Embargoed for release at 07.00 hours, Wednesday 6 May 2009
INTERIM MANAGEMENT STATEMENT
Rightmove plc ("Rightmove"), the UK's number one property website today
publishes its Interim Management Statement for the period from 1 January 2009
to 5 May 2009 with management information relating to the period 1 January
2009 to 31 March 2009 and key performance indicators to 30 April 2009.
Four months into the year the business is trading ahead of the Board's
expectations helped by a significant decline in the rate at which estate
agents are leaving the industry. This experience is markedly different from
other major property advertising businesses who have recently reported 52-60%
reduction in year-on-year property advertising revenues. In a tough housing
market environment agents appear to be responding by maintaining spend with
Rightmove while dramatically cutting their off-line spending.
- Enquiries to advertisers at record levels, with website usage by home
hunters running at similar levels to that immediately before the downturn in
the housing market
- Overall number of advertisers unchanged compared to the end of 2008, with
Average Revenue per Advertiser (ARPA) ahead of the same period last year
- Estate agency membership is unchanged so far in 2009. Lettings membership
continues to grow but the cut back in building activity among house builders
in the UK and overseas has resulted in fewer developments and overseas homes
- Three major contract renewals among large estate agents during the first
four months of 2009
- Full impact of cost reduction activity in second half of 2008 now being
reflected in the financial performance
Activity levels on the website
Page impressions on the Rightmove.co.uk and our mapping website (Aboutmyplace)
during the first three months of 2009 were similar to the same period a year
ago. Enquiries being generated have increased markedly (up 50% for Q1 2009 as
compared to Q1 2008 and up 78% on a per advertiser basis). During April site
traffic rose for the first time relative to the same month in 2008, reflecting
the rapid decline in the state of the housing market a year ago.
Rightmove's market share among the top property websites has been running at
the historically high level of 79-80%*, helped by the success of the recent
new Rightmove TV advertisement and marketing campaign.
Rightmove estate agency membership was flat during the first four months of
2009 and stands at 9,800, unchanged since the end of 2008. Though the
improvement in conditions compared to 2008 may be assisted by seasonal
factors, the improvement for April 2009 as compared to April 2008 is greatest,
with a downward trend in the number of estate agents leaving the industry this
April as compared to a strong upward trend a year ago. Average revenue per
advertiser (ARPA) is up modestly for Q1 2009 as compared to Q1 2008 aided by a
large number of estate agents entering the lettings market and upgrading their
Rightmove membership accordingly.
The number of lettings (rental) only agents has grown by over 300 to 3,500 up
by 10% since the end of 2008, along with a substantial increase in ARPA aided
by the introduction and adoption of Choice products.
We recently announced that Countrywide, the UK's largest estate agency
business, renewed its listing contract with Rightmove to the end of 2011,
following the decision last December by Connells, the second largest estate
agency group, to commit into 2012.
We are pleased to be able to announce that Lending Solutions Ltd, the UK's
third largest estate agency group and owner of the Your Move and Reeds Rains
brands, has committed to advertise with Rightmove for another two years and
that Halifax Estate Agents, the UK's fourth largest estate agency group, has
signed a new three year contract.
The number of developments coming to market is very low though this continues
to be partially offset by the length of time it is taking to sell
developments. A particular challenge has been the number of Housing
Association developments withdrawn from sale and converted to social rent.
Total development numbers stand just above 3,000, down 9% since the end of
2008, with around half of the decline being from Housing Associations. ARPA
continues to grow modestly with continued interest in our enhanced advertising
products and email campaigns, though held back somewhat by a faster decline in
the number of developments from small developers as compared to those from
volume house builders.
The overseas homes advertising market remains tough with many overseas markets
now viewing the UK as a limited source of buyers. As a consequence the number
of overseas advertisers is down 15% compared to the end of 2008. ARPA is
unchanged compared to the same period a year ago.
Average Revenue Per Advertiser
Overall ARPA is up slightly compared to the first three months of 2008. The
increase in the proportion of our customers who are lettings only agents as
compared to a year ago has had a dampening effect on ARPA but underlying
growth in estate agency, new homes and especially among lettings agents
reflects the importance of Rightmove to our advertisers despite the tough
Holiday Lettings goes from strength to strength with increasing numbers of
advertisers, greater focus by advertisers on achieving higher occupancy rates
and more holiday makers visiting the website in search of self-catering
accommodation. Page impressions to the HolidayLettings.co.uk website were up
by 32% in Q1 2009 on a year earlier and booking enquiries up 30%, including a
92% leap in booking enquiries in relation to UK properties. The increase in
annual price per property advertised (£185 for new advertisers and £149 for
renewals) has had no discernable negative impact on sales or retention.
The second half of 2008 saw a significant reduction in staff numbers, staff
representing the majority of overall costs, consistent with a £5m year-on-year
cost reduction. Cost reductions are likely to result in a cost base below £29m
in 2009, £1m lower than previously indicated. Lower levels of bad debt are
helping to contribute to the lower cost projections.
The decision to term out £25m of a £40m debt facility will result in
significantly lower interest payments.
There are no significant upward pressures on costs, though the opportunities
presented by a housing market in the earliest stages of a recovery may result
in increased investment in growth, particularly with regard to product
The outlook for the UK property market is cautiously positive albeit from an
unprecedentedly low level of activity. The availability of mortgage lending is
likely to be a key factor in determining whether and how fast conditions
improve. Rightmove has limited visibility regarding any further deterioration
or improvements in the housing market generally and membership numbers
Nevertheless, given the positive results so far this year, coupled with the
subscription-based business model and the significantly lower costs, the Board
believes that 2009 pre-tax profits will be ahead of its previous expectations.
Ed Williams (MD) or Nick McKittrick (FD), Rightmove plc 0207 087 0605
* percentage of all UK pages of the top four property websites as measured by
Hitwise, including Aboutmyplace and Holiday Lettings Ltd