Half-yearly Report

Embargoed until 07.00, Friday 29 August 2008 RIGHTMOVE PLC - 2008 HALF YEAR RESULTS Rightmove plc, the UK's no. 1 property search website, announces half year results for the six months ended 30 June 2008. Financial Highlights for the six months ended 30 June 2008 - Revenue up 49% to Â£37.8m (2007: Â£25.4m) - Underlying operating profit* up 58% to Â£20.8m (2007: Â£13.2m) - Underlying earnings per share up 38% to 11.3p (2007: 8.2p) - Average revenue per advertiser up to Â£317 per month (2007: Â£234) - Interim dividend of 3.0p per ordinary share (2007: 2.0p) - Share buy back programme continued with 10.7m shares bought back in the period at a total cost of Â£42m - Net debt of Â£23.3m (2007: net cash of Â£17.5m) - Number of advertisers up 5% to 19,301 (2007: 18,383) - Page impressions on Rightmove websites up 15% to 3.1bn (2007: 2.7bn) * From continuing operations and excludes share-based payments, National Insurance on share options under issue and capital reconstruction costs Ed Williams, Group Managing Director, said: "These strong results, coming at a time of severe housing market difficulties, are evidence of the strength of the Rightmove proposition and the loyalty of our customers. Having established Rightmove as the home movers' no.1 property search engine, it now enables our members to make big reductions in their print marketing spend helping them to survive the drastic downturn in property sales. We are redoubling our efforts to ensure that Rightmove generates the enquiries from prospective home buyers which our customers so desperately need." Half yearly statement Overview The half year results come at a time when the UK housing market is suffering a severe downturn in activity which is having serious consequences for many of Rightmove's customers. The strength of the results in these circumstances is testament to the loyalty of our customers. The results also reflect the key role Rightmove plays in generating enquiries and sales opportunities for our customers and our cost effectiveness compared to local and regional newspaper advertising. Revenue increased 49% to Â£37.8m compared to the same period last year, driven by strong growth in revenue per advertiser and sales to new members. Indeed, despite the reduction in the number of estate agents in the industry, overall membership grew by 5% driven by growth in our lettings and new homes businesses. Underlying operating profit* grew by 58% to Â£20.8m. The continued success of Rightmove Choice advertising products and the introduction of email campaigns for new homes developers contributed to average revenue per advertiser per month increasing by 35% to Â£317 by the half year (30 June 2007: Â£234). Holiday Lettings Limited continues to grow rapidly with like-for-like revenue growth of 75% in the period. We have also seen the first major sale of our Automated Valuation Model. The underlying operating margin for the first half of 2008 was 55.1% compared to 51.9% for the first half of 2007. With plans for a major new marketing campaign including new TV adverts, coupled with the prospect of a further reduction in the number of estate agents, margins are unlikely to rise in the second half of the year, as they have in previous years. Operating costs** for the first six months were up 39% compared to the same period twelve months ago at Â£17.0m (2007: Â£12.2m) due primarily to higher personnel costs, continued investment in marketing and increased bad debt provision. A one off cost of Â£0.3m relating to our former London office vacated in July 2007 was provided for in full in the period. Underlying earnings per share rose 38% to 11.3p, lower than the increase in profitability as a consequence of a higher tax rate of 36% (compared to a standard rate of 28%), (30 June 2007: 28%). This was principally due to the reversal of the deferred tax asset relating to future share option gains. Borrowings During April 2008, Rightmove entered into a bilateral facility of up to Â£40m with the Bank of Scotland for the specific purpose of facilitating share buy backs. Under the terms of the loan agreement there is an option at maturity in April 2009 for the revolving loan facility to convert to a term loan for a further five years. Whilst the underlying business generated strong operating cash flow of Â£19.2m in the period, share repurchases of Â£42m have resulted in a net debt position of Â£23.3m. We completed our capital reconstruction in January 2008 which increased the distributable reserves available to the Group to approximately Â£430m and allows Rightmove to continue its strategy of returning capital to shareholders through share buy backs. Membership growth The first six months have seen continued growth in most key metrics compared with the same period a year ago: - Overall membership up 5% to 19,301 - Estate agency membership down 3% to 11,984 - New homes developments up 16% to 4,022 - Lettings agents up 22% to 2,719 - Overseas homes agents up 14% to 576 - Retention rate among estate agents down to 84% as a consequence of the large number of estate agency businesses leaving the industry - Page impressions on Rightmove websites up 15% to 3.1bn. * From continuing operations and excludes share-based payments, National Insurance on share options under issue and capital reconstruction costs ** Administrative expenses excluding share-based payments and National Insurance on share options under issue Customer spending Average customer spending with Rightmove has risen by 35% to Â£317 per month over the last year. The biggest increase, at just under 60%, has come from new homes developers who have been finding it increasingly difficult to sell properties and have invested substantially more in their online marketing efforts. Around half of all new homes developments are now being displayed using our enhanced advertising products known generally as Rightmove Choice. Developers have also adopted our email campaign service by which Rightmove targets registered home hunters on their behalf with propositions being made by the developers. The initial three Choice products have been extended to six. Lettings agents and overseas agents can now also buy selected products from the Choice range. In order to support our member agents in tough times, we have given every member agent a free set of Premium Displays for them to use with their own clients. We have also put together a bundle of Choice products worth over Â£400 available to agents for just Â£200 per month. Despite severe pressures on estate agent budgets, almost one in four agents now take at least one Choice product, contributing significantly to the overall increase in spend with Rightmove. Market update We identified three main areas of uncertainty or risk to our business in the 2007 annual report. First, we noted that Rightmove's exposure to the state of the UK housing market was uncertain. Secondly, we highlighted the potential for further competition from traditional media companies seeking to protect their franchises and other potential new entrants. Thirdly, we underlined the uncertainty around adoption of our new products and the rate of migration of advertising spend from traditional to online media. These issues are further commented upon below. The Rightmove directors believe that a major structural shift is now underway within the UK property advertising industry. Until this year, growth in spending online had been accompanied by spending growth in newspapers. However, 2008 is seeing local and regional newspaper groups reporting very substantial declines in their property advertising revenue. We believe that, although there has been a decline in the number of estate agents, the majority of the decline being reported by newspapers is a result of agents deciding to cut their newspaper spending. This comes at a time when Rightmove has grown year-on-year revenues by 49%. In our view, the remainder of 2008 will see estate agents leaving the industry at higher rates than in the first six months of the year as conditions continue to toughen. Indeed, given the current low level of transactions in the market, it is probable that 2009 will also see a further decrease in the number of estate agents trading. While the number of new developments being brought to market has declined substantially, and will continue to do so, the lengthening in the time taken to sell developments has meant that the new homes business has proven relatively robust thus far. By focusing resources on Housing Associations (social providers of housing) Rightmove is seeking to protect its position in the new homes market against what will undoubtedly be a prolonged difficult time for new homes developers. Rightmove continues to be cost effective and of demonstrable value for money as property advertisers increasingly scrutinise all their costs. Nonetheless, market conditions mean that we cannot rule out customers seeking to reduce spend by cancelling Choice products or indeed by cancelling their membership completely. Our lettings, automated valuation and non-property advertising sales businesses as well as our subsidiary, Holiday Lettings Limited, all offer the prospects of continued growth despite the general economic environment and the specific challenges of the housing market. Since the year end there has been no significant change in the competition from traditional media companies seeking to defend a threatened franchise and from potential new entrants to online media. For eight years Rightmove has been strongly focused as a business on managing the migration from traditional media to online in UK property advertising, a process much further advanced in jobs and cars. We intend to build on Rightmove's position as the property site most used by the UK home moving public and the place that a home buyer is most likely to first see their new home. In doing so the directors believe Rightmove will be a major beneficiary of the cyclical up turn in the property industry as and when it happens. Dividend and share buy back The Board intends to pay an interim dividend of 3.0p (2007: 2.0p) in line with the declared progressive dividend policy and with earnings growth in the period. The interim dividend will be paid on 10 October 2008 to members on the register on 12 September 2008. In June 2007, Rightmove initiated a share buy back programme in addition to returning cash to shareholders by way of dividend. During the first six months of 2008 Rightmove bought back 10,712,806 shares (of which 2,505,430 have been transferred into treasury) at an average price of 390p per share. The total number of shares bought back since the programme began is 14m shares at a total cost including expenses of Â£61.6m. The Board of Rightmove anticipates that, subject to market conditions, the share buy back programme will continue. Current trading and outlook The UK residential housing market is now in the grips of a major downturn. The depth and length of this downturn is hard to judge and will be dependent on the state of the wider economy. The Board believes Rightmove's exposure relates first to the number of estate agents who leave the industry and secondly to the viability of new homes developers. These are both driven, above all, by the number of housing transactions. Falls in house prices and increasing levels of repossessions, while generally bad news, should help to restart transaction volumes at some point though we believe that there is little immediate prospect of an improvement. Our primary focus is on maintaining our market position through delivering the most effective service to our customers. As a result, irrespective of market conditions, we believe we will see a continuation of the dramatic structural shift of property advertising online which has been accelerated by the current cyclical downturn. The Board reiterates its confidence in meeting market expectations for the current year. Scott Forbes, Chairman Ed Williams, Group Managing Director 29 August 2008 For further information please contact:- Rightmove Ed Williams, Group Managing Director Graham Zacharias, Group Finance Director Katherine Seaborn, Head of PR 07894 255315 RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF-YEARLY FINANCIAL REPORT 2008 We confirm that to the best of our knowledge: The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; The interim management report includes a fair review of the information required by: (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed interim financial statements; and description of the principal risks and uncertainties for the remaining six months of the financial year; and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so. By order of the Board Scott Forbes, Chairman Ed Williams, Group Managing Director 29 August 2008 CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT for the six months ended 30 June 2008 Note 6 months 6 months Year ended ended ended 31 December 30 June 2008 30 June 2007 2007 Â£000 Â£000 Â£000 Revenue 37,817 25,425 56,712 Administrative expenses (17,702) (13,780) (30,285) Operating profit before share-based payments, NI on share options under issue, and 20,833 13,184 30,746 capital reconstruction costs Share-based payments 5 (958) (1,210) (2,331) NI on share options under issue 5 240 (329) (298) Capital reconstruction costs - - (1,690) Operating profit 20,115 11,645 26,427 Financial income 6 203 488 891 Financial expenses 7 (524) - (199) Net financial (expenses)/ (321) 488 692 income Profit before tax 19,794 12,133 27,119 Income tax expense 10 (7,203) (3,447) (8,472) Profit for the period 12,591 8,686 18,647 Attributable to: Equity holders of the Parent 12,591 8,686 18,647 Earnings per share (pence) Basic 8 10.71 7.00 15.16 Diluted 8 10.57 6.55 14.19 CONDENSED CONSOLIDATED INTERIM STATEMENT OF RECOGNISED INCOME AND EXPENSE for the six months ended 30 June 2008 6 months 6 months Year ended ended ended 31 December 30 June 2008 30 June 2007 2007 Â£000 Â£000 Â£000 Tax in respect of share options recognised directly in equity - 857 - Net income recognised directly - 857 - in equity Profit for the period 12,591 8,686 18,647 Total recognised income and expense for the period attributable to equity holders 12,591 9,543 18,647 of the Parent CONDENSED CONSOLIDATED INTERIM BALANCE SHEET as at 30 June 2008 Note 30 June 2008 30 June 2007 31 December 2007 Â£000 Â£000 Â£000 Non-current assets Property, plant and 11 2,142 1,511 2,042 equipment Intangible assets 7,839 6,876 7,580 Deferred tax assets 192 2,262 1,336 Total non-current assets 10,173 10,649 10,958 Current assets Trade and other receivables 12 12,485 4,912 11,202 Income tax receivable - 163 163 Cash and cash equivalents 3,162 17,464 11,807 Total current assets 15,647 22,539 23,172 Total assets 25,820 33,188 34,130 Current liabilities Loans and borrowings 14 (26,500) - - Trade and other payables 13 (13,400) (10,169) (14,714) Income tax payable (6,224) (3,692) (4,413) Deferred consideration 15 (2,461) - - Provisions (160) (96) (130) Total current liabilities (48,745) (13,957) (19,257) Non-current liabilities Deferred tax liabilities (99) (126) (110) Deferred consideration - (2,202) (2,328) Provisions (167) (64) (43) Total non-current (266) (2,392) (2,481) liabilities Net (liabilities)/assets (23,191) 16,839 12,392 Equity Share capital 1,212 1,327 1,327 Share premium - 105 105 Other reserves 220 - - (Deficit)/retained earnings (24,623) 15,407 10,960 Total equity attributable to equity holders of the 16 (23,191) 16,839 12,392 Parent CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW FOR THE SIX MONTHS ENDED 30 JUNE 2008 Note 6 months 6 months ended Year ended ended 30 June 2007 31 December 30 June 2008 2007 Â£000 Â£000 Â£000 Cash flows from operating activities Profit for the period 12,591 8,686 18,647 Adjustments for: Depreciation charges 314 218 503 Amortisation charges 207 185 390 Financial income (203) (488) (891) Financial expenses 524 - 129 Share-based payments charge 958 1,210 2,331 Income tax expense 7,203 3,447 8,472 Operating profit before changes in working capital 21,594 13,258 29,581 Increase in trade and other (1,283) (1,728) (8,023) receivables (Decrease)/increase in trade and other payables (1,310) 1,117 8,337 Increase/(decrease) in 154 (48) (35) provisions Cash generated from 19,155 12,599 29,860 operations Interest paid (191) - (3) Income taxes paid (4,100) - (4,250) Net cash from operating activities 14,864 12,599 25,607 Cash flows from investing activities Interest received 203 488 891 Acquisition of property, (414) (341) (1,157) plant and equipment Acquisition of intangible (466) (157) (643) assets Acquisition of subsidiary - (3,177) (3,177) (net of cash acquired) Net cash used in investing (677) (3,187) (4,086) activities Cash flows from financing activities Dividends paid 9 (7,082) (3,729) (6,176) Purchase of shares for 16 (11,917) (4,043) (19,362) treasury Purchase of shares for 16 (29,861) - - cancellation Share buy back expenses (272) - - New shares issued - 105 105 Proceeds from borrowings 14 26,500 - - Debt issue costs (200) - - Proceeds on exercise of share - 838 838 options Net cash used in financing (22,832) (6,829) (24,595) activities Net (decrease)/increase in cash and cash equivalents (8,645) 2,583 (3,074) Cash and cash equivalents at 11,807 14,881 14,881 1 January Cash and cash equivalents at 3,162 17,464 11,807 period end NOTES 1 General information Rightmove plc (the Company) is a Company domiciled in the United Kingdom (UK). The condensed consolidated interim financial statements of the Company as at and for the six months ended 30 June 2008 comprise the Company and its interest in its subsidiaries (together referred to as the Group). The consolidated financial statements of the Group as at and for the year ended 31 December 2007 are available upon request to the Company Secretary from the Company's registered office at 4th Floor, 33 Soho Square, London, W1D 3QU or from the investor relations website at www.rightmove.co.uk/investors.rsp. 2 Basis of preparation The condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting and the Disclosure and Transparency Rules of the UK's Financial Services Authority. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2007. The condensed consolidated interim financial statements were approved by the Board of directors on 29 August 2008. The half-year results for the current and comparative period are unaudited. The auditor, KPMG Audit Plc, has carried out a review of the interim financial statements and their report is set out at the end of this document. The comparative figures as at and for the year ended 31 December 2007 are extracted from the Group's statutory accounts for that financial year. Those accounts have been reported on by the auditor and delivered to the registrar of companies. The report of the auditor was: (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. The Group's financial risk management objectives and policies are consistent with that disclosed in the consolidated financial statements as at and for the year ended 31 December 2007. The directors are satisfied that the Group is a going concern and able to meet its current obligations as they fall due. The Group net liability position at 30 June 2008 has arisen as a result of the loan facility entered into to finance the share buy back programme (see Notes 14 and 17). The directors expect this to convert into a five year term loan as set out in Note 14. Capital structure On 28 January 2008, the ordinary shares of Rightmove Group plc (Company no.: 6426485) (subsequently renamed Rightmove plc) (the Company) were admitted to trading on the official list of the London Stock Exchange and became the holding company of Rightmove plc (Company no.: 3997679) and its subsidiary companies. This occurred as part of a Scheme of Arrangement under Section 425 of the Companies Act 1985 under which Rightmove Group plc (Company no.: 6426485) replaced the previously listed company, Rightmove plc (Company no.: 3997679). With effect from 28 January 2008, Rightmove Group plc (Company no.: 6426485) changed its name to Rightmove plc and Rightmove plc (Company no.: 3997679) re-registered as a private company and changed its name to Rightmove Group Limited. The corporate restructuring has been accounted for as a reverse acquisition. Therefore, the condensed unaudited consolidated interim financial statements as at and for the six-month period ended 30 June 2008 of the Company are prepared as a continuation of the previously listed company's condensed unaudited consolidated interim financial statements. There was no change to the Board of directors, management and corporate governance arrangements as a result of the Scheme of Arrangement. The consolidated assets and liabilities of the Group immediately after the Scheme of Arrangement were substantially the same as the consolidated assets and liabilities of the Group immediately prior thereto. 3 Significant accounting policies The accounting policies applied by the Group in these condensed consolidated financial statements are in accordance with International Financial Reporting Standards as adopted by the European Union (Adopted IFRSs) and are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2007. The same accounting policies are anticipated to be applied for the year ending 31 December 2008. Judgements and estimates The preparation of financial statements in conformity with Adopted IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods if applicable. In particular information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in Note 5 Share-based payments, Note 10 Taxation and Note 12 Trade and other receivables. 4 Segmental reporting The Group does not have geographical segments, with all revenue derived from external operations in all periods. Revenue derived from outside the UK is not material in either 2008 or 2007. All activities in all periods relate to the property advertising segment and there were no other separately identifiable business segment income statement or balance sheet items. 5 Share-based payments In accordance with International Financial Reporting Standard (IFRS) 2 a charge of Â£958,000 (30 June 2007 : Â£1,210,000) is included in the income statement, being the amortisation of the value of the share options granted in 2006 and 2007. Employer's National Insurance (NI) is being accrued at a rate of 12.8% on the difference between the share price at the balance sheet date and the average exercise price of the share options. Based on the share price at 30 June 2008 the accrual built up in prior periods has been reversed resulting in a credit to the income statement of Â£240,000. 6 Financial income 6 months ended 6 months ended Year ended 30 June 2008 30 June 2007 31 December 2007 Â£000 Â£000 Â£000 Interest income on cash 203 488 891 balances 7 Financial expenses 6 months ended 6 months ended Year ended 30 June 2008 30 June 2007 31 December 2007 Â£000 Â£000 Â£000 Debt issue costs 200 - - Interest expense 138 - - Unwinding of effective interest rate on deferred 133 - 126 purchase consideration Other financial expenses 52 - 70 Preference dividend interest 1 - - Interest expense on late payment of taxes - - 3 524 - 199 8 Earnings per share (EPS) Weighted average number of Earnings Pence ordinary shares Â£000 per share Six months ended 30 June 2008 Basic EPS 117,518,535 12,591 10.71 Diluted EPS 119,123,970 12,591 10.57 Underlying basic EPS 117,518,535 13,309 11.32 Underlying diluted EPS 119,123,970 13,309 11.17 Six months ended 30 June 2007 Basic EPS 124,136,849 8,686 7.00 Diluted EPS 132,599,665 8,686 6.55 Underlying basic EPS 124,136,849 10,225 8.24 Underlying diluted EPS 132,599,665 10,225 7.71 Year ended 31 December 2007 Basic EPS 123,023,728 18,647 15.16 Diluted EPS 131,431,538 18,647 14.19 Underlying basic EPS 123,023,728 22,966 18.67 Underlying diluted EPS 131,431,538 22,966 17.47 Weighted average number of ordinary shares (basic) 6 months ended 6 months ended Year ended 30 June 2008 30 June 2007 31 December 2007 Number of shares Number of shares Number of shares Issued ordinary shares at 1 January less own shares 121,046,278 124,054,318 124,054,318 held Effect of own shares held (1,783,400) (59,219) (1,242,710) in treasury Effect of own shares purchased for cancellation (1,744,343) - - Effect of share options - 140,884 195,890 exercised Effect of new shares issued - 866 16,230 117,518,535 124,136,849 123,023,728 Weighted average number of ordinary shares (diluted) For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential shares. The Group has one class of dilutive potential ordinary shares being those shares held by The Rightmove Employees' Share Trust (EBT) to satisfy share options granted to employees. 6 months ended 6 months ended Year ended 30 June 2008 30 June 2007 31 December 2007 Number of shares Number of shares Number of shares Weighted average number of ordinary shares (basic) 117,518,535 124,136,849 123,023,728 Dilutive impact of share 1,605,435 8,462,816 8,407,810 options 119,123,970 132,599,665 131,431,538 Underlying EPS is calculated before the charge for share-based payments, capital reconstruction costs and Employer's NI on share options under issue. Reconciliation of the basic earnings for the period to the underlying earnings is presented below: 6 months ended 6 months ended Year ended 30 June 2008 30 June 2007 31 December 2007 Â£000 Â£000 Â£000 Basic earnings for the 12,591 8,686 18,647 period Share-based payments 958 1,210 2,331 NI on share options under (240) 329 298 issue Capital reconstruction - - 1,690 costs Underlying earnings for the 13,309 10,225 22,966 period 9 Dividends Dividends declared and paid by the Group were as follows: 6 months ended 6 months ended Year ended 30 June 2008 30 June 2007 31 December 2007 Pence per Pence per Pence per share Â£000 share Â£000 share Â£000 2006 final dividend - - 3.0 3,729 3.0 3,729 paid 2007 interim dividend - - - - 2.0 2,447 paid 2007 final dividend 6.0 7,082 - - - - paid 7,082 3,729 6,176 After the period end an interim dividend of 3.0p (30 June 2007: 2.0p) per qualifying ordinary share being Â£3,279,000 (30 June 2007: Â£2,447,000) was proposed by the directors. No provision was made for the interim dividend in either period and there are no income tax consequences. The 2007 final dividend paid on 12 May 2008 was Â£7,082,000 (31 December 2007: Â£ 7,119,000) the difference of Â£37,000 being due to a reduction in the ordinary shares entitled to a dividend following share buy backs made in the period between the year end and the 2007 final dividend record date of 11 April 2008. 10 Taxation The Group's consolidated effective tax rate for the six months ended 30 June 2008 is 36% (30 June 2007: 28%). The difference between the standard rate and the effective rate is the reversal of the deferred tax asset on share options (6%) and disallowable expenditure (2%). The deferred tax asset of Â£192,000 as at 30 June 2008 is in respect of tax losses brought forward, equity settled share options and accelerated capital allowances. The deferred tax asset relating to equity settled share options at 30 June 2008 is Â£4,000 (1 January 2008: Â£1,252,000). This decrease is due to the Company's share price decreasing from Â£4.64 at 1 January 2008 to Â£2.68 at 30 June 2008. 11 Property, plant and equipment During the six months ended 30 June 2008 the Group acquired assets with a cost of Â£414,000 (30 June 2007: Â£341,000). 12 Trade and other receivables 30 June 2008 30 June 2007 31 December 2007 Â£000 Â£000 Â£000 Trade receivables 11,013 2,744 8,865 Less provision for impairment of trade receivables (726) (4) (91) Net trade receivables 10,287 2,740 8,774 Amounts owed by related parties 159 335 333 (see Note 18) 159 335 333 Other debtors 763 931 1,016 Prepayments and accrued income 1,276 906 1,079 12,485 4,912 11,202 13 Trade and other payables 30 June 2008 30 June 2007 31 December 2007 Â£000 Â£000 Â£000 Trade payables 1,080 989 1,696 Amounts accrued in relation to purchase of shares for treasury - 3,094 - Of treasury shares Trade accruals 2,535 2,060 3,215 Other creditors 137 373 609 Other taxation and social security 3,262 2,201 3,300 Deferred income 6,386 1,452 5,894 13,400 10,169 14,714 14 Loans and borrowings During the period, the Company obtained a Sterling-denominated revolving loan facility of Â£40m to support its continuing share buy back programme. Under the terms of the loan agreement there is an option at maturity (April 2009) for the revolving loan facility to convert into a term loan for a further five years. The loan bears interest at LIBOR plus 1.5% together with a mandatory cost applied by the lender. Face value Carrying Face value Carrying 30 June value 30 June value 2008 30 June 2008 2007 30 June 2007 Â£000 Â£000 Â£000 Â£000 Unsecured revolving loan 26,500 26,500 - - facility Subsequent to the period end on 16 July 2008, a further Â£4m was drawn down under the revolving loan facility. 15 Deferred consideration The deferred consideration of Â£2,461,000 relates to the Group's acquisition on 21 March 2007 of 66.7% of the ordinary share capital of Holiday Lettings Limited (HLL). In terms of the HLL shareholders' agreement, a put and call option exists to acquire the remaining 33.3% of ordinary shares held by management. The earliest opportunity HLL management has to exercise the put and call option is 30 June 2009 based on the audited accounts for the year ending 31 December 2008. 16 Reconciliation of movement in capital and reserves Share Share EBT own Treasury Capital Merger Other Total capital premium shares cancelled redemption reserve retained reserve shares reserve earnings fund Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 At 1 January 2007 1,327 - (17,663) - - - 32,345 16,009 Profit for the - - - - - - 8,686 8,686 period Dividends to shareholders - - - - - - (3,729) (3,729) Equity settled share options - - - - - - 1,210 1,210 charge New shares issued - 105 - - - - - 105 Purchase of shares for treasury - - - (7,137) - - - (7,137) EBT own shares held - - 514 - - - - 514 Gain on exercise of share options - - - - - - 324 324 Tax in respect of share options recognised directly - - - - - - 857 857 in equity At 30 June 2007 1,327 105 (17,149) (7,137) - - 39,693 16,839 At 1 January 2007 1,327 - (17,663) - - - 32,345 16,009 Profit for the year - - - - - - 18,647 18,647 Dividends to shareholders - - - - - - (6,176) (6,176) Equity settled share options - - - - - - 2,331 2,331 charge New shares issued - 105 - - - - - 105 Purchase of shares for treasury - - - (19,362) - - - (19,362) EBT own shares held - - 514 - - - - 514 Gain on exercise of share options - - - - - - 324 324 At 31 December 2007 1,327 105 (17,149) (19,362) - - 47,471 12,392 At 1 January 2008 1,327 105 (17,149) (19,362) - - 47,471 12,392 Capital (33) (105) - 19,362 138 (19,362) - reconstruction Profit for the - - - - - - 12,591 12,591 period Dividends to shareholders - - - - - - (7,082) (7,082) Equity settled share options - - - - - - 958 958 charge Purchase of shares for treasury - - - (11,917) - - - (11,917) Purchase of own - - - (29,861) - - - (29,861) shares Cancellation of own shares (82) - - 29,861 82 - (29,861) - Share buy back expenses - - - - - - (272) (272) At 30 June 2008 1,212 - (17,149) (11,917) 82 138 4,443 (23,191) 17 Share buy back In June 2007, the Company commenced a share buy back programme to purchase its own ordinary shares. The total number of shares bought back in the six months to 30 June 2008 was 10,712,806 (30 June 2007: 1,176,966) representing 9% of the issued share capital (excluding shares held in treasury). Of the 10,712,806 shares bought back in the period 8,207,376 shares were cancelled and 2,505,430 shares were transferred to treasury. The shares were acquired on the open market at a total consideration (excluding costs) of Â£41,778,000 (30 June 2007: Â£7,137,000). The maximum and minimum prices paid were 501p and 319p per share respectively. 18 Related parties As at 30 June 2008 Rightmove plc has one principal shareholder, Connells Limited, who holds 17.9% of the issued share capital (excluding shares held in treasury). As at 30 June 2007 there were two principal shareholders, Connells Limited and Halifax Estate Agencies Limited. Halifax Estate Agencies Limited sold its remaining interest in the Company in May 2008. The Group's transactions and balances with these shareholders for all periods were as follows: 6 months ended 6 months ended Year ended 30 June 2008 30 June 2007 31 December 2007 Â£000 Â£000 Â£000 Amounts owed by shareholders: Sequence (UK) Limited 58 102 183 (Connells) Connells Residential 32 127 62 Halifax Estate Agencies 69 106 88 Limited 159 335 333 Amounts invoiced to shareholders: Sequence (UK) Limited 337 210 539 (Connells) Connells Overseas Property 2 1 3 Department Connells Residential 186 106 291 Halifax Estate Agencies 404 241 543 Limited 929 558 1,376 Amounts invoiced by shareholders: Connells Residential - 4 34 Dividends paid: Connells Limited 1,275 826 1,251 Halifax Estate Agencies 974 639 1,065 Limited 2,249 1,465 2,316 Amounts owed to shareholders: Connells Estate Agents - 4 - Included within trade and other receivables is Â£159,000 due from related parties (30 June 2007: Â£335,000).Trade and other payables include Â£nil due to related parties (30 June 2007: Â£4,000). Independent review report to Rightmove plc Introduction We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 which comprises the condensed consolidated interim income statement, the condensed consolidated interim statement of recognised income and expense, the condensed consolidated interim balance sheet, the condensed consolidated interim cash flow statement and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FSA. As disclosed in note 3, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. Our responsibility Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit performed in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA. KPMG Audit Plc Chartered Accountants Milton Keynes 29 August 2008

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Rightmove (RMV)

Thursday, 23rd May 2024

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HL. QQ. AJB

Another day and another round of takeover talk with Hargreaves Lansdown being eyed by private equity suitors. AJ Bell also advances on upbeat earnings news whilst QinetiQ upgrades its profit guidance, too.

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