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Rightmove PLC (RMV)

  Print      Mail a friend       Annual reports

Friday 26 February, 2010

Rightmove PLC

Final Results


Rightmove plc

33 Soho Square

London

W1D 3QU
 

                                                                EMBARGOED UNTIL

                                                           7AM 26 FEBRUARY 2010

                                                                               

                                 RIGHTMOVE plc                                 

                            2009 FULL YEAR RESULTS                             


Rightmove plc, the UK's number one property website, today announces its Full
Year results for the year ended 31 December 2009.


Highlights:

  * Underlying operating profit(1) increased by 2% from £41.0m to £41.9m
  * Revenue fell by 6% from £74.0m to £69.4m and costs(1) were reduced by 17%
    to £27.5m (2008: £33.0m)
  * Underlying operating margin(2) up from 55% to 60%
  * Underlying EPS up 28% to 30.5p from 23.8p
  * Net cash at 31 December 2009 of £3.4m (2008: net debt of £16.9m) with the
    outstanding debt of £22.5m retired early in February 2010 with no penalties
  * 1.1m shares bought back during 2009 (2008: 11.9m) at an average price of £
    4.84 (2008: £3.78)
  * Number of advertisers grew by 6% to 17,664 (2008: 16,741)
  * Average revenue per advertiser (ARPA) at £308 per month (2008: £307 per
    month)
  * Proposed final dividend of 7.0p making a total dividend of 10.0p for the
    year (2008: 10.0p)



 

Ed Williams, Managing Director, said:

 

"The last 18 months have demonstrated the importance of Rightmove in leading a
structural shift from traditional media to online property advertising. As
early as April 2009 our revenues started to rise in contrast to traditional
property advertising media which continues to decline."



For more information please contact:

Rightmove                                   
                                            
Ed Williams or Nick McKittrick              
                                            
Rightmove plc Press Office    07894 255295  
                                            



(1) Before share-based payments, NI on share-based incentives and capital
reconstruction credit/costs.

(2) Based upon operating profit before share-based payments, NI on share-based
incentives and capital reconstruction credit/costs




A PDF copy of the 2009 Full Year results can be downloaded from
www.rightmove.co.uk/investors.rsp

This Annual Report contains forward looking statements.  These forward looking
statements are not guarantees of future performance.  Rather they are based on
current views and assumptions and involve known and unknown risks,
uncertainties and other factors that may cause actual results to differ from
any future results or developments expressed or implied from the forward
looking statements.  Each forward looking statement speaks only as of the date
of the particular statement.




CHAIRMAN'S STATEMENT


It is my pleasure to present Rightmove plc's financial results for the year
ended 31 December 2009.

Rightmove's performance during 2009 reflects the widespread recognition across
the residential property industry of the primary importance of the internet as
a marketing channel and specifically Rightmove's strong leadership position and
product innovation.


Online advertising's role as the most relevant marketing channel for both home
sellers and home hunters was reinforced by Rightmove's experience in 2009.
Research recently conducted indicates that half of all successful UK home
buyers in 2009 first saw the property they bought on the internet and two
thirds of this group first saw the property on Rightmove(1).


Our unwavering commitment to both user experience and customer service resulted
in record results in 2009 despite a housing market that delivered historically
low home sales. Our prospects for 2010 are promising, assisted by the launch of
advertising products that enable our customers to promote their brands and
market proposition more prominently in addition to advertising the homes they
have for sale and to let.


Financial results

Profits and earnings per share for 2009 were up on 2008, despite the number of
estate agents and new home developments being sharply lower than during the
first half of 2008. Underlying operating profit(2) was up 2% to £41.9m (2008: £
41.0m) and underlying basic earnings per share was up 28% to 30.5p (2008:
 23.8p).


Profit growth was achieved in no small part by prompt cost reduction
initiatives undertaken in 2008. Increased average online spending also
contributed to increases in profitability and revenue from the low point in
March 2009. Revenues for the second half of 2009 were 7% higher than in the
first half and monthly revenues, by the end of 2009, close to their all time
peak prior to the collapse in the property market.


Growth in earnings per share was attributed in part by the repurchase of 13m
shares at an average price of £3.87 per share during 2008 and 2009. This
reduction of around a tenth of all shares outstanding was  financed largely by
a £40m loan facility entered into in April 2008, which was converted to a £25m
term loan in April 2009. Strong cash generation allowed us to repay the loan
early and in full in February 2010.


Dividend

The Board announced that it would maintain a 3.0p per ordinary share interim
dividend which was paid on 13 November 2009. The Board proposes to pay a final
dividend of 7.0p per ordinary share which gives a total dividend for the year
of 10.0p (2008: 10.0p) consistent with our policy of paying dividends in line
with profits. The final dividend, subject to shareholder approval, will be paid
on 11 June 2010 to members on the register on 14 May 2010.

 
The Board of directors

As previously announced, Nigel Cooper and Graham Zacharias retired from the
Board on 31 March 2009 and 10 April 2009 respectively. As part of the
organisational restructure in early January 2009, Nick McKittrick assumed the
joint role of Chief Operating Officer and Finance Director.


I was delighted to announce the appointment of Ashley Martin as a non-executive
director to the Board on 11 June 2009. Ashley's construction and media industry
background have made him a welcome addition to the Board and his considerable
listed company financial experience is well suited for his role of Audit
Committee Chairman.


Annual General Meeting and resolutions

The majority of the resolutions being proposed at the Annual General Meeting
are general in nature. In addition, the Company is required to make amendments
to its Articles of Association to incorporate changes required following full
implementation of the Companies Act 2006. A summary of the business to be
conducted is described in the Directors' Report and in the Notice of Annual
General Meeting which will be sent to shareholders in March 2010. I hope that
shareholders will approve these resolutions and I and the rest of the Board
look forward to answering any questions and updating shareholders further on
the development of the business at our Annual General Meeting which will take
place at 10am on 5 May 2010 at the offices of UBS Limited at 1 Finsbury Avenue,
London, EC2M 2PP.


Outlook

Based on increased investment in Rightmove by our customers, our proven ability
to innovate with new advertising products and the prospect at some point in the
cycle of a significant increase in customer numbers, the Board is confident of
our future success.


On behalf of shareholders, I would like to thank Ed Williams and his entire
team for the achievements of the past year. My thanks also go to the Board for
its guidance during challenging economic times.


Scott Forbes

Chairman

(1) Source: BMRB omnibus survey, November 2009

(2) Before share-based payments, NI on share-based incentives and capital
reconstruction credit/costs


BUSINESS AND FINANCIAL REVIEW

2009 has been another year of considerable success for Rightmove.  Profits for
2009 were the highest in the Group's history.  Revenues for the year were
significantly higher than at the top of the 2007 market, despite a sharp
reduction in the number of estate agents and new homes developments being
marketed. 


The last 18 months have demonstrated the importance of Rightmove in leading a
structural shift from traditional media to online property advertising.  As
early as April 2009 our revenues started to rise in contrast to traditional
property advertising media which continues to decline.


Writing a year ago, we stated as our objective "to communicate unequivocally to
home hunters that we remain the place to look for property and to the property
industry that we are the place to advertise". 


In 2010 we will build on our position of strength with a focus on stressing the
importance to sellers not only of having their property on Rightmove, but also
the choices that agents can offer them as to how their property is advertised
on Rightmove.


Our 2009 results

2009 was a record year in terms of Rightmove's profit after tax: £30.0m (2008: 
£25.5m). Underlying operating profit(1) was up 2% at £41.9m (2008: £41.0m) and
revenue declined by 6% to £69.4m
(2008: £74.0m).  This was achieved in a difficult year for the housing
industry, with approximately one fifth of estate agents closing and a decline
of around one third in the number of developments being marketed.  Both revenue
and profits in the second half of the year were up on the first half of the
year.

 
The usage of the Rightmove.co.uk website has been at record levels, as has been
our share of activity across all UK property websites.  Our number of
advertisers has grown and the typical spend by our advertisers has
increased.   


What we do and the keys to success

Rightmove's continued success in adverse conditions arises directly from what
we do and how that differs from others.


The most effective property advertising medium

By using the Rightmove.co.uk website our advertisers reach the largest audience
of prospective home movers in the country by far and home movers see more
properties more effectively presented than anywhere else. 


In 2009 around one third(2) of all houses sold were first found by the buyer on
the Rightmove website and Rightmove was used by 85% of buyers who used the
internet as part of their home searching activity.


Page impressions on the Rightmove.co.uk website were up by 23% to 6.5bn (2008:
 5.3bn).  According to Experian Hitwise, Rightmove served as many pages of
property information as all the other fourteen hundred property websites
combined and ten times that of our nearest competitor.


The key performance indicators that we monitor include:

MARKET SHARE                               NUMBER OF ADVERTISERS               
                                                                               
                                                                               
                                                                               
82% of the market share of the top 4 UK    Total membership at end of 2009 was 
property websites by pages viewed up from  17,664 (2008: 16,741), up 6% year on
79% in 2008                                year                                
                                                                      
                                                                                                                                                       
Source: Experian Hitwise and Rightmove:                                        
January 2010 and January 2009                                                  
                                                                               
                                                                               
                                                                               
PAGE IMPRESSIONS                           CORPORATE ESTATE AGENTS             
                                                                               
                                                                               
                                                                               
6.5 billion page impressions up from 5.3   100% of all of the top 25 corporate 
billion in 2008                            estate agents list their properties 
                                           with us                             
                                                                               
                                                                               
Source: Rightmove                                                              
                                                                               
                                                                               
                                                                               
                                                                               
PROPERTIES DISPLAYED                       NEW HOME DEVELOPERS                 
                                                                               
                                                                               
                                                                               
1 million properties displayed on          92% - 23 out of 25 of the top new   
Rightmove.co.uk at 31 December 2009, 7.6%  home developers advertised on       
down on 2008 reflecting conditions within  Rightmove.co.uk in 2009             
the UK property market                                                         
                                                                               
                                                                               
                                                                               
                                                                               
EMAIL ENQUIRIES                            ADOPTION OF ADDITIONAL PRODUCTS     
                                                                               
                                                                               
                                                                               
Number of emails doubled from 5.3million   At December 2009, 48% of customers  
to 10.6 million as a result of             take additional advertising         
improvements to the way the site works for products, an increase from 32% as at
enquiry generation                         December 2008                       
                                                                               


Rightmove's ability to out-perform newspapers in these challenging times
reflects:

our ongoing property service and relationships with our advertisers;

our increasing audience - at a time when newspaper circulation continues to
decline;

the need for enquiries from home buyers;

measurability - with all our customers seeking to reduce costs and yet make
sales, measurability has been thrust to the fore;

the recognition that home sellers expect their agent to market their property
in the places that they themselves look -  the internet in general and
Rightmove specifically.


Long-term sustained investment in brand and the service to home hunters

The high level of site activity and enquiries is the result of our historic
investment in the development of the Rightmove.co.uk website and the marketing
of it.  That investment was maintained in 2009 despite an overall reduction in
our operating cost base.

 

Rightmove's brand strength means that over four out of every five visitors to
the site come as a result of either typing in the "Rightmove" name, responding
to email alerts that we send our registered users when relevant properties come
onto the market or via websites that link to Rightmove.  A further 15% comes to
us free as a result of Rightmove being found in generic searches entered into
search engines (e.g. "property for sale in Chelmsford"). Only 2% to 3% of
visits involve Rightmove paying for online traffic.

 

2009 saw the launch of our iPhone application, which with over 300,000
downloads was the third most popular free iPhone application.  We have embraced
other aspects of new technology including RSS data feeds, integration with
social networking sites and Twitter.  We also launched a new area of the site
dedicated to helping sellers and landlords with their market research.

Behind the scenes we have invested heavily in ensuring that a particular area
(such as "Everton" in Liverpool) is defined in a way that corresponds to how
home hunters and estate agents think of it, not just the way the Royal Mail
post code defines it.  We also now provide "find-as-you-type" functionality to
make it even easier to search on Rightmove and have launched map-based
searching.


Our "See More" media campaign ran from Christmas 2008 to the start of February
2009 and again in September 2009.  From Boxing Day 2009 we ran a new TV
advertisement building on the "See More" theme and specifically focused on
influencing prospective sellers of the benefits of choosing an estate agent
that is a Rightmove member.


Support to our advertisers

Rightmove has a large field and telephone based team of account managers as
well as customer service staff to provide a high quality level of service to
our customers, in contrast to other entirely online services adopted by many
internet advertising businesses.


During the year we substantially upgraded the toolkit we provide to our
advertisers in terms of management and performance reporting. A new competitive
scorecard allows agents to assess their performance against their key
competitors on a range of critical performance criteria.  We also upgraded our
call handling facilities to provide a service to our customers to track their
performance responding to phone calls and recording phone calls for quality
checking purposes.


Of particular note in 2009 were the 35 breakfast seminars held across the UK,
with close to 3,000 estate agents taking up the invitation to attend this free
service. The seminars focused on helping our members get the best value for
money out of their basic Rightmove membership and indeed any other property
website that they might use.


Innovation in advertising products

2009 saw a high level of innovation in new advertising products.  This is
central to our strategy.  We aim to provide our members with advertising
products which allow them to promote their own brands and their unique selling
points as effectively as we help them find prospective buyers for the
properties they are marketing.

 

The latter part of the year saw record levels of adoption of our existing and
enhanced Choice products, with approaching 48% of all our customers and over
59% of new homes developers taking additional products.  Improvements were made
to the Premium Listing product which enhances the presentation of a property in
the search results, as well as rolling Premium Listing out to our lettings and
overseas homes customers.

 

The biggest innovation has been the introduction of "search term" driven
display advertising in the forms of our Local Homepage advertisements and our
Featured Agent/Featured Developer product.  Agents and developers can not only
target the geographical area where their property stock is, but also target
areas they see as offering good future prospects.  The format of the
advertisements allows agents and developers to communicate their brand, the
quality of their product and make offers.  Some agents have chosen to use Local
Homepage advertisements on Rightmove to communicate to potential vendors that,
if they instruct that agent, they will enhance the way in which the seller's
property is advertised on the Rightmove website by using one or more of our
existing Choice products.  


The initial take up of these products in January 2010 has been excellent.
Critical to overall success of these products will be the retention rates we
see through the coming year. 

 

Focus

Our focus has been and remains on the UK online property advertising market. 
We believe this focus is a vital ingredient of our success.  The last 18 months
have offered opportunities to make acquisitions but none had the attraction of
organic revenue growth in our core markets.



Protecting shareholder value


How the Board monitors performance

The Board reviews performance at Board meetings and by a detailed monthly
management report, which includes the performance of each operating segment
against the monthly and annual plan and covers all the key performance
indicators featured in this report. Risks are primarily monitored and managed
by the monthly Executive Board, which reports to the main Board on such risks
bi-annually or as the business requires.  With the assistance of the Audit
Committee, the Board reviews the effectiveness of internal controls at least
annually.


Uncertainties, threats and risks

The Rightmove business model has proved to be remarkably resilient in the face
of the unprecedented down-turn affecting the customers we serve.  Nonetheless
the business is inevitably exposed to the general state of the housing market
and particularly to transaction volumes.  Having hit their lowest levels in 50
years during late 2008 and early 2009, there has been a steady recovery. 
Nonetheless, 2009 will prove to have been the second worst year (after 2008) in
terms of overall transaction volumes.  We expect 2010 to also be among the most
challenging years in terms of transaction volumes, partly due to agents
experiencing low existing stock and lack of sellers coming to market. However,
we believe that lower cost bases among estate agents and a recent period of
healthier profits, together with recapitalisation of house builders, should
offer more opportunities than challenges.


From its inception, Rightmove has experienced a regular flow of new property
portal entrants, whether explicitly seeking to compete with us or not.  They
have exhibited a range of business models and frequently offer free advertising
to agents.  Those who attracted the most attention have failed to make any
material impact on our market share and whilst we cannot rule out the
appearance of a completely new entrant or business model, nothing we have seen
to date gives us serious cause for concern. 


Looking to our organic growth prospects, Rightmove's success as the preferred
alternative to local newspapers when property advertising spend recovers will
depend on our ability to develop and commercialise the right range of products
and services. 


We believe that risks relating to operational failures, to financial and legal
exposures, to fraud or embezzlement or from onerous commercial obligations or
liabilities are limited.  The business has few tangible assets and the major
intellectual assets are tied up in the design of our website and in our brand
identity, recognition and reputation.


Financial position


Revenue

Revenue fell in 2009 by £4.6m reflecting the tougher trading conditions within
the UK housing market. Revenue from estate agency contributed to 68% of total
revenue with a year on year fall of £2.3m. The slow down in the house building
industry saw revenue from new homes developers fall by £4.1m. However, the
increase in revenues from Holiday Lettings Limited of £1.8m partially offset
the falls experienced elsewhere.


Margin growth

The underlying operating margin for the year increased from 55% to 60% as a
consequence of a significantly reduced cost base. 

                                   Year ended       Year ended       Year ended
                             31 December 2009 31 December 2008 31 December 2007
                                                                               
Underlying operating margin                                                    
% (3)                                     60%              55%              54%
                                                                               
 

Bad debt

During the year the net bad debt charge was £0.2m (2008: £1.4m). The greatly
reduced bad debt charge principally reflects the much reduced number of estate
agents leaving the industry.

 

Taxation

The consolidated tax rate for the year ended 31 December 2009 was 21% (2008:
 33%).  The difference between this and the standard rate of tax at 28% is
mainly attributable to the deferred tax asset created of £2.5m on share-based
incentives due to the increase in the Company share price over the period,
together with tax relief on share options exercised during the year.


Share-based payments and national insurance (NI)

In accordance with IFRS 2, a non-cash charge of £1.9m (2008: £2.0m) is included
in the profit or loss representing the amortisation of the fair value of
share-based incentives granted, including Sharesave options, since 2006.


Employer's NI is being accrued, where applicable, at a rate of 12.8% on the
potential employee gain on share-based incentives granted. Based on a closing
share price at the year end of £5.04 this resulted in a charge for the year of
£1.3m (2008: £0.2m credit).


Net financial expenses

Net financial expenses were £0.9m (2008: £1.3m). This reduction reflects a
combination of a lower level of average borrowings as compared to 2008 and
historically low LIBOR rates.


Earnings per share

Basic earnings per ordinary share of 27.5p (2008: 22.5p) is based on profit
after taxation and a weighted average of 109.1m ordinary shares in issue (2008:
 113.4m). Underlying basic earnings per ordinary share(1) was 30.5p (2008:
 23.8p).


Statement of financial position

Due to the strong financial performance and cash generation during the year
combined with lower levels of share buy backs, the Group has moved into a net
asset position with total equity of £3.2m at 31 December 2009 (2008: deficit of
£15.5m). 


The reduction in trade and other receivables from £12.6m to £9.4m relates
principally to strong cash collections due to an increased focus on credit
control processes as well as a reduction of £1.2m in relation to marketing
prepayments.


Trade and other payables increased from £12.4m to £13.9m principally due to an
increase in the potential liability for employer's NI on share-based incentive
gains and an increase in deferred revenue of £0.9m (of which £0.6m relates to
Holiday Lettings Limited).


Cash flow and net debt

Cash generated from operations was £46.2m (2008: £38.7m) and cash flow
conversion was in excess of 100%. Net cash from operating activities was £7.5m
higher at £34.7m (2008: £27.2m) due to a net positive movement in working
capital and lower interest paid offset by increased taxes of £0.8m. Capital
expenditure was £0.3m (2008: £1.0m).


A total of £5.5m was invested during 2009 in the repurchase of our own shares
(2008: £44.8m) whilst a further £10.9m was paid by way of dividends (2008: £
10.4m) to the Company's shareholders. 


Proceeds of £5.4m (2008: £nil) were received on the exercise of share options
of which £2.4m were applied in the purchase of our own shares by The Rightmove
Employees' Share Trust.


The Group elected to repay £14.8m of its revolving loan facility in April 2009
and termed out £25m of the loan at LIBOR plus 150 basis points, repayable in
equal quarterly instalments over five years. In addition £2.5m of scheduled
payments were made during the year bringing total debt repayments in the year
to £17.3m. In February 2010, a decision was made to retire the debt early and
the loan was repaid in full without penalty.


Net cash at 31 December 2009 was £3.4m (2008: net debt of £16.9m).


The Board of directors is confident that with the existing cash resources and
banking facilities in place, the Group and the Company will remain cash
positive and have adequate resources to continue in operational existence for
the foreseeable future.


The Board's priorities for the usage of cash are: investment in the business;
payment of dividends; and the return of excess cash to shareholders via share
buy backs. We believe that the future working capital and capital expenditure
requirements of the business will continue to be low and that the business will
be in a position to return surplus capital to shareholders during 2010 through
a combination of dividends and share buy backs. 


Current trading and outlook

2010 has started with the Rightmove.co.uk website experiencing record levels of
site traffic and enquiries, including several of the busiest days in
Rightmove's history.  The new advertising campaign has been well received not
only among home buyers and our advertisers but also with potential home
sellers.


Average spend per advertiser has started the year strongly and is expected to
rise further over the coming months. The strong start to the year is the result
of encouraging levels of spending on the new display advertising products as
well as the Choice products plus the revenue impact from the first 2010
subscription price rises. By April we expect to see the full impact of these
price rises across all business segments.


Estate agency membership continues to grow at rates similar to the second half
of 2009, while the number of new home developments continues to decline and may
be challenging for some time to come. Holiday Lettings has continued to grow
with good renewal rates achieved in the key months of January and February.

The overall outlook for the UK residential housing market cannot be separated
from the general economic environment, consumer confidence and spending power
and short- term uncertainties around the forthcoming general election. Subject
to there being no further decline in the UK housing market, the
Board remains confident of making further progress in 2010.

                                    


Ed Williams                                                    Nick McKittrick
Managing Director                                              Chief Operating Officer and Finance Director


(1)  Before share-based payments, NI on share-based incentives and capital
reconstruction credit/costs

(2)  Source: BMRB omnibus survey, November 2009

(3)  Based upon operating profit before share-based payments, NI on share-based
incentives and capital reconstruction credit/costs


DIRECTORS AND OFFICERS

Scott Forbes
Chairman
Scott was appointed Chairman of Rightmove plc in July 2005. He is also the
Chief Executive of Bridge Capital Advisors Ltd which he founded in 2007 and was
a director of NetJets Management Ltd, a subsidiary of Berkshire Hathaway
through to October 2009.  Scott has nearly 30 years' experience in operations,
finance and mergers & acquisitions which includes 15 years at Cendant
Corporation which was formerly the largest worldwide provider of residential
property services. Scott established the Cendant international headquarters in
London in 1999 and led this division as Group Managing Director until he joined
Rightmove. He was Chairman or Chief Executive of various residential property
and travel industry businesses during his tenure at Cendant and held similar
roles for other companies in other sectors, including National Car Parks and
Green Flag. Prior to his time at Cendant, Scott was a certified public
accountant. (Appointed 13 July 2005.)


Ed Williams
Managing Director
Ed joined Rightmove in December 2000 as Managing Director at its inception. He
is Chairman of Holiday Lettings (Holdings) Limited in which Rightmove has a
two-thirds ownership stake. His prior experience is in business strategy and IT
consulting with McKinsey & Co, Accenture and JPMorgan. (Appointed
19 December 2000.)


Nick McKittrick
Chief Operating Officer and Finance Director
Nick joined Rightmove in 2000. He led the development of Rightmove's original
website and then went on to build the new homes, lettings and overseas
businesses. At the start of 2005 Nick became the Managing Director of the main
Rightmove.co.uk operating subsidiary overseeing a trebling of revenue in three
years. In 2009, he was promoted to the role of Chief Operating Officer and
Finance Director. Before joining the Company he worked in Accenture for eight
years in the technology consulting division. (Appointed to the Board on
5 March 2004.)


Jonathan Agnew
Non-executive Director
Jonathan joined the Board in January 2006 as Senior Independent Director. He is
Chairman of Beazley, LMS Capital, The Cayenne Trust and Ashmore Global
Opportunities. Jonathan was an investment banker for over 25 years, including
being a Managing Director of Morgan Stanley and Group Chief Executive of
Kleinwort Benson. He has been Chairman of Nationwide Building Society, Limit
and Gerrard Group and has served on the Council of Lloyd's.  (Appointed
16 January 2006.) (Chairman of the Remuneration Committee and a member of the
Audit and Nomination Committees.)


Colin Kemp
Non-executive Director
Colin was appointed to the Board in July 2007. He is Finance and Business
Performance Director for the Halifax Community Bank following the formation of
Lloyds Banking Group in January 2009. With over 30 years' experience in high
street retail banking, Colin has worked for HBOS companies since 1979. His
roles have included running the Retail Contact Centres and heading up the
Halifax Employee Share Services business, administering employee share plans to
over 400 UK companies. Between January 2005 and December 2007, Colin was
Managing Director of Halifax Estate Agents. Colin is a Cranfield MBA and an
Associate of the Chartered Institute of Marketing. (Appointed 3 July 2007.)


Ashley Martin
Non-executive Director
Ashley joined Rightmove plc in June  2009 as a non-executive director and also
as Chairman of the Audit Committee, where he provides oversight of the
financial reporting practices, internal control environment and compliance with
the various listed company regulations. He is also a member of the Remuneration
Committee. He is Finance Director of Rok plc and prior to that served as Group
Finance Director of the media services company, Tempus plc. (Appointed
11 June 2009.) (Chairman of the Audit Committee and member of the Remuneration
Committee.)

Stephen Shipperley
Non-executive Director
Stephen joined the Board on its formation in 2000. Stephen has over 30 years of
experience in the property industry. He is Group Executive Chairman of Connells
Limited, which has grown to become the second largest estate agency business in
the UK with interests in residential estate agency, surveying, financial
services, relocations and conveyancing. (Appointed 30 June 2000.)


Judy Vezmar
Non-executive Director
Judy is Chief Executive Officer of LexisNexis International. LexisNexis®, part
of the global media group Reed Elsevier PLC, is a leading worldwide provider of
content-enabled workflow solutions designed specifically for professionals in
the legal, risk management, corporate, government, law enforcement, accounting
and academic markets. Judy is responsible for the International group and their
expansion of the range of successful online services to over 100
countries.  She is based in London.  (Appointed 16 January 2006.) (Member of
the Audit, Remuneration and Nomination Committees.)


Liz Taylor
Company Secretary
Liz Taylor was appointed Company Secretary of Rightmove plc on 4 July 2006. She
is a Fellow of the Institute of Chartered Secretaries and Administrators and
has 20 years' company secretarial experience across a variety of public
companies. Prior to joining Rightmove, she was Company Secretary of The
Berkeley Group Holdings plc.


SENIOR MANAGEMENT TEAM

Peter Brooks-Johnson, Agency Director
Peter joined Rightmove in 2006 and is responsible for the Estate Agency
business, marketing, the website and the proposition to agency customers
including the development of advertising products. Peter was formerly a
management consultant with Accenture and The Berkeley Partnership, working with
clients such as BP, Marks & Spencer and the Woolwich.


Peter Armstrong, New Homes Director
Peter joined Rightmove in 2003 as one of the first handful of people developing
the New Homes business, a business which he has run since May 2006. Prior to
Rightmove, Peter worked in sales and sales management, latterly in directory
advertising with Yell.


Miles Shipside, Commercial Director
Miles joined Rightmove as a founding director in 2001 bringing 20 years of
experience at senior levels in independent estate agency and with Halifax
Estate Agency. He has responsibility for estate agency and media relations,
specialising in advising the industry on how the internet is transforming home
moving and the state of the housing market.  He qualified as a Chartered
Surveyor in 1982.


Alan Gearing, Managing Director, Rightmove Property Services
Alan joined Rightmove in 2006 developing new sources of revenue separate from
property advertising. He was appointed as Managing Director of Rightmove's
Automated Valuation Model division in July 2008. Prior to Rightmove he was a
founder of both The Asset Management Group (property disposal and maintenance
services) and The Inventory Exchange (online inventory and property inspection)
and was Managing Director of a 50 branch estate agency chain.

Scott Marshall, Finance Director of Rightmove.co.uk
Scott joined Rightmove in 2001 as Finance Director and was Company Secretary
until the IPO in 2006. Scott led the preparations for the float on the London
Stock Exchange in 2006 and led the 2008 Scheme of Arrangement project to
introduce and list a new holding company for the Group. Scott is a director of
Holiday Lettings (Holdings) Limited.  Scott qualified as a Chartered Accountant
in Australia with Ernst & Young.


Simon Hickie, Human Resources Director
Simon joined Rightmove in 2007 following seven years at Bloomberg LP where he
was responsible for HR operations across Europe, the Middle East and Africa.
Prior to moving into HR, he had managed part of Bloomberg's financial research
operation covering new debt and equity security issuance and M&A activity in
Europe.


Robyn Perriss, Financial Controller
Robyn joined Rightmove in 2007 and has day-to-day responsibility for the
financial operations, based out of Milton Keynes, as well as statutory
reporting and the treasury function. She was formerly Group Financial
Controller at the online media business, Auto Trader. She qualified as a
chartered accountant in South Africa with KPMG.


CORPORATE SOCIAL RESPONSIBILITY

Our people

Our people are our largest resource and our most highly valued asset. We are
proud of our people and the mixture of talent and experience that they bring
and we depend on their skills and commitment to achieve our objectives.


Our cultural style is bolstered by an open and honest communication environment
and by investment in ensuring that all employees have a profound understanding
of Rightmove's core values and goals. We achieve this through a combination of
a rigorous selection process, an off-site residential course to ensure all
Rightmovers understand our core values and the role that they perform, ongoing
coaching and mentoring, and cross-functional team building events involving all
employees. Staff opinions are frequently sought through regular staff forums
with senior managers and employee online surveys.


We have also expanded our Rightmover-led training academy designed to provide a
structured means for employees to expand and diversify their skills and
knowledge and explore new ways of working with one another. Given the
specialised technical nature of the work we do and the services we provide, we
also support ongoing external professional development where appropriate.


During 2009 we have explored new ways of ensuring that Rightmovers are aware of
the additional benefits that they are entitled to access, and which have proved
to be a useful retention tool. This is achieved not only via our induction
process and intranet but also through benefits fairs. In November 2009, the
Company's first Sharesave contract matured allowing a large cross section of
employees to invest and benefit from the success of the Company over the last
three years. 42% of employees currently participate in the Sharesave scheme.


Rightmove has a strong commitment to equality of opportunity in all our
employment policies, practices and procedures. We take a proactive approach
throughout our recruitment and selection process to ensure that we attract,
hire and retain a diverse and talented workforce and this is kept under close
and regular scrutiny. No existing or potential employee will receive less
favourable treatment due to their race, creed, nationality, colour, ethnic
origin, age, religion or similar belief, connections with a national minority,
sexual orientation, gender, gender reassignment, marital status, membership or
non-membership of a trade union, disability, or any other classification as
prescribed by law.


Charitable activity

During 2009, our employees continued to support the NSPCC, our Company
nominated charity and we continue to encourage all our employees to devote time
and fundraising efforts to charitable causes of particular importance to them
as individuals.  During 2009 a considerable number of staff have been active in
raising money or supporting the fundraising activities of others.


Environment

Rightmove actively considers its environmental impact. Since our operation is
primarily office-based, the direct environmental impact is relatively low.
Indeed Rightmove's business creates opportunities to reduce the overall
environmental harm associated with a variety of aspects of the whole home
hunting process.


Traditional ways of finding a home tend to involve large amounts of paper and
printing, whether in the form of newspaper advertising, property particulars
mailed to applicants through the post or leaflet drops by agents. Rightmove
reduces the need for print media and the environmental damage that goes with
them.  Rightmove takes care to design the layout of property particulars to
reduce the total number of pages that need to be printed out in those cases
where a home hunter does want a physical copy.


Enhanced information on properties also reduces the amount of time home hunters
waste in visiting properties that rapidly turn out to be inappropriate. As a
high proportion of viewings involve a car journey, any reduction in wasted
viewings has an environmental benefit. Rightmove has worked hard to increase
the number of photographs of each property and has introduced more
comprehensive maps and aerial photographs which help home hunters to identify
the specific location of a property. The higher quality the information
presented about properties the less carbon footprint is generated by
prospective buyers making wasted journeys.

The Rightmove.co.uk website includes functionality for our customers to display
Energy Performance Certificates which allow prospective buyers to evaluate the
energy efficiency of a property they are considering buying and to identify
opportunities to improve the energy efficiency once they have purchased the
property.


We take the environmental impact of our own operations very seriously. As an
internet-based Group with most staff employed in three office locations, we
believe our own environmental footprint is small and that there are no
by-products of our operations which have a clear negative impact on the
environment. Our staff are encouraged to take proactive steps to address our
environmental responsibilities. For instance, we continue to operate
comprehensive recycling schemes which were established in consultation with
local authorities and recycling partners. As an operator of an online property
portal, the main environmental impact is the power usage of our data centres.
Our procurement policy is to purchase hardware with the best computational
performance which uses the least electrical power. For example, in the period,
we have completed a partial refresh of our data centre hardware replacing old
less efficient servers with half the number of new efficient units. This
refresh has not only reduced our electrical power usage, but has allowed us to
serve over six billion page impressions to our customers, an increase of 23%
above that of 2008.


As an online Group, our culture emphasises a paperless environment. We also
recognise that our responsibilities do not stop just with how we operate
internally - we also encourage all our customers, business partners and
suppliers not to unnecessarily print out emails sent by us in the signature of
all our emails. Moreover in 2008 we introduced e-communications for our
shareholders, including an interactive copy of the annual report to enable
investors and people with an interest in the Company to print specified pages
thereby reducing the quantity of printed material we distribute. In 2009, we
introduced e-mail invoicing for our new homes developer customers and have
plans to roll out e-mail invoicing to the wider customer base in 2010, where
practicable to do so.


Health and safety

The Group considers the effective management of health and safety to be an
integral part of managing its business. During 2009, we continued our fire
safety, first aid and work place safety training. The Group's ongoing policy on
health and safety is to provide adequate control of the health and safety risks
arising from work activities, through further consultation with, and training
of, employees, the provision and maintenance of plant and equipment, safe
handling and use of all substances and the prevention of accidents and causes
of ill health. The Group will maintain safe and healthy working conditions for
employees, visitors and contractors, and keep the policy on health and safety
up-to-date with regular reviews and necessary alterations to the policy as
required.


DIRECTORS' REPORT

The directors submit their report together with the audited financial
statements for Rightmove plc (the Company) and its subsidiary companies (the
Group) for the year ended 31 December 2009. The Company is domiciled in England
(registered number 6426485).


Principal activities
The Group operates in the UK residential property industry connecting people to
properties.


Its principal business is the operation of the Rightmove.co.uk website, which
is the UK's largest residential property website. Its customers (estate agents,
letting agents, new homes developers and overseas homes agents and vendors) pay
fees for the right to display properties on the Rightmove website, which
provides home hunters with property details to search.

Further information on the Group's activities during the year under review and
of its prospects are contained in the Business and Financial Review on pages 4
to 9.


The following sections inclusive are incorporated by reference into the
Directors' Report which have been drawn up and presented in accordance with and
in reliance upon acceptable English company law and the liabilities of the
directors in connection with the report shall be subject to the limitations and
restrictions provided by such law:


• Business and financial review (pages 4 to 9)
• Directors and officers (pages 10 to 12)
• Corporate social responsibility (pages 13 to 14)
• Corporate governance (pages 19 to 25)
• Remuneration report (pages 26 to 38)

In compliance with the business review provisions of the Companies Act 2006,
within the Business and Financial Review, principal risk factors are discussed
under the section "Uncertainties, Threats and Risks" on page 7. Key performance
indicators are given on page 5 and information on the likely developments of
the Group under "Current Trading and Outlook" on page 9.


Trading results

The Group's underlying operating profit from continuing operations (before
share-based payments, National Insurance (NI) on share-based incentives and
capital reconstruction credit/costs) for the financial year was £41,916,000
(2008: £41,004,000). Further information on the results for the Group is set
out in the Consolidated Statement of Comprehensive Income on page 41 and the
supporting Notes and also the Business and Financial Review on pages 4 to 9.


Dividend

An interim dividend of 3.0p (2008: 3.0p) per ordinary share was paid on
13 November 2009 to shareholders on the register of members at the close of
business on 16 October 2009. The directors are recommending a final dividend
for the year of 7.0p (2008: 7.0p) per ordinary share, which together with the
interim dividend of 3.0p, paid in respect of the half year period ended
30 June 2009, makes a total for the year of 10.0p (2008: 10.0p), amounting to £
10,909,000 (2008: £10,891,000). Subject to shareholders' approval at the Annual
General Meeting on 5 May 2010, the final dividend will be paid on 11 June 2010
to shareholders on the register of members at the close of business on 14 May
2010.


The final dividend payment has not been included in trade and other payables as
it was not approved before the year end.


Share capital

The ordinary shares in issue (including 2,505,430 shares held in treasury) at
the year end comprised 118,923,411 (2008: 120,050,873) ordinary shares of £0.01
each, being £1,189,000 (2008: £1,201,000). The holders of ordinary shares are
entitled to receive dividends as declared from time to time, and are entitled
to one vote per share at meetings of the Company. Movements in the Company's
share capital in the year are shown in Note 22 to the financial statements.
Information on the Group's share-based incentives schemes is set out in Note 24
to the financial statements. Details of the share-based incentive schemes for
directors are set out in the Remuneration Report on page 36.


Share buy back

The Company announced a share buy back programme in June 2007, which continued
during 2008 and the latter part of 2009. Of the 15% authority given by
shareholders at the 2009 Annual General Meeting, a total of 1,127,462 ordinary
shares of £0.01 each were purchased in the year to 31 December 2009, being 1%
of the shares in issue (excluding shares held in treasury) at the time the
authority was granted. The average price paid per share was £4.84 with a total
consideration paid (inclusive of all costs) of £5,490,000 (2008: £45,044,000).Since the introduction of the new parent Company in January 2008, a total of
12,981,997 shares have been purchased of which 2,505,430 have been transferred
into treasury with the remainder having been cancelled. A resolution seeking to
renew this authority will be put to shareholders at the Annual General Meeting
on 5 May 2010.


Shares held in trust

As at 31 December 2009, 7,418,874 ordinary shares of £0.01 each in the Company
were held by The Rightmove Employees' Share Trust (EBT) for the benefit of
Group employees (2008: 8,353,700). These shares had a nominal value at
31 December 2009 of £74,000 (2008: £84,000) and a market value of £37,428,000
(2008: £14,703,000). The shares held by the EBT may be used to satisfy
share-based incentives for the Group's employee share plans. During the year
the EBT purchased 706,965 shares in the Company and 1,641,791 shares were
transferred to Group employees following the exercise of both executive and
Sharesave share options.


The terms of the EBT provide that dividends payable on the shares held by the
trust are waived.

Substantial shareholdings

As at the date of this report, the following beneficial interests in 3% or more
of the Company's issued ordinary share capital (excluding shares held in
treasury) on behalf of the organisations shown in the table below, had been
notified to the Company pursuant to Rule 5 of the Disclosure and Transparency
Rules:

 

                                                              No of shares %(1)
                                                                               
Tremblant Partners LP                                           10,160,848  8.7
                                                                               
BlackRock Inc                                                    9,251,289  7.9
                                                                               
Baille Gifford & Co                                              8,708,438  7.5
                                                                               
The Rightmove Employee Trust                                     7,418,874  6.4
                                                                               
Caledonia Investments Pty Ltd                                    7,016,588  6.0
                                                                               
Credit Suisse Group AG                                           6,864,011  5.9
                                                                               
Old Mutual Asset Management                                      6,792,531  5.8
                                                                               
Lone Pine Capital LLC                                            6,625,149  5.7
                                                                               
Maverick Capital Ltd (as a discretionary manager)                6,153,416  5.3
                                                                               
Marathon Asset Management LLP                                    5,930,755  5.1
                                                                               
Aegon UK Group                                                   4,544,788  3.9
                                                                               
Legal and General Investment Mngt                                4,171,564  3.6
                                                                             
(1) The above percentages are based upon the voting rights capital (being the
shares in issue less shares held in treasury) of 116,417,981.


Directors

The directors of the Company at the year end and as at the date of this report
are named on pages 10 to 11 together with their profiles.


The Articles of Association of the Company require directors to submit
themselves for re-appointment where they have been a director at each of the preceding two
Annual General Meetings and were not appointed or re-appointed by the Company
at, or since, either such meeting. In accordance with these provisions, Ed
Williams (Managing Director), Nick McKittrick (Chief Operating Officer and
Finance Director) and Stephen Shipperley (non-executive director) will retire
at the forthcoming Annual General Meeting and each will offer themselves for
re-election. Ashley Martin (non-executive director), will also retire and offer
himself for election, this being his first general meeting since his
appointment in June 2009.

The Board is satisfied that the directors retiring are qualified for
re-appointment by virtue of their skills, experience and contribution to the
Board. Ed Williams and Nick McKittrick have service agreements with the Company
which can be terminated on 12 months notice. Ashley Martin and Stephen
Shipperley have a Letter of Appointment with the Company that can be terminated
on three months' notice.
 

The interests of the directors in the share capital of the Company at
31 December 2009, the directors' total remuneration for the year and details of
their service contracts and Letters of Appointment are set out in the
Remuneration Report on pages 26 to 38. At 31 December 2009 each of the
executive directors was deemed to have a non-beneficial interest in 7,418,874
ordinary shares of £0.01 each held by the trustees of the EBT.


Directors' interests in contracts

Stephen Shipperley, non-executive director, is Group Chairman of Connells
Limited. Colin Kemp, 
non-executive director, held the position of Managing Director of Halifax
Estate Agencies Limited from January 2005 to December 2007. Prior to the IPO in
2006 the Group had entered into agreements with Connells Limited and Halifax
Estate Agencies Limited to list all their respective estate agency properties
on Rightmove.co.uk until at least March 2009. In December 2008 and April 2009
respectively, the Group announced that the agreements with Connells Limited and
Halifax Estate Agencies Limited had been extended into 2012. Further details of
amounts owed by and invoiced to Connells Limited during the year are disclosed
in the section dealing with Related Party Disclosures in Note 28 to the
financial statements on page 74.


Supplier payment policy

The Group and Company's policy concerning creditors is to agree payment terms
with its suppliers, ensure the relevant terms of payment are included in
contracts and to abide by those terms when it is satisfied that goods or
services have been provided in accordance with the contracts. For the year to
31 December 2009, trade creditors represented 26 days (2008: 25 days) of
average daily purchases. The Group had £777,000 of trade payables at the year
end (2008:  £1,225,000).


Contractual arrangements

Due to the nature of the Group's business activities, the Group maintains a
small number of contractual arrangements with external providers of data,
software, hardware and web-based services, which are essential to support the
operation of all business segments. However, the loss of one of these
arrangements due to supplier failure would not result in a critical business
failure, as such services could be sourced from a number of other suppliers.


Research and development

The Group undertakes research and development expenditure in view of developing
new products and improving the existing property websites. Further details are
disclosed in Note 2 to the financial statements on page 50.


Charitable and political donations

The Company made no charitable contributions or political donations during the
year (2008: £nil).


Subsequent events

In the period between 31 December 2009 and the date that the Directors' Report
was signed, the Board of directors agreed to retire the debt with the Bank of
Scotland and the outstanding sum of the term loan of £21,250,000  (being the
balance of the term loan at 31 December 2009 of £22,500,000 less a quarterly
instalment of £1,250,000) was repaid in full on 10 February 2010. Further
details are disclosed in Note 31 to the financial statements on page 77.


Annual General Meeting

The Annual General Meeting of Rightmove plc will be held at the offices of UBS
Limited at 1 Finsbury Avenue, London, EC2M 2PP on 5 May 2010 at 10am.

The majority of the resolutions being proposed at the 2010 Annual General
Meeting are general in nature including the renewal for a further year of the
limited authority of the directors to allot the unissued share capital of the
Company and to issue shares for cash other than to existing shareholders. A
resolution will also be proposed to renew the directors' authority to purchase
a proportion of the Company's own shares.


One of the items of special business to be addressed at this Annual General
Meeting relates to the requirement in the Companies (Shareholders' Rights)
Regulations 2009, which came into force on 3 August 2009, that all general
meetings must be held on not less than 21 clear days' notice unless
shareholders approve a shorter notice period.  At the 2009 Annual General
Meeting, a resolution was passed allowing the Company to call general meetings
(other than Annual General Meetings) on not less than 14 clear days' notice. 
As this authority will expire at this Annual General Meeting, we will be
proposing a resolution at the 2010 Annual General Meeting to renew this
authority.


We will also be asking shareholders to approve a number of amendments to our
Articles of Association, primarily to reflect the remaining provisions of the
Companies Act 2006 which came into force in October 2009.  An explanation of
the main changes between the proposed and the existing Articles of Association
and other resolutions being proposed at the 2010 Annual General Meeting will be
provided in the Notice of Annual General Meeting, which will be sent to
shareholders (where requested) and made available on the corporate website
(www.rightmove.co.uk/investors.rsp) in March 2010.

 
Auditors

KPMG Audit Plc has confirmed its willingness to continue in office as auditors
of the Group. In accordance with Section 489 of the Companies Act 2006, a
resolution for the re-appointment of KPMG Audit Plc as auditors of the Group
and for the Audit Committee to determine their remuneration will be proposed at
the forthcoming Annual General Meeting.


Audit information

So far as the directors in office at the date of signing of the report are
aware, there is no relevant audit information of which the auditors are unaware
and each such director has taken all reasonable steps to make themselves aware
of any relevant audit information and to establish that the auditors are aware
of that information.


Responsibility statement of the directors in respect of the annual financial
report

We confirm that to the best of our knowledge:

  * the financial statements, prepared in accordance with the applicable set of
    accounting standards, give a true and fair view of the assets, liabilities,
    financial position and profit or loss of the Company and the undertakings
    included in the consolidation taken as a whole; and

  * the Directors' Report includes a fair review of the development and
    performance of the business and the position of the issuer and the
    undertakings included in the consolidation taken as a whole, together with
    a description of the principal risks and uncertainties that they face.

Signed by the Board:
                                   

Ed Williams                         Nick McKittrick
Managing Director                   Chief Operating Officer and Finance Director


26 February 2010


CORPORATE GOVERNANCE


Statement of compliance

The 2008 Combined Code of Corporate Governance (Combined Code) sets out the
principles and provisions relating to good governance of UK listed companies.
In this section we set out how we have applied the principles and complied with
the provisions of the Combined Code during 2009 and explain the reason for one
area of non-compliance.


The Board

At the date of this report, the Board comprises eight directors including the
Chairman (Scott Forbes), two executive directors (Ed Williams, Managing
Director and Nick McKittrick, Chief Operating Officer and Finance Director) and
five non-executive directors (Jonathan Agnew, who is the Senior Independent
Director, Ashley Martin, Judy Vezmar, Colin Kemp and Stephen Shipperley).


Stephen Shipperley is Group Executive Chairman of Connells Limited and in
strict application of the criteria of the Combined Code is not considered to be
independent. Colin Kemp has worked for HBOS companies for over 30 years and
held the position as Managing Director of Halifax Estate Agencies Limited from
January 2005 to December 2007. The Board considers thatboth Stephen Shipperley
and Colin Kemp are independent in character and in particular both continue to
challenge rigorously the executive directors and the Board as a whole. Whilst
the composition of the Board for the period under review was not in strict
compliance with supporting principle A3.2 of the Combined Code in that at least
half of the directors (excluding the Chairman) are not considered independent
non-executive directors, the directors believe that the Board currently
operates effectively and that all the non-executive directors are fully
independent of management and that Jonathan Agnew, Ashley Martin and Judy
Vezmar are free from any business or other relationship that could materially
interfere with the exercise of their independent judgment and advice to the
Board.


Neither the Chairman nor any of the executive directors hold any other
non-executive directorships or commitments disclosable under the Combined Code.


Biographical details of the directors appear on pages 10 and 11.


Directors' remuneration

The principles and details of directors' remuneration and contractual
arrangements are contained in the Remuneration Report on pages 26 to 38.


Board and committee membership and attendance

In accordance with the Combined Code, the Articles of Association require all
directors to seek re-election every three years. In addition all directors are
subject to election by shareholders at the first opportunity after their
appointment. As previously explained in the Directors' Report, Ed Williams,
Nick McKittrick and Stephen Shipperley are required to seek re-election at the
2010 Annual General Meeting. Ashley Martin, who having been appointed since the
last Annual General Meeting, will retire from the position as non-executive
director and offer himself for election.


The membership of the Committees of the Board and attendance at meetings for
the year under review are set out in the table below:

                                 Remuneration           Audit          Nomination
                  Board             Committee       Committee           Committee
                                                                                 
Total meetings        7                     4               4                   2
                                                                                 
Scott Forbes          7                  4(1)             N/A                   2
                                                                                 
Jonathan Agnew        7                     4               4                   2
                                                                                 
Colin Kemp            6                   N/A             N/A                 N/A
                                                                                 
Ashley Martin      4(2)                  2(2)            3(2)                 N/A
                                                                                 
Nick McKittrick       7                   N/A             N/A                 N/A
                                                                                 
Stephen               6                   N/A             N/A                 N/A
Shipperley                                                                       
                                                                                 
Judy Vezmar           7                     3               4                   2
                                                                                 
Ed Williams           7                   N/A             N/A                 N/A
                                                                                 

The Remuneration Committee Chairman has requested that the Chairman of the
Board attend the Remuneration Committee meetings.

Ashley Martin has attended all Board, Audit and Remuneration Committee meetings
since his appointment to the Board on 11 June 2009. 

In addition to the above meetings, the Chairman conducts meetings with the
non-executive directors without the executive directors being present when
required. Jonathan Agnew, the Senior Independent Director, chaired a meeting of
the Board at which the performance of the Chairman was also reviewed (without
the presence of the Chairman). 


Operation of the Board

The Board is responsible to shareholders for the overall direction and control
of the Group. Its key task is to approve strategy, ensuring the successful
implementation of projects and proposals and monitoring the operating
performance of the Group in pursuit of its objectives in the interest of
maximising long-term shareholder value. The Board has adopted a formal schedule
of matters requiring specific approval. These include, amongst other things,
the approval of the annual business plan, capital structure, dividend policy,
acquisitions and disposals, appointment and removal of officers of the Company,
approval of the Half Year and Full Year results, shareholder communication and
responsibility for corporate governance and review of the Group's risks and
system of internal controls.


The Board receives meeting papers one week prior to the meeting to allow
sufficient time for detailed review and consideration of the documents
beforehand. If any director has a concern about any aspect of the business
conducted at any Board meeting, the Company Secretary shall discuss this with
the director concerned and record their concern or comments in the Board
minutes. The Board also receives monthly management and financial reports on
the operational and financial performance of the business setting out actual
and forecast financial performance against approved budgets in addition to
other key performance indicators. The Board also receives copies of broker
reports and press releases relating to the Group. At least once a year the
Managing Director and the senior management team present a strategic review and
an annual plan to the Board for review and approval.
The Board normally schedules eight meetings each year although meetings can be
scheduled at short notice at the request of any director or if required. In
2009 seven meetings were required. In addition to formal Board meetings, there
is regular informal dialogue between all directors.


Chairman and Managing Director

There are clear written guidelines to support the division of responsibilities
at the head of the Company with the roles of the Chairman and Managing Director
separately held. The Chairman is responsible for the effective conduct of the
Board, for communication with shareholders and for ensuring that each director
uses their skills and experience to the benefit of the Board's decision making.
With the assistance of the Company Secretary, the Chairman monitors the
information provided to the Board to ensure that it is sufficient, pertinent,
timely and clear.


The Managing Director has day-to-day executive responsibility for the running
of the Group, leading the executive and operational teams in developing
strategies and delivering results against defined targets to enable the Group
to meet its objectives.


Board training

The breadth of management, financial and listed company experience of the
non-executive directors is described in the biographical details on pages 10
and 11, and demonstrates a range of business expertise that provides the right
mix of skills and experience given the size of the Company. There are
procedures in place for individual Board members to receive induction and
training as appropriate and to seek the advice and services of independent
professional advisers, at the Company's expense, where specific expertise or
training is required in the course of their duties.


The directors disclose a qualifying third-party indemnity provision between the
Company and its directors and officers as provided by the Articles of
Association of the Company, which was in force at the date of this report. The
Group has also arranged directors' and officers' insurance cover in respect of
legal action against the directors.


The Group has set out written policies in compliance with a code of securities
dealings in relation to the shares and equivalent to the Model Code published
in the Listing Rules. The code applies to all directors, other persons
discharging managerial responsibility and other relevant employees.


Board evaluation

The Board conducted a Board evaluation exercise in quarter four of 2009 which
was led by the Chairman, assisted by the Company Secretary. All directors
completed a comprehensive questionnaire inviting feedback on the performance
and operation of the Board. The results were discussed at a Board meeting in
December 2009, with all scores exceeding performance recorded in 2007 and 2008.
Accordingly the Board agreed that it was operating effectively and no actions
were required for the forthcoming year. In addition each director completed an
individual questionnaire on the performance of each of their Board colleagues
and feedback was provided at one-to-one meetings conducted by the Chairman. At
a meeting chaired by Jonathan Agnew, Senior Independent Director, the Board
provided input into and reviewed the performance of the Chairman.


Relations with shareholders

The Board is accountable to shareholders for the performance and activities of
the Company and the Chairman ensures that effective communication with
shareholders takes place.


Within the terms of the regulatory framework, the Company has conducted regular
dialogue with shareholders through ongoing meetings with institutional
investors and research firms to discuss strategy, operating performance and
financial performance. Contact in the UK is principally with the Managing
Director and Chief Operating Officer and Finance Director. The Chairman also
participates in the USA bi-annual investor road shows. In 2009, Jonathan Agnew,
the Senior Independent Director consulted major shareholders on the
remuneration policy for the executive directors and is also available to
shareholders if they wish to supplement communication or if contact through the
normal channels is inappropriate.


Shareholders are also kept up to date with the Group's activities through the
Full Year and Half Year Reports and the investor relations section of its
website, which provides details of all the directors, latest news, including
financial results, investor presentations and Stock Exchange announcements.


The Board is kept informed of the views and opinions of those with an interest
in the Company through reports from the Managing Director and Chief Operating
Officer and Finance Director as well as reports from the Company's joint
brokers, UBS and Numis. All directors receive notification of any changes in
the status of substantial shareholders and at each Board meeting an update is
given by the executive directors on the movements in major shareholdings and on
the views and opinions of those with an interest in the Company.


Conflicts of interest

In cases of doubt, the Chairman of the Board is responsible for determining
whether a conflict of interest exists.


Annual General Meeting

All shareholders are invited to participate in the Company's Annual General
Meeting on 5 May 2010 where all directors will be available to answer questions
and will also be available for discussions with shareholders prior to and after
the meeting.


The Company will arrange for the Annual Report and Accounts and related papers
to be available on the Company's corporate website at www.rightmove.co.uk/
investors.rsp or posted to shareholders (where requested) so as to allow at
least 20 working days for consideration before the Annual General Meeting.


The Company also complies with the Combined Code with the separation of all
resolutions put to the vote of shareholders. The Company proactively encourages
shareholders to vote at general meetings by providing electronic voting for
shareholders who hold their shares through the Crest system and provides
personalised proxy cards to ensure that all votes are clearly identified. The
Company presently takes votes at general meetings on a show of hands on the
grounds of practicality due to the limited number of shareholders in
attendance. Votes are taken by a poll at any shareholder meeting where legally
required. All proxy votes are counted and the level of proxy votes including
abstentions lodged for each resolution are reported after each resolution and
published on the Company's website.


Board committees

The Board has established three principal committees, the Audit Committee, the
Remuneration Committee and the Nomination Committee, each of which operates
within written terms of reference approved by the Board. No person other than a
Committee member is entitled to attend the meetings of these Committees, except
by invitation of the Chairman of that Committee.


Remuneration committee

The Remuneration Committee consists of the three independent non-executive
directors, Jonathan Agnew (who is Chairman), Judy Vezmar and Ashley Martin. In
addition, the Remuneration Committee Chairman has requested that the Chairman
of the Board attend the Remuneration Committee meetings. The quorum for
meetings of the Remuneration Committee is two members. The Remuneration
Committee will meet at such times as may be necessary but will normally meet at
least twice a year.


The purpose of the Remuneration Committee is to ensure that the Company's
executive directors and senior executives are properly incentivised and fairly
rewarded for their individual contributions to the Company's overall
performance having due regard to the interests of the shareholders and to the
financial and commercial health of the Group.


The Remuneration Committee's terms of reference are available on the Company's
website, www.rightmove.co.uk/investors.rsp or by request from the Company
Secretary.


The Company Secretary acts as Secretary to the Committee. The Chairman of the
Remuneration Committee reports to the Board on the Remuneration Committee's
behalf after each meeting.

During 2008 the Committee appointed Hewitt New Bridge Street (HNBS),
remuneration consultants, to assist with a review of the remuneration policy
and to set the remuneration for the executive directors and senior management
for 2009. During 2009, the Committee implemented the new remuneration policy
and sought HNBS's input in terms of the general remuneration environment and
changes in market sentiment and practice.


A detailed report on the Company's remuneration policy and the work of the
Remuneration Committee is available in the Remuneration Report on pages 26 to
38.


Nomination committee

The Nomination Committee consists of Scott Forbes (who is also Chairman of the
Board), Jonathan Agnew and Judy Vezmar as independent non-executive directors.
The quorum for meetings of the Nomination Committee is two members. The
Chairman of the Company may not chair the Nomination Committee in connection
with any discussion about the appointment of his successor to the chairmanship
of the Company. In these circumstances, the Senior Independent Director will
take the chair. Appointments are for a period of up to three years, extendable
by no more than two additional three year periods, so long as members continue
to be independent.


The Nomination Committee meets at such times as may be necessary and normally
meets at least twice a year. The purpose of the Nomination Committee is to
consider and make recommendations to the Board about the composition of the
Board, including proposed appointees, and whether to fill any vacancies that
arise or to change the number of Board members.


The Nomination Committee's terms of reference are available on the Company's
website, www.rightmove.co.uk/investors.rsp or by request from the Company
Secretary.


During the year the Nomination Committee appointed Korn Ferry to assist with
the search for a new non-executive director and recommended the appointment of
Ashley Martin to the Board as non-executive director and Audit Committee
Chairman. In addition, the Nomination Committee reviewed the organisation
structure, approved the plans for the succession of the executive directors and
the senior management team, agreed the process for the Board's annual
evaluation and conducted an annual review of its terms of reference. 


Audit committee

The Audit Committee consists of the three independent non-executive directors,
Ashley Martin (who is Chairman), Judy Vezmar and Jonathan Agnew. Ashley Martin
is the Finance Director of Rok plc and was previously Group Finance Director of
the media services group, Tempus Group plc and having relevant financial skills
and experience, was appointed to the role of Audit Committee Chairman on his
appointment to the Board in June 2009.


The quorum for meetings of the Audit Committee is two members. Appointments to
the Committee are for a period of up to three years, extendable by no more than
two additional three year periods, so long as members continue to be
independent.


The Audit Committee meets at least four times a year and more often if
necessary. Two of its meetings are prior to the announcement of the Half Year
and Full Year results of the Group, when the external auditor is in attendance.
The Company Secretary acts as Secretary to the Committee. The Chief Operating
Officer and Finance Director and Financial Controller are normally invited to
attend the meetings.


The Chairman of the Audit Committee reports to the Board on the Audit
Committee's behalf after each meeting. The Audit Committee assists the Board in
the discharge of its duties concerning the announcement of results, the Annual
and Half Year Reports and the maintenance of internal controls. It reviews the
scope and planning of the audit and the auditor's findings and considers the
Group's accounting policies and the compliance with those policies and
applicable legal and accounting standards.


The Audit Committee has authority to investigate any areas of concern as to
financial impropriety that arise and to obtain outside legal or other
independent professional advice in connection therewith. The Audit Committee's
principal duties and terms of reference are available on the Company's website,
www.rightmove.co.uk/investors.rsp or by request from the Company Secretary.


During 2009 the Committee has, amongst other matters, approved the appointment
of the external auditors, fixed their remuneration and reviewed the
effectiveness of the external audit process. The Committee has also considered
the need for an internal audit function. Given the simplicity of the
organisational structure, the open and accountable culture with clear authority
limits, the straightforward financial model and systems and the fact that the
management team and Board conduct regular financial reviews, the Committee
recommended to the Board that an internal audit function was not currently
appropriate for the business. This decision is kept under regular review.


The Committee also discussed its responsibilities to safeguard the audit
objectivity and independence as well as the needs of the business and agreed
that it was practical in many cases for the auditors to be assigned to other
non-audit project work due to their knowledge and expertise of the business.
This would usually relate to corporate transaction advice and tax compliance.
The Committee agreed a policy that management be given authority to incur
non-audit fees up to 50% of the annual agreed audit and tax fee in any
financial year without the prior approval of the Audit Committee. In 2009 the
non-audit fees were £2,000 in relation to other advisory services and are fully
disclosed in Note 6 of the financial statements.


Combined with the induction programme for Ashley Martin, the Committee also
requested presentations regarding the availability of the Rightmove.co.uk
website and its disaster recovery processes and also the billing and revenue
recognition controls and processes.


The Committee reviewed the Annual and Half Year Reports. The external auditors
also presented the results of their review of the 2008 Full Year and 2009 Half
Year results as well as their audit plan to the Audit Committee. In addition to
receiving reports from the external auditors, members met with the external
auditors without the presence of the executive directors.


The Committee also reviewed the whistleblowing policy (which provides the
procedure for staff to report any concerns that they may have independent of
management about suspected misconduct without fear of retaliation) and
conducted an annual review of its terms of reference.


Internal controls

The Board of directors has overall responsibility for the Group's system of
internal controls and has established a framework of financial and other
controls, which is periodically reviewed in accordance with the Turnbull
guidance for its effectiveness.


The Board has taken, and will continue to take, appropriate measures to ensure
that the chances of financial irregularities occurring are reduced as far as
reasonably possible by continually seeking to improve the quality of
information at all levels in the Group, fostering an open environment and
ensuring that the financial analysis is rigorously applied. Any system of
internal control is designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only provide reasonable and not
absolute assurance against material misstatement or loss.


The Group's management has established the procedures necessary to ensure that
there is an ongoing process for identifying, evaluating and managing the
significant risks to the Group. These procedures have been in place for the
whole of the financial year ended 31 December 2009 and up to the date of the
approval of these financial statements and they are reviewed regularly.


The key elements of the system of internal control are:

Major commercial, strategic, competitive and financial risks are formally
identified, quantified and assessed, discussed with the executive directors,
after which they are considered by the Board of directors;

A comprehensive system of planning, budgeting and monitoring Group results.
This includes monthly management reporting and monitoring of performance
against both budgets and forecasts with explanations for all significant
variances;

An organisational structure with clearly defined lines of responsibility and
delegation of authority;

Clearly defined policies for capital expenditure and investment exist,
including appropriate authorisation levels, with larger capital projects,
acquisitions and disposals requiring Board approval;

 
A comprehensive disaster recovery plan based upon co-hosting of the
Rightmove.co.uk website across three separate London locations, which is
regularly tested and reviewed;

A treasury function which manages net debt against cash flow forecasts and is
responsible for monitoring compliance with bank covenants; and

A whistleblowing policy of which all employees are made aware, to enable
concerns to be raised either with line management or, if appropriate,
confidentially outside the line management structure.

Through the procedures outlined above, the Board of directors has considered
all significant aspects of internal control for the year and up to the date of
this Annual Report and Accounts.

 
Going concern

The Board of directors is required under the Combined Code to consider whether
or not it is appropriate to adopt the going concern basis in preparing the
Group and the parent Company financial statements.


As part of its normal business practice the Group prepares annual and longer
term financial plans. In addition, a going concern paper was prepared and
presented to the Audit Committee in February 2010 prior to it recommending the
approval of the financial statements and notes to the accounts for the year
ended 31 December 2009 to the Board of directors.


After reviewing this, the Board of directors has a reasonable expectation that
the Group has adequate resources and banking facilities to continue in
operational existence for the foreseeable future. Accordingly they continue to
adopt the going concern basis in preparing the financial statements. Further
information is provided in Note 1 to the financial statements.


Statement of directors' responsibilities in respect of the Annual Report and
financial statements 

The directors are responsible for preparing the Annual Report and the Group and
parent Company financial statements in accordance with applicable law and
regulations.

Company law requires the directors to prepare Group and parent Company
financial statements for each financial year. Under that law they are required
to prepare the Group financial statements in accordance with IFRSs as adopted
by the EU and applicable law and have elected to prepare the parent Company
financial statements on the same basis.

Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and parent Company and of their profit or loss for that
period. In preparing each of the Group and parent Company financial statements,
the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRSs as adopted by
the EU; and

• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group and the parent Company will continue in
business.

The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the parent Company's transactions and disclose
with reasonable accuracy at any time the financial position of the parent
Company and enable them to ensure that its financial statements comply with the
Companies Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for
preparing a Directors' Report, Directors' Remuneration Report and Corporate
Governance Statement that comply with that law and those regulations.

The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.


REMUNERATION REPORT

As required by Section 420 of the Companies Act 2006, the directors present the
report on directors' remuneration for the year ended 31 December 2009. This
report sets out the policies under which executive and non-executive directors
were remunerated and provides tables of information showing details of the
remuneration and share interests of all the directors. In accordance with the
requirements, the report provides the disclosure in two parts: information
subject to audit and information that is not subject to audit.


The Company has complied with Section B of the Combined Code on Corporate
Governance (Combined Code).


Shareholders will be provided with an opportunity to vote on the Remuneration
Report as set out in this Annual Report at the forthcoming Annual General
Meeting to be held on 5 May 2010.


Part I

This part of the Remuneration Report is not subject to audit.

The Remuneration Committee

Terms of reference

The Remuneration Committee's primary role is to make recommendations to the
Board as to the Company's broad policy and framework for the remuneration of
the executive directors, the Chairman of the Board and the Company Secretary. 
In accordance with the Combined Code, the Remuneration Committee also
recommends the structure and monitors the level of remuneration for the first
layer of management below Board level. The Remuneration Committee is also aware
of and advises on the employee benefit structures throughout the Company and
its subsidiaries and ensures that it is kept aware of any potential business
risks arising from remuneration arrangements throughout the Company.


The Remuneration Committee has formal terms of reference which are reviewed
annually and updated as required. These are available on the Company's website
at www.rightmove.co.uk/investors.rsp or on request

from the Company Secretary.

Membership

The Remuneration Committee consists of independent non-executive directors,
these being at the date of this report, Jonathan Agnew (Chairman), Ashley
Martin and Judy Vezmar. Only members of the Remuneration Committee have the
right to attend Remuneration Committee meetings. The Chairman of the
Remuneration Committee has however requested that Scott Forbes, the Chairman of
the Board, attend the meetings except during discussions relating to his own
remuneration. The Company Secretary acts as the Secretary of the Remuneration
Committee and normally attends the meetings.


Ed Williams, Managing Director, may also be invited to meetings and the
Remuneration Committee takes into consideration his recommendations regarding
the remuneration of his executive colleagues and the first layer of management
below Board level. No director is involved in deciding their own remuneration.


The Remuneration Committee will meet at such times as may be necessary but
normally meets at least twice a year. During 2009 the Remuneration Committee
met four times and the attendance is shown below:

                                                    Number of meetings attended
Name of director                                                               
                                                                               
Jonathan Agnew                                                       4 out of 4
                                                                               
Judy Vezmar                                                          3 out of 4
                                                                               
Ashley Martin (appointed 11 June 2009)                               2 out of 2
                                                                               
Nigel Cooper (retired 31 March 2009)                                 1 out of 1
                                                                               

Advice

During 2008, Hewitt Associates (trading as Hewitt New Bridge Street (HNBS)) was
engaged by the Remuneration Committee to review the executive director
remuneration policy. The policy had been established prior to the IPO in 2006
and was designed to apply for the first three years following the IPO. As the
three year period had elapsed, the Remuneration Committee commissioned an
independent review by HNBS to assist in its determination of an appropriate
future remuneration framework for executive directors from 2009.


During 2009, HNBS's input was sought in terms of the general remuneration
environment and changes in practice, although they were not formally engaged to
conduct any further review.  Some of the changes to remuneration policy
reported below for 2010 were a result of or in line with recommendations made
in the 2008 review, but were not implemented for 2009 owing to the prevailing
economic environment and the market challenges facing the Group at that time.


During the year HNBS also provided services in connection with the valuation of
share-based incentive awards (as required by IFRS 2) to the Company and
confirmed that, in their view, this service did not present a conflict of
interest with the services provided to the Remuneration Committee.


Remuneration policy

The key principles of the Remuneration Committee's policy are as follows:

Remuneration arrangements should be designed so as to provide executive
directors with the opportunity to receive a share in the future growth and
development of the Company which is regarded as fair by both other employees
and by shareholders.  This approach should allow the Company to attract and
retain the sort of dynamic, self-motivated individuals who are critical to the
success of the business.

Executive directors should have significantly below market levels of base
salary, minimal benefits (and only benefits which are made available on the
same basis to all Rightmove employees) and above market levels of variable pay
potential.  This arrangement is designed to best align the interests of the
executive directors with the interests of shareholders.

As far as possible, remuneration arrangements should be simple to understand
and administer.

As far as possible, changes to remuneration should be made infrequently and
those changes made each year should, in most instances, be directly linked to
the policies applied to all employees (specifically with regard to rises in
base salary and changes to benefits).

Executive directors should be principally rewarded for the overall success of
the business for which they have collective responsibility.  The Company has
key short-term, medium-term, and long-term strategic goals and executive
directors should be incentivised against all these goals. 

Executives should not be able to gain significantly from short-term successes
which subsequently prove not to be consistent with growing the overall value of
the business.  Hence a majority of any bonus payable in relation to short-term
strategic goals is to be in the form of Rightmove plc shares which are deferred
for a further two years from when the bonus target has been achieved.

2009 Remuneration

Last year's resolution to approve the Remuneration Report received a vote of
76% in favour at the 2009 Annual General Meeting. Some adverse comments from UK
investor bodies resulted in votes against the Remuneration Report, which we
wish to address.


The Remuneration Committee and the Board believe that Rightmove's remuneration
policy has served the business and shareholders well including during recent
periods when the challenging economic environment created concern about the
remuneration of boards of directors and senior executives generally. The
Remuneration Committee wishes to take this opportunity to clarify not only the
policy, but the underlying rationale behind the policy, how it believes this
policy has served well in 2009 and why it intends to continue with the policy. 


Rightmove's remuneration policy is based on a fundamental belief that growth
oriented companies should reward executives with demonstrably lower than market
base salaries and benefits and higher than market equity rewards which are
contingent upon challenging performance criteria. As a direct result of these
principles, some aspects of the policy are not in line with the guidelines
produced by UK investor advisory bodies, although we believe that Rightmove's
remuneration meets the established objectives of those same advisory bodies. In
several cases the fact that Rightmove's policy appears not to be in line with
the guidelines of these advisory bodies is a direct consequence of the way in
which some guidelines are structured.  In particular bonus and long-term
incentives are expressed as a percentage of base salary which results in
seemingly high percentage levels of bonus and long-term incentives.  As
illustrated below, the Remuneration Committee and the Board believe that in
absolute terms the levels of these elements of remuneration are, at most, in
line with companies of a similar market capitalisation.  The high percentages
result purely from the policy of paying substantially lower quartile base
salaries, itself an explicit component of Rightmove's remuneration policy.

We believe that in 2009 the remuneration policy has worked well given the
following:

The low level of base salary and benefits by market standards positioned the
business to continue to operate with a low level of fixed cost at a time when
revenue was falling, following the collapse in the UK housing market in 2008.

The actual performance, which has resulted in an increase in underlying
operating profit and contributed to the strong share price performance in the
year, has in part been achieved by extending Rightmove's leadership position in
terms of site traffic and retaining all Rightmove's key customers as well as
significantly reducing costs.  These, together with a target for underlying
operating profit, have resulted in payment of a full bonus which the
Remuneration Committee believes is appropriate in the context of the business
performance relative to prevailing market conditions in the property and media
industries. The 2009 bonus for executive directors will, therefore, comprise
75% of salary paid in cash and 125% of salary paid to Ed Williams and 100% to
Nick McKittrick respectively in the form of deferred shares to be awarded in
March 2010 and vest in March 2012.

The share option scheme and deferred bonus in the form of Rightmove shares mean
that the substantial majority of the executive director's remuneration for 2009
will only be realisable in 2012 and the value of it will be directly related to
share price performance two years hence.  The Board believes that the nature of
Rightmove's business affords little potential for management to drive
short-term performance to the detriment of longer term performance. 
Nonetheless the remuneration structure affords shareholders a high degree of
protection in this respect.

The business has retained all the key senior executives whom it wished to
retain during a period when at times the short-term prospects were challenging
and the exercise price of all outstanding share options was considerably below
the then share price. 
 

Remuneration for 2010

On the recommendation of the Remuneration Committee, the Board of directors has
agreed remuneration for 2010 based on the framework established last year and
is implementing the policy stated above.  The only changes to the remuneration
of the executive directors in comparison with the previous year are:

An increase in base salary levels of 4%, the amount to be awarded to all
employees in good standing from 1 January 2010 and following a salary freeze
applied to all employees and all directors for the duration of 2009.

Significantly more challenging profit targets (reflecting the more stable
economic outlook) to trigger bonus entitlement in 2010.

An increase in the maximum potential bonus from 175% of salary to 200% of
salary and share options from 300% of salary to 350% of salary for Nick
McKittrick, in recognition of his successfully undertaking the role of Finance
Director in addition to that of Chief Operating Officer.

The use of an equal mixture of earnings per share (EPS) and relative Total
Shareholder Return (TSR) performance measures to determine the ability to
exercise options granted in 2010.

Base salary

The current salaries for the executive directors with effect from 1 January
2010 are set out in the table below:

 

                                                                               
                                                      Salary                   
                                                  year ended                   
                                Salary  31 December 2008 and                   
                                           31 December 2009  Increase in salary
                        1 January 2010                                         
                                                                               
Executive directors(1)                                                         
                                                                               
Ed Williams                   £217,239              £208,884                 4%
                                                                               
Nick McKittrick               £217,239              £208,884                 4%
                                                                               

(1)  The executive directors' basic salaries made up 3.3% of the Group's basic
salary cost in 2009.


Annual performance-related bonus

In 2010 the executive directors will be eligible to receive a bonus of 75% of
base salary in cash with an opportunity of earning up to a further 125% of
salary in deferred shares.  Shares will be deferred for two years and be
potentially forfeitable over that period.


The bonus will, as in previous years, be determined principally (70%) by
underlying operating profit  performance with targets set in relation to a
carefully considered business plan and requiring significant
out-performance of that plan to trigger maximum payments.  A significant
portion of the bonus (30%) will be determined by reference to pre-set targets
for key performance indicators relating to underlying drivers of long-term
revenue growth.


Share-based incentives 

The Company has established executive share option plans designed to align the
interests of employees with the long-term success of the business. 


The Remuneration Committee intends to make a grant in March 2010 of market
value share options over shares worth 400% of salary to Ed Williams and 350% of
salary to Nick McKittrick in order to ensure the retention and motivation of
these key individuals. These awards are within the exceptional annual award
limits of the unapproved share option plan.  As outlined above, the
Remuneration Committee believes that awards of this multiple of salary are
entirely appropriate given the deliberate policy of setting lower quartile base
salaries for the directors.


Options will only be exercisable in the event of prior satisfaction of a
performance condition.  As indicated in last year's report, the Remuneration
Committee believes that an EPS growth target is the most appropriate type of
performance condition for the business in normal operating conditions. 
However, given the market uncertainty for 2009, the Remuneration Committee
applied a relative TSR performance condition to the share option awards made in
March 2009.


The Remuneration Committee has reviewed the performance conditions to apply to
awards of options in 2010 and, reflecting the more stable economic outlook, has
decided to make these awards subject to an equal measure of TSR performance and
growth in the Group's EPS.

The vesting of 50% of the award will be dependent on a relative TSR performance
condition measured over a three-year performance period. 

  TSR performance of the Company relative to the                                    
                  FTSE 250 Index                     % of half of the 2010 options  
                                                              exercisable           
                                                                                    
               Less than the Index                                0%                
                                                                                    
                Equal to the Index                                25%               
                                                                                    
           25% higher than the Index(1)                          100%               
                                                                                    
             Intermediate performance                 Pro-rata on a sliding scale   
                                                                                    

e.g. if the FTSE 250 Index's TSR was 50% over the three-year period, then the
Company's TSR would have to be at least 75% for all 50% of the 2010 options
subject to the TSR performance condition to be exercisable.


The vesting of the other 50% of the 2010 award will be dependent on the
satisfaction of EPS growth targets over a three-year vesting period. The
Remuneration Committee has decided to calculate the EPS denominator based on
the diluted number of shares in issue at the period end and will apply the
standard corporation tax rate prevailing at the end of the performance period
to underlying operating profit. This will avoid any positive or adverse swings
in the Group's tax rate which have in the past been significant and which for
the year ended 31 December 2009 (the base year by which the performance of the
2010 awards will be measured) significantly increased EPS. Therefore, the EPS
figure used for this purpose will be the equivalent to the Group's reported
diluted underlying EPS but with a standard tax rate applied (Normalised EPS)
and will be disclosed in the Report & Accounts.

The Remuneration Committee has applied more stretching targets to awards made
over 200% of salary. The following vesting schedule will apply to 50% of the
2010 share option awards dependent on the Group's Normalised EPS measured over
a three-year performance period:


  Aggregate Normalised EPS growth    % of quarter of the   % of quarter of the 
  over the three-year performance       2010 options          2010 options     
             period(1)                   exercisable           exercisable     
                                                                               
                25%                          0%                                
                                                                               
                45%                         100%                   0%          
                                                                               
                65%                                               100%         
                                                                               
                                    Straight line vesting between these points 
                                                                               
(1) Assuming no change in the standard corporation tax rate before the end of
the performance period, the benchmark Normalised EPS for      2009 from which
these growth targets will be measured is 26.7p.


All existing executive share-based incentives can be satisfied from shares held
in The Rightmove Employees' Share Trust (EBT). It is intended that the 2010
share-based incentive awards would also be settled from shares currently held
in the EBT or from shares held in treasury so that the Company will not need to
issue new shares.


The non-executive directors do not participate in or benefit from any of the
Company's share incentive or bonus plans except that Scott Forbes
(non-executive Chairman) received Pre- admission options in consideration for
the work involved in the IPO and in accordance with his contractual agreement
on appointment in 2005.


Executive directors are also eligible to participate in the Company's employee
Sharesave scheme. Ed Williams and Nick McKittrick had both contributed to the
2006 Sharesave contract to the maximum amounts permitted under the scheme. The
contract matured on 1 November 2009 when both directors opted to exercise and
sell all the shares received on exercise. Further details are included in the
table "Directors' interests in options to purchase ordinary shares" on page
36.Ed Williams and Nick McKittrick have both contributed to the 2009 Sharesave
contract to the maximum amounts permitted under the scheme.


Shareholding requirement

To be consistent with best practice, a formal share ownership guideline has
been introduced for executive directors requiring them to retain at least half
of any future share awards vesting as shares (after selling sufficient shares
to meet the exercise price and to pay tax due on the vesting of the shares)
until they have a Rightmove shareholding worth at least 200% of salary for the
Managing Director and 100% of salary for any other executive director. The
value of the current shareholdings held by the executive directors as a
percentage of base salary is shown in the table on page 38.


Other benefits

The executive directors are entitled to private medical insurance and to life
assurance cover equal to four times basic annual salary.


Pensions

In 2007, the Company launched a new stakeholder pension plan for Rightmove
Group employees which commenced on 1 January 2008. The employer contributes 6%
of basic salary (to a maximum of £3,000 each year) subject to the employee
contributing a minimum of 3% of basic salary. Participation in the plan was
extended to the executive directors with effect from 1 January 2009. Ed
Williams and Nick McKittrick have chosen not to participate in the Company
pension arrangements. The Company does not contribute to any personal pension
arrangements.


External appointments

With the approval of the Board of directors in each case, executive directors
may accept one external appointment as a non-executive director of another
company and retain any fees received.  Ed Williams and Nick McKittrick do not
hold any external appointments as non-executive directors.


Chairman's and non-executive directors' fees

The fee levels of the Chairman and the non-executive directors were set at the
start of 2006 and have not been increased to reflect inflation or rises in
comparable fees elsewhere.  The external review of directors' remuneration
conducted towards the end of 2008 recommended increases to the aggregate fees
paid to the Chairman and non-executive directors to better align fees with the
current market fee levels in comparable size businesses.  However, the Board
took the view that any increase for 2009 was inappropriate in the context of a
freeze on employee salaries and the likely short-term prospects for the
business.


Given the changed circumstances, the Board of directors has decided that an
increase in the base fees for the Chairman and non-executive directors in line
with basic salary increases within the Rightmove business since 2006 (2007: 3%;
 2008: 4%; 2009: 0%; 2010: 4%) would result in annual fees approximating market
fees for comparable size businesses.  It is the intention of the Board to
increase fees in future years annually, directly in line with the basic level
of pay rise received by employees within the business until such time as it is
considered appropriate to conduct a wider review of non-executive director
remuneration.


The Chairman is entitled to receive a fee of £100,000 per annum (2009: £
90,000). The other
non-executive directors are entitled to receive a fee of £40,000 per annum
(2009: £35,000) for their basic role and an additional £5,000 fee per annum
(2009: £5,000) is paid for the chairing of the Audit and Remuneration
Committees. Jonathan Agnew is paid a further £5,000 fee per annum (2009: £
5,000) as Senior Independent Director.


The non-executive directors' fee levels are within the limits set by the
Articles of Association of the Company. The current fee levels for the
non-executive directors with effect from 1 January 2010 are set out in the
table below:

                         Fee               Fee                                  
                                    year ended Increase  Average annual increase
             1 January 2010  31 December 2009    in fee        in fee since 2006
                                                                                
Scott Forbes        £100,000           £90,000      11%                       3%
                                                                                
Jonathan                                                                        
Agnew                £50,000           £45,000      11%                       3%
                                                                                
Colin Kemp                                                                      
(1) (2)              £40,000               N/A      N/A                      N/A
                                                                                
Ashley                                                                          
Martin(2)                                                                       
(3)                  £45,000           £40,000      12%                      N/A
                                                                                
Stephen                                                                         
Shipperley                                                                      
(2)                  £40,000           £35,000      14%                       3%
                                                                                
Judy Vezmar          £40,000           £35,000      14%                       3%
                                                                                

Colin Kemp, non-executive director, waives his fee whilst employed by the
Lloyds Banking Group, the fee having been waived in full in 2009 and continues
to be waived as at the date of this report.

Either not actually on the Board or not entitled to a fee in 2006, but fees
earned since being eligible for a fee have been set at 2006 rates.

Appointed to the Board on 11 June 2009. The fee payable was £35,000 per annum
base fee with £5,000 per annum payable for chairing the Audit Committee. The
actual fee paid was pro-rata for the period from 11 June 2009 to
31 December 2009, being £22,154.


Directors' service contracts and non-executive directors' terms of appointment


The Remuneration Committee's policy on service agreements for executive
directors is that they should provide for 12 months' notice of termination by
the Company and by the executive. Any proposals for the early termination of
the service agreements of directors or senior executives are considered by the
Remuneration Committee.


The service agreements for the executive directors (Ed Williams and Nick
McKittrick) allow for lawful termination of employment by making a payment in
lieu of notice or by making phased payments over any remaining unexpired period
of notice. The phased payments may be reduced if and to the extent that the
executive finds an alternative remunerated position.


Scott Forbes' appointment may be terminated by either party giving to the other
not less than three months' notice in writing. The Company may also terminate
by making a payment in lieu of notice. Scott Forbes is not contractually
entitled to any other benefits on termination of his contract other than in
relation to his share options as described in the table on page 36.


The Letters of Appointment for Jonathan Agnew, Ashley Martin and Judy Vezmar
(the independent non-executive directors) provide for a term of up to two
three-year periods (subject to re-election by shareholders) with a notice
period of three months on either side and also set out the time commitments
required to meet the expectations of their roles. The Letters of Appointment
for Stephen Shipperley and Colin Kemp provide that their appointments may be
terminated by either party upon three months' written notice. Copies are
available for inspection by request to the Company Secretary.


Further details of all directors' contracts and Letters of Appointment are
summarised on page 34.


Directors' contracts and Letters of Appointment

                                                              
                                                           
                       Date of  Date of contract/(2)   Notice  Length of service
                   appointment  Letter of Appointment (months)   at 26 February
                                                                           2010
                                                                                
Executive                                                                       
directors                                                                       
                                                                                
Ed Williams                                                      
(Managing     19 December 2000       7 February 2006       12   9 years 2 months
Director)                                                                       
                                                                                
Nick              5 March 2004       7 February 2006       12  5 years 11 months
McKittrick (1)                                                                  
                                                                                
                                                                                
                                                                                
Non-executive                                                                   
directors                                                                       
                                                                                
Scott Forbes      13 July 2005      21 February 2006        3   4 years 7 months
(Chairman)                                                                      
                                                                                
Jonathan Agnew 16 January 2006      12 December 2005        3    4 years 1 month
(Senior                                                                         
Independent                                                                     
Director)                                                                       
                                                                                
Colin Kemp         3 July 2007       4 December 2007        3   2 years 7 months
                                                                                
Ashley Martin     11 June 2009          11 June 2009        3           8 months
                                                                                
Stephen           30 June 2000        1 January 2009        3   9 years 8 months
Shipperley                                                                      
                                                                                
Judy Vezmar    16 January 2006      12 December 2005        3    4 years 1 month
                                                                                
                                                                                
                                                                                
Former                                                                   Date of
directors                                                            resignation
                                                                                
Nigel Cooper   16 January 2006      12 December 2005        3      31 March 2009
(3)                                                                             
                                                                                
Graham         17 January 2006       7 February 2006       12      10 April 2009
Zacharias(4)                                                                    
                                                                                

(1) Nick McKittrick joined the Company in December 2000 and was
appointed to the Board on 5 March 2004. His service with the Company at the
date of this report is 9 years and 2 months.

(2) The contracts of employment and the Letters of Appointment were transferred
from Rightmove Group Limited to Rightmove plc with effect from 28 January 2008
on completion of a Scheme of Arrangement under the Companies Act 1985.

(3) Nigel Cooper, non-executive director, retired from the Board on 31 March 2009.

(4) Graham Zacharias, executive director, left the Company on 10 April 2009.



Part II (Audited)

Directors' remuneration


The remuneration of the directors of the Company during the year for time
served as a director is as follows:
                                                                          
                                                                               
                                                                               
                                                                               
                                        2009                                   
                                                                               
                         Basic    Cash bonus  Benefits in                      
                      salary /    payable(1)      kind(2)                      
                          fees                            2009 total 2008 total
                             £             £            £          £          £         
                                                                             
                                                                               
Executive                                                                      
directors                                                                      
                                                                               
Ed Williams            208,884       156,663          989    366,536    276,717
(Managing                                                                      
Director)                                                                      
                                                                               
Nick McKittrick        208,884       156,663          943    366,490    276,436
                                                                            
                                                                            
                                                                               
Non-executive                                                                  
directors                                                                      
                                                                               
Scott Forbes            90,000             -            -     90,000     90,000
(Chairman)                                                                     
                                                                               
Jonathan Agnew          45,000             -            -     45,000     45,000
(Senior                                                                        
Independent                                                                    
Director)                                                                      
                                                                               
Colin Kemp(3)                -             -            -          -          -
                                                                               
Ashley Martin (4)       22,154             -            -     22,154          -
                                                                               
Stephen Shipperley      35,000             -            -     35,000          -
                                                                               
Judy Vezmar             35,000             -            -     35,000     35,000
                                                                              
                                                                            
                                                                               
Former directors                                                               
                                                                               
Nigel Cooper(5)         10,000             -            -     10,000     40,000
                                                                               
Graham Zacharias        65,879             -          452     66,331    485,825
(6)                                                                            
                                                                               

(1)    Bonus relates to the accrued cash payment in respect of the Full Year
results for the year ended 31 December 2009. An award of deferred shares worth
125% and 100% of salary will additionally be granted to Ed Williams and Nick
McKittrick respectively in March 2010 and vesting in 2012.  The bonus payment
reflects the increase in underlying operating profit and strong share price
performance in the period, the extension of Rightmove's leadership position in
terms of site traffic and the retention of all of Rightmove's key customers. 
The Remuneration Committee believes the resulting bonus payment is appropriate
in the context of the business performance relative to prevailing market
conditions in the property and media industries.

(2)    Benefits in kind for the executive directors relate to private medical
insurance.

(3)    Colin Kemp waives his fee whilst employed by the Lloyds Banking Group,
the fee having been waived in full in 2009 and continues to be waived as at the
date of this report.

(4)    Ashley Martin was appointed to the Board on 11 June 2009. The fee
received is from 11 June to 31 December 2009.

(5) Nigel Cooper, non-executive director, resigned from the Board on 31 March 2009.

(6) Graham Zacharias, executive director, left the Company on 10 April 2009.
Included in the 2008 total was the contractual accrued payment payable for pay
in lieu of notice and compensation for loss of office on the termination of his
employment.


Directors' interests in options to purchase ordinary shares
                                                                                Options               
                           Options held                            Price at     held at               
                                        Granted Exercise Exercised  date of 31 December Vesting Expiry
            Date granted 1 January 2009 in year    price   in year exercise        2009    date   date
                                                                                                      
Executive directors                                                                                   
                                                                                                      
Ed Williams                                                                             Between       
(Managing                                                                                 14/3/       
Director)                                                                                  2009       
               14/3/2006                                                                and 14/  13/3/
              (Approved)          7,317       -    £4.10         -      N/A       7,317  3/2011   2016
                                                                                                      
                                                                                        Between       
                                                                                          15/3/       
               15/3/2006                                                                   2009       
                                                                                           and 15/  14/3/
            (Unapproved)   1,981,412(1)       -    £3.35   300,000(1)    £5.30   1,681,412  3/2011   2016
                                                                                                      
                5/3/2009                                                                              
                                        373,007                                            5/3/   4/3/
            (Unapproved)              -     (3)    £2.24         -      N/A     373,007    2012   2019
                                                                                                      
               2/10/2006                                                                              
                                                                                          1/11/  30/4/
             (Sharesave)          3,648       -    £2.59 3,648 (2)    £5.30           -    2009   2010
                                                                                                      
               1/10/2009                                                                              
                                                                                          1/11/  30/4/
             (Sharesave)              -   2,135    £4.25         -      N/A       2,135    2012   2013
                                                                                                      
TOTAL                         1,992,377 375,142      N/A   303,648      N/A   2,063,871               
                                                                                                      
Nick                                                                                    Between       
                                                                                          14/3/       
McKittrick                                                                                 2009       
               14/3/2006                                                                and 14/  13/3/
              (Approved)          7,317       -    £4.10         -      N/A       7,317  3/2011   2016
                                                                                                      
                                                                                        Between       
                                                                                          15/3/       
               15/3/2006                                                                   2009       
                                                                                        and 15/  14/3/
            (Unapproved)        987,047       -    £3.35         -      N/A     987,047  3/2011   2016
                                                                                                      
              10/10/2007                                                                              
                                                                                         15/03/  9/10/
            (Unapproved)      75,000(4)       -    £5.22         -      N/A      75,000    2011   2017
                                                                                                      
                5/3/2009                                                                              
                                                                                           5/3/   4/3/
            (Unapproved)              - 279,755(3) £2.24         -      N/A     279,755    2012   2019
                                                                                                      
               2/10/2006                                                                              
                                                                                          1/11/  30/4/
             (Sharesave)          3,648       -    £2.59  3,648(2)    £5.30           -    2009   2010
                                                                                                      
               1/10/2009                                                                              
                                                                                          1/11/  30/4/
             (Sharesave)              -   2,135    £4.25         -        -       2,135    2012   2013
                                                                                                      
TOTAL                         1,073,012 281,890      N/A     3,648      N/A   1,351,254               
                                                                                                      
Non-executive director                                                                                
                                                                                                      
Scott                                                                                   Between       
Forbes         15/3/2006                                                                  15/3/       
(Chairman)                1,738,729 (5)       -    £3.35   600,000    £5.41   1,138,729    2007  14/3/
            (Unapproved)                                       (5)                      and 15/   2016
                                                                                         3/2009       
                                                                                                      
Former director                                                                                       
                                                                                                      
                                                                               Options               
                                                                   Price at     held at               
                           Options held Granted Exercise Lapsed in  date of     date of Vesting Expiry
            Date granted 1 January 2009 in year    price      year exercise     leaving    date   date
                                                                                                      
Graham                                                                                  Between       
Zacharias                                                                                 14/3/       
(6)                                                                                        2009       
               14/3/2006                                                                and 14/  13/3/
              (Approved)          7,317       -    £4.10     2,439      N/A       4,878  3/2010   2011
                                                                                                      
                                                                                        Between       
                                                                                          15/3/       
               15/3/2006                                                                   2009       
                                                                                        and 15/  14/3/
            (Unapproved)        987,047       -    £3.35   329,016      N/A     658,031  3/2010   2011
                                                                                                      
               2/10/2006                                                                              
                                                                                                      
             (Sharesave)          3,648       -    £2.59     3,648      N/A           -     N/A    N/A
                                                                                                      
TOTAL                           998,012       -      N/A   335,103      N/A     662,909               
                                                                                                      

(1) Pre-admission options granted to Ed Williams under the Rightmove
Unapproved Executive Share Option Plan, vest as to one third of the number of
option shares on each of the third, fourth and fifth anniversaries of the date
of the option grant. Accordingly, on 15 March 2009, one third (660,471) of the
unapproved options granted to Ed Williams on 15 March 2006 became exercisable.
On 5 November 2009, Ed Williams exercised 300,000 of the vested options at an
exercise price of £3.35 and sold the shares received on exercise at a market
value of £5.30 per share. The gross gain on exercise was £585,000.

(2)On 1 November 2009, the 2006 Sharesave contract matured. Ed
Williams and Nick McKittrick exercised their right to use the money in their
Sharesave accounts to buy 3,648 shares at the option exercise price of £2.59,
and subsequently sold all the shares on exercise at a market price of £5.30 per
share. The gross gain on exercise was £9,886.

(3) The options granted on 5 March 2009 are exercisable in 2012,
subject to 100% TSR performance criteria based upon the performance of
Rightmove's shares against the FTSE 250 Index for the period from
1 January 2009 to 31 December 2011.

 TSR performance of the Company relative to   % of the 2009 options exercisable
                     the                                                       
               FTSE 250 Index                                                  
                                                                               
             Less than the Index                             0%                
                                                                               
             Equal to the Index                              25%               
                                                                               
       25% higher than the Index (1)                        100%               
                                                                               
          Intermediate performance               Pro-rata on a sliding scale   
                                                                               

(1)  e.g. if the FTSE 250 Index's TSR was 50% over the three-year period, then
the Company's TSR would have to be at least 75% for all of the 2009 options to
be exercisable.


(4)The options granted on 10 October 2007 are exercisable on 15March 2011, subject 
to the basic earnings per share per the audited consolidated financial statements 
for the Group for the year ended 31 December 2010 being not less than 30p.

(5) Pre-admission options granted to Scott Forbes under the Rightmove
Unapproved Executive Share Option Plan, vest as to one third of the number of
option shares on each of the first, second and third anniversaries of the date
of the option grant. On 30 November 2009, Scott Forbes exercised 600,000 of the
vested options at an option price of £3.35 and sold the shares received on
exercise at a market value of £5.41 per share. The gross gain on exercise was 
£1,238,000.

(6) At the date of leaving the Company on 10 April 2009, one third of
the unapproved and approved options held by Graham Zacharias (a former
executive director) lapsed. Graham Zacharias retained the right to exercise
658,031 unapproved share options and 4,878 approved options. One half of the
options vested on 15 March 2009 and are exercisable for a period of 12 months
from the date of leaving and one half are exercisable for a period of 12 months
from the vesting date of 15 March 2010.

Directors' interests in shares

The interests (both beneficial and family interests) of the directors in office
at 31 December 2009 in the share capital of the Company were as follows:

                                                                               
                                                                               
                         Interests in                    Interests in          
                                                                               
                   ordinary shares of £0.01              share options         
                                                                               
                                                              At               
                              At             At                              At
                31 December 2009 1 January 2009 31 December 2009 1 January 2009
                                                                               
Executive                                                                      
directors                                                                      
                                                                               
Ed Williams                                                                    
(Managing                                                             
Director)              2,407,995      2,407,995        2,063,871      1,992,377         
                                                                               
Nick McKittrick          129,000        129,000        1,351,254      1,073,012
                                                                               
                                                                               
                                                                               
Non-executive                                                                  
directors                                                                      
                                                                               
Scott Forbes             619,300        619,300        1,138,729      1,738,729
(Chairman)                                                                     
                                                                               
Jonathan Agnew                                                                 
(Senior                                                                        
Independent               30,000         30,000                -              -
Director)                                                                      
                                                                               
Colin Kemp                     -              -                -              -
                                                                               
Ashley Martin              2,060              -                -              -
                                                                               
Stephen                        -              -                -              -
Shipperley                                                                     
                                                                               
Judy Vezmar               31,343         31,343                -              -
                                                                           
(1)    The Company's shares in issue (including 2,505,430 shares held in
treasury) as at 31 December 2009 comprised 118,923,411 (2008: 120,050,873)
ordinary shares of £0.01 each.
(2)    The mid-market share price of the Company was £1.76 as at 1 January 2009
and was £5.04 as at 31 December 2009. The mid-market high and low share prices
of the Company were £5.94 and £1.59 respectively in the year.
(3)    The executive directors are regarded as being interested, for the
purposes of the Companies Act 2006, in 7,418,874 (2008:  8,353,700) ordinary
shares of £0.01 each in the Company currently held by the EBT as they are,
together with other employees, potential beneficiaries of the EBT.
(4)    The directors' beneficial holdings represent 2.8% of the Company's
shares in issue as at 31 December 2009
(2008: 2.7%) (excluding shares held in treasury).
(5)    There have been no changes to the above interests between the year end
and the date of this report.


The interests of the executive directors in office at 31 December 2009 in the
share capital of the Company as a percentage of basic salary were as follows:

                                                                       Value of
                                                                    shares as a
                                  Number of shares         Value of  % of basic
                     Basic salary          held at        shares at      salary
                 31 December 2009 31 December 2009 31 December 2009            
                                                                               
Executive                                                                      
directors                                                                      
                                                                               
Ed Williams (Managing                                                          
Director)                       £208,884  2,407,995     £12,148,000      5,816%
                                                                               
Nick McKittrick                 £208,884    129,000        £651,000        312%
                                                                               


Jonathan Agnew

Chairman, Remuneration Committee
26 February 2010


AUDITORS' REPORT

THE INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF RIGHTMOVE PLC

We have audited the Group and parent Company financial statements (the
"financial statements") of Rightmove plc for the year ended 31 December 2009
set out on pages 41 to 77. The financial reporting framework that has been
applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the EU and, as regards the parent
Company financial statements, as applied in accordance with the provisions of
the Companies Act 2006.


The report is made solely to the Company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we are
required to state to them in an auditors' 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 and the Company's members, for our audit work,
for this report, or for the opinions we have formed.


Respective responsibilities of directors and auditors


As explained more fully in the Directors' Responsibilities Statement set out on
page 25, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's (APB's)
Ethical Standards for Auditors.


Scope of the audit of the financial statements


A description of the scope of an audit of financial statements is provided on
the APB's website at www.frc.org.uk/apb/scope/UKP.


Opinion on financial statements


In our opinion:

the financial statements give a true and fair view of the state of the Group's
and of the parent Company's affairs as at 31 December 2009 and of the Group's
profit for the year then ended;

the Group financial statements have been properly prepared in accordance with
IFRSs as adopted by the EU;

the parent Company financial statements have been properly prepared in
accordance with IFRSs as adopted by the EU and as applied in accordance with
the provisions of the Companies Act 2006; and

the financial statements have been prepared in accordance with the requirements
of the Companies Act 2006 and, as regards the Group financial statements,
Article 4 of the IAS Regulation.


Opinion on other matters prescribed by the Companies Act 2006


In our opinion:

the part of the Directors' Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006;

the information given in the Directors' Report for the financial year for which
the financial statements are prepared is consistent with the financial
statements; and

information given in the Corporate Governance Statement set out on pages 19 to
25 with respect to internal control and risk management systems in relation to
financial reporting processes and about share capital structures is consistent
with the financial statements.


Matters on which we are required to report by exception


We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our
opinion:

adequate accounting records have not been kept by the parent Company, or
returns adequate for our audit have not been received from branches not visited
by us; or

the parent Company financial statements and the part of the Directors'
Remuneration Report to be audited are not in agreement with the accounting
records and returns; or

certain disclosures of directors' remuneration specified by law are not made;
or

we have not received all the information and explanations we require for our
audit; or

a Corporate Governance Statement has not been prepared by the Company.


Under the Listing Rules we are required to review:

the directors' statement, set out on page 25, in relation to going concern; and

the part of the Corporate Governance Statement on pages 19 to 25 relating to
the Company's compliance with the nine provisions of the June 2008 Combined
Code specified for our review.


SJ Wardell (Senior Statutory Auditor)

for and on behalf of KPMG Audit Plc, Statutory Auditor

Chartered Accountants

Altius House

One North Fourth Street

Milton Keynes

MK9 1NE

26 February 2010

 

                CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                 
                      FOR THE YEAR ENDED 31 DECEMBER 2009                      

                                            Year ended        Year ended
                                      31 December 2009  31 December 2008
                                                                        
                                 Note             £000              £000

                                                                      
Revenue                           2             69,386            74,046
                                                                               
Administrative expenses                       (30,676)           (34,555)
                                                                        
Operating profit before                                                 
share-based payments, NI on                                             
share-based incentives, and                                             
capital reconstruction credit                   41,916            41,004
                                                                        
Share-based payments              24           (1,896)           (1,998)
                                                                        
NI on share-based incentives      24           (1,310)               240
                                                                        
Capital reconstruction credit     6                  -               245
                                                                        
                                                                        
Operating profit                  6             38,710            39,491
                                                                        
Financial income                  8                199               630
                                                                        
Financial expenses                9            (1,088)           (1,955)
                                                                        
Net financial expenses                           (889)           (1,325)
                                                                        
Profit before tax                               37,821            38,166
                                                                        
Income tax expense                10           (7,794)          (12,663)
                                                                        
Profit for the year being total                                         
comprehensive income                            30,027                  
                                                                  25,503
                                                                        
Attributable to:                                                        
Equity holders of the Parent                    30,027            25,503
                                                                        
                                                                        
                                                                     
Earnings per share (pence)                                              
                                                                        
Basic                             11             27.52             22.49
                                                                        
Diluted                           11             27.18             22.48
                                                                        
                                                                        
                                                                        
Dividends per share (pence)       12             10.00              9.00
                                                                        
Total dividends                   12            10,894            10,358
                                                                        
               

                 CONSOLIDATED STATEMENT OF FINANCIAL POSITION                  
                            AS AT 31 DECEMBER 2009                             
                                                                               

                                                      31 December  31 December
                                                             2009         2008
                                                Note         £000         £000
                                                                              
Non-current assets                                                            
                                                                              
Property, plant and equipment                    13         1,393        1,883
                                                                              
Intangible assets                                14        14,314       11,123
                                                                              
Deferred tax assets                              21         2,722          164
                                                                              
Total non-current assets                                   18,429       13,170
                                                                              
Current assets                                                                
                                                                              
Trade and other receivables                      16         9,421       12,627
                                                                              
Cash and cash equivalents                        17        25,893       23,059
                                                                              
Total current assets                                       35,314       35,686
                                                                              
Total assets                                               53,743       48,856
                                                                              
Current liabilities                                                           
                                                                              
Loans and borrowings                             19       (5,000)     (39,750)
                                                                              
Bank overdraft                                   19             -        (172)
                                                                              
Trade and other payables                         18      (13,861)     (12,418)
                                                                              
Income tax payable                                        (5,203)      (5,787)
                                                                              
Deferred consideration                           27       (8,909)      (6,133)
                                                                              
Provisions                                       20           (6)         (13)
                                                                              
Total current liabilities                                (32,979)     (64,273)
                                                                              
Non-current liabilities                                                       
                                                                              
Loans and borrowings                             19      (17,500)            -
                                                                              
Deferred tax liabilities                         21          (71)         (92)
                                                                              
Total non-current liabilities                            (17,571)         (92)
                                                                              
                                                                              
                                                                              
Net assets/(liabilities)                                    3,193     (15,509)
                                                                              
                                                                              
                                                                              
Equity                                                                        
                                                                              
Share capital                                    23         1,189        1,201
                                                                              
Other reserves                                   23           243          231
                                                                              
Retained earnings/(deficit)                      23         1,761     (16,941)
                                                                              
Total equity attributable to the equity holders                               
of the Parent                                               3,193     (15,509)
                                                 23                           
                                                                              


The financial statements were approved by the Board of directors on 26 February
2010 and were signed on its behalf by:

Ed Williams
Director


Nick McKittrick
Director
             

                    COMPANY STATEMENT OF FINANCIAL POSITION                    
                            AS AT 31 DECEMBER 2009                             

                                                                               

                                                                                      
                                                                            31 December 31 December
                                                                          Note     2009     2008
                                                                                   £000     £000
                                                                                           
Non-current assets                                                                              
                                                                                                
Investments                                                                15   538,501  537,668
                                                                                                
Deferred tax assets                                                        21     1,896        -
                                                                                                
Total non-current assets                                                        540,397  537,668
                                                                                                
Current assets                                                                                  
                                                                                                
Cash and cash equivalents                                                  17     5,424   17,050
                                                                                                
Total current assets                                                              5,424   17,050
                                                                                                
Total assets                                                                    545,821  554,718
                                                                                                
Current liabilities                                                                             
                                                                                                
Bank overdraft                                                             19         -    (172)
                                                                                                
Loans and borrowings                                                       19   (5,000) (39,750)
                                                                                                
Trade and other payables                                                   18  (62,933) (36,828)
                                                                                                
Total current liabilities                                                      (67,933) (76,750)
                                                                                                
Non-current liabilities                                                                         
                                                                                                
Loans and borrowings                                                       19  (17,500)        -
                                                                                                
Total non-current liabilities                                                  (17,500)        -
                                                                                                
                                                                                                
Net assets                                                                      460,388  477,968
                                                                                                
                                                                                      
                                                                                                
Equity                                                                                          
                                                                                                
Share capital                                                              23     1,189    1,201
                                                                                                
Other reserves                                                             23   105,116  104,271
                                                                                                
Retained earnings                                                          23   354,083  372,496
                                                                                                
Total equity attributable to the equity holders of the Parent                                   
                                                                                460,388  477,968
                                                                           23                   
                                                                                                


The financial statements were approved by the Board of directors on 26 February
2010 and were signed on its behalf by:



Ed Williams
Director

 

Nick McKittrick
Director


                     CONSOLIDATED STATEMENT OF CASH FLOWS                      
                      FOR THE YEAR ENDED 31 DECEMBER 2009                      

                                                      Year ended       Year ended
                                                                                 
                                                31 December 2009 31 December 2008
                                                            £000             £000
                                           Note                                  
                                                                                 
Cash flows from operating activities                                             
                                                                                 
Profit for the year                                       30,027           25,503
                                                                                 
                                                                                 
                                                                                 
Adjustments for:                                                                 
                                                                                 
Depreciation charges                        13               646              648
                                                                                 
Amortisation charges                        14               482              452
                                                                                 
Loss on disposal of property, plant and     13                94                -
equipment                                                                        
                                                                                 
Financial income                            8              (199)            (630)
                                                                                 
Financial expenses                          9              1,088            1,955
                                                                                 
Share-based payments charge                 24             1,896            1,998
                                                                                 
Income tax expense                          10             7,794           12,663
                                                                                 
                                                                                 
                                                                                 
Operating cash flow before changes in                     41,828           42,589
working capital                                                                  
                                                                                 
                                                                                 
                                                                                 
Decrease/(increase) in trade and other                     3,199          (1,462)
receivables                                                                      
                                                                                 
Increase/(decrease) in trade and other                     1,225          (2,296)
payables                                                                         
                                                                                 
Decrease in provisions                                       (7)            (160)
                                                                                 
                                                                                 
                                                                                 
Cash generated from operations                            46,245           38,671
                                                                                 
                                                                                 
                                                                                 
Interest paid                                              (744)          (1,480)
                                                                                 
Income taxes paid                                       (10,783)          (9,972)
                                                                                 
                                                                                 
                                                                                 
Net cash from operating activities                        34,718           27,219
                                                                                 
                                                                                 
                                                                                 
Cash flows from investing activities                                             
                                                                                 
Interest received                                            206              667
                                                                                 
Acquisition of property, plant and          13             (250)            (491)
equipment                                                                        
                                                                                 
Acquisition of intangible assets            14              (28)            (464)
                                                                                 
Proceeds from disposal of property, plant                      -                1
and equipment                                                                    
                                                                                 
                                                                                 
                                                                                 
Net cash used in investing activities                       (72)            (287)
                                                                                 
                                                                                 
                                                                                 
Cash flows from financing activities                                             
                                                                                 
Dividends paid                              12          (10,894)         (10,358)
                                                                                 
Subsidiary dividends paid to minority       12             (870)                -
shareholders                                                                     
                                                                                 
Purchase of shares for treasury             23                 -         (11,917)
                                                                                 
Purchase of shares for cancellation         23           (5,452)         (32,840)
                                                                                 
Purchase of shares by The Rightmove                                              
Employees' Share Trust (EBT)                             (2,401)                 
                                            23                                  -
                                                                                 
Share related expenses                      23              (56)            (287)
                                                                                 
Proceeds on exercise of share options       23             5,408                -
                                                                                 
Proceeds from borrowings                    19                 -           39,750
                                                                                 
Repayment of borrowings                     19          (17,250)                -
                                                                                 
Debt issue costs                                           (125)            (200)
                                                                                 
                                                                                 
                                                                                 
Net cash used in financing activities                   (31,640)         (15,852)
                                                                                 
                                                                                 
                                                           3,006           11,080
Net increase in cash and cash equivalents                                        
                                                                                 
Cash and cash equivalents at 1 January                    22,887           11,807
                                                                                 
                                                                                 
Cash and cash equivalents at 31 December    17            25,893           22,887
                                                                                 


                        COMPANY STATEMENT OF CASH FLOWS                        
                      FOR THE YEAR ENDED 31 DECEMBER 2009                      

                                                      Year ended       Period ended
                                                     31 December 31 December 2008 £
                                                            2009                000
                                                            £000                   
                                              Note                                 
                                                                                   
Cash flows from operating activities                                               
                                                                                   
Loss for the period                            23        (4,315)            (5,637)
                                                                                   
                                                                                   
                                                                                   
Adjustments for:                                                                   
                                                                                   
Financial income                                            (91)              (253)
                                                                                   
Financial expenses                                         1,624              2,758
                                                                                   
Share-based payments charge                    24          1,063              1,339
                                                                                   
Income tax credit                                          (673)                  -
                                                                                   
                                                                                   
                                                                                   
Operating cash flow before changes in working            (2,392)            (1,793)
capital                                                                            
                                                                                   
Decrease in trade and other receivables                        -                 50
                                                                                   
Increase in trade and other payables                      25,275             35,602
                                                                                   
                                                                                   
                                                                                   
Cash generated from operations                            22,883             33,859
                                                                                   
Interest paid                                              (669)            (1,332)
                                                                                   
                                                                                   
                                                                                   
Net cash from operating activities                        22,214             32,527
                                                                                   
                                                                                   
                                                                                   
Cash flows from investing activities                                               
                                                                                   
Interest received                                             91                253
                                                                                   
                                                                                   
                                                                                   
Net cash from investing activities                            91                253
                                                                                   
                                                                                   
                                                                                   
Cash flows from financing activities                                               
                                                                                   
Dividends paid                                 12       (10,894)           (10,358)
                                                                                   
Purchase of shares for treasury                23              -           (11,917)
                                                                                   
Purchase of shares for cancellation            23        (5,452)           (32,840)
                                                                                   
Share related expenses                         23           (38)              (287)
                                                                                   
Proceeds from borrowings                       19              -             39,750
                                                                                   
Repayment of borrowings                        19       (17,250)                  -
                                                                                   
Debt issue costs                                           (125)              (200)
                                                                                   
Redemption of redeemable preference shares                     -               (50)
                                                                                   
                                                                                   
                                                                                   
Net cash used in financing activities                   (33,759)           (15,902)
                                                                                   
                                                                                   
Net (decrease)/increase in cash and cash                (11,454)             16,878
equivalents                                                                        
                                                                                   
Cash and cash equivalents at beginning of the             16,878                  -
period                                                                             
                                                                                   
                                                                                   
Cash and cash equivalents at 31 December       17          5,424             16,878
                                                                                   
           CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY           
                      FOR THE YEAR ENDED 31 DECEMBER 2009                      

                                                                                              
                                           EBT                       Reverse                  
                        Share   Share   shares Treasury    Other acquisition Retained    Total
                      capital premium  reserve   shares reserves   reserve   earnings  equity 
Group            Note    £000    £000     £000     £000     £000       £000     £000     £000   
                                                           
                                                                                              
At 1 January            1,327     105 (17,149) (19,362)        -           -   47,471   12,392
2008                                                                                          
                                                                                              
                                                                                              
                                                                                              
Total                                                                                         
comprehensive                                                                                 
income                                                                                        
                                                                                              
Profit for the              -       -        -        -        -           -   25,503   25,503
year                                                                                          
                                                                                              
                                                                                              
                                                                                              
Transactions                                                                                  
with owners                                                                                   
recorded                                                                                      
directly in                                                                                   
equity                                                                                        
                                                                                              
Capital                  (33)   (105)        -   19,362        -          138   (19,362)      -
reconstruction                                                                                
                                                                                              
Equity settled                                                                                
share-based        24       -       -        -        -        -           -     1,998    1,998
incentives                                                                                    
charge                                                                                        
                                                                                              
Dividends to       12       -       -        -        -        -           -  (10,358) (10,358)
shareholders                                                                                  
                                                                                              
Purchase of                                                                                   
shares for         23       -                                                                 
treasury                            -        -  (11,917)       -           -        -  (11,917)
                                                                                              
Purchase of own    23       -       -        - (32,840)        -           -        -  (32,840)
shares                                                                                        
                                                                                              
Cancellation of    23    (93)       -        -   32,840       93           -  (32,840)       -
own shares                                                                                    
                                                                                              
Share related      23       -       -        -        -        -           -    (287)    (287)
expenses                                                                                      
                                                                                              
                                                                                              
At                      1,201       - (17,149) (11,917)       93         138   12,125 (15,509)       
31 December 2008                                                                      
                                                                                              
                                                                                              
                                                                                              
                                                                                              
                                                                                              
At 1 January            1,201       - (17,149) (11,917)       93         138   12,125 (15,509)
2009                                                                                          
                                                                                              
                                                                                              
                                                                                              
Total                                                                                         
comprehensive                                                                                 
income                                                                                        
                                                                                              
Profit for the              -       -        -        -        -           -   30,027   30,027
year                                                                                          
                                                                                              
                                                                                              
                                                                                              
Transactions                                                                                  
with owners                                                                                   
recorded                                                                                      
directly in                                                                                   
equity                                                                                        
                                                                                              
Equity settled                                                                                
share-based        24       -       -        -        -        -           -    1,896    1,896
incentives                                                                                  
charge                                                                                        
                                                                                              
Tax in respect                                                                                
of share-based                                       
incentives                                                                      
recognised                                                                                    
directly in        21       -      -         -        -        -           -      174      174          
equity                                                                                        
                                                                                              
Dividends to       12       -       -        -        -        -           -  (10,894) (10,894)
shareholders                                                                                  
                                                                                              
Exercise of        23       -       -    3,365        -        -           -    2,043    5,408
share options                                                                                 
                                                                                              
Purchase of own    23       -       -  (2,401)        -        -           -        -   (2,401)
shares                                                                                        
                                                                                              
Cancellation of                                                                               
own shares         23    (12)       -        -        -       12           -  (5,452)  (5,452)
                                                                                              
Share related      23       -       -        -        -        -           -     (56)     (56)
expenses                                                                                      
                                                                                              
                                                                                              
At 31 December                                                                     
2009                    1,189       - (16,185) (11,917)      105         138   29,863    3,193             
                                                                                              

 


             COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY              
                      FOR THE YEAR ENDED 31 DECEMBER 2009                      

                                                                               
                                                      Reverse                  
                        Share   Treasury    Other acquisition Retained    Total
                      capital   shares £ reserves     reserve earnings   equity
Company        Note      £000    £000        £000        £000     £000    £000         
                                               
                                                                               
At 1 January 2008            -        -        -           -        -        -
                                                                               
                                                                               
                                                                               
Total                                                                          
comprehensive                                                                  
income                                                                         
                                                                               
Loss for the                 -        -        -           -     (5,637)  (5,637)
period                                                                  
                                                                               
                                                                               
                                                                               
Transactions with                                                              
owners recorded                                                                
directly in equity                                                             
                                                                               
Share for share         433,490       -        -           -        -   433,490
exchange                                                                     
                                                                               
Capital               (432,196)       -        -     103,520   432,196  103,520
reconstruction                                                          
                                                                               
Equity settled                                                                 
share-based                                                                    
incentives charge  24         -       -        -           -     1,339    1,339
                                                                               
Capital            15         -        -      658           -        -      658
contribution                                                                  
                                                                               
Dividends to       12         -        -        -           -   (10,358) (10,358)
shareholders                                                           
                                                                               
Purchase of shares 23         -   (11,917)      -           -       -   (11,917)
for treasury                                                                  
                                                                               
Purchase of own    23         -   (32,840)      -           -       -   (32,840)
shares                                                                
                                                                               
Cancellation of    23       (93)   32,840      93           -     (32,840)    -
own shares                                                             
                                                                               
Share related      23         -        -        -           -        (287) (287)
expenses                                                                  
                                                                               
                                                                               
At                        1,201   (11,917)     751     103,520    384,413 477,968
31 December 2008                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
At 1 January 2009         1,201  (11,917)      751     103,520   384,413  477,968
                                                                               
                                                                               
                                                                               
Total                                                                          
comprehensive                                                                  
income                                                                         
                                                                               
Loss for the year             -        -        -           -   (4,315)   (4,315)
                                                                               
                                                                               
                                                                               
Transactions with                                                              
owners recorded                                                                
directly in equity                                                             
                                                                               
Equity settled                                                                 
share-based                                                                    
                                                                               
incentives charge  24         -        -        -           -    1,063    1,063
                                                                               
Tax in respect of                                                              
share-based                                                                    
incentives                                                                     
recognised                                                                     
directly in equity 21         -        -        -           -    1,223    1,223
                                                                               
Capital            15         -        -       833          -        -      833
contribution                                                                   
                                                                               
Dividends to       12         -        -        -           - (10,894)  (10,894)
shareholders                                                                   
                                                                               
Cancellation of    23       (12)       -       12           -  (5,452)   (5,452)
own shares                                                                     
                                                                               
Share related      23         -        -        -           -     (38)     (38)
expenses                                                                       
                                                                               
                                                                               
At 31 December 2009        1,189  (11,917)   1,596     103,520   366,000  460,388
                                                 
NOTES FORMING PART OF THE FINANCIAL STATEMENTS

1 General information
Rightmove plc (the Company) is a company registered in England (Company no.
6426485) domiciled in the United Kingdom (UK). The consolidated financial
statements of the Company as at and for the year ended 31 December 2009
comprise the Company and its interest in its subsidiaries (together referred to
as the Group). Its principal business is the operation of the Rightmove.co.uk
website, which is the UK's largest property website.

 

The consolidated financial statements of the Group as at and for the year ended
31 December 2009 are available upon request to the Company Secretary from the
Company's registered office or from the investor relations website at
www.rightmove.co.uk/investors.rsp.


The Company's registered office is 4th Floor, 33 Soho Square, London, W1D 3QU.

Statement of compliance
The consolidated and Company financial statements have been prepared and
approved by the Board of directors in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union (Adopted IFRSs)
and issued by the International Accounting Standards Board (IASB).

The consolidated financial statements were authorised for issue by the Board of
directors on 26 February 2010.

Basis of preparation
On publishing the Company financial statements here together with the Group
financial statements, the Company is taking advantage of the exemption in s408
of the Companies Act 2006 not to present its individual statement of
comprehensive income and related notes that form a part of these approved
financial statements.

The accounting policies set out below have been consistently applied to all the
periods presented, unless otherwise stated.

The financial statements have been prepared on an historical cost basis.


Changes in accounting policies

The accounting policies applied by the Group in these consolidated financial
statements are in accordance with Adopted IFRSs and except as described below
are the same as those applied by the Group in its consolidated financial
statements as at and for the year ended 31 December 2008.

The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1 January 2009:

 

Revised IAS 1 Presentation of Financial Statements (2007) introduces the term
'total comprehensive income' which represents changes in equity during the
period other than those changes from transactions with owners in their capacity
as owners. The Group has elected to present one performance statement being the
statement of comprehensive income which replaces the income statement.
Comparative information has been re-presented so that it is also in conformity
with the revised standard. Since the change in accounting policy only impacts
presentation aspects, there is no impact on earnings per share. 

IFRS 2 Share-Based Payments - Vesting Conditions and Cancellations clarifies
the definition of vesting conditions, introduces the concept of non-vesting
conditions to be reflected in the grant date fair value and provides the
accounting treatment for non-vesting conditions and cancellations. Revisions to
IFRS 2 have been adopted in the calculation of share-based payments in the
current year. The revisions had no significant impact to the financial
statements in the prior year and accordingly the 2008 comparatives have not
been restated. The change in accounting policy had no material impact on
earnings per share.

IFRS 8 Operating Segments introduces the 'management approach' to segment
reporting under which segment information is presented on the same basis as
that used for internal reporting purposes. This has resulted in an increase in
the number of reportable segments presented, as the previously reported
property advertising segment has been split into Agency, New Homes, Holiday
Lettings and Other segments. Comparative segment information has been
re-presented so that it is also in conformity with the revised standard. Since
the change in accounting policy only impacts presentation and disclosure
aspects, there is no impact on earnings per share.


Going concern
The Group has significant cash balances of £25,893,000 at 31 December 2009
(refer Note 17). As described in
Note 19, the Company entered into a revolving loan facility of £39,750,000
during 2008. During 2009 £14,750,000 of the revolving loan facility was repaid
and on 16 April 2009 the Company converted £25,000,000 into a five year term
loan. In February 2010 a decision was made to repay the term loan early thereby
extinguishing the debt
(refer Note 31). Post repayment of the debt, the Group and the Company
continued to be cash positive.

 

The Group met all banking covenant requirements during the year.


After making enquiries, the Board of directors has a reasonable expectation
that the Group and the Company have adequate resources and banking facilities
to continue in operational existence for the foreseeable future. Accordingly,
the Board of directors continues to adopt the going concern basis in preparing
the annual report and financial statements.


Further information regarding the Group's business activities, together with
the factors likely to affect its future development, performance and position
are set out in the Business and Financial Review on pages 4 to 9. The financial
position of the Group, its cash flows, liquidity position and borrowing
facilities are described in the Financial Position on pages 7 to 9. In addition
Note 4 to the financial statements includes the Group's objectives, policies
and processes for managing its capital; its financial risk management
objectives; details of its financial instruments and its exposures to credit
risk and liquidity risk.


Capital structure

The Company was incorporated and registered in England and Wales on
14 November 2007 under the Companies Act 1985 as a private company limited by
shares with the name Rightmove Group Limited, registered no. 6426485. The
Company was re-registered as a public limited company under the name
Rightmove Group plc on 29 November 2007. On 28 January 2008 the Company became
the holding company of Rightmove Group Limited (formerly Rightmove plc,
Company no. 3997679) and its subsidiaries pursuant to a Scheme of Arrangement
(the Scheme) under s425 of the Companies Act 1985. The shares in the Company
were admitted to trading on the Official List of the London Stock Exchange on
28 January 2008 and the Company immediately changed its name to Rightmove plc.
Details of the share capital of the Company are disclosed in Note 22.

Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the
Group has the power, directly or indirectly, to govern the financial and
operating policies of an entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that are currently exercisable or
convertible are taken into account. The financial statements of subsidiaries
are included in the consolidated financial statements from the date that
control commences until the date that control ceases.

The minority shareholders of Holiday Lettings (Holdings) Limited (HLHL) have a
put option which if exercised requires Rightmove Group Limited to purchase
their remaining 33.3% shareholding in HLHL (refer Note 27). In accordance with
IAS 32, the option for the purchase of the remaining 33.3% shareholding along
with the existing investment in HLHL of 66.7% has been accounted for at a
consolidated level as if the Group holds 100% of the ordinary share capital in
HLHL and consequently no minority interest is recognised. HLHL management can
exercise the put option from 1 July 2009 based on either a multiple of EBIT per
the latest audited accounts or HLHL's market value if higher. The impact on the
consolidated statement of financial position is to recognise a liability of £
8,909,000 which is based upon Rightmove Group Limited's best estimate of likely
market value for the business.  This has resulted in an increase of £2,776,000
in deferred consideration and a corresponding increase in goodwill.


Judgments and estimates
The preparation of the consolidated financial statements in conformity with
Adopted IFRSs requires management to make judgments, estimates and assumptions
that affect the application of accounting policies and the 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 judgments 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 any future periods, if applicable.

In particular, information about critical judgments in applying accounting
policies that have the most significant effect on the amounts recognised in the
consolidated financial statements is included in the following notes:

Note 14   Measurement of the recoverable amounts of cash generating units
containing goodwill

Note 21   Deferred tax assets and liabilities

Note 24   Measurement of share-based payments

Note 27   Estimate of deferred purchase consideration for HLHL

2 Significant accounting policies


(a)  Investments
Investments in subsidiaries are held at cost less any provision for impairment
in the Parent company financial statements.

(b)  Intangible assets

    (i)  Goodwill
All business combinations are accounted for by applying the purchase method.
Goodwill that arises upon the acquisition of subsidiaries is included in
intangible assets. In respect of business acquisitions that have occurred since
1 January 2004, goodwill represents the difference between the cost of the
acquisition and the fair value of the net identifiable assets acquired.

In respect of acquisitions prior to this date goodwill is included on the basis
of its deemed cost, which represents the amount recorded under previous UK
Generally Accepted Accounting Principles (GAAP). The classification and
accounting treatment of business combinations that occurred prior to
1 January 2004 were not reconsidered in preparing the Group's opening IFRS
statement of financial position at 1 January 2004.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is
no longer amortised but is tested annually for impairment. This applies to all
goodwill arising both before and after 1 January 2004. IFRS 1 permits goodwill
on acquisitions made before this date to be brought onto the statement of
financial position at 1 January 2004 at its carrying value under UK GAAP.

    (ii)  Research and development
The Group undertakes research and development expenditure in view of developing
new products and improving the existing property websites. Expenditure on
research activities, undertaken with the prospect of gaining new technical
knowledge and understanding, is recognised in the profit or loss as incurred.

Expenditure on development activities, whereby research findings are applied to
a plan or design for the production of a new product or substantially enhanced
website, is capitalised if the new product or the enhanced website is
technically and commercially feasible and the Group has sufficient resources to
complete development.

The expenditure capitalised includes subcontractors and direct labour.
Capitalised development expenditure is stated at cost less accumulated
amortisation and accumulated impairment losses. Subsequent expenditure on
capitalised intangible assets is capitalised only when it increases the
economic benefits embodied in the specific asset to which it relates. All other
expenditure is expensed when incurred.

    (iii)  Computer software
Computer software is capitalised and is stated at cost less accumulated
amortisation and impairment losses. Amortisation is charged from the date the
asset is available for use. Amortisation is provided to write off the cost less
the estimated residual value of the computer software by equal annual
instalments over its estimated useful economic life as follows:

Computer software                                 16.7% - 33.3% per annum

    (iv)  Customer relationships
Customer relationships are identified on the acquisition of a business and
valued using discounted cash flows based on historical customer attrition
rates. Amortisation is expensed in the profit or loss on a straight line basis
over the estimated useful economic life as follows:

Customer relationships                                    16.7% per annum

 

(c)  Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses. Depreciation is provided to write off the cost less the
estimated residual value of property, plant and equipment by equal annual
instalments over their estimated useful economic lives as follows:

Office equipment, fixtures & fittings                      20.0% per annum
Computer equipment                                         20.0% per annum

(d)  Impairment
The carrying value of the property, plant and equipment is reviewed at each
reporting date to determine whether there is any indication of impairment. If
any such indication exists, the asset's recoverable amount is estimated.
An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount of non-financial
assets is the greater of their fair value less costs to sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For
an asset that does not generate largely independent cash flows, the recoverable
amount is determined for the cash generating unit to which the asset belongs.

Intangible assets that have an indefinite useful life and which are not
available for use are not subject to amortisation but are tested for impairment
annually and whenever there is an indication that they might be impaired. An
impairment loss is recognised for the amount by which the carrying value of the
asset exceeds its recoverable amount.

Goodwill was tested for impairment at the IFRS transition date; no impairment
was deemed necessary. An impairment test is performed annually at 31 December
on goodwill regardless of the existence of impairment indicators.

Investments are assessed for possible impairment when there is an indication
that the fair value of the investments may be below the Company's carrying
value. When such a condition is deemed to be other than temporary, the carrying
value of the investment is written down to its fair value and the amount
written off is included in net income. In making the determination as to
whether a decline is other than temporary, the Company considers such factors
as the duration and extent of the decline, the investee's financial performance
and the Company's ability and intention to retain its investment for a period
that will be sufficient to allow for any anticipated recovery in the
investment's market value.

(e)  Financial instruments
Trade receivables are recognised at fair value less any impairment loss. A
provision for impairment of trade receivables is established when there is
objective evidence that the Group will not be able to collect all amounts due
according to the original terms of receivables.

Inter-group balances and transactions, and any unrealised income and expenses
arising from inter-group transactions, are eliminated in preparing the
consolidated financial statements.


Trade payables are recognised at fair value. Trade payables are classified as
current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.

All loans and borrowings are initially recognised at cost, being the fair value
of the consideration received net of issue costs associated with borrowings.
After initial recognition, loans and borrowings are subsequently measured at
amortised cost and any difference between the proceeds and the redemption value
is recognised in the profit or loss over the period of the borrowings using the
effective interest method.

The Group uses derivative financial instruments such as foreign currency
contracts to hedge the risk associated with changes in foreign exchange rates.
Such derivative financial instruments are initially measured at fair value on
the contract date and are remeasured to fair value at subsequent reporting
dates.

The fair value of forward exchange contracts is calculated by reference to

current forward exchange rates for contracts with similar maturity profiles.
The Company does not specifically designate forward exchange contracts as cash
flow hedges and gains and losses are recorded directly in the profit or loss.

(f)  Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with
original maturities of three months or less. Bank overdrafts that are repayable
on demand and form an integral part of the Group's cash management are included
as a component of cash and cash equivalents for the purpose of the statement of
cash flows.

(g)  Provisions
A provision is recognised when the Group has a legal or constructive obligation
as a result of a past event and it is probable that an outflow of economic
benefits will be required to settle the obligation. If the effect is material,
provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of
money and, where appropriate, the risk specific to the liability. The unwinding
of the discount is recognised as a finance cost.

A provision is maintained in respect of vacant leasehold properties where the
lease is considered to be onerous to take account of the net present value of
residual lease commitments over the remaining term of the lease.

(h)  Employee benefits

    (i)  Pensions
The Group provides access to a stakeholder pension scheme into which employees
may elect to contribute via salary deduction. Obligations for contributions to
defined contribution pension plans are recognised as an employee benefit
expense in the profit or loss when they are due.

    (ii)  Employee share schemes
The share option and deferred share plans allow certain senior management to
acquire shares in the Company. An expense is recognised in the profit or loss,
with a corresponding increase in equity, over the period to which the employees
become unconditionally entitled, on equity settled share-based payment schemes
granted after 7 November 2002 and which had not vested by 1 January 2005.
Awards made before this date are not accounted for under IFRS 2, as permitted
under the transitional rules of IFRS 1. For awards made after 7 November 2002
and not vested by 1 January 2005, the charge is based on the fair value of the
share-based incentive granted as at the grant date, calculated using an option
pricing model.

Fair value is measured using either the Monte Carlo pricing model or Black
Scholes model as is most appropriate for each scheme. Measurement inputs
include share price on measurement date, exercise price of the instrument,
expected volatility (based on weighted average historic volatility adjusted for
changes expected due to publicly available information), weighted average
expected life of the instruments (based on historical experience and general
option behaviour), expected dividends, and risk-free interest rates (based on
government bonds). Service and non-market performance conditions attached to
the awards are not taken into account in determining the fair value.

    (iii)  Own shares held by The Rightmove Employees' Share Trust (EBT)
The EBT is treated as an agent of Rightmove Group Limited and as such EBT
transactions are treated as being those of Rightmove Group Limited and are
therefore reflected in the Group's consolidated financial statements. In
particular, at a consolidated level, the EBT's purchases of shares in the
Company are debited directly to equity.

(i)  Treasury shares and shares purchased for cancellation
When share capital recognised as equity is repurchased, the amount of the
consideration paid, including directly attributable costs, is recognised as a
deduction from equity. Repurchased shares are either held in treasury or
cancelled.

(j)  Revenue
Revenue principally represents the amounts, excluding value added tax (VAT),
receivable from customers in respect of properties advertised on Group
websites. Revenue relating to properties advertised on the website is
recognised in the month to which it relates. Estate agency and overseas
branches are billed in advance with net revenue deferred until the service
commencement date. The VAT liability is recognised at the point of invoice. New
homes developers are typically billed monthly in arrears. Where invoices are
raised on other than a monthly basis, the amounts are recognised as deferred or
accrued revenue and released to the profit or loss on a monthly basis in line
with the provision of services as stipulated in the contract terms. Holiday
Lettings Limited (HLL) revenue is billed in advance. The majority of HLL
revenue relates to a 12 month period although some is billed quarterly and half
yearly. This revenue is spread equally over the period with any deferred
revenue held on the statement of financial position.

(k)  Segmental reporting
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the Group's other
components. An operating segment's operating results are reviewed regularly by
the Group's Managing Director to make decisions about resources to be allocated
to the segment and assess its performance, and for which discrete financial
information is available.

(l)  Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional
currencies of Group entities at exchange rates at the dates of transactions.
Monetary assets and liabilities denominated in foreign currencies at the
reporting date are retranslated to the functional currency at the exchange rate
at that date. Foreign currency differences arising on retranslation are
recognised in the profit or loss.

(m)  Leases
Operating lease rentals are charged to the profit or loss on a straight line
basis over the period of the lease. Where cash is received in exchange for
entering into a lease with rates above market value, this upfront payment is
deferred and released on a straight line basis over the lease term.

(n)  Financial income and expenses
Financial income comprises interest receivable on cash balances, deposits and
dividend income. Interest income is recognised as it accrues, using the
effective interest method.  Dividend income is recognised on the date that the
Group's right to receive payment is established.

Financial expenses comprise debt issue costs, preference dividend interest and
interest payable on bank loans. Interest payable is recognised on an accruals
basis.

(o)  Taxation
Income tax on the results for the year comprises current and deferred tax.
Income tax is recognised in the profit or loss except to the extent that it
relates to items recognised directly in equity, in which case it is recognised
in equity.
Current tax is the expected tax payable on the taxable income for the period,
using tax rates enacted or substantially enacted at the reporting date, and any
adjustment to tax payable in respect of previous periods.

Deferred tax is provided in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for taxation purposes. The following temporary differences are
not provided for: the initial recognition of goodwill, the initial recognition
of assets or liabilities that affect neither accounting nor taxable profit
other than in a business combination and the differences relating to
investments in subsidiaries to the extent that they will probably not reverse
in the foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantially enacted by the
reporting date.

A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised.

In accordance with IAS 12, the Group policy in relation to the recognition of
deferred tax on share-based payments is to include the income tax effect of the
excess tax deduction in the profit or loss to the value of the income tax
charge on the cumulative IFRS 2 charge.  The remainder of the income tax effect
of the excess tax deduction is recognised in equity.

(p)  Dividends
Dividends unpaid at the reporting date are only recognised as a liability (and
deduction to equity) at that date to the extent that they are appropriately
authorised and are no longer at the discretion of the Company. Unpaid dividends
that do not meet these criteria are disclosed in the notes to the financial
statements.

(q)  Earnings per share
The Group presents basic, diluted and underlying earnings per share (EPS) data
for its ordinary shares. Basic EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period, adjusted for own
shares held. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding, adjusted for own shares held, for the effects of
all potential dilutive instruments, which comprise
share-based incentives granted to employees.  The calculation of underlying EPS
is disclosed in Note 11.

3 IFRSs not yet applied

A number of new standards, amendments to standards and interpretations are not
yet effective for the year ended 31 December 2009 and have not been applied in
preparing these consolidated financial statements.  The standards and
interpretations to be adopted include:  

 

                                                                 Effective date
                                                                               
Revised IFRS 3 Business Combinations (2008)                            1/1/2010
                                                                               
Amended IAS 27 Consolidated and Separate Financial Statements          1/1/2010
(2008)                                                                         
                                                                               
                                                                               
                                                                               

Revised IFRS 3 Business Combinations (2008) incorporates the following changes
that are likely to be relevant to the Group's operations:

The definition of a business has been broadened, which is likely to result in
more acquisitions being treated as business combinations;

Contingent consideration will be measured at fair value, with subsequent
changes therein recognised in profit or loss;

Transaction costs, other than share and debt issue costs, will be expensed as
incurred;

Any pre-existing interest in the acquiree will be measured at fair value with
the gain or loss recognised in profit or loss; and

Any non-controlling (minority) interest will be measured at either fair value,
or at its proportionate interest in the identifiable assets and liabilities of
the acquiree, on a transaction by transaction basis.


Revised IFRS 3, which becomes mandatory for the Group's 2010 consolidated
financial statements, will be applied prospectively and therefore there will be
no impact on prior years.

Amended IAS 27 Consolidated and Separate Financial Statements (2008) requires
accounting for changes in ownership interests by the Group in a subsidiary,
while maintaining control, to be recognised as an equity transaction. When the
Group loses control of a subsidiary, any interest retained in the former
subsidiary will be measured at fair value with the gain or loss recognised in
profit or loss. The amendments to IAS 27, which become mandatory for the
Group's 2010 consolidated financial statements, are not expected to have a
significant impact on the consolidated financial statements.

4 Financial risk management

Overview
The Group has exposure to the following risks from its use of financial
instruments:

credit risk

liquidity risk

market risk

operational risk


This note presents information about the Group and Company's exposure to each
of the above risks, the Group's objectives, policies and processes for
measuring and managing risk and the Group's management of capital. Further
quantitative disclosures are included throughout these consolidated financial
statements.

The Board of directors has overall responsibility for the establishment and
oversight of the Group's risk management framework. The primary method by which
risks are monitored and managed by the Group is through the monthly Executive
Management Board, where any significant new risks or change in status to
existing risks will be discussed and actions taken as appropriate.

The Group's risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and controls and
to monitor risks and adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Group's
activities. The Group, through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment
in which all employees understand their roles and obligations.

The Audit Committee oversees how management monitors compliance with the
Group's internal controls and reviews the adequacy of the risk management
framework in relation to the risks faced by the Group.

Credit risk
Credit risk is the risk of financial loss to the Group if a customer fails to
meet its contractual obligations.

The Group's exposure to credit risk is influenced mainly by the individual
characteristics of each customer. The Group provides credit to customers in the
normal course of business. The Group provides its services to a wide range of
customers in the UK and overseas and therefore believes it has no material
concentration of credit risk.

More than 90.5% of the Group's customers pay via monthly direct debit,
minimising the risk of non-payment. The Group establishes an allowance for
impairment that represents its estimate of incurred losses in respect of trade
and other receivables based on individually identified loss exposures.

Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in
meeting the obligations associated with its financial liabilities that are
settled by delivering cash. The Group and Company's  approach to managing
liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the
Group's reputation.

The Group's revenue model is largely subscription-based which results in a
regular level of cash conversion allowing it to service working capital
requirements.

The Group and Company ensures that they have sufficient cash on demand to meet
expected operational expenses excluding the potential impact of extreme
circumstances that cannot reasonably be predicted, such as natural disasters.
Throughout the year, the Group typically had sufficient cash on demand to meet
operational expenses, before financing activities, for a period of 277 days
(2008: 113 days).

As at 31 December 2009 the Group had bank borrowings of £22,500,000 (2008: £
39,750,000). On 10 February 2010 the loan was repaid in full without penalty
(refer Note 31).

Market risk
Market risk is the risk that changes in market prices such as foreign exchange
and interest rates will affect the Group's income. The objective of market risk
management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk.

Currency risk 
More than 99.9% of the Group's sales are Sterling denominated, with the balance
being Euro denominated. As the value of Euro denominated trade receivables is
low in relation to total receivables, no amounts are hedged.

HLL purchases forward exchange contracts to hedge the currency risk associated
with changes in US Dollar exchange rates in respect of search marketing
services supplied by Google (refer to Note 29).

Interest rate risk
The Group and Company have interest bearing financial liabilities. The Group
and Company are exposed to interest rate risk on the bank loan facility and
cash balances.

Operational risk

Operational risk is the risk of direct or indirect loss arising from a wide
variety of causes associated with the Group's processes, personnel, technology
and infrastructure, and from external factors other than credit, market and
liquidity risks such as those arising from legal and regulatory requirements
and generally accepted standards of corporate behaviour. Operational risks
arise from all of the Group's operations.  

The Group's objective is to manage operational risk so as to balance the
avoidance of financial losses and damage to the Group's reputation with overall
cost effectiveness and to avoid control procedures that restrict initiative and
creativity.

The primary responsibility for the development and implementation of controls
to address operational risk is assigned to senior management within each
business unit. This responsibility is supported by the development of overall
Group standards for the management of operational risk in the following areas: 

requirements for appropriate segregation of duties, including the independent
authorisation of transactions;

requirements for the reconciliation and monitoring of transactions;

compliance with regulatory and other legal requirements;

documentation of controls and procedures;

requirements for the periodic assessment of operational risks faced, and the
adequacy of controls and procedures to address the risks identified;

requirements for reporting of operational losses and proposed remedial action;

development of contingency plans;

training and professional development; and

risk mitigation, including insurance where this is effective.

Capital management
The Board of directors policy is to maintain an efficient statement of
financial position with an appropriate level of leverage for the size of the
business so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The Board of directors considers
that the future working capital and capital expenditure requirements of the
Group will continue to be low and accordingly return on capital measures are
not key performance targets. The Board of directors monitors the spread of the
Company's shareholders as well as underlying earnings per share. The Board of
directors has a progressive dividend policy and also monitors the level of
dividends to ordinary shareholders in relation to profit growth.

As at 31 December 2009 the directors hold 2.8% of the ordinary share capital of
the Company (excluding shares held in treasury). In addition the executive
directors are regarded as being interested, for the purposes of the Companies
Act 2006, in 6.4% (2008: 7.1%) ordinary shares in the Company currently held by
the EBT as they are, together with other employees, potential beneficiaries of
the EBT.

The Company purchases its own shares in the market; the timing of these
purchases depends on market conditions. In April 2008 the Company entered into
a revolving loan facility in order to support its continuing share buy back
programme. Of the 11,854,535 shares bought back during 2008, 9,349,105 were
cancelled, with the balance transferred into treasury, providing flexibility
for future share-based incentives. In 2009, 1,127,462 shares were bought back
and were cancelled.

There were no changes in the Group's approach to capital management during the
year. Neither the Company nor any of its subsidiaries are subject to externally
imposed capital requirements.

5 Operating segments

As from 1 January 2009, the Group determines and presents operating segments
based on the information that internally is provided to the Managing Director,
who is the Group's Chief Operating Decision Maker.

The Group's reportable segments are as follows:

The Agency segment which provides resale and lettings property advertising
services on www.rightmove.co.uk;

The New Homes segment which provides property advertising services to new homes
developers and Housing Associations on www.rightmove.co.uk;and

The Holiday Lettings segment which provides advertising services in connection
with holiday rental properties on www.holidaylettings.co.uk.

The Other segment which represents activities under the reportable segments
threshold, comprises overseas property advertising services on
www.rightmove.co.uk and non-property advertising services which include
business and information services, banner advertising on www.aboutmyplace.co.uk
and Automated Valuation Model services.

Management monitors the operating results of business segments separately for
the purpose of making decisions about resources to be allocated and of
assessing performance. Segment performance is evaluated based on revenue which
in certain respects, as explained in the table below, is measured differently
from revenue as reported in the consolidated financial statements. All revenues
in all periods are derived from third parties and there are no inter-segment
revenues.

Operating costs, financial income, financial expenses and income taxes in
relation to the Agency, New Homes and the Other segment are managed on a
centralised basis at a Rightmove Group Limited level and as there are no
internal measures of individual segment profitability relevant disclosures have
been shown under the heading of Central in the table below. 

The Company has no reportable segments.

                      
                     
                                                           
                      New   Holiday                                                      
             Agency  Homes  Lettings  Sub total  Other  Central  Adjustments       Total 
                                                                           
Operating      £000  £000       £000     £000     £000    £000         £000         £000         
segments                                                                              
                                                                                      
Year ended                                                                            
                                                                                      
31 December                                                                           
2009                                                                                  
                                                                                      
Revenue      47,096 14,554     5,523     67,173  2,871       -       (658) (1)    69,386
                                                                                      
Operating         -      -     2,052      2,052     -    40,606    (3,948) (3)    38,710
profit(2)                                                                             
                                                                                      
Depreciation                                                                          
and                                                                                   
                                                                                      
amortisation      -      -       (32)      (32)     -    (1,012)      (84) (4)   (1,128)
                                                                                      
Financial         -      -        20         20     -        179        -           199
income                                                                              
                                                                                      
Financial         -      -        (2)       (2)     -     (1,086)       -        (1,088)
expenses                                                                             
                                                                                      
Trade         5,806   2,131       77     8,014    209          -       97(6)       8,320
receivables                                                                           
(5)                                                                                   
                                                                                      
Other             -      -       891       891      -    31,731     12,801 (7)    45,423
segment                                                                               
assets                                                                                
                                                                                      
Segment           -      -        (649)  (649)      -  (47,666)     (2,235) (8)  (50,550)
liabilities                                                                           
                                                                                      
Capital           -      -           49     49      -      229            -          278
expenditure                                                                           
(9)                                                                                   
                                                                                      
                                                                                      
                                                                                      
Year ended                                                                            
                                                                                      
31 December                                                                           
2008                                                                                  
                                                                                      
Revenue      49,428   18,676       3,791   71,895  3,209     -     (1,058)(1)    74,046
                                                                                      
Operating         -      -           907      907    -   41,239    (2,655)(10)   39,491
profit(2)                                                                             
                                                                                      
Depreciation                                                                          
and                                                                            
amortisation      -      -           (19)    (19)    -     (997)     (84) (4)   (1,100)                   
                                                                             
                                                                                      
Financial         -      -             30     30     -      600        -           630
income                                                                               
                                                                                      
Financial         -      -             (2)    (2)    -   (1,679)    (274)(11)  (1,955)
expenses                                                                              
                                                                                      
Trade          5,209  3,704             50  8,963   852        -       150(6)   9,965
receivables                                                                           
(5)                                                                                   
                                                                                      
Other             -      -           1,538  1,538     -   28,113     9,240(7)   38,891
segment                                                                               
assets                                                                                
                                                                                      
Segment           -      -           (322)  (322)     - (62,413)   (1,630)(8) (64,365)
liabilities                                                                           
                                                                                      
Capital           -      -            102    102     -      853        -          955
expenditure                                                                         
(9)                                                                                   
                                                                                      


(1) Segment revenue in respect of Holiday Lettings is recognised for management
purposes when the invoice is raised. In the consolidated financial statements
the revenue is spread evenly over the period of the contracted service with any
deferred revenue held on the statement of financial position and accordingly an
adjustment has been made to reconcile to consolidated Group revenue.
(2) Operating profit is stated after the charge for depreciation and
amortisation.
(3) Operating profit for the year ended 31 December 2009 does not include
share-based payments charge (£1,896,000), Employer's National Insurance (NI) on
share-based incentives (£1,310,000), the amortisation of customer relationships
(£84,000) and the additional segment revenue recognised by Holiday Lettings (£
658,000).
(4) Depreciation and amortisation excludes the consolidation adjustment in
respect of the amortisation of customer relationships.
(5) The only segment assets that are separately monitored by the Chief
Operating Decision Maker relate to trade receivables net of any associated
provision for impairment. All other segment assets are reported on a
centralised basis.
(6) The adjustments column reflects the reclassification of credit balances in
accounts receivable made on consolidation for statutory accounts purposes.
(7) Other segment assets exclude goodwill arising on consolidation in
connection with the accounting entries for the acquisition of HLHL as well as
the net book value of customer relationships.
(8) The adjustment column reflects the reclassification of credit balances in
accounts receivable as well as an adjustment to reflect the deferred revenue
balance in respect of the Holiday Lettings segment.
(9) Capital expenditure consists of additions of property, plant and equipment
and intangible assets (excluding goodwill).
(10) Operating profit for the year ended 31 December 2008 does not include
share-based payments charge (£1,998,000), NI on share-based incentives (£
240,000 credit), capital reconstruction credit (£245,000), the amortisation of
customer relationships (£84,000) and the additional segment revenue recognised
by Holiday Lettings (£1,058,000).
(11) Financial expenses exclude the consolidation adjustment relating to the
unwinding of the effective interest rate on the HLHL deferred purchase
consideration.

Geographic information

In presenting information on the basis of geography, revenue and assets are
based on the geographical location of customers.
 

                    Year ended 31 December 2009     Year ended 31 December 2008  
                                                                                 
                   Revenue      Trade Receivables   Revenue     Trade Receivables
                      £000                   £000      £000                  £000
Group                                                                            
                                                                                 
UK                  66,609                  8,305    71,523                 9,879
                                                                                 
Rest of the world    2,777                     15     2,523                    86
                                                                                 
                    69,386                  8,320    74,046                 9,965
                                                                                 


6 Operating profit

                                                    Year ended       Year ended
                                              31 December 2009 31 December 2008
                                                          £000                 
                                                                           £000
                                                                               
Operating profit is stated after charging/                                     
(crediting):                                                                   
                                                                               
Depreciation of property, plant and equipment              646              648
                                                                               
Amortisation of computer software                          398              368
                                                                               
Amortisation of customer relationships                      84               84
                                                                               
Bad debt impairment charge                                 191            1,353
                                                                               
Operating lease rentals                                                        
                                                                               
   Land and buildings                                      899            1,038
                                                                               
   Other                                                   350              668
                                                                               
Capital reconstruction (credit)*                             -            (245)
                                                                               


*Following clarification of the VAT treatment on professional fees incurred in
connection with the capital reconstruction £245,000 was released to the profit
and loss in 2008.



Auditors' remuneration

                                                   Year ended       Year ended
                                                           31               31
                                                December 2009    December 2008
                                                         £000             £000    
                                                                              
Fees payable to the Company's auditors and                                    
their associates in respect of the audit                                      
                                                                              
Audit of the Company's financial statements                20               15
                                                                              
Audit of the Company's subsidiaries pursuant to           112              115
legislation 
                                                                                                            
Total audit remuneration                                  132              130
                                                                             
Fees payable to the Company's auditors in                                     
respect of non-audit related services                                         
                                                                              
Tax advisory                                               13               20
                                                                              
Transaction services                                        -               14
                                                                              
All other services                                          2               13
                                                                              
Total non-audit remuneration                               15               47
                                                                              


Included in the current year's auditors' remuneration for the Company is an
amount of £5,000 (2008: £nil) relating to the prior year audit and £nil (2008: 
£9,000) relating to finalisation of the prior year tax computation.

7 Employee numbers and costs

The average number of persons employed (including directors) during the year,
analysed by category, was as follows:

 

                                         Year ended                     Year ended
                                   31 December 2009               31 December 2008
                                Number of employees            Number of employees
                                                                                  
Administration                                  292                            346
                                                                                  
Management                                       14                             14
                                                                                  
                                                306                            360
                                                                                  


The aggregate payroll costs of these persons were as follows:

 

                                               Year ended               Year ended
                                         31 December 2009         31 December 2008
                                                     £000                     £000
                                                                                  
Wages and salaries                                 12,665                   15,200
                                                                                  
Social security costs                               1,192                    1,674
                                                                                  
Pension costs                                         235                      295
                                                                                  
                                                   14,092                   17,169
                                                                                  


8 Financial income

                                                     Year ended         Year ended
                                               31 December 2009   31 December 2008
                                                           £000               £000
                                                                                  
Interest income on cash balances                            199                551
                                                                                  
Interest income on over payment of taxes                      -                 79
                                                                                  
                                                            199                630
                                                                                  


9 Financial expenses

                                                       Year ended       Year ended
                                                 31 December 2009 31 December 2008
                                                             £000             £000
                                                                                  
Debt issue costs                                              325              200
                                                                                  
Interest expense                                              668            1,367
                                                                                  
Unwinding of effective interest rate on deferred                                  
purchase consideration                                          -              274
                                                                                  
Other financial expenses                                       95              113
                                                                                  
Preference dividend interest                                    -                1
                                                                                  
                                                            1,088            1,955
                                                                                  


10 Income tax expense

                                                       Year ended       Year ended
                                                 31 December 2009 31 December 2008
                                                             £000             £000
                                                                                  
Current tax expense                                                               
                                                                                  
Current year                                               10,273           11,718
                                                                                  
Adjustment to current tax charge in respect of               (74)            (209)
prior years                                                                       
                                                                                  
                                                           10,199           11,509
                                                                                  
Deferred tax expense                                                              
                                                                                  
Origination and reversal of temporary                     (2,405)            1,155
differences                                                                       
                                                                                  
Reduction in tax rate                                          -               (1)
                                                                                  
                                                          (2,405)            1,154
                                                                                  
                                                                                  
                                                                                  
Total income tax expense                                    7,794           12,663
                                                                                  

 

Reconciliation of effective tax rate

The Group's income tax expense for the year is lower (2008: higher) than the
standard rate of corporation tax in the UK of 28.0% (2008: 28.5%). The
differences are explained below:

                                                    Year ended       Year ended
                                              31 December 2009 31 December 2008
                                                          £000             £000
                                                                               
Profit before tax                                       37,821           38,166
                                                                               
                                                                               
Current tax at 28.0% (2008: 28.5%)                                       10,877
                                                        10,590                 
                                                                               
Adjustment to current tax charge in respect               (74)            (209)
of prior years                                                                 
                                                                               
Non-deductible expenses                                     54              859
                                                                               
Change in tax rate                                           -              (1)
                                                                               
Small companies relief                                       -              (2)
                                                                               
Share-based incentives                                 (2,790)            1,252
                                                                               
Adjustment to deferred tax charge in respect                14            (113)
of prior years                                                                 
                                                                               
                                                         7,794           12,663
                                                                               


The Group's consolidated effective tax rate for the year ended 31 December 2009
is 20.6% (2008: 33.0%). The difference between the standard rate and effective
rate at 31 December 2009 is mainly attributable to credits as a result of the
increase in the deferred tax asset arising on share-based incentives (6.2%) and
corporation tax deductions arising on exercise of share options (2.3%), offset
by disallowable expenditure (1.6%).


Income tax recognised directly in equity

                                                     Year ended       Year ended
                                                             31 31 December 2008
                                                  December 2009             £000
                                                           £000                 
                                                                                
Deferred tax                                                                    
                                                                                
Equity settled share-based incentives                       174                -
                                                                                
Total income tax credit recognised directly in              174                -
equity                                                                          
                                                                                


11 Earnings per share (EPS)

                              Weighted average number of Earnings               
                                                  shares     £000      Pence per
                                                                           share
                                                                                
Year ended                                                                      
31 December 2009                                                                
                                                                                
 Basic EPS                                   109,100,758   30,027          27.52
                                                                                
 Diluted EPS                                 110,482,567   30,027          27.18
                                                                                
 Underlying basic EPS                        109,100,758   33,233          30.46
                                                                                
 Underlying diluted EPS                      110,482,567   33,233          30.08
                                                                                
Year ended                                                                      
31 December 2008                                                                
                                                                                
 Basic EPS                                   113,405,224   25,503          22.49
                                                                                
 Diluted EPS                                 113,449,416   25,503          22.48
                                                                                
 Underlying basic EPS                        113,405,224   27,016          23.82
                                                                                
 Underlying diluted EPS                      113,449,416   27,016          23.81
                                                                                


Weighted average number of ordinary shares (basic)

                                                     Year ended       Year ended
                                               31 December 2009 31 December 2008
                                               Number of shares                 
                                                                Number of shares
                                                                                
Issued ordinary shares at 1 January less            111,697,173      121,046,278
ordinary shares held by the EBT                                                 
                                                                                
Effect of own shares held in treasury               (2,505,430)      (2,146,388)
                                                                                
Effect of own shares purchased for                     (65,260)      (5,494,666)
cancellation                                                                    
                                                                                
Effect of own shares purchased by the EBT             (331,649)                -
                                                                                
Effect of share options exercised                       305,924                -
                                                                                
                                                    109,100,758      113,405,224
                                                                                

 

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 potential dilutive instrument being those ordinary shares held by the EBT
to satisfy share-based incentives granted to employees.

                                                    Year ended       Year ended
                                              31 December 2009 31 December 2008
                                              Number of shares Number of shares
                                                                               
Weighted average number of ordinary shares         109,100,758      113,405,224
(basic)                                                                        
                                                                               
Dilutive impact of own shares held by the EBT        1,381,809           44,192
                                                                               
                                                   110,482,567      113,449,416
                                                                               


Underlying EPS is calculated before the charge for share-based payments,
capital reconstruction credit and National Insurance (NI) on share-based
incentives. A reconciliation of the basic earnings for the year to the
underlying earnings is presented below:

                                                 Year ended          Year ended
                                           31 December 2009    31 December 2008
                                                       £000                £000
                                                                               
Basic earnings for the year                          30,027              25,503
                                                                               
Share-based payments                                  1,896               1,998
                                                                               
NI on share-based incentives                          1,310               (240)
                                                                               
Capital reconstruction credit                             -               (245)
                                                                               
Underlying earnings for the year                     33,233              27,016
                                                                               


12 Dividends

Dividends declared and paid by the Company were as follows:

                                                                            
                                                                            
                                      2009                    2008          
                                                                            
                              Pence per share   £000  Pence per share   £000
                                                                            
2007 final dividend paid                    -      -              6.0  7,082
                                                                            
2008 interim dividend paid                  -      -              3.0  3,276
                                                                            
2008 final dividend paid                  7.0  7,615                -      -
                                                                            
2009 interim dividend paid                3.0  3,279                -      -
                                                                            
                                         10.0 10,894              9.0 10,358
                                                                            


After the reporting date a final dividend of 7.0p (2008: 7.0p) per qualifying
ordinary share being £7,630,000 (2008: £7,643,000) was proposed by the Board of directors.

 

The 2008 final dividend paid on 12 June 2009 was £7,615,000 being a difference
of £28,000 compared to that reported in the 2008 Annual Report which was due to
a reduction in the ordinary shares entitled to a dividend between
31 December 2008 and the final dividend record date of 15 May 2009 following
the purchase of own shares by the EBT.

 

The 2009 interim dividend paid on 13 November 2009 was £3,279,000 being a
difference of £15,000 compared to that reported in the 2009 Half Year Report
which was due to an increase in the ordinary shares entitled to a dividend
between 30 June 2009 and the interim dividend record date of 16 October 2009,
following the exercise of share-based incentives.

 

The terms of the EBT provide that dividends payable on the ordinary shares held
by the EBT are waived.


No provision was made for the final dividend in either year and there are no
income tax consequences.

Subsidiary dividends

 

Dividends of £870,000 (2008: £nil) were paid in the year by HLHL to minority
shareholders. As no minority interest is recognised in the consolidated
statement of financial position and the Group consolidates 100% of HLHL's
results, the dividends paid in the year have been treated as an addition to
goodwill.

13 Property, plant and equipment

                         Office                                                    
                     equipment,                                                    
                     fixtures &      Computer        Leasehold      Work in        
Group                  fittings     equipment     improvements     progress   Total
                           £000          £000             £000         £000    £000
                                                                                   
Cost                                                                               
                                                                                   
At                          844         3,632               32            -   4,508
1 January 2009                                                                     
                                                                                   
Additions                     2           233               15            -     250
                                                                                   
Disposals                  (62)       (1,155)                -            - (1,217)
                                                                                   
At                          784         2,710               47            -   3,541
31 December 2009                                                                   
                                                                                   
Depreciation                                                                       
                                                                                   
At                        (379)       (2,242)              (4)            - (2,625)
1 January 2009                                                                     
                                                                                   
Charge for year           (118)         (521)              (7)            -   (646)
                                                                                   
Disposals                    56         1,067                -            -   1,123
                                                                                   
At                        (441)       (1,696)             (11)            - (2,148)
31 December 2009                                                                   
                                                                                   
Net book value                                                                     
                                                                                   
At                          343         1,014               36            -   1,393
31 December 2009                                                                   
                                                                                   
                                                                                   
At                          465         1,390               28            -   1,883
1 January 2009                                                                     
                                                                                   


                         Office                                                    
                     equipment,                                                    
                     fixtures &      Computer        Leasehold      Work in        
Group                  fittings     equipment     improvements     progress   Total
                           £000          £000             £000         £000    £000
                                                                                   
Cost                                                                               
                                                                                   
At                          771         3,224                8           16   4,019
1 January 2008                                                                     
                                                                                   
Transfers                     -            16                -         (16)       -
                                                                                   
Additions                    73           394               24            -     491
                                                                                   
Disposals                     -           (2)                -            -     (2)
                                                                                   
At                          844         3,632               32            -   4,508
31 December 2008                                                                   
                                                                                   
Depreciation                                                                       
                                                                                   
At                        (269)       (1,708)                -            - (1,977)
1 January 2008                                                                     
                                                                                   
Charge for year           (110)         (534)              (4)            -   (648)
                                                                                   
At                        (379)       (2,242)              (4)            - (2,625)
31 December 2008                                                                   
                                                                                   
Net book value                                                                     
                                                                                   
At                          465         1,390               28            -   1,883
31 December 2008                                                                   
                                                                                   
                                                                                   
At                          502         1,516                8           16   2,042
1 January 2008                                                                     
                                                                                   


During 2008 the development of the new finance billing system was brought into
use and so the associated costs were transferred from work in progress to
computer equipment.

 

The Company has no property, plant or equipment in either period.

14 Intangible assets

 

                               Computer           Customer       Work in        
                 Goodwill      software      relationships      progress   Total
Group                £000          £000               £000          £000    £000
                                                                                
Cost                                                                            
                                                                                
At 1 January        9,605         3,200                514             -  13,319
2009                                                                            
                                                                                
Additions           3,645            28                  -             -   3,673
                                                                                
Disposals               -         (216)                  -             -   (216)
                                                                                
At                 13,250         3,012                514             -  16,776
31 December 2009                                                                
                                                                                
Amortisation                                                                    
                                                                                
At                      -       (2,049)              (147)             - (2,196)
1 January 2009                                                                  
                                                                                
Charge for year         -         (398)               (84)             -   (482)
                                                                                
Disposals               -           216                  -             -     216
                                                                                
At                      -       (2,231)              (231)             - (2,462)
31 December 2009                                                                
                                                                                
Net book value                                                                  
                                                                                
At                 13,250           781                283             -  14,314
31 December 2009                                                                
                                                                                
                                                                                
At                  9,605         1,151                367             -  11,123
1 January 2009                                                                  
                                                                                
                                                                                
                                                                                
                               Computer           Customer       Work in        
                 Goodwill      software      relationships      progress   Total
Group                £000          £000               £000                  £000
                                                                    £000        
                                                                                
Cost                                                                            
                                                                                
At                  6,074         2,359                514           377   9,324
1 January 2008                                                                  
                                                                                
Transfers               -           377                  -         (377)       -
                                                                                
Additions           3,531           464                  -             -   3,995
                                                                                
At                  9,605         3,200                514             -  13,319
31 December 2008                                                                
                                                                                
Amortisation                                                                    
                                                                                
At                      -       (1,681)               (63)             - (1,744)
1 January 2008                                                                  
                                                                                
Charge for year         -         (368)               (84)             -   (452)
                                                                                
At                      -       (2,049)              (147)             - (2,196)
31 December 2008                                                                
                                                                                
Net book value                                                                  
                                                                                
At                  9,605         1,151                367             -  11,123
31 December 2008                                                                
                                                                                
                                                                                
At                  6,074           678                451           377   7,580
1 January 2008                                                                  
                                                                                


During 2008 the development of the new finance billing system was brought into
use and so the associated costs were transferred from work in progress to
computer software.

 

The Company has no intangible assets in either period.

Impairment testing for cash generating units containing goodwill

For the purpose of impairment testing, goodwill is allocated to the Group's
operations which represent the lowest level within the Group at which the
goodwill is monitored for internal management purposes, which is not higher
than the Group's operating segments as reported in Note 5.


The aggregate carrying amounts of goodwill allocated to each unit are as
follows:

                                        31 December 2009       31 December 2008
                                                    £000                   £000
                                                                               
Holiday Lettings Limited                          12,518                  8,873
                                                                               
Rightmove Group Limited                              732                    732
                                                                               
                                                  13,250                  9,605
                                                                               


The recoverable amount of the HLL cash generating unit was based on its value
in use. Value in use was determined by discounting the estimated future cash
flows generated from the business and was based on the following key
assumptions:

Cash flows were projected based on past experience, actual operating results
and the three year business plan;

Cash flows thereafter were extrapolated into perpetuity applying a growth rate
of 2.0% (2008: 2.0%);

The key assumption is sales growth rate. In 2009 revenues on a management
accounts basis, before adjusting for deferred revenue, grew by 45.7% year on
year (refer Note 5) and in the business plan revenues have been projected based
on historical growth and future plans for the business; and

A pre-tax discount rate of 19.6% was applied in determining the recoverable
amount; based on an industry specific weighted average cost of capital.

 

The carrying value of the £732,000 purchased goodwill in Rightmove Group
Limited, arising pre-transition to IFRS, is also reviewed annually for
impairment. Due to its level of significance the disclosures as required by IAS
36 Impairment of Assets have not been made.


15 Investments


The subsidiaries of the Group as at 31 December 2009 are as follows:

                                                  Country of                   
Company                            Nature of   incorporation Holding   Class of
                                    business                             shares
                                                                               
Rightmove Group Limited               Online     England and    100%   Ordinary
                                 advertising           Wales                   
                                                                               
Holiday Lettings (Holdings)          Holding     England and   66.7%   Ordinary
Limited                              company           Wales                   
                                                                               
Holiday Lettings Limited              Online     England and   66.7%   Ordinary
                                 advertising           Wales                   
                                                                               
Rightmove.co.uk Limited              Dormant     England and    100%   Ordinary
                                                       Wales                   
                                                                               
Rightmove Home Information Packs                                               
Limited                              Dormant     England and    100%   Ordinary
                                                       Wales                   
                                                                               


All the above subsidiaries are included in the Group consolidated results. HLHL
and HLL were indirectly owned by the Company at the reporting date.


Company

                                              31 December 2009 31 December 2008
Investment in subsidiary undertakings                     £000             £000
                                                                               
At 1 January                                           537,668                -
                                                                               
Additions in the year - capital                              -          537,010
reconstruction                                                                 
                                                                               
Additions - subsidiary equity settled share                                    
options charge (refer Note 23)                             833              658
                                                                               
At 31 December                                         538,501          537,668
                                                                               

 

As described within Note 1, capital structure, Rightmove plc became the new
holding company for the Group on
28 January 2008. The increase in the cost of investment of £537,010,000 in the
prior year represents the purchase of 100% of the ordinary shares in Rightmove
Group Limited (formerly Rightmove plc).

Following the capital reconstruction in 2008 all employees' share-based
incentives were transferred to the new holding company, Rightmove plc. In
addition certain directors' contracts of employment were transferred from
Rightmove Group Limited to Rightmove plc, whilst all other employees remained
employed by Rightmove Group Limited. Accordingly the IFRS 2 charge has been
split between the Company and Rightmove Group Limited with £833,000 (2008: £
658,000) being recognised in the Company accounts as a capital contribution to
its subsidiary.

16 Trade and other receivables

                                            31 December 2009 31 December 2008
                                                        £000             £000
Group                                                                        
                                                                             
Trade receivables                                      8,405           10,266
                                                                             
Less provision for impairment of trade                 (216)            (383)
receivables                                                                  
                                                                             
Net trade receivables                                  8,189            9,883
                                                                             
Amounts owed by related parties (refer                   131               82
Note 28)                                                                     
                                                                             
Other debtors                                            132              260
                                                                             
Prepayments and accrued income                           967            2,395
                                                                             
Forward exchange contracts                                 2                -
                                                                             
Accrued interest receivable                                -                7
                                                                             
                                                       9,421           12,627
                                                                             


Exposure to credit and currency risks and impairment losses related to trade
and other receivables are disclosed in Note 29.

 

The Company has no trade and other receivables in either period.

17 Cash and cash equivalents

                            Group                            Company             
                                                                                 
              31 December 2009 31 December 2008 31 December 2009 31 December 2008
                          £000             £000             £000             £000
                                                                                 
                                                                                 
Bank accounts              932            5,091                -                -
                                                                                 
Deposit                 24,961           17,968            5,424           17,050
accounts                                                                         
                                                                                 
Cash and cash           25,893           23,059            5,424           17,050
equivalents                                                                      
                                                                                 
Bank                                                                             
overdraft                    -            (172)                -            (172)
used for cash                                                                    
management                                                                       

purposes                                                                         
                                                                                 
Cash and cash                                                                    
equivalents             25,893                             5,424                 
in the                                   22,887                            16,878
statement of                                                                     
cash flows                                                                       
                                                                                 

Cash balances were placed on deposit for various lengths between one day and
two months during the year and attracted interest at a weighted average rate of
0.9% (2008: 4.2%).




18 Trade and other payables

                          Group                            Company             
                                                                               
            31 December 2009 31 December 2008 31 December 2009 31 December 2008
                        £000             £000             £000             £000
                                                                               
Trade                    777            1,225                -                2
payables                                                                       
                                                                               
Trade                  2,670            2,112            1,314                -
accruals                                                                       
                                                                               
Other                    250               67                -                -
creditors                                                                      
                                                                               
Other                                                                          
taxation               2,798            2,601                -                -
and social                                                                     
security                                                                       
                                                                               
Deferred               7,347            6,413                -                -
revenue                                                                        
                                                                               
Inter-group                -                -           59,763           35,600
payables                                                                       
                                                                               
Accrued                                                                        
interest on                -                -            1,837            1,226
inter-group                                                                    
payables                                                                       
balance                                                                        
                                                                               
Interest                  19                -               19                -
payable                                                                        
                                                                               
                      13,861           12,418           62,933           36,828
                                                                               


Exposure to currency and liquidity risk related to trade and other payables is
disclosed in Note 29.

19 Loans and borrowings

In April 2008, the Company entered into a Sterling-denominated revolving loan
facility of £39,750,000 with the Bank of Scotland to support its share buy back
programme. During 2009, £14,750,000 of the revolving loan facility was repaid
out of surplus cash. On 16 April 2009 the Company converted £25,000,000, being
the balance of its revolving loan facility, into a five year term loan. The
loan bears interest at LIBOR plus 1.5% together with a mandatory cost applied
by the lender and is repayable over five years in 20 equal instalments. 

 

In February 2010, the Company repaid the loan early, without penalty, thereby
extinguishing the debt. Post repayment of the debt, both the Company and the
Group continued to be cash positive (refer Note 31).

 

                  Fair value   Carrying value       Fair value   Carrying value
            31 December 2009 31 December 2009 31 December 2008 31 December 2008
                                                                               
Group                   £000             £000             £000             £000
                                                                               
Non-current                                                                    
liabilities                                                                    
                                                                               
Unsecured             17,500           17,500                -                -
bank                                                                           
borrowings                                                                     
                                                                               
                                                                               
                                                                               
Current                                                                        
liabilities                                                                    
                                                                               
Bank                       -                -              172              172
overdraft                                                                      
                                                                               
Unsecured              5,000            5,000           39,750           39,750
bank                                                                           
borrowings                                                                     
                                                                               
                      22,500           22,500           39,922           39,922
                                                                               
Cash and                                                                       
cash                (25,893)         (25,893)         (23,059)         (23,059)
equivalents                                                                    
                                                                               
(refer                                                                         
Note 17)                                                                       
                                                                               
Total net            (3,393)          (3,393)           16,863           16,863
(cash)/debt                                                                    
                                                                               



Analysis of net debt cash flows

                                                                               
                                     1 January 2009 Cash flows 31 December 2009
                                                                               
Group                                          £000       £000             £000
                                                                               
Cash and cash equivalents                  (23,059)    (2,834)         (25,893)
                                                                               
Bank overdraft                                  172      (172)                -
                                                                               
Interest-bearing loans and                                                     
borrowings                                   39,750   (17,250)           22,500
                                                                               
Total net debt/(cash)                        16,863   (20,256)          (3,393)
                                                                               

 

                   Fair value   Carrying value       Fair value   Carrying value
             31 December 2009 31 December 2009 31 December 2008 31 December 2008
                                                                                
Company                  £000             £000             £000             £000
                                                                                
Non-current                                                                     
liabilities                                                                     
                                                                                
Unsecured               17,500           17,500           -                -               
bank                                                                            
borrowings                                                                      
                                                                                
                                                                                
                                                                                
Current                                                                         
liabilities                                                                     
                                                                                
Bank                      -                -                172              172             
overdraft                                                                       
                                                                                
Unsecured              5,000            5,000            39,750           39,750          
bank                                                                            
borrowings                                                                      
                                                                                
                       22,500           22,500           39,922           39,922          
                                                                                
Cash and                                                                        
cash                   (5,424)          (5,424)          (17,050)         (17,050)        
equivalents                                                                     
(refer Note                                                                     
17)                                                                             
                                                                                
Total net               17,076           17,076           22,872           22,872
debt                                                                            
                                                                                


Analysis of net debt cash flows
                                                                               
                                     1 January 2009 Cash flows 31 December 2009
                                                                               
Company                                        £000       £000             £000
                                                                               
Cash and cash equivalents                  (17,050)     11,626          (5,424)
                                                                               
Bank overdraft                                  172      (172)                -
                                                                               
Interest-bearing loans and                                                     
borrowings                                   39,750   (17,250)           22,500
                                                                               
Total net debt/(cash)                        22,872    (5,796)           17,076
                                                                               


20 Provisions


                                                      Property provisions
                                                                     £000
Group                                                                    
                                                                         
At 1 January 2009                                                      13
                                                                         
Provisions utilised in the year                                      (13)
                                                                         
Provisions made during the year                                         6
                                                                         
At 31 December 2009                                                     6
                                                                         


The 2008 provision for vacant leasehold property related to the former premises
occupied by HLL. The provision represented the total future lease and rate
payments over the remaining term of the lease. In determining the provision for
the vacant leasehold property the cash flows were not discounted as the time
value of money was not significant. This provision has now been fully utilised.
 

The 2009 provision for lease dilapidations relates to the current premises
occupied by HLL.


The Company has no provisions in either period.

21 Deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

                                                                                    
                           Assets               Liabilities                         
                                                                         Net        
                                                                                    
                    
Group              31 December 31 December  31 December 31 December 31 December 31 December
                           2009       2008        2009        2008       2009   2008
                           £000       £000        £000        £000       £000   £000  
                                              
                                                                                    
Property, plant                                                                     
and equipment             (150)       (91)            4          4        (146)   (87)      
                                                                                    
Tax losses                    -       (66)          -          -           -      (66)
                                                                                    
Provisions                 (48)        (7)          -          -         (48)      (7)
                                                                                    
Intangible assets             -          -         67         88          67        88
                                                                                    
Equity settled                                                                      
share-based             (2,524)                     -          -      (2,524)        -
incentives                               -                                          
                                                                                    
Net tax (assets)        (2,722)      (164)         71         92      (2,651)      (72)
                                                                                    

 

The net deferred tax asset of £2,651,000 at 31 December 2009 (2008: £72,000) is
in respect of share-based incentives, intangibles, accelerated capital
allowances and provisions.

The deferred tax asset relating to share-based incentives at 31 December 2009
is £2,524,000 (2008: £nil).  This increase is due to the Company's share price
increasing from £1.76 at 31 December 2008 to £5.04 at 31 December 2009.

                                                                                    
                           Assets               Liabilities              Net        
                                                                                    
                    31 December         31         31         31        31        31
                  2009            December   December   December  December  December
Company                          2008      2009        2008                         
                           £000                                  2009      2008     
                                      £000       £000       £000                    
                                                                      £000      £000
                                                                                    
Equity settled                                                                      
share-based             (1,896)                     -          -   (1,896)         -
incentives                               -                                          
                                                                                    
Net tax (assets)        (1,896)          -          -          -   (1,896)         -
                                                                                    


The net deferred tax asset of £1,896,000 at 31 December 2009 (2008: £nil) is in
respect of share-based incentives. This increase is due to the Company's share
price increasing from £1.76 at 31 December 2008 to £5.04 at 31 December 2009.


Movement in deferred tax during the year:

                                        Recognised in Recognised in            
                         1 January 2009        income        equity            
                                   £000          £000          £000 31 December
Group                                                                      2009
                                                                           £000
                                                                               
Provisions                          (7)          (41)             -        (48)
                                                                               
Property, plant and                (87)          (59)             -       (146)
equipment                                                                      
                                                                               
Intangible assets                    88          (21)             -          67
                                                                               
Tax losses                         (66)            66             -           -
                                                                               
Equity settled                                                                 
share-based incentives                -       (2,350)         (174)     (2,524)
                                                                               
                                   (72)       (2,405)         (174)     (2,651)
                                                                               

 

                                        Recognised in Recognised in            
                                               income        equity            
                         1 January 2009          £000          £000 31 December
Company                            £000                                    2009
                                                                           £000
                                                                               
Equity settled                                                                 
share-based incentives                -         (673)       (1,223)     (1,896)
                                                                               


Movement in deferred tax during the prior year:

                                        Recognised in Recognised in            
                         1 January 2008        income        equity 31 December
                                   £000          £000          £000        2008
Group                                                                      £000
                                                                               
Provisions                            -           (7)             -         (7)
                                                                               
Property, plant and                (82)           (5)             -        (87)
equipment                                                                      
                                                                               
Intangible assets                   108          (20)             -          88
                                                                               
Tax losses                            -          (66)             -        (66)
                                                                               
Equity settled                                                                 
share-based incentives          (1,252)         1,252             -           -
                                                                               
                                (1,226)         1,154             -        (72)
                                                                               


The deferred tax asset arising on equity settled share-based incentives in both
years was recognised in the profit and loss to the extent that the related
equity settled share options charge was recognised in the profit and loss.


22 Share capital

                                    Ordinary shares        Non-voting preference  
                                                                  shares          
                                     of £0.01 each                                
                                                               of £0.01 each      
                                                                                  
                                31 December  31 December  31 December  31 December
                                       2009         2008         2009         2008
                                  Number of    Number of    Number of    Number of
                                     shares       shares       shares       shares
                                                                                  
In issue                                                                          
                                                                                  
At 1 January                    120,050,873          200            -    5,000,000
                                                                                  
Issue of shares pursuant to                                                       
the Scheme                                -  129,399,778            -            -
                                                                                  
Redemption of shares                      -            -            -  (5,000,000)
                                                                                  
Purchase and cancellation of                                                      
own shares                      (1,127,462)  (9,349,105)            -            -
                                                                                  
At 31 December                  118,923,411  120,050,873            -            -
                                                                                  


On 28 January 2008, a total of 129,399,978 ordinary shares were allotted to the
former holders of ordinary shares in the capital of Rightmove Group Limited
pursuant to the Scheme, credited as fully paid (refer Note 1).


During 2008, 9,349,105 ordinary shares were bought back by the Company and were
subsequently cancelled. In 2009, 1,127,462 shares were bought back and were
cancelled. Further details are disclosed in Note 23. 


At 31 December 2009 the authorised share capital comprised 300,000,000 (2008:
300,000,000) ordinary shares of £0.01 each. All issued shares are fully paid.


The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at general meetings of
the Company.


Included within shares in issue at 31 December are 7,418,874 ordinary shares
(2008: 8,353,700) held by the EBT and 2,505,430 (2008: 2,505,430) are held in
treasury.

23 Reconciliation of movement in capital and reserves

 

                                   EBT                        Reverse                  
                 Share   Share   shares                   acquisition             Total
               capital premium  reserve Treasury    Other   reserve £ Retained  equity 
Group             £000    £000     £000   shares reserves         000 earnings         
                                            £000                          £000     £000
                                                     £000                              
                                                                                       
At               1,327     105 (17,149) (19,362)        -           -   47,471   12,392
1 January 2008                                                                         
                                                                                       
Capital           (33)   (105)        -   19,362        -         138 (19,362)        -
reconstruction                                                                         
                                                                                       
Profit for the       -       -        -        -        -           -   25,503   25,503
year                                                                                   
                                                                                       
Equity settled                                                                         
share-based                                                                            
incentives           -       -        -        -        -           -    1,998    1,998
charge                                                                                 
                                                                                       
Dividends to         -       -        -        -        -           - (10,358)  (10,358)
shareholders                                                                           
                                                                                       
Purchase of          -       -        -  (11,917)        -           -       -  (11,917)
shares for                                                                             
treasury                                                                               
                                                                                       
Purchase of          -       -        -                 -           -        -  (32,840)
own shares                              (32,840)                                       
                                                                                       
Cancellation      (93)       -        -   32,840       93           - (32,840)        -
of own shares                                                                          
                                                                                       
Share related        -       -        -        -        -           -    (287)    (287)
expenses                                                                               
                                                                                       
At 31 December   1,201       - (17,149) (11,917)       93         138   12,125 (15,509)
2008                                                                                   
                                                                                       

 

At 1 January 2009              1,201 - (17,149) (11,917)  93 138   12,125 (15,509)
                                                                                  
Profit for the year                - -        -        -   -   -   30,027   30,027
                                                                                  
Equity settled share-based                                                        
incentives charge                                                                 
                                   - -        -        -   -   -    1,896    1,896
                                                                                  
Tax in respect of share-                                                          
                                                                                  
based incentives recognised                                                       
directly in equity                                                                
                                   - -        -        -   -   -      174      174
                                                                                  
Dividends to shareholders          - -        -        -   -   - (10,894) (10,894)
                                                                                  
Exercise of share options          - -    3,365        -   -   -    2,043    5,408
                                                                                  
Purchase of own shares             - -  (2,401)        -   -   -        -  (2,401)
                                                                                  
Cancellation of own shares      (12) -        -        -  12   -  (5,452)  (5,452)
                                                                                  
Share related expenses             - -        -        -   -   -     (56)     (56)
                                                                                  
At 31 December 2009            1,189 - (16,185) (11,917) 105 138   29,863    3,193
                                                                                  

 

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 2009 was
1,127,462 (2008: 11,854,535) representing 1.0% (2008: 10.1%) of the issued
share capital (excluding shares held in treasury). Of the 1,127,462 shares
bought back in year, 1,127,462 (2008: 9,349,105) shares were cancelled and nil 
(2008: 2,505,430) shares were transferred to treasury. The shares were acquired 
on the open market at a total consideration (excluding costs) of £5,452,000 
(2008: £44,757,000). The maximum and minimum prices paid were 
500p (2008: 501p) and 471p (2008: 215p) per share respectively.


EBT shares reserve

This reserve represents the carrying value of own shares held by the EBT.
During the year the EBT purchased 706,965 shares on the open market at a cost
of £2,401,000 to satisfy share-based incentive awards. 1,642,000 options were
exercised by Group employees in the year at an average price of £3.29 per
ordinary share, which were satisfied by shares held in the EBT. At 31 December
2009 the EBT held 7,418,874 (31 December 2008: 8,353,700) ordinary shares in
the Company of £0.01 each representing 6.4% (2008: 7.1%) of the ordinary shares
in issue (excluding shares held in treasury). The market value of the shares
held in the EBT at 31 December 2009 was £37,428,000 (2008: £14,703,000).


Other reserves

The movement on other reserves of £12,000 (2008: £93,000) comprises the nominal
value of ordinary shares cancelled during the year.

Retained earnings
The gain on the exercise of share options is the difference between the value
that the shares held by the EBT were originally acquired at and the option
grant price at which exercises took place during the year.

                                                     Reverse                   
                                                 acquisition                   
                        Share Treasury   Other       reserve  Retained    Total
                      capital   shares reserves               earnings   equity
                                  £000                  £000      £000         
                         £000              £000                            £000
Company                                                                        
                                                                               
At 1 January 2008           -        -        -            -         -        -
                                                                               
Share for share       433,490        -        -            -         -  433,490
exchange                                                                       
                                                                               
Capital             (432,196)        -        -      103,520   432,196  103,520
reconstruction                                                                 
                                                                               
Loss for the period         -        -        -            -   (5,637)  (5,637)
                                                                               
Dividends to                -        -        -            -  (10,358) (10,358)
shareholders                                                                   
                                                                               
Equity settled                                                                 
share-based                                                                    
incentives charge           -        -        -            -     1,339    1,339
                                                                               
Capital                     -        -      658            -         -      658
contribution                                                                   
                                                                               
Purchase of shares          - (11,917)        -            -         - (11,917)
for treasury                                                                   
                                                                               
Purchase of own             - (32,840)        -            -         - (32,840)
shares                                                                         
                                                                               
Cancellation of own      (93)   32,840       93            -  (32,840)        -
shares                                                                         
                                                                               
Share related               -        -        -            -     (287)    (287)
expenses                                                                       
                                                                               
At 31 December 2008     1,201 (11,917)      751      103,520   384,413  477,968
                                                                               

 

At 1 January 2009                1,201 (11,917)   751 103,520  384,413  477,968
                                                                               
Loss for the year                    -        -     -       -  (4,315)  (4,315)
                                                                               
Dividends to shareholders            -        -     -       - (10,894) (10,894)
                                                                               
Equity settled share-based                                                     
incentives charge                    -        -     -       -    1,063    1,063
                                                                               
Tax in respect of share-based                                                  
incentives recognised directly                                                 
in equity                                                                      
                                                                               
                                     -        -     -       -    1,223    1,223
                                                                               
Capital contribution                 -        -   833       -        -      833
                                                                               
Cancellation of own shares        (12)        -    12       -  (5,452)  (5,452)
                                                                               
Share related expenses               -        -     -       -     (38)     (38)
                                                                               
At 31 December 2009              1,189 (11,917) 1,596 103,520  366,000  460,388
                                                                               

 

Reverse acquisition reserve
This reserve resulted from the acquisition of Rightmove Group Limited by the
Company and represents the difference between the value of the shares acquired
at 28 January 2008 and the nominal value of the shares issued.


Other reserves

The principal movement in other reserves for the year comprises £833,000 (2008:
£658,000) in respect of the equity settled share-based incentives charge for
employees of Rightmove Group Limited. As the awards relate to shares in the
Company the IFRS 2 charge has been treated as a deemed capital contribution. In
addition a movement of £12,000 (2008: £93,000) has been recorded in relation to
the nominal value of ordinary shares cancelled during the year.


24 Share-based payments

The Group and Company operate share-based incentive schemes for certain senior
management comprising the Rightmove Unapproved Executive Share Option Plan
(Unapproved Plan), the Rightmove Approved Executive Share Option Plan (Approved
Plan) and the Rightmove Deferred Share Bonus Plan. The Group also operates a
Savings Related Share Option Scheme (Sharesave).

The fair value of services received in return for share-based incentives is
measured by reference to the fair value of share-based incentives granted. The
estimate of the fair value of the services received is measured using either
the Monte Carlo pricing model or Black Scholes model as is most appropriate for
each scheme.


All share-based incentive schemes are granted under a service condition. Such
conditions are not taken into account in the fair value of the service
received. The unapproved executive share option awards made on 5 March 2009 are
subject to TSR performance over a three year period, relative to the
constituents of the FTSE 250. There are no market conditions associated with
any other share-based incentives granted.


The total Group charge for the year relating to employee share-based incentive
plans was £1,896,000
(2008: £1,998,000).


The total Company charge for the year was £1,063,000 (2008: £1,339,000).



Approved and unapproved plans
The assumptions used in the measurement of the fair values at grant date of the
share option plans are as follows:

                                                                                     
                                                                                     
                                                          
                                                          
Grant date     Share price  Exercise   Expected  Option      Risk   Dividend   before     per
                 at grant   price     volatility  life       free      yield  vesting        
                    date    (pence)        (%)   (years)     rate      option
                  (pence)                                     (%)     (%)     (pence)
                                                        (%)                          
                                              (years)                                
                                                                                     
14 March           413.50   410.00       27.0     7.0   4.5      4.0     16.0   92.00
2006                                                                                 
(Approved)                                                                           
                                                                                     
15 March           413.75   335.00       27.0     7.0   4.5      4.0      0.0  116.00
2006                                                                                 
(Unapproved)                                                                         
                                                                                     
15 March           413.75   335.00       27.0     6.0   4.5      3.0     16.0  130.00
2006                                                                                 
(Unapproved)                                                                         
                                                                                     
12 October         348.00   347.00       27.0     7.0   4.5      4.0     16.0   76.00
2006                                                                                 
(Unapproved)                                                                         
                                                                                     
6 September        613.00   597.00       32.0     7.0   5.8      2.0     17.0  228.00
2007                                                                                 
(Approved)                                                                           
                                                                                     
6 September        613.00   597.00       32.0     7.0   5.8      2.0     17.0  181.00
2007                                                                                 
Unapproved)                                                                          
                                                                                     
10 October         525.00   522.00       32.0    6.75   5.8      2.0     17.0  189.00
2007                                                                                 
(Unapproved)                                                                         
                                                                                     
5 March 2009       226.75   224.00       50.3     6.5   2.6      4.4     12.0   69.00
(Unapproved)                                                                         
                                                                                     


Expected volatility is estimated by considering historic average share price
volatility at the grant date.

                                   2009                           2008           
                                                                                 
                                                                         Weighted
                                      Weighted average           average exercise
                                        exercise price                      price
Group                    Number                (pence)    Number          (pence)
                                                                                 
Outstanding at 1      7,305,292                 348.66 8,044,439           348.59
January                                                                          
                                                                                 
Granted               1,103,948                 224.00         -                -
                                                                                 
Forfeited              (33,146)                 596.99 (739,147)           347.99
                                                                                 
Exercised           (1,497,784)                 336.24         -                -
                                                                                 
                                                                                 
                                                                                 
Outstanding at 31     6,878,310                 330.16 7,305,292           348.66
December                                                                         
                                                                                 
                                                                                 
                                                                                 
Exercisable at 31     2,199,400                 336.01 1,075,819           335.00
December                                                                         
                                                                                 

 

                                          2009                       2008         
                                                                                  
                                           Weighted average               Weighted
                                                   exercise                average
                                                      price               exercise
                                  Number            (pence)    Number        price
Company                                                                    (pence)
                                                                                  
Outstanding at beginning of    7,305,292             348.66         -            -
the period                                                                        
                                                                                  
Granted                        1,103,948             224.00         -            -
                                                                                  
Transferred                            -                  - 8,044,439       348.59
                                                                                  
Forfeited                       (33,146)             596.99 (739,147)       347.99
                                                                                  
Exercised                    (1,497,784)             336.24         -            -
                                                                                  
                                                                                  
                                                                                  
Outstanding at 31 December     6,878,310             330.16 7,305,292       348.66
                                                                                  
                                                                                  
                                                                                  
Exercisable at 31 December     2,199,400             336.01 1,075,819       335.00
                                                                                  


Following the capital reconstruction in January 2008 all employees' share
option entitlements were transferred to the new holding company, Rightmove plc.
In addition certain directors' contracts of employment were transferred from
Rightmove Group Limited to Rightmove plc, whilst all other staff remained
employed by Rightmove Group Limited. Accordingly the IFRS 2 charge has been
split between the Company and Rightmove Group Limited.

The weighted average market value per ordinary share for executive options
exercised in 2009 was £5.44
(2008: no options exercised).


NI is accrued, where applicable, at a rate of 12.8% on the difference between
the share price at the reporting date and the average exercise price of share
options. The charge for the year ended 31 December 2009 is £1,268,000. Based on
the share price as at 31 December 2008 the accrual built up in prior periods
was reversed resulting in a credit to the profit and loss of £240,000 in that
year.

Sharesave options
The Group operates an Her Majesty's Revenue and Customs approved Sharesave
option scheme under which employees are granted an option to purchase ordinary
shares in the Company at up to 20% less than the market price at invitation, in
three years' time, dependent on their entering into a contract to make monthly
contributions into a savings account over the relevant period. These funds are
used to fund the option exercise. No performance criteria are applied to the
exercise of Sharesave options. The assumptions used in the measurement of the
fair value at grant date of the Sharesave option scheme are as follows:

                                                           Employee turnover         
                                                          before vesting/non         
          Share                                           vesting conditions         
          price                                                          (%)         
             at Exercise   Expected  Option Risk Dividend                        Fair
          grant    price volatility    life free    yield                       value
Grant      date  (pence)        (%) (years) rate      (%)                         per
date    (pence)                              (%)                               option
                                                                              (pence)
                                                                                     
2        345.75   259.00       27.0    3.25  4.5      3.0                 16   108.00
October                                                                              
2006                                                                                 
                                                                                     
3        525.00   490.00       32.0    3.25  5.8      1.5                 84   156.00
October                                                                              
2007                                                                                 
                                                                                     
2        253.75   255.00       32.0    3.25  3.0      1.5                 25    59.00
October                                                                              
2008                                                                                 
                                                                                     
1        545.00   425.00       50.3    3.25  3.5      4.4                 25   199.00
October                                                                              
2009                                                                                 
                                                                                     

 

Expected volatility is estimated by considering historic average share price
volatility at the grant date.


The requirement that an employee has to save in order to purchase shares under
the Sharesave option scheme is a non-vesting condition. This feature has been
incorporated into the fair value at grant date by applying a discount to the
valuation obtained from the Black Scholes pricing model. The discount has been
determined by estimating the probability that the employee will stop saving
based on expected future trends in the share price and employee behaviour.

 

                                      2009                         2008          
                                                                                 
                                        Weighted average                 Weighted
                                                exercise                  average
                                                   price                 exercise
                           Number                (pence)    Number          price
Group                                                                     (pence)
                                                                                 
Outstanding at 1          274,993                 267.41   311,470         312.93
January                                                                          
                                                                                 
Granted                   106,527                 545.00   122,757         255.00
                                                                                 
Forfeited                (59,078)                 282.77 (159,234)         346.87
                                                                                 
Exercised               (144,007)                 259.00         -              -
                                                                                 
                                                                                 
                                                                                 
Outstanding at 31         178,435                 434.84   274,993         267.41
December                                                                         
                                                                                 
                                                                                 
                                                                                 
Exercisable at 31           7,661                 259.00         -              -
December                                                                         
                                                                                 

 

                                     2009                        2008            
                                                                                 
                                    Weighted  average                    Weighted
                                             exercise                     average
                                                price                    exercise
                             Number           (pence)    Number             price
Company                                                                   (pence)
                                                                                 
Outstanding at beginning                                                         
of the period                                                                    
                            274,993            267.41         -                 -
                                                                                 
Transferred                       -                 -   311,470            312.93
                                                                                 
Granted                     106,527            545.00   122,757            255.00
                                                                                 
Forfeited                  (59,078)            282.77 (159,234)            346.87
                                                                                 
Exercised                 (144,007)            259.00         -                 -
                                                                                 
                                                                                 
                                                                                 
Outstanding at 31           178,435            434.84   274,993            267.41
December                                                                         
                                                                                 
                                                                                 
                                                                                 
Exercisable at 31             7,661            259.00         -                 -
December                                                                         
                                                                                 

 

Following the capital reconstruction in January 2008 all employees' Sharesave
option entitlements were transferred to the new holding company, Rightmove plc.
In addition certain directors' contracts of employment were transferred from
Rightmove Group Limited to Rightmove plc, whilst all other staff remained
employed by Rightmove Group Limited. Accordingly the IFRS 2 charge has been
split between the Company and Rightmove Group Limited.


The weighted average market value per ordinary share for Sharesave options
exercised in 2009 was £5.21
(2008: no options exercised).



Deferred share plan
In March 2009 a deferred share plan was established which will allow certain
senior management the opportunity to earn a bonus linked as a percentage of
base salary settled in deferred shares. The award of shares in March 2010 is
contingent on the satisfaction of pre-set internal targets including profit
before tax relative to the Group business plan and key performance indicators
such as website traffic share and customer retention. The right to the shares
will be deferred for two years from March 2010 until March 2012 and potentially
forfeitable during that period should the employee leave employment. The
deferred share awards have been valued using the Black Scholes model and the
resulting IFRS 2 charge has been spread evenly over the combined performance
period and the vesting period of the shares, being three years. The IFRS 2
charge for the period ended 31 December 2009 is £187,000.


NI is being accrued, where applicable, at a rate of 12.8% based on the share
price at the period end date. The charge for the period ended 31 December 2009
is £42,000. The charges have been split between the Company and Rightmove Group
Limited.


The assumptions used in the measurement of the fair value at grant date of the
deferred share plan are as follows:

 

                                                                                     
                                                                   Employee          
                                                          Dividend                   
        Share price             Expected Expected    Risk    yield turnover      Fair
           at grant Exercise  volatility     term    free                   value per
Grant          date    price         (%)  (years)    rate      (%)   before     share
date                 (pence)                          (%)           vesting          
            (pence)                                                           (pence)
                                                                        (%)          
                                                                                     
5            226.75      nil         n/a      3.0     2.6      4.4     12.0    199.00
March                                                                                
2009                                                                                 
                                                                                     

 

25 Operating lease commitments

Non-cancellable operating lease rentals are payable as follows:

                              31 December 2009                31 December 2008        
                                                                                      
                       Plant & machinery £             Plant & machinery £            
                                       000 Other                       000 Other Total
                                                 Total                      £000  £000
                                            £000                                      
Group                                             £000                                
                                                                                      
Less than one year                     260   967 1,227                 430   978 1,408
                                                                                      
Between one and five                                                                  
years                                   69 3,804 3,873                                
                                                                       294 3,394 3,688
                                                                                      
More than five years                     - 1,713 1,713                   - 2,527 2,527
                                                                                      
                                       329 6,484 6,813                 724 6,899 7,623
                                                                                      


An area of the HLL premises has been sublet during 2009. The lease and the
subleases expire in 2015. Sub lease income of £46,000 is expected to be
received during the next financial year.


The Company has no operating lease commitments in either period.

26 Capital commitments

As at 31 December 2009 the Group had committed to incur capital expenditure of
£nil (2008: £nil).

The Company has no capital commitments in either period.

27 Acquisitions and disposals

On 21 March 2007, Rightmove Group Limited acquired 66.7% of the ordinary share
capital of HLL, a provider of online advertising services to owners of holiday
rental properties, for consideration of £3,216,000, including acquisition costs
of £73,000. On 2 January 2009 all the shares in HLL were sold to a newly
incorporated holding company, HLHL. In return Rightmove Group Limited received
shares in HLHL in the same proportions as previously held in HLL. There was no
change to the ultimate parent company, being Rightmove plc.

 

In terms of the HLHL shareholders' agreement, a put and call option exists to
acquire the remaining 33.3% interest owned by management. The put option can be
exercised any time from 1 July 2009 based either on a multiple of EBIT per the
latest audited accounts or HLHL's market value if higher. The call option can
be exercised by Rightmove Group Limited from
1 July 2013. At 31 December 2009 the deferred consideration was increased to £
8,909,000 based on Rightmove Group Limited's best estimate of the likely market
value for the business. 




28 Related party disclosures

Transactions with principal shareholders

Halifax Estate Agencies Limited and Connells Limited sold their shareholdings
in the Company in May and December 2008 respectively. Consequently as at 31
December 2008 and 31 December 2009 the Company had no principal shareholders.

 

Inter-group transactions with subsidiaries

During the year Rightmove plc was charged interest of £611,000 (2008: £
1,226,000) by Rightmove Group Limited in respect of balances owing under the
inter-group loan agreement dated 30 January 2008. As at 31 December 2009 the
balance owing under this agreement was £61,600,000 (2008: £36,826,000)
including capitalised interest.


Directors' transactions

There were no transactions with directors in either year other than those
disclosed in the Remuneration Report. Information on the emoluments of
directors, together with information regarding the beneficial interest of the
directors in the ordinary shares of the Company is included in the Remuneration
Report on pages 26 to 38.


Stephen Shipperley, a non executive director, is also Group Executive Chairman
of Connells Limited, a significant estate agency customer of the Group. During
the year Connells Limited renewed their membership for a further three years on
an arms length basis. The Group's transactions and balances with this customer
for both years were as follows:

 

                                                Year ended        Year ended
                                          31 December 2009  31 December 2008
Group                                                 £000              £000
                                                                            
Amounts owed by:                                                            
                                                                            
Sequence (UK) Limited (Connells)                        80                55
                                                                            
Connells Residential                                    51                27
                                                                            
                                                       131                82
                                                                            
                                                                            
Amounts invoiced to:                                                        
                                                                            
Sequence (UK) Limited (Connells)                       598               581
                                                                            
Connells Overseas Property Department                    -                 2
                                                                            
Connells Residential                                   327               333
                                                                            
                                                       925               916
                                                                            


Included within trade and other receivables is £131,000 due from related
parties (2008: £82,000). Trade and other payables include £nil due to former
shareholders (2008: £nil).

                                         Year ended                Year ended
                                   31 December 2009          31 December 2008
Group                                          £000                      £000
                                                                             
Dividends paid:                                                              
                                                                             
Connells Limited                                  -                     1,912
                                                                             


Transactions with key management staff

There were no transactions in either year with key management staff.

29 Financial instruments

Credit risk

The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:

                               Group                            Company             
                                                                                    
                 31 December 2009 31 December 2008 31 December 2009 31 December 2008
            Note             £000             £000             £000             £000
                                                                                    
Net trade     16            8,189            9,883                -                -
receivables                                                                         
                                                                                    
Amounts                                                                             
owed by       16              131               82                                 -
related                                                           -                 
parties                                                                             
                                                                                    
Other         16              132              260                -                -
debtors                                                                             
                                                                                    
Accrued                                                                             
interest      16                -                7                                 -
receivable                                                        -                 
                                                                                    
Cash and                                                                            
cash          17           25,893           23,059                            17,050
equivalents                                                 (5,424)                 
                                                                                    
                           34,345           33,291          (5,424)           17,050
                                                                                    


The maximum exposure to credit risk for trade receivables (including related
parties) at the reporting date by geographic region was:

                                         31 December 2009      31 December 2008
Group                    Note                        £000                  £000
                                                                               
UK                                                  8,305                 9,879
                                                                               
Rest of the world                                      15                    86
                                                                               
                           16                       8,320                 9,965
                                                                               


The maximum exposure to credit risk for trade receivables (including related
parties) at the reporting date by type of customer was:

                                          31 December 2009      31 December 2008
Group                       Note                      £000                  £000
                                                                                
Property advertisers                                 8,123                 9,229
                                                                                
Other                                                  197                   736
                                                                                
                              16                     8,320                 9,965
                                                                                


The Group's most significant customer, a UK house builder, accounts for £
220,000 (2008: £444,000) of the trade receivables carrying amount.


Impairment losses

The ageing of trade receivables (including related parties) at the reporting
date was:

                             31 December 2009                    31 December 2008
                                                                                 
                 Gross             Impairment         Gross            Impairment
                                                                                 
Group             £000                   £000          £000                  £000
                                                                                 
Not past         5,610                    (4)         4,803                  (24)
due                                                                              
                                                                                 
Past due 0       1,737                   (25)         2,637                  (49)
- 30 days                                                                        
                                                                                 
Past due           951                   (11)         1,418                  (53)
30 - 60                                                                          
days                                                                             
                                                                                 
Past due           142                  (104)           596                  (67)
60 - 90                                                                          
days                                                                             
                                                                                 
Past due            96                   (72)           894                 (190)
older                                                                            
                                                                                 
                 8,536                  (216)        10,348                 (383)
                                                                                 


The movement in the allowance for impairment in respect of trade receivables
during the year was as follows:

                                                                              
                                                                              
                                     31 December 2009 £000    31 December 2008
Group                                                                         
                                                                          £000
                                                                              
At 1 January                                           383                  91
                                                                              
Charged during the year                                191               1,353
                                                                              
Utilised during the year                             (358)             (1,061)
                                                                              
At 31 December                                         216                 383
                                                                              


The Group has identified specific balances for which it has provided an
impairment allowance on a line by line basis across all ledgers, in both years.
No general impairment allowance has been provided in either year.

The allowance accounts in respect of trade receivables are used to record
impairment losses unless the Group is satisfied that no recovery of the amount
owing is possible; at that point the amounts considered irrecoverable are
written off against the financial asset directly.

Liquidity risk

The following are the contractual maturities of financial liabilities,
including estimated interest payments:

                                                                               
                                                                               
31 December 2009                                                               
                                                                               
                        Carrying   Contractual       6                         
                          amount    cash flows  months    6-12     1-2      2-5
                                                        months   years    years
                            £000          £000 or less                         
                                                          £000    £000     £000
Group                                             £000                         
                                                                               
Non-derivative                                                                 
financial liabilities                                                          
                                                                               
Unsecured bank            22,500      (22,500) (2,500) (2,500) (5,000) (12,500)
borrowings                                                                     
                                                                               
Trade payables               777         (777)   (777)       -       -        -
                                                                               
                          23,277      (23,277) (3,277) (2,500) (5,000) (12,500)
                                                                               
Derivative financial                                                           
liabilities                                                                    
                                                                               
Forward exchange             (2)         (216)   (216)       -       -        -
contracts                                                                      
                                                                               
                          23,275      (23,493) (3,493) (2,500) (5,000) (12,500)
                                                                               

 

31 December 2008                                                               
                                                                               
                          Carrying    Contractual 6 months   6-12              
                            amount     cash flows          months              
                                                   or less           1-2    2-5
                              £000           £000            £000  years  years
                                                      £000                     
Group                                                               £000   £000
                                                                               
Non-derivative                                                                 
financial liabilities                                                          
                                                                               
Unsecured bank              39,750       (39,750) (39,750)      -      -      -
borrowings                                                                     
                                                                               
Trade payables               1,225        (1,225)  (1,225)      -      -      -
                                                                               
                            40,975       (40,975) (40,975)      -      -      -
                                                                               

 

31 December 2009                                                               
                                                                               
                        Carrying   Contractual       6                         
                          amount    cash flows  months    6-12     1-2      2-5
                                                        months   years    years
                            £000          £000 or less                         
                                                          £000    £000     £000
Company                                           £000                         
                                                                               
Non-derivative                                                                 
financial liabilities                                                          
                                                                               
Unsecured bank            22,500      (22,500) (2,500) (2,500) (5,000) (12,500)
borrowings                                                                     
                                                                               

 

31 December 2008                                                               
                                                                               
                          Carrying    Contractual 6 months   6-12              
                            amount     cash flows          months              
                                                   or less           1-2    2-5
                              £000           £000            £000  years  years
                                                      £000                     
Company                                                             £000   £000
                                                                               
Non-derivative                                                                 
financial liabilities                                                          
                                                                               
Unsecured bank              39,750       (39,750) (39,750)      -      -      -
borrowings                                                                     
                                                                               
Trade payables                   2            (2)      (2)      -      -      -
                                                                               
                            39,752       (39,752) (39,752)      -      -      -
                                                                               

 

The contractual cash flows in respect of unsecured bank borrowings relate only
to the principal amount and do not include interest as the loan was repaid in
full on 10 February 2010 (refer Note 31).

 

It is not expected that the cash flows included in the maturity analysis could
occur at significantly different amounts.

Currency risk
During 2009 all the Group's sales were Sterling denominated. As such the Group
does not present sensitivity analysis for a movement in the Sterling to Euro
exchange rate, nor does the Group undertake any hedging of foreign currency
receivables exposure.


As at 31 December 2009 the Group's subsidiary, HLL, has entered into seven
forward exchange contracts of USD 50,000 each which mature in 2010. HLL
purchases forward exchange contracts to hedge the currency risk associated with
changes in US Dollar exchange rates in respect of search marketing services
supplied by Google.

A strengthening of the US Dollar of 5% against the GBP at 31 December 2009
would have decreased equity and profit or loss by £11,000. This analysis is
based on the foreign currency exchange rate variances that the Group considers
to be reasonably possible at 31 December 2009. The analysis assumes that all
other variables, in particular interest rates, remain constant.


Interest rate risk
The Group and the Company have exposure to interest rate risk on their cash
balances and bank overdraft. As at 31 December 2009 the Group had total cash of
£25,893,000 (2008: £23,059,000) and a bank overdraft of £nil (2008: £172,000).

The Group and the Company have exposure to interest rate risk on the loan
facility of £22,500,000 (2008: £39,750,000) which bears interest at LIBOR plus
1.5%. A change of 100 basis points in interest rates would have increased or
decreased equity by £265,000 (2008: £196,000).

Fair values
The fair values of all financial instruments in both years are set out in the
tables below:

                                                                              
                               31 December 2009                               
                                                         31 December 2008     
                                                                              
                                 Carrying Fair value       Carrying Fair value
                                   amount       £000         amount       £000
Group                                £000                      £000           
                                                                              
Trade and other                     9,421      9,421         12,627     12,627
receivables                                                                   
                                                                              
Cash and cash equivalents          25,893     25,893         23,059     23,059
                                                                              
Bank overdraft                          -          -          (172)      (172)
                                                                              
Trade and other payables         (13,861)   (13,861)       (12,418)   (12,418)
                                                                              
Loans and borrowings             (22,500)   (22,500)       (39,750)   (39,750)
                                                                              
                                  (1,047)    (1,047)       (16,654)   (16,654)
                                                                              

 

                                                                              
                                                                              
                              31 December 2009           31 December 2008     
                                                                              
                         Carrying amount Fair value Carrying amount Fair value
                                    £000       £000            £000       £000
Company                                                                       
                                                                              
Cash and cash                      5,424      5,424          17,050     17,050
equivalents                                                                   
                                                                              
Bank overdraft                         -          -           (172)      (172)
                                                                              
Trade and other payables        (62,933)   (62,933)        (36,828)   (36,828)
                                                                              
Loans and borrowings            (22,500)   (22,500)        (39,750)   (39,750)
                                                                              
                                (80,009)   (80,009)        (59,700)   (59,700)
                                                                              


30 Contingent liabilities

The Group and the Company had no contingent liabilities in either period.


31 Subsequent events


Subsequent to 31 December 2009, the Board of directors agreed to retire the
debt with the Bank of Scotland and on
10 February 2010 the outstanding debt of £21,250,000, being the balance at 31
December 2009 less a quarterly instalment of £1,250,000 paid in January 2010,
was repaid in full. No penalties or break costs were incurred in exiting the
facility early.


Post repayment of the debt both the Group and the Company continued to be cash
positive.


ADVISERS AND SHAREHOLDER INFORMATION


Contacts                                                       Registered  Corporate      
                                                               office      advisers       
                                                                                          
Managing Director:          Ed Williams                        Rightmove   Financial      
                                                               plc         adviser        
                                                                                          
Chief Operating Officer and                                    4th Floor   UBS Investment 
Finance Director:           Nick McKittrick                    33 Soho     Bank           
                                                               Square      Joint brokers  
                                                                                          
Company Secretary:          Liz Taylor                         London      UBS Limited    
                                                                                          
Website:                    www.rightmove.co.uk                W1D 3QU     Numis          
                                                                           Securities     
                                                                           Limited        
                                                                                          
Email:                      investor.relations@rightmove.co.uk Registered  Auditor        
                                                               in                         
                                                                                          
                                                               England no. KPMG Audit Plc 
                                                               6426485                    
                                                                                          
                                                                           Bankers        
                                                                                          
Financial calendar 2010                                                    Barclays Bank  
                                                                           plc            
                                                                                          
2009 full year results      26 February 2010                               Bank of        
                                                                           Scotland plc   
                                                                                          
Annual General Meeting      05 May 2010                                    Solicitors     
                                                                           Slaughter and  
Final dividend record date  14 May 2010                                    May            
                                                                                          
Final dividend payment      11 June 2010                                   Pinsent Masons 
                                                                                          
Interim Management          May, November 2010                             Registrar      
Statement                                                                                 
                                                                                          
Half year results           27 August 2010                                 Capita         
                                                                           Registrars*    
                                                                                          
Interim dividend            November 2010                                                 
                                                                                          
                                                                                          
                                                                                          


*Shareholder enquiries
The Company's registrar is Capita Registrars. They will be pleased to deal with
any questions regarding your shareholding or dividends. Please notify them of
your change of address or other personal information. Their address details
are:

Capita Registrars
PO Box 1269
Huddersfield
HD1 9UT

Capita Registrars is a trading name of Capita Registrars Limited.

Capita shareholder helpline: 0871 664 0300 (calls cost 10p per minute plus
network extras) (Overseas: +44 20 8639 3399)
Email: ssd@capitaregistrars.com

Share portal: www.capitashareportal.com

Through the website of our registrar, Capita Registrars, shareholders are able
to manage their shareholding online and facilities include electronic
communications, account enquires, amendment of address and dividend mandate
instructions.