home market amid a temporary recovery in demand. We welcome the new government’s proposals to reform the planning system and “Foster Britain Build”. However, so far this year, developers have generally taken a cautious stance towards building, whilst uptake of our digital products has remained strong, resulting in new home ARPA increasing 9% to £1,940 (23 June: £1,776). Revenue growth was slower (4%) as the number of developments fell to 2,868 (December 2023: 2,946), reflecting a slower pace of construction. The number of developments under our top package, Advanced, increased by 56% (December 2023: 53%).
Our strategic growth areas continue to progress, with Mortgages seeing impressive growth in principal mortgage volumes and revenue increasing 176%/£1.4m to £2.2m. Commercial revenue increased 12%/£0.7m to £6.5m, reflecting both increased membership numbers and renewals. In Rental Services, our Lead to Key proposition continues to gain traction with letting agents and we have further improved the quality and efficiency of our product during the half year. Rental Services revenue increased 29%/£0.6m to £2.5m.
Overall, total revenue increased 7% compared to the same period in 2023 to £192.1 million and Group ARPA increased 6% to £1,497 (June 2023: £1,411).
New product innovation for consumers as well as partners continues to move at a rapid pace, and in the third quarter we plan to release our newest consumer enhancement, a renovation calculator, which will enable consumers to evaluate the increase in property value that a given renovation could bring.
Growth in the first half has been underpinned by continued investment in both the Rightmove platform and its people, with over 100 people being recruited by 2024 and developers enabling AI with Github Copilot. For the first time, Rightmove was named a Sunday Times ‘Best Place to Work’ and over 80% of employees consider Rightmove to be a great place to work.
Rightmove is the only place to find almost the entire UK property market in one place. It’s home hunters’ first go-to and most frequently used destination for help in their search. Our platform plays a central role in making every move easier by driving the digitisation of the property market, while also providing market insights from our vast and proprietary property market data. As market leader, our market share of consumer time is over 80%.
Our strategy is to create growth for all our stakeholders and we look forward to working with all our partners to build success and champion the industry which will translate into growth for Rightmove and our shareholders.
Johan Svanström, Chief Executive Officer, said:
“We are pleased to have delivered a strong first half performance and to be making progress in delivering on our plans to create an even more valuable digital platform for the UK property industry.
“Our results come amid a continuing challenging mortgage rate environment, which has seen an increase in existing home listings and transactions, a continuing but easing imbalance between supply and demand for rental housing, and a tentative outlook for new home development volumes. Now that the election is over, the property market is hoping for interest rate cuts which could stimulate further activity.
“We have a leading market position and momentum to expand our products and innovation for consumers and partners, so we are confident in Rightmove’s long-term prospects.”