Rightmove issues update after takeover collapse

move to the right The Australian portal group has published an update on REA Group’s finances, just a month after its takeover bid collapsed.

REA withdrew after four unsuccessful cash and share offers for Rightmove and a war of words between the two parties.

Rightmove’s board accused the Australian portal firm of undervaluing the company and being opportunistic.

Membership forecast dropped

Now the board has issued a statement revealing revenue was around £390m (within previous expectations of 7-9% growth).

Rightmove says the one-off cost is around £10 million. The portal announced earlier this year that it had spent £3 million to acquire an 8% stake in the Coadjute transport platform.

Membership numbers are expected to grow by approximately 1% in 2023; This is below the 2% forecast published in the summer. Rightmove says this is due to a “slower than expected recovery in new housing projects”.

share autumn

Reports Average Revenue Per Advertiser (ARPA) increase of £85-95, compared to £1,431 in 2023; This is higher than the previous estimate of £75-85, which “reflects successful sales for estate agents and the move to the Optimizer Edge suite as product uptake among both estate agents and new home partners”.

Rightmove’s shares have fallen 3.4% in the month since REA’s takeover bid collapsed.

In the last semester results, Published in JulyRevenue rose 7% to £192.1 million, of which £100 million was returned to shareholders through dividends and share buybacks.

Market share remained steady at 86% and average revenue per agent rose 6% to £1,497; 36% of agencies now use the Prime Optimizer package.

“This has been another period of strong progress for Rightmove.”

Johan Svanstrom, CEO of Rightmove, says: “This has been another period of strong progress for Rightmove and it is pleasing to see our product development and sales delivery gaining greater interest from consumers and partners.

“As a result, we remain confident that we will achieve meaningful strategic and financial growth in 2024. We see continued momentum building product depth across our platform, driving revenue growth across our core businesses and strategic growth areas,” he says.

Industry reaction

Anthony Codling, MD of Equity Research at RBC Capital Markets, says: “Rightmove’s trading update today is a testament to the strength, stability and robustness of its business model.

“While its clients (builders and estate agents) often have to navigate turbulent seas and deal with problems at the factory, Rightmove has a masterful ability to chart calm waters and keep its ship in good order, and today it is upgrading rather than reducing steering.

“Rightmove shares our view that conditions in the UK housing market are improving and that this will not be derailed by Budget ups and downs and agents and housebuilders appear to be putting their ARPA where their mouths are, so the path for housing is improving. “For Rightmove too, it looks like the market is heading towards the sunny plateaus of recovery.”