# Rightmove revenue up £12.8m/9% on 2021 to £162.7m

- Link: https://www.directorstalkinterviews.com/rightmove-revenue-up-12.8m9-on-2021-to-162.7m/4121075136
- Published: 2022-07-29T07:40:31+01:00
- Author: Amilia Stone

**[Rightmove plc](https://www.directorstalkinterviews.com/ftse-company/rightmove-plc/rmv.l)**(
LON:RMV), the UK’s largest property portal, has announced its unaudited results 
for the six months ended 30 June 2022.

**Financial Highlights**

| 
 | **H1 2022** | **H1 2021** | **Change vs 2021** | **% Change vs 2021** | 
| Revenue | £162.7m | £149.9m | +£12.8m | +9% | 
| Operating profit | £121.3m | £114.9m | +£6.4m | +6% | 
| Underlying operating profit^((1)) | £122.4m | £117.1m | +£5.3m | +5% | 
| Underlying operating profit excludingprior year ‘other income’^((2))   | £122.4m | £114.7m | +£7.7m | +7% | 
| Interim dividend | 3.3p | 3.0p | +0.3p | +10% | 
| Basic earnings per share | 11.7p | 10.8p | +0.9p | +8% | 
| Underlying earnings per share^((3)) | 11.8p | 11.0p | +0.8p | +7% |

·    Revenue up £12.8m/9% on 2021 to £162.7m, as customers continued to increase
their use of digital products and upgrade their packages

·    Operating profit of £121.3m, up 6% on 2021 (2021: £114.9m)

·    Excluding the one-off impact of ‘other income’ of £2.4m in the prior year (
in relation to the release in 2021 of the contingent consideration for the acquisition
of Van Mildert), underlying operating profit^((2)) is up 7% compared to 2021. Underlying
operating profit^((1)) of £122.4m, up 5% on 2021 (2021: £117.1m)

·    Basic earnings per share up 8% to 11.7p (2021: 10.8p), underlying earnings 
per share^((3)) is up 7% to 11.8p (2021: 11.0p)

·    Interim dividend for 2022 up 10% to 3.3p (2021: 3.0p) per ordinary share

·    £100.3m of cash returned to shareholders through share buybacks and dividends
in the first half of 2022 (2021: £128.3m)

·    Cash and cash equivalents, including money market deposits, at the end of the
period of £43.9m (31 December 2021: £48.0m)

**Operational highlights**

·   Time on site averaged 1.5 billion^((4)) minutes per month over the period (2021:
1.7 billion; 2019: 1.1 billion); 36% higher than the pre-pandemic record from 2019,
reflecting Rightmove’s trusted brand

·    Average Revenue Per Advertiser (ARPA) ^((5)) up 11% to £1,290 per month (30
June 2021: £1,163)

·    Record Agency ARPA growth, up £132 (12%), and strong New Homes ARPA growth,
up £117 (9%), driven primarily by increased product purchases and package prices

·    Stable overall membership numbers since the start of the year at 18,934, with
16,116 Agency branches and 2,818 New Homes developments (31 December 2021: 16,110
and 2,859)

·    Strong housing market combined with Rightmove’s market leading position led
to highest net growth in sales agent branches since June 2016, offset by a reduction
in lettings-only branches

·    Record number of organic upgrades to our premium Optimiser 2020 package and
successful migration of Optimiser 2015 customers to new packages, with 34% of independent
agents now subscribing to Optimiser, up from 31% in June 2021

·    Innovative Native Search Advert for Agency customers launched in June, bringing
agents’ promotional short form videos to the UK’s largest property audience for 
the first time

·    Initial release of the “lead-to-keys” tenant digital workflow, a market first,
part of our digitisation of the rental journey

_(1)    Underlying operating profit is operating profit before the share-based payments
including the related NI charge_

_(2)   Underlying operating profit excluding prior year ‘other income’ removes the
impact of £2.4m ‘other income’ in 2021, which represented the release of a one-off
contingent consideration provision_

_(3)    Underlying EPS is profit for the year before share-based payments charges(
including the related National Insurance and appropriate tax adjustments), divided
by the weighted average number of ordinary shares outstanding in the period_

_(4)    Source: Comscore, June 2022_

_(5)   Average Revenue per Advertiser (ARPA) is calculated as revenue from Agency
and New Homes advertisers in a given month divided by the total number of advertisers
during the month, measured as a monthly average over the six-month period._

**O****utlook**

The property market in the first half of 2022 cooled slightly from the frenetic 
pace of 2021 but remained healthy and ahead of 2019. Despite growing economic uncertainty
towards the end of the half, there was little reduction in sales activity or demand.

New agent formation may slow following the upturn in the first half. Agency branch
numbers are expected to be broadly stable in the second half. The slightly cooler
market may improve the availability of new homes developments by the end of the 
year, with development numbers also expected to be broadly stable through to the
end of the year.

ARPA growth was strong in the first half as customers took advantage of Rightmove’s
leading digital solutions to compete effectively for new listings. In 2022, we returned
to a more normal pattern of package upgrades and price reviews, with the majority
of the activity being in the first half. Therefore, we expect ARPA growth in the
second half of the year broadly to mirror pre-pandemic growth levels, while still
likely to exceed previous guidance for the full year.

We maintain our disciplined cost management, with the phasing of costs to be slightly
weighted to the second half and consistent with previous indications of between 
25% and 26% of revenues.

While mindful of the economic uncertainty, the strong pipeline of product delivery
planned in the second half of the year, a culture of continuous innovation and a
commitment to continue to make home moving more digital for our customers and consumers,
give the Board confidence in delivering its expectations for the full year and beyond.

> **Peter Brooks-Johnson, Chief Executive Officer, said:**
> _“Our success during the first half of the year demonstrated the ongoing resilience
> of our customer base and the continuing love for and trust in our brand. Despite
> the housing market cooling slightly, activity on our platform was significantly
> higher than in the pre-pandemic market of 2019, with home-hunters using Rightmove
> for 1.5 billion minutes every month. Our continuous improvements and innovation
> have helped to increase engagement from home-hunters in tools such as sold prices,
> along with further investment from agents and developers as they continue to believe
> in the effectiveness of our digital products and tools to help them run and grow
> their businesses”. _
> _“I’m excited by our recent developments to make the process of renting a property
> easier for tenants and agents. The new lead-to-keys workflow will give tenants
> the ability to search, view, secure and contract on a property, all from their
> mobile phones. I hope that this will alleviate some of the stress in this very
> competitive rental market”._

**The Company will publish a pre-recorded audio results presentation at 7.00am today,
followed by an audio Q&A session for analysts and investors at 9.30am with Peter
Brooks-Johnson, CEO, and Alison Dolan, CFO.**

**Half Year Statement**

Rightmove remains the place that home-hunters turn to, to research the market and
to find their next property. Home-hunters spent an average of over 1.5 billion minutes
per month on the platform in the first half of the year, which – while lower than
2021 – was up 36% on the pre-pandemic record in 2019.

Our restless innovation continued to develop our offer to home-hunters. For example,
a ground-up redesign of our Sold Property price tool saw home-hunter engagement 
increase by nearly 20% since launch, and a combination of new features such as property
shortlists and enhanced personalisation saw the number of signed-in users increase
by almost 40% since the start of the year. We continue to innovate and are proud
to have received the ‘Best Contextual Innovation” award in the 2022 Thinkbox TV 
planning awards.

As the market remained stock-constrained and competitive during the first half of
the year, our focus has been to support our customers in finding and then selling
properties – through providing both new products and enhancements to existing products–
as well as on providing home-hunters with the tools they need to assess properties
they view on our site.

In response, agents have chosen to spend more on our packages and products, and 
Agency revenue and ARPA have both grown by a record 12% as a result. Optimiser 2015
has now been retired, as customers have all transferred onto other packages, with
34% of independent agents now subscribed to our premium Optimiser 2020 package. 
Over 35% of our customers continue to spend incrementally on new products on top
of their core packages, with vendor lead products such as Rightmove Discover and
Local Valuation Alert being the fastest growing products. Leads to agents increased
by 12% on the comparable period, and Agency retention has been at a record high 
of 95%.

New Homes developers have continued to face the challenges of record demand for 
new homes, with some developments being fully sold off-plan, reducing developers’
needs to market these properties. Nonetheless, New Homes ARPA grew by 9% in the 
first half, largely driven by our new Native Search Advert product which launched
at the end of 2021.

Our smaller business units have all had double digit growth in the first half. Commercial
real estate, in particular, grew by 20% on 2021, driven by the increased digitisation
of the Commercial sector. The Overseas business grew by 30%, benefiting from the
travel market re-opening post Covid restrictions.

Our focus on making the home moving journey more digital continues apace, with notable
releases targeting the digital rental journey. The ‘Lead-to-Keys’ tenancy digital
workflow was launched in June, which allows lettings agents to create contracts 
and generate offers, sign and store contracts digitally, and receive holding deposits
via open banking. Further functionality will be introduced in H2. We also introduced
our first open banking-based reference; increasing turnaround speed and reducing
the input required from tenants. These two releases create a market first, with 
tenants able to search, secure and contract on a property entirely from their mobile
device.

Preparations are nearly complete for the launch of our integrated, lender-backed
Mortgage in Principle. Again, a market first, which will allow home-hunters to tailor
their property searches, confident of a mortgage once they find the right property.
In addition, this will generate better leads for customers, helping them to be more
efficient

Our focus on environmental, social and governance matters remains high on our strategic
agenda. Our near-term environmental targets are in the process of validation with
the SBTi. 

Our teams underpin everything we do, and we are delighted to have successfully returned
to our offices at least two days each week, to benefit from time spent together 
to enhance collaboration and build connections, while retaining the efficiency benefits
remote working can bring. Our field-based teams have also returned to meeting customers
face to face, which has been welcomed by the Rightmove teams and customers alike.
We have continued with our popular “How to Thrive” wellbeing and personal development
workshops, which have been enthusiastically embraced as everyone adjusts to a post-
pandemic world.

**Financial performance**

**Revenue**

Revenue increased by £12.8m/9% year on year to £162.7m (2021: £149.9m) due to strong
product uptake from customers, increasing ARPA during the first half of 2022. 

| 
 | **H1 2022£m | H1 2021£m | Change vs 2021 £m | Change vs 2021 % | 
| Agency | 122.2 | 109.6 | 12.6 | 12% | 
| New Homes | 24.7 | 25.3 | (0.6) | (2)% | 
| Other | 15.8 | 15.0 | 0.8 | 5% | 
| Total revenue | 162.7 | 149.9 | 12.8 | 9% |

|  | **30 June 2022** | **31 Dec 2021** | **30 June 2021** | **Change vs  Dec 2021** | **Change vs Dec 2021 % ** | 
| Agency branches | 16,116 | 16,110 | 16,052 | 6 | 0% | 
| New Homes devs | 2,818 | 2,859 | 3,064 | (41) | (1)% | 
| **Total membership** | **18,934** | **18,969** | **19,116** | **(35)** | **0%** |

Agency revenue increased by £12.6m year on year to £122.2m, as we continued to 
see strong product purchase and package upgrades – as a result of the value our 
products deliver – and we secured core membership price increases through customers’
contract renewal processes. Agency ARPA^((1)) increased by £132/12% to £1,262 (June
2021: £1,130) and Agency customer numbers were flat on 31 December 2021, ending 
the first half of the year at 16,116 branches.

New Homes revenue decreased by £0.6m to £24.7m. The buoyant market meant that the
New Homes’ market remained forward-sold for the entirety of the period, with some
developments not being advertised as a result. This was reflected in the gradual
reduction in the number of developments listed – down by 41 in the first half of
the year to 2,818. The impact of reduced membership was largely offset by strong
product spend, with developers particularly investing in our new Native Search Adverts
product. New Homes ARPA^((2)) increased by £117/9% to £1,446 per development per
month (June 2021: £1,329). 

Other revenue increased by £0.8m to £15.8m. Commercial, Overseas, Data Services 
and Third Party all saw double digit percentage growth, with Commercial real estate,
in particular, growing by 20% year on year. Growth in these areas was, however, 
largely offset by a £1.7m decline in Mortgage revenues as we moved away from our
previous fixed marketing fee, towards a procuration fee model which has more long-
term upside potential.

**Administrative costs**

Operating costs increased by £3.9m from £37.4m to £41.3m.

Underlying operating costs^((3)) (defined as operating costs before the inclusion
of share-based payments charges and related national insurance) increased £5.1m 
to £40.2m (2021: £35.2m). The increase in costs is largely due to higher salary 
costs (£3.9m increase), reflecting ongoing investment in our product development
and sales teams.

**Operating profit**

Operating profit increased by £6.4m to £121.3m (2021: £114.9m), with an operating
profit margin of 75% (2021: 77%).

|     | **H1 2022
£m
 | H1 2021
£m
 | Change vs2021 £m | Change vs 2021  % | 
| Revenue | 162.7 | 149.9 | 12.8 | +9% | 
| Other income | – | 2.4 | (2.4) | (100)% | 
| Administrative expenses | (41.3) | (37.4) | (3.9) | (10)% | 
| Operating profit | 121.3 | 114.9 | 6.4 | +6% | 
| _Operating Margin_ | _75%_ | _77%_ | _ _ | _ _ |

Underlying operating profit^((4)) of £122.4m, before the impact of the share-based
incentive charges and related national insurance of £1.1m, increased by £5.3m/5%(
2021: £117.1m), with an underlying operating profit margin^((5)) of 75% (2021: 78%).

The prior year results and margins reflected other income of £2.4m, a one-off credit
representing the release of a contingent consideration provision in relation to 
the acquisition of Rightmove Landlord and Tenant Services (previously Van Mildert)
in 2019, as the threshold performance criteria for pay out were not met. Excluding
the impact of the prior year other income, the comparative prior year operating 
margin was 75%, the underlying operating margin was 77% and the increase in the 
underlying profit in 2022 would be £7.7m/7%.

**Earnings per share (EPS)**

Basic EPS increased by 0.9p to 11.7p (2021: 10.8p), driven by the increase in profit
and the share buyback programme, which reduced the weighted average number of ordinary
shares in issue to 841.5m (2021: 865.9m)

Underlying EPS^((6)) (based on underlying profit) increased by 7% to 11.8p (2021:
11.0p)

**Summary consolidated statement of financial position**

|  | **30 June****2022****£m** | 31 December 2021£m | 30 June2021*£m | Change fromDec 2021£m | 
| Property, plant and equipment | **11.5** | 12.0 | 13.3 | (0.5) | 
| Intangible assets | **21.7** | 21.1 | 21.6 | 0.6 | 
| Deferred tax asset | **1.5** | 2.2 | 2.0 | (0.7) | 
| Trade and other receivables | **22.6** | 23.1 | 22.0 | (0.5) | 
| Contract assets | **0.4** | 0.1 | 0.1 | 0.3 | 
| Income tax receivable | **0.9** | 1.0 | 0.1 | (0.1) | 
| Cash including money market deposits | **43.9** | 48.0 | 67.7 | (4.1) | 
| Trade and other payables | **(20.1)** | (22.8) | (22.6) | 2.7 | 
| Contract liabilities | **(2.2)** | (2.6) | (1.8) | 0.5 | 
| Lease liabilities | **(10****.****6)** | (11.0) | (12.0) | 0.4 | 
| Provisions | **(0.7)** | (0.6) | (0.6) | (0.1) | 
| **Net assets** | **68.9** | 70.5 | 89.8 |  |

_*The comparative position as at 30 June 2021 includes a reclassification, applied
to align with presentation at 31 December 2021 – see note 1_

Rightmove’s balance sheet as at 30 June 2022 shows total equity of £68.9m (December
2021: £70.5m). The cash position reduced to £43.9m, consistent with the continued
returns to shareholders by way of share buybacks and dividends.

Trade receivables of £18.4m, included within trade and other receivables, are in
line with December 2021 (£18.6m). Trade and other payables decreased due to timing
of accruals. Trade payments continue to be made in line with contractually agreed
terms.

**Cash flow and liquidity**

Rightmove remained debt-free during the period and cash generation remained strong,
with cash generated from

operating activities of £122.1m (June 2021: £121.5m) and operating cash conversion
in excess of 100%^((7)).

The closing Group cash balance at 30 June 2022, including money market deposits,
was £43.9m (December 2021: £48.0m).    Surplus cash continues to be invested in 
short-term, easily accessible money market deposits, including in a green money-
market fund.

The Group bought back and cancelled 9.8m ordinary shares during the period (2021:
14.9m), at a cost of £60.0m (excluding expenses) as part of its ongoing share buyback
programme (2021: £89.4m). Dividends totalling £40.3m in relation to the final 2021
dividend were also paid during the year (2021: £38.9m). 

Cash capital expenditure largely represents investment in intangible assets – primarily
in relation to our new ERP system – and lease payments.

**Shareholder returns**

Consistent with the policy of growing dividends broadly in line with the increase
in Underlying EPS, the Directors are recommending an interim dividend of 3.3p per
ordinary share, which will be paid on 28 October 2022 to all shareholders on the
register at 30 September 2022.

We intend to continue the share buyback programme in the second half of 2022.

**Alison Dolan** – Chief Financial Officer

_(1)    Agency ARPA is calculated as revenue from Agency advertisers in a given 
month divided by the total number of advertisers during the month, measured as a
monthly average over the year_

_(2)    New Homes ARPA is calculated as revenue from New Homes developers in a given
month divided by the total number of developers during the month, measured as a 
monthly average over the year_

_(3)    Underlying operating costs are defined as administrative expenses before
share-based payments charges (including the related National Insurance)_

_(4)    Underlying operating profit is defined as operating profit before share-
based payments charges (including the related National Insurance)_

_(5)    Underlying operating margin is defined as the underlying operating profit
as a percentage of revenue_

_(6)    Underlying EPS is defined as profit for the year before share-based payments
charges (including the related National Insurance and appropriate tax adjustments),
divided by the weighted average number of ordinary shares in issue for the period_

_(7)    Cash generated from operating activities of £122.1m (2021: 121.5) compared
to operating profit as reported in the income statement of £121.3m (2021: £114.9m)._

**Principal Risks and Uncertainties**

The Board and Audit Committee regularly review the principal risks to our business,
our position against our risk appetite, and monitor progress to manage risks within
that risk appetite.

Consideration is given to emerging risks and to any changes in the internal or external
environment that could impact our strategy and how we operate. We regularly update
our risks and responses where required. The Board and Audit Committee have reviewed
the principal risks and uncertainties faced by the Group.

**Key risks**

The risks set out in the 2021 Annual Report remain relevant for 2022. There has 
been no change to the definition of these risks since disclosed in the Group’s 2021
Annual Report:

| **Risk** | **Overview/Description** | 
| **Macroeconomic environment**  | The Group derives almost all its revenues from the UK and is therefore dependent on the macroeconomic conditions surrounding the UK housing market and consumer confidence, which impacts property transaction levels. | 
| **Competitive environment**  | The Group operates in a competitive marketplace, with attractive margins and low barriers to entry, which may result in increased competition from existing competitors or new entrants targeting the Group’s primary revenue markets. | 
| **New or disruptive technologies and changing consumer behaviours**    | Rightmove operates in a fast-moving online marketplace. Failure to innovate or to adopt new technologies or failure to adapt to changing customer business models and evolving consumer behaviour may impact the Group’s ability to offer the best products and services to its advertisers, and the best consumer experience to those using our sites. | 
| **Cyber security and IT systems**  | The Group has a high dependency on technology and internal IT systems. In today’s digital world there are increased risks associated with external cyber-attacks which could result in an inability to operate our platforms. A security breach, such as loss of key data, may disrupt the efficiency and functioning of the Group’s day-to-day operations. | 
| **Securing and retaining the right talent** | Our continued success is dependent on our ability to attract, recruit, retain and motivate our highly skilled workforce. An inability to recruit and retain talented people could impact our ability to maintain our financial performance and deliver growth. |

Further detail on these risks and the ways in which they are managed is available
in the Rightmove plc Annual Report 2021.

**Next trading update**

Our next scheduled reporting date is 2 March 2023, when we will announce our results
for the year ending 2022.

**Statement of Directors’ responsibilities**

The Directors are responsible for preparing the interim report in accordance with
applicable law and regulations. The Directors confirm that the condensed consolidated
interim financial information has been prepared in accordance with UK adopted International
Accounting Standard 34, ‘Interim Financial Reporting’ and the Disclosure Guidance
and Transparency Rules sourcebook of the United Kingdom’s Financial Conduct Authority.

The interim management report includes a fair review of the information required
by the Disclosure and Transparency Rules paragraphs 4.2.7R and 4.2.8R, namely:

·    an indication of important events that have occurred during the six months 
ended 30 June 2022 and their impact on the condensed set of financial information,
and a description of the principal risks and uncertainties for the remaining six
months of the financial year; and

·    material related-party transactions during the six months ended 30 June 2022
and any material changes in the related-party transactions described in the Annual
report and Accounts 2021.

The Directors of Rightmove plc are listed in the Annual report and Accounts 2021.
A list of current Directors is maintained on the Rightmove plc website: https://
plc.rightmove.co.uk.

The Directors are responsible for the maintenance and integrity of, amongst other
things, the financial and corporate governance information as provided on the Rightmove
website (https://plc.rightmove.co.uk). Legislation in the United Kingdom governing
the preparation and dissemination of financial information may differ from legislation
in other jurisdictions.

The interim report was approved by the Board of Directors and authorised for issue
on 28 July 2022 and signed on its behalf by:

**Peter Brooks-Johnson                                                         
Alison Dolan         **

Chief Executive Officer                                                         
Chief Financial Officer

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