Full Year Results for the year ended 31 December 2018 - 1 March 2019 - Rightmove Investor Centre
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1 March 2019 Full Year Results for the year ended 31 December 2018
Disclaimer
This presentation has been prepared by Rightmove plc (the “Company”). No representation or warranty (express or implied) of any nature is
given nor is any responsibility or liability of any kind accepted by the Company or any of its directors, officers, employees, advisers,
representatives or other agents, with respect to the truthfulness, completeness or accuracy of any information, projection, representation or
warranty (expressed or implied), omissions, errors or misstatements in this presentation, or any other written or oral statement provided.
In particular, no responsibility or liability is or will be accepted and no representation or warranty is or is authorised to be given as to the
accuracy, reliability or reasonableness of any forward-looking statement, including any future projections, management targets, estimates or
assessments of future prospects contained in this presentation, or of any assumption or estimate on the basis of which they have been given
(which may be subject to significant business, economic or competitive uncertainties and contingencies beyond the control of the management
of the Company). Any such forward looking statements have not been independently audited, examined or otherwise reviewed or verified and
nothing in this presentation should be construed as a profit forecast.
All views expressed in this presentation are based on financial, economic, market and other conditions prevailing as of the date of this
presentation. The Company does not undertake to provide access to any additional information or to update any future projections,
management targets, estimates or assessment of future prospects or any other forward-looking statements to reflect events that occur or
circumstances that arise after the date of this presentation, or to correct any inaccuracies in this presentation which may become apparent. Past
performance is not indicative of future results and forward-looking statements are not guarantees of future performance.
This presentation is for information purposes only and does not constitute an offering document or an offer of transferable securities to the
public in the UK. This presentation is not intended to provide the basis for any credit or other evaluation of any securities of the Company and
should not be considered as a recommendation, invitation or inducement that any investor should subscribe for, dispose of or purchase any
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2
Highlights
Revenue: Profit: EPS: Dividend:
+10% +10% +12% +12%
Revenue up to £267.8m Underlying operating profit1 Underlying basic EPS2 Final dividend increased by
(2017: £243.3m) increased to £203.3m grew to 18.3p 0.4p to 4.0p (2017: 3.6p*)
(2017: £184.4m) (2017:16.3p*) making a total dividend of 6.5p
(2017: 5.8p*) per ordinary share
Cash returned: Advertisers3: Site traffic4: ARPA4:
£168.5m 20,454 12.3bn £1,005
Free cash flow returned Stable membership as at Time in minutes up 5% year Per month, up £83
to shareholders through 31 December 2018 on year (2017: 11.7bn) (2017: £922)
dividends and buybacks (2017: 20,427)
(2017: £140.4m)
* 2017 comparatives have been restated for ease of comparability to reflect the 10:1 share split effective 31 August 2018
1. Before share-based payments and NI on share-based incentives
3 2. Before share-based payments, NI on share-based incentives and no related adjustment for tax customers
3. For Agency and New Homes customers
4. Source: Google Analytics
Revenue
Revenue Revenue bridge
275 267.8 300
243.3 2.0 267.8
£ millions
£ millions
250 20.4 2.1
220.0 243.3
250
225
192.1
200
200
175
150
150
125
100
100
75
50 50
25
0 0
2015 2016 2017 2018 2017 ARPA Customer Other 2018
growth growth growth
4
Cost, profits and margins
1 1
Costs Underlying operating profit
Margin: 75.1% 75.5% 75.8% 75.9%
70 250
£ millions
£ millions
64.5
58.9
60
203.3
53.8
200
184.4
47.8
50
166.2
144.3
150
40
30
100
20
50
10
0 0
2015 2016 2017 2018 2015 2016 2017 2018
5 Source: Rightmove
1. Before share-based payments and NI on share-based incentives
Income statement
Year ended Year ended
31 December 2018 31 December 2017
£m £m
Revenue 267.8 243.3
Operating costs (64.5) (58.9)
Underlying operating profit 203.3 184.4
Underlying operating profit margin 75.9% 75.8%
Share-based payments (4.3) (4.9)
NI on share-based incentives (0.4) (1.2)
Operating profit 198.6 178.3
Net financial expense (0.3) (0.1)
Profit before tax 198.3 178.2
Income tax expense (37.8) (34.1)
Profit for the year 160.5 144.1
6 Source: Rightmove
Summary balance sheet
As at As at
31 December 2018 31 December 2017
£m £m
Property, plant and equipment 15.2 2.7
Intangible assets 2.9 3.3
Deferred tax assets 2.8 5.7
Total non-current assets 20.9 11.7
Trade and other receivables 22.5 35.1
Contract assets 0.4 -
Cash and money market deposits 19.9 25.0
Total current assets 42.8 60.1
Trade and other payables (18.1) (38.9)
Contract liabilities (2.1) -
Lease liabilities (13.0) -
Income tax payable (16.8) (14.7)
Provisions (1.1) (1.0)
Total liabilities (51.1) (54.6)
Net assets 12.6 17.2
7 Source: Rightmove
Cash bridge and dividend
Full year 2018
• £168.5m (2017: £140.4m)
250
206.8
returned to shareholders in
the year
(6.3)
• 25.0m (2017: 22.2m1)
£ millions
200
(32.8) shares bought back and
(1.7)
cancelled
150 • 10:1 share split effected on
31 August 2018
100
• Closing cash and money
market deposits of £19.9m
(114.3)
(2017: £25.0m)
50 • Final dividend increased by
25.0
19.9
0.4p to 4.0p bringing the full
(55.0)
(1.5) (0.3) year dividend to 6.5p
0 (2017: 5.8p1) up 12%
Cash Dec EBITDA Working Tax Capex Share buy Dividends Lease Other Cash Dec
2017 before capital payments backs incl payments 2018
IFRS 2 costs
Source: Rightmove
8
1. 2017 comparatives have been restated for ease of comparability to reflect the 10:1 share split effective 31 August 2018Making home moving easier in the UK
Our aim is to create a simpler and more efficient property marketplace
The three pillars of our strategy:
• The place consumers ‘turn to first’ and engage with most
• Offer unrivalled exposure, leads and products for our customers
• Innovate to create a better marketplace
9The UK housing market is stable
Housing Transactions 2006-2018 (UK)
1,800
1,600
1,670
Transactions (thousands)
1,613
1,400
1,200
1,235
1,230
1,220
1,219
1,192
1,000
1,073
933
800
900
886
885
858
600
400
200
0
• The number of housing transactions in Year on Year Transactions
102%
2018 was only 2% lower than 2017
101%
• Second half of 2018 showed more
100%
positive momentum
99%
• Commission rates are unchanged and
the overall Agency revenue pool is stable 98%
97%
• Two-thirds of our Agency customers also
96%
generate recurring revenue from lettings
95%
2018 Q1 2018 Q2 2018 Q3 2018 Q4
10 Source: HMRCUncertainty is causing hesitation
• Underlying demand is stable. The time spent on site in January 2019 was the
same as 2018
• January leads are 10% down showing an increasing hesitation to commit
• However, history shows the market recovers quickly once certainty returns
• Lettings market is unaffected
Leads June – July 2016
1.04
EU Referendum
Index to Week of 6 June 2016
1.02
1.00
0.98
0.96
0.94
0.92
0.90
06 June 2016 13 June 2016 20 June 2016 27 June 2016 04 July 2016 11 July 2016
11 Source: RightmoveConsumer demand remains strong
1
Traffic Record engagement, up 5% to 12.3 billion
14 1.8
minutes
11.7 12.3
11.1 11.7 1.6
12
1.4
• Nearly 1.6 billion visits in 2018, up 4%
Billions of Minutes
10 year on year
Billions of Visits
1.2
8 1
• Growth driven by continued mobile
6 0.8
0.6
adoption with 70% of time spent on
4
0.4 mobile
2
0.2
• Traffic to our research tools grew 8%
0 0
2015 2016 2017 2018 with consumers spending 450 million
Time Visits
minutes on features such as sold prices
Instant property alerts sent2 • We sent over 42 million leads to our
1000 customers, 3% down on 2017 mirroring
800
781 property market transaction levels
Millions of alerts
638 600
510
600
400
200
0
2015 2016 2017 2018
12 Source: 1. Google Analytics & Rightmove 2. RightmoveMore consumers and more engagement
Market share of top 4 property portals
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Rightmove Zoopla.co.uk Primelocation OnTheMarket
13 Source: comScore (time spent on all platforms)Britain moves at Rightmove 14
Customers are resilient
Agency and New Homes Stable membership numbers
22
• Agency branches down 2% to 17,328
Thousands
20,427 20,454
Thousands
19,752 20,121
20
18 • New Homes developments at their highest
16
level since 2009, up to 3,126
14 • Customers advertising one million UK
12 residential properties on Rightmove
10 • We continue to be the only place to see
2015 2016 2017 2018
virtually the whole UK property market
Agency customer size
100+ Branches 100+ Branches 100+ Branches
100+ Branches
21-100 Branches 21-100 Branches 21-100 Branches
21-100 Branches
3-20 Branches 3-20 Branches 3-20 Branches
3-20 Branches
2 Branches 2 Branches 2 Branches 2 Branches
Single Branch Single Branch Single Branch Single Branch
January 2013 December 2016 December 2017 December 2018
15 Source: RightmoveRightmove enables businesses to be more
efficient
Growth packages Training & support
Rightmove’s
audience and
data
The marketplace Efficiency tools
16Helping agents win business efficiently
The marketing funnel Performance of Rightmove customers
Brand visibility on Rightmove
4.0
Visibility (index)
Awareness 2.0
Rightmove package
performance
0.0
Essential Enhanced Optimiser
3.0 Valuation leads
Leads (index)
2.0
Consideration 1.0
0.0
Essential Enhanced Optimiser
Agent conversion
New instructions
performance
2.0
Instructions
(index)
Decision 1.0
0.0
Essential Enhanced Optimiser
Average across all customers
17 Source: RightmoveHelping agents operate efficiently
Embedded in ways of working
• 90% of agents log into the Rightmove
reporting and insight software every month
• Spending over 100 million minutes
• The Best Price Guide was used over ten
24 Acacia Avenue
million times in 2018
• The Marketing Report was run on
700,000 unique properties, 50% more
than 2017
• Rightmove has delivered over one million
minutes of training to agents in 2018:
• Over half a million minutes spent
watching live webinars
• Half a million minutes on the Rightmove
Hub watching on demand videos
18Innovating for efficiency
Contact Bell & Daughter, Tamworth Phase one of the Tenant Passport, “pre-
Orchard Grove, Tamworth
qualification” in roll out
• Includes full property requirements and basic
household details
• Reduces wasteful repetition for both agent and
tenant
• Early roll out with no above the line marketing
• Passport creation rate illustrates demand
Cumulative Passports Created
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
Send Email 0
Nov-18 Dec-18 Jan-19
19Product innovation
Featured Property doubles the interest a property receives creating more leads, more sales and
more opportunities to win the next instruction
Auto Featured Property will make it
easier for larger customers to make
the most of their valuable asset – their
stock:
• Automatically features properties in
their first week of marketing when
interest is highest
• Automatically relaunches properties
which fall through
• Automatically supports price
reductions by maximising exposure to
buyers at a new price point
• Simpler pricing for larger agents,
approximately four times the cost of a
single Featured Property
• Launching Q2 2019
20Customers value efficiency in uncertain
times
1
ARPA • ARPA up £83 to £1,005 per month
£1,005 (2017: £922)
per month
• ARPA growth driven by package sales and
£ per office/development per year
12,000
£922
10,000
£842 membership price increases
£754
8,000 • First full year of Enhanced package sales
6,000 ahead of plan with over 1,500 upgrades in
4,000 the year at an average uplift of over £175
2,000 • Opportunity to grow revenue through more
0 product sales, product innovation and
2015 2016 2017 2018 pricing
• Delivering efficiency savings for our
Optimiser and Enhanced packages customers allows more spend on marketing
3,000 • 2019 product sales and pricing progressing
2,500
2,000 according to plan
1,500
1,000
500 Optimiser
0 Enhanced
2015 2016 2017 2018
21 Source: Rightmove
1. Agency and New Homes customersSummary
• Record traffic, over 12 billion minutes
• Resilient customer numbers at over 20,400
• Record ARPA driven by pricing and customers spending more on
packages to secure efficient marketing in uncertain times
1
• Revenue and underlying operating profit both up 10%
• £168m cash returned in the year
22 1. Before share-based payments and NI on share-based incentivesThe proportion of revenue spent on
Rightmove varies
Spend on Rightmove as a proportion of revenue
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Agent Commission Spend on Rightmove
Proportion of branches
Proportion of commission pool
Businesses who spend a higher proportion of revenue on Rightmove tend to be newer businesses and
greater users of efficiency tools
23 Source: RightmoveDriving efficiency drives growth
January 2010
January 2014
January 2018
Percentage of Independent Estate Agency Offices
January 2019
£1000/m+ £1500/m+
56% 19%
45% 14%
9% 1%
Total spend per month
24
Source: RightmoveOutlook
• Underlying housing demand unchanged with traffic stable in January
year on year
• Political and economic noise leading to consumers hesitant to commit
• Overall membership stable in January. Continued uncertainty and
tenant fee ban may impact the viability of small numbers of agents at
the margins, conversely tighter market increases number of new home
developments advertised
• Efficiency of Rightmove advertising continues to support growth in
ARPA
• Rightmove Tenant Passport phase one – “pre-qualification” a focus on
innovation to make renting process more efficient
• Confident of meeting our expectations for the year
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