Full Year Results for the full year ended 31 December 2020 - Rightmove Plc
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Full Year Results for the full year ended 31 December 2020
1. Covid-19 Response Peter Brooks-Johnson, CEO 2. FY 2020 Highlights 3. Financials Alison Dolan, CFO 4. Strategic update Peter Brooks-Johnson, CEO 5. Outlook 6. Appendix
Covid-19 Response Peter Brooks-Johnson, CEO
Support during Covid
Helping to keep Britain moving
• Key information hub for customers and consumers alike:
• over 400,000 visits to our customer advice pages
• c100 webinars on regulatory changes & operational safety
• 3.3m visits to the consumer Covid-advice hub
• Our weekly consumer updates read an average of 750,000 times per week.
Significant financial support for customers Video viewings platform
• Invoices discounted by 75% while housing market closed March-June.
• Discount reduction tapered
Support for our employees
• Seamlessly transitioned to working from home, with program to keep
employees connected and updated
• Enhanced support for health & well-being
• Ten additional days’ leave for carers and five additional for home-
schooling parents
• Training to help managers lead out of lockdown Local Market Data
FY 2020 Highlights
Key Performance Indicators
Revenue: Profit: EPS: Dividend:
-29% -37% -36% 4.5p
Revenue down to £205.7m Operating profit decreased Basic EPS Final dividend per ordinary
(2019: £289.3m) to £135.1m (2019: £213.7m) of 12.6p (2019: 19.6p) share (2019: interim 2.8p. No
final dividend)
Cash returned: Advertisers1: ARPA1: Site traffic2:
£30.1m 19,197 £778 15.9bn
(2019: £148.8m through 31 December 2020, down 3.1% down 28% reflecting Time in minutes for the
buybacks and dividends) (31 December 2019: 19,809) discounts to customers 12 months ended 31 Dec
(2019: £1,088) up 31%
(2019: 12.1bn)
Delivering on our long-term strategic goals
Innovating Innovating Innovating
in property advertising for efficiency for future growth
• Promising growth of premium • Secure video viewings • First phase of digital rental
Optimiser 2020 package functionality launched journey complete, phase two
• New property details page • Integrated appointment in development
with bigger images and booking for rentals launched • Promising early growth in
integrated video increasing • New data insights allowing Tenant Services
home hunter engagement customers to understand • Integrated online auctions;
• New Homes product in beta their local market and better beta testing Q2
test; launch in April target their marketing
A member of the wider community
• Carbon neutral and continued reduction in carbon emission across our activities
• Renewed focus on providing opportunities for talent from diverse backgrounds
Financials Alison Dolan, CFO
Revenue
Revenue Revenue bridge
300
289.3
29%
275 267.8 8%
250 243.3 10%
225
205.7
200
£ millions
£ millions
175
150
125
100
75
50
25
0
2017 2018 2019 2020
Agency New Homes Breadth
Other
ARPA
ARPA1
1,200 £83
£ per office/development per year
£83
1,000
+8%
£1,088
£1,005 £310
+9%
800
£922 -28%
£788
600
ARPA returns to 2019 levels
400
200 • ARPA down £310 to £778 per
month, reflecting discounts
0
2017 2018 2019 2020 • Customers continued to upgrade
and increase product spend in H2
3 month trailing monthly ARPA1 • December monthly ARPA £1,103
£ per office/development per year
1,200
(Dec 19: £1,083)
1,000
800
600
400
200
0Costs1
5.1m -1.4m
69.6 68.2
70 5.6m
64.5
58.9
60
Cost savings in 2020 but no
50
structural change in cost base
• Recruitment (paused in 2020) has
40
now restarted
• Marketing cost is discretionary
£ millions
• Cost growth will revert to normal
30
in 2021
20
10
0
2017 2018 2019 2020
Payroll Marketing Technology G&A DepreciationCost bridge1
Cost savings of £1.4m
72
One-off savings £4.6m Increases £3.2m
£ millions
70 69.6 (1.9)
2.5 68.2 One-off Covid driven savings of
68 (0.7) £4.6m in 2020
(2.0) • Headcount and staff related
expenses reduced
66 0.7
• Marketing cutback while market
closed
64
• Costs increases in technology
• Full year of Van Mildert costs
62
60Operating profit & margin
Margin: 73% 74% 74% 66%
250
213.7
198.6
£ millions
200 178.3
150 135.1
100
50
0
2017 2018 2019 2020
Operating profit down £78.6m
213.7 (88.9)
200
£ millions
Revenue increase £5.3m
150 (12.2)
13.6 3.6 135.1
3.9 1.4
100
Revenue down £83.6m Cost savings £5.0m
50
0
2019 Discount ARPA Customers Other Operating costs Share based 2020
paymentsCash bridge
Increase in cash of £60.4m
200
141.5 (45.0)
• Cash generated from
operating activities of £142m
150
(2019:£222m)
(3.5)
(30.3)
• Operating cash conversion(1)
£ millions
of 105% (2019:104%)
• Closing cash of £96.7m
(2.1)
(0.2) 96.7 (31 Dec 2019*: £36.3 m)
100
• Higher cash balance reflects
pause of dividend and share
buybacks
• Long term capital returns
policy unchanged
50
36.3
0
Cash Dec Cash Tax Capex Share Lease Other Cash
2019* generation payments buybacks payments 2020
(incl costs)Profit & Loss
Year ended Year ended
31 December 2020 31 December 2019
£m £m
Revenue 205.7 289.3
Operating costs (exc. share-based incentives) (68.2) (69.6)
Operating profit before share-based incentives 137.5 219.7
Margin 67% 76%
Share based incentives charge (2.4) (6.0)
Operating profit 135.1 213.7
Margin 66% 74%
Net financial expense (0.3) (0.1)
Profit before tax 134.8 213.6
Income tax expense (25.0) (40.5)
Profit for the year 109.8 173.1Balance Sheet
As at As at
31 December 2020 31 December 2019
£m £m
Property, plant and equipment 13.9 12.8
Intangible assets 22.1 21.9
Deferred tax assets 2.8 2.7
Total non-current assets 38.8 37.4
Trade and other receivables 23.4 24.0
Contract assets 0.3 0.4
Income tax receivable 1.2 -
Cash and money market deposits 96.7 36.3
Total current assets 121.6 60.7
Trade and other payables (18.9) (19.5)
Contract liabilities (1.6) (2.1)
Lease liabilities (12.3) (12.2)
Income tax payable - (18.9)
Deferred tax liabilities (0.9) (0.9)
Provisions (3.6) (3.2)
Total liabilities (37.3) (56.8)
Net assets 123.1 41.3Climate Change Rightmove has been carbon neutral
since 2019
and ESG Activity
Targets to 2025 Status to date Key environmental issues:
Reduce the carbon footprint of the We reduced CO2 by 40% between 2016- • Managing the environmental footprint of
data centres by 10% within three 2019 and CO2/employee by 47%. our data centres
years Working with data centre provider on
greener energy strategy • Reduce energy consumption of our
25% of company cars to be ultra- On target to beat our 2022 target early mobile sales force, particularly the car
low emission by 2022; 100% by fleet
2028
Reduce office carbon emissions by Office carbon emissions reduced by 54%
10% in next three years from 2016-2019 and CO2/employee by Key Reporting Metrics:
60%. MK offices uses 100% renewable
energy • Total energy consumed
Reduce water consumption by 10% More to do. Working with data centre • Percentage renewable energy
in next three years providers and office water providers
• Reduction in employee travel
50% of waste to be recycled in next Currently at 43% and working with office • Reduced water consumption
three years
Reduce business travel All staff working from home c40% of the
week Management Action:
• Integration of environmental
Remain carbon neutral Aim to reduce need to offset by reducing
emissions considerations into strategic planning for
data centres
Frameworks now in use : SBTi, SASB, TCFD (incorporating CRP)
• Becoming a ‘system-positive’ business:
SBTi: agreeing science behind ambitious emissions reduction targets using our scale and reach to promote
climate-positive contentStrategic update Peter Brooks-Johnson, CEO
Despite the restrictions the housing market in the
second half of 2020 was strong
Housing transactions 2007-2020 (UK)1
1,800
Transaction (thousands)
1,600
1,613
1,400
1,200
1,235
1,230
1,220
1,219
1,191
1,000
1,176
1,073
1,043
800
933
900
886
885
858
600
400
200
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
UK Housing transactions 1 • Total transactions only down 11%
160,000
on 2019 despite market closure
for nearly three months
Transactions
140,000
120,000 • Covid related processing delays
100,000 led to transaction volumes building
80,000 back from July
60,000
• An estimated 630,000
40,000
transactions in the pipeline at the
20,000
end of January 2021
0
2020 2019The number of sales agreed has
remained resilient
Demand, Sales Agreed1 and total number of • 20% more sales agreed in
January 2021 than 2019
UK transactions2 vs 2019
180%
• High number of current sales
160% agreed will drive transactions in
140% Q1
120%
100% • Marginally increased average
80% commission rates and achieved
60%
40%
price growth in most areas have
20% helped commission pool
0%
• Looking forward, continuing
lockdown may cool the market:
Demand Sales Agreed Transactions
•
Available Stock1 and New Listings1 vs 2019
160%
140% •
120%
100%
80%
60%
40% •
20%
0%
Available Stock New ListingsMaking home moving easier in the UK
Our aim is to create a simpler and more efficient property marketplace
Buyers
Sellers Agents
Renters Developers
Landlords
SIMPLICITY
The place consumers turn to first Unrivalled exposure, leads and
and engage with most products for our customers
• The place consumers ‘turn to first’ and engage with most
• Offer unrivalled exposure, leads and products for our customers
• Innovate to create a better marketplaceThe uncertainty reinforced
Rightmove as the place consumers • Rightmove is the only place
to find virtually the whole of
‘turn to first’ and engage with most the UK property market in
one place
Market Share of top 4 property portals1 • Engagement up 31% year on
100.0% year; 15.9 billion minutes
90.0%
spent on Rightmove
80.0%
70.0% • Over 2 billion visits, up 31%
60.0%
comscore methodology change
year on year
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Rightmove Zoopla Prime OnTheMarket
Traffic2
18.0 2.5
16.0
14.0 2
Billions of minutes
Billions of visits
12.0
1.5
10.0
8.0
1
6.0
4.0 0.5
2.0
0.0 0
2015 2016 2017 2018 2019 2020
Time VisitsDelivering unrivalled exposure
and leads for our customers
Leads1
160%
• A record 51 million leads
sent to customers, an
140%
increase of 27%
• Leads higher than 2019 in
120% every month except March
and April when the market
100%
was shut
80%
• Site optimisation
contributed to a record
60%
number of instant property
alert registrations
40% • Instant alerts sent to
homehunters increased
20%
24%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecProducts continue to help Agents win
• Premium Listing allows agents to
business highlight properties within the
Premium Listings 2020 vs 20191 property search results with a bigger
listing and more images
130%
120%
110%
• Launched in 2007, regularly
100%
90%
optimised over its lifetime
80%
70% • Often used by agents to convince a
60%
50% potential seller in the decision phase
• Sold By Me allows agents to
demonstrate their local selling
Sold By Me traffic to agents’ websites1 success to potential sellers in the
70,000 consideration phase
60,000
50,000 • Launched in November 2019
40,000
30,000 exclusively for Optimiser 2020
20,000 customers, £2.9m annual revenue
10,000
0 run rate in December
• Local Valuation Alert puts potential
sellers in direct contact with Agents
Potential agent commission from Local Valuation Alert1
80
in their area
Potential commission
60 • Optimised product targeting
40
generating more business for
£m
agents
20
0
2019 2020Trusted products and unrivalled exposure led to healthy
demand for Optimiser 2020 in second half
Optimiser package1 • Growth in the premium Optimiser 2020 package
with 1,000 upgrades in 2020 with an average uplift
4,000
3,500
of £360
3,000 Optimiser • Proportion of our Agency branches buying either
2020
2,500
Enhanced or Optimiser packages unchanged at
2,000
38%
1,500
1,000 Optimiser
2015
• A promising start to 2021 with 60 upgrades to
500 Optimiser 2020 in January
0
2015 2016 2017 2018 2019 2020
Enhanced package1 Number of Optimiser 2020 customers1
3,500 1,200
3,000
1,000
2,500
800
2,000
1,500 600
1,000 400
500 200
0 0
2017 2018 2019 2020Agent numbers recovered in H2 after disruption of lockdown
in H1, New Homes impacted as demand outstripped supply
Agency and New Homes1 • H1 impacted by lockdown of the property market
20,427 19,809 19,197
but with agent joiners coming back after it
22 20,454
reopened
Thousands
20
18
16 • More agent joiners in H2 than any six months since
14
12
2015 H1 driven by both new entrants to the market
10 and branches being un-frozen
8
6 • Agent leavers continue to be mainly single branch,
4
2 low stock agents
0
2017 2018 2019 2020
Agency New Homes
Agency joiners indexed to 20201 Agency leavers indexed to 20201
140% 120%
120% 100%
100%
80%
80%
60%
60%
40%
40%
20% 20%
0% 0%
2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020
H1 H2 H1 H2Developer numbers broadly steady
Developments and number of developers1
3,500 500
3,450
3,400 400
Number of developments
3,350
Number of developers
3,300 300
3,250
3,200 200
3,150
3,100 100
3,050 Developments Developers
3,000 0
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20
• Supply, impacted by Covid delays to construction, outstripped by demand
• The number of developers advertising largely unchanged
• Refined proposition for developments in the pre-marketing phase are growing in popularity
• With the majority of larger developers “forward sold” until summer 2021 pressures on development
numbers will continue in H1Innovating for property advertising We will introduce three new products during 2021 supporting diverse customer groups New Homes developments – enabling cross-sell and up-sell • A more integrated mechanism for developers to cross and up-sell the properties on their developments to generate more leads • Currently in beta test due to launch in April Online auctions – enabling more people to participate in property auctions • Collaboration with online auction providers, integrating current bid information for the first time at scale • Due to enter beta test in Q2 Build To Rent – enabling build to rent operators to differentiate their proposition • A new listing design to enable Build To Rent developers to better promote their properties and allow tenants to more easily find them • Due to enter beta test in Q3
Innovating for efficiency New homes “coming soon” “Coming Soon” tool is used by developers when assessing marketing and pricing for a new development Collates Rightmove’s unique data to show: • Competing properties • Supply and demand dynamics by price band and property type • Where demand is coming from to tune marketing mix Estate Agency lead location New homes “coming soon” Lead location tool allows estate agents to see where buyers who currently live in their area are thinking of moving to Allows an agent to: • Understand the proportion of the market they have contact with • Adjust marketing mix to capture those people who are moving out of area • Consider where to place a new branch to maximise Estate Agency lead location their network
Building the foundations to make the journey to a rental
more digital
Search Enquire View Reference Contract Move in
Part of Tenant
phase 2 Services
currently in Nearly 7,000
development tenants helped
with contents
insuranceBuilding the foundations to make the journey to a rental
more digital
Search Enquire View Reference Contract Move in
Rightmove Tenant Viewings Van Mildert Part of Tenant
the Largest and Passport manager Integrated phase 2 Services
most trusted Agents can Electronic reference currently in Nearly 7,000
source assess suitability appointment ordering in development tenants helped
Online viewing and affordability booking and Viewings with contents
videos before reminders. Manager insurance
Uploaded video committing to a Reduces no shows reducing
allow tenants to physical viewing. by up to 50% rekeying
view properties 40,000 passports saving significant
with no agent produced wasted effort.
interaction. November 2020 18,000
– January 2021 appointments
requested in
January
Typically a branch 50% fewer viewing Up to 70% fewer
has 250 enquiries requests post video viewings per let
per month viewing
Agency efficiency opportunity Rightmove revenue generation opportunityOutlook
Outlook • Rightmove’s network effects continue to position us at the heart of the UK property market • Positive trading in second half of 2020 and optimistic start to 2021 as agents use Rightmove products to benefit from strong market • Branch number momentum in 2021 dependent on wider economy and recovery from impact of Covid restrictions • Development numbers in the first half of 2021 likely to follow a similar trajectory to second half of 2020 due to strong sales rate and Covid impact on construction rate • Unchanged capital return policy resumed, all free cash flow to be returned to shareholders through a mix of dividend and share buybacks • Continued product innovation in 2021 • The Board has confidence in Rightmove’s outlook in 2021 and beyond
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