Half Year Results for the half year ended 30 June 2020 7 August 2020 - Rightmove Plc
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Half Year
Results
for the half year ended
30 June 2020
7 August 2020
Agenda
1. Covid-19 Response
Peter Brooks-Johnson, CEO
2. HY 2020 Highlights
3. Financials
Georgina Hudson, Interim FD
4. Strategic update
Peter Brooks-Johnson, CEO
5. Outlook
6. Appendix
2
1. Covid-19 Response
Peter Brooks-Johnson, CEO
3
Looking after our people
• All employees moved seamlessly to working from home on 17 March 2020. Small scale trial return
to office in July
• Weekly Company-wide live Town Halls to keep team connected and updated
• Enhanced support for health and well being including webinars on topics such as home schooling
and mental health
• Ten days extra paid leave for those with caring responsibilities
• Recognising the challenges of the continually changing environment, new training to help
managers ‘lead out of lockdown’
4
Supporting our customers
Significant financial support
• We gave all customers an automatic discount on their entire
invoice value
• Tapered the discount beyond the end of the closure of the
property market recognising that revenue on new transactions
takes three months to reach agents post sale agreed
Helping to keep Britain moving
• 34,000 professionals from 5,200 branches attended over 50
Covid-19 related advice webinars for agents
Video viewings platform
• Provided bespoke local data to help agents make decisions
during the lockdown period
• Created a Covid advice hub for consumers and professionals
which has been accessed nearly 700,000 times
• Weekly consumer updates read 800,000 times per week
• Delivered integrated and secure video viewing functionality
• An automatic “relaunch” set of emails for properties listed
shortly before and during lockdown
Local Market Data
5
2. HY 2020 Highlights
Peter Brooks-Johnson, CEO
6
Key Performance Indicators
Revenue: Profit: EPS: Cash returned:
-34% -43% -42% £30.1m
Revenue down to £94.8m Operating profit decreased Basic EPS Free cash flow returned
(2019: £143.9m) to £61.7m (2019: £108.2m) of 5.7p (2019: 9.9p) through buybacks. No
interim dividend proposed
(2019: 2.8p)
(2019: £54.0m through
buybacks and dividends).
Advertisers1: ARPA1: Share of time2: Site traffic3:
19,158 £712 88% 1.1bn
As at 30 June 2019 down 3.3% Per month, down 34% Market share of time, slightly Average monthly time in
(31 December 2019: 19,809) reflecting discounts to up from June 2019 minutes for the
customers in Q2 in response (2019: 87%) 6 months ended 30 June
to Covid-19 (2019: £1,077) (2019: 1.1bn)
1. For Agency and New Homes customers
7 2. Source: Comscore
7 3. Source: Google Analytics
Delivering on our long term strategic goals
Innovating Innovating Innovating
in property advertising for agent efficiency for future growth
• Promising growth of premium • Secure video viewings • Tenant Passport integrated into
Optimiser 2020 package functionality launched appointment booking
• Further Local Valuation Alert • Integrated appointment booking functionality
optimisation for rentals in beta testing • Tenant contents insurance sales
• New property details page with • Further improved lead quality live as a proof of concept
bigger images and integrated • Refinement of mortgage tools
video in beta testing with Nationwide Building
Society doubling engagement
8
3. Financials
Georgina Hudson, Interim FD
9
Revenue
Revenue Revenue bridge
300 289.3 160
143.9 (50.5)
£ millions
£ millions
275 267.8
140
250 243.3
225 120
200 6.7 (7.5)
100 2.2 94.8
175
150 143.9 80
125
60
100
94.8
75 40
50
20
25
0 0
2017 2018 2019 H1 2019 H1 2020 Revenue Discount * ARPA Customer * Other Revenue
HY 2019 growth numbers revenue HY 2020
10 * Excluding impact of discount
10Membership and ARPA
Agency and New Homes Membership numbers down 3%
22
• Agency branches down 580 since the start of
Thousands
20,427 20,454 19,809 20,209
20 19,158
the year to 15,767
18
16 • New Homes developments down 71 to 3,391
14 • Customers advertising 940,000 UK
12 residential properties on Rightmove
10
2017 2018 2019 H1 2019 H1 2020
ARPA
£ per office/development per year
14,000 £83 £1,088 £1,077
£90 ARPA impacted by actions to
£1,005
12,000 £922
£8
support customers
10,000 £712
8,000 • ARPA down £365 year on year to £7121
6,000 per month
4,000
2,000 • ARPA impacted by 75% discount to
0 Agency and New Homes customers
2017 2018 2019 H1 2019 H1 2020 during Q2
11 1: For Agency and New Homes customers
11Protecting our liquidity
• The Board and Leadership Team have taken a voluntary 20% reduction in salary between 1 April and
31 July
• Suspended the share buyback scheme in March, cancelled the previously announced 2019 final
dividend
• The Directors are not declaring an interim dividend
• £12.1m of VAT payments deferred
• Confirmed eligibility for CCFF, however no Commercial Paper has been issued
• Utilised the Coronavirus Job Retention Scheme (CJRS) for nearly a third of employees between April
and June. We intend to repay the CJRS grant by the end of the year
• Recruitment paused, recently restarted for strategic roles
• Marketing spend deferred and small cost savings across travel, accommodation and staff
entertainment costs
• Ended the period with £50m cash
12Costs, operating profit and margin
Costs1 Operating profit
Margin: 73.2% 74.2% 73.9% 75.2% 65.1%
80 250
75.6
£ millions
£ millions
69.2 213.7
70
65.0 198.6
200
60 178.3
50
150
40
35.7 108.2
33.1
100
30
61.7
20
50
10
0 0
2017 2018 2019 H1 2019 H1 2020 2017 2018 2019 H1 2019 H1 2020
13 1. Costs are reported on a GAAP basis and include IFRS 2 and NI charge
13Income Statement
6 months ended 6 months ended
30 June 2020 30 June 2019
£m £m
Revenue 94.8 143.9
Administrative expenses (33.4) (32.9)
Share-based payments 0.2 (2.2)
NI on share-based incentives 0.1 (0.6)
Operating profit 61.7 108.2
Margin 65.1% 75.2%
Net financial expense (0.1) (0.1)
Profit before tax 61.6 108.1
Tax (11.6) (20.6)
Profit for the period 50.0 87.5
14
14Balance Sheet As at
30 June 2020
As at
30 June 2019
£m £m
Property, plant and equipment 12.7 14.1
Intangible assets 22.3 2.9
Deferred tax assets 2.6 3.1
Total non-current assets 37.6 20.1
Trade and other receivables 12.8 25.6
Contract assets 0.4 0.4
Cash and money market deposits 50.3 54.1
Total current assets 63.5 80.1
Trade and other payables (22.5) (17.1)
Lease liabilities (11.5) (12.6)
Contract liabilities (1.3) (2.0)
Income tax payable (0.9) (20.5)
Provisions (3.5) (0.7)
Deferred tax liability (0.9) -
Total liabilities (40.6) (52.9)
Net assets 60.5 47.3
Share capital 0.9 0.9
Other reserves 0.5 0.5
Retained earnings 59.1 45.9
Total equity 60.5 47.3
15
15Cash bridge
Half year 2020
• £30.1m (2019:£54.0m) returned
140
to shareholders prior to
suspension of the buyback
£ millions
120 13.7 (29.9) programme on 14th March
63.6 • 5.0m (2019: 3.6m) shares bought
100
back and cancelled
(2.1) (30.4)
80 • Closing cash of £50.3m
(31 Dec 2019: £36.3m cash and
60 money market deposits)
(1.0) 0.1 50.3
• No interim dividend (2019: 2.8p)
36.3
40 given ongoing market uncertainty
• Long term capital returns policy
20
unchanged of returning all free
cash flows to shareholders
0
Cash Dec EBITDA Working Tax Capex Share Lease Proceeds Cash HY
through dividends and share
2019 before capital payments buybacks payments on share 2020 buybacks
IFRS 2 (incl option
costs) exercises
16
164. Strategic update
Peter Brooks-Johnson, CEO
17Making 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 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
18Branch based agent numbers have thus far
proven resilient to lockdown
Estate Agency movements vs 2019
Branch based agents: 300%
• Fewer leavers every month than 2019 200%
Proportion of 2019
except for April as agents reacted to the 100%
unprecedented uncertainty 0%
-100%
• More joiners than 2019 in May and June -200%
• A net positive movement in July -300%
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
Hybrid agents: Branch based Agent Joiner Rate Branch Based Agent Leaver Rate
• Reduced property stock in Q4 2019 Hybrid Agent Joiner Rate Hybrid Agent Leaver Rate
reduced number of ‘virtual’ hybrid
Estate Agency net membership movement
branches
• Little change in number of hybrid 50
companies -50
-150
-250
-350
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
Branch based Agents Hybrid Agents
19New Homes development flow
New Homes Development numbers indexed to 2019
200%
Data approximately
1 month delayed
150% from activity
100%
50%
0%
January February March April May June
New Development Listing Rate Site Sold Rate
• Developments reduced in Q1 as sales rate outstripped build rate
• Listing rate slows first as lockdown impacts construction
• Slight delay to sales rate decline once lockdown is implemented as deals in train complete
• If the market continues at the current pace construction is likely to be outstripped by demand in the
second half of the year
20Number of sales agreed is accelerating and
stock is returning to market
Year-to-date Sales Agreed vs 2019 • Home hunters are active in the marketplace
120% with 38% more sales agreed in July 2020 than
110%
July 2019
100%
90% • Available stock is 11% lower than this time last
80%
70%
year, but there were over 35% more new
60% listings in July 2020 than last year
50%
• Most areas showing asking price and achieved
price growth
• However, when thinking about branch
numbers:
Available Stock vs 2019
90%
• Wider economic and mortgage availability
88% concerns hang over momentum in Q4
85% • The end of the furlough scheme in October
83% will further negatively impact agent cash flow
80%
of the smallest agents
78%
75%
21Rightmove digital solutions are helping agents
recover
Featured Agent Engagement vs 2019
160% • Featured Agent allows an agent to showcase
140% their brand to potential sellers
120%
100%
80%
• Brand awareness is key for an agent being
60% invited to value a potential seller’s home
40%
20% • Can be used to drive traffic to an agent’s own
website
Local Valuation Alert leads vs 2019
250% • Local Valuation Alert encourages potential
200% home sellers to request a property valuation
150% • The strong performance of Local Valuation
100% Alert has been helped by product optimisation
in the first half of the year
50%
22Unrivalled exposure, leads and products
for our customers
• Customers value Rightmove products even in the most
Enhanced package1 turbulent of markets with 39% of Agency branches now
3,500
3,000
taking either the Enhanced or Optimiser package, up from
2,500
38% in December 2019
2,000
• Promising growth in the premium Optimiser 2020 package
1,500
with 400 sales in 2020 including nearly 100 sales during
1,000
lockdown with an average uplift of over £360
500
0 • Product sales growing post market reopening with July
2017 2018 2019 H1 2019 H1 2020
sales to Agents 7% higher than a year ago1
Optimiser package1 Product sales compared to 20191
3,500 120%
Optimiser
3,000
2020 100%
2,500
2,000 80%
1,500 60%
Optimiser
1,000 2015
40%
500
0 20%
2015 2016 2017 2018 2019 H1 2019 H1 2020 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20
23 1. Units sold to estate and rental agentsHome hunters have returned to the market and
returned to Rightmove in record numbers
Time on Rightmove Busiest day ever
Busiest day ever 8 Jul – 68.8m mins
450
pre-lockdown
Millions
400 19 Feb – 42.8m mins
350
Minutes per week
All weeks
300 since 24
250 June
higher
200 than
previous
150 record
100
50
0
02 Feb 20 16 Feb 20 01 Mar 20 15 Mar 20 29 Mar 20 12 Apr 20 26 Apr 20 10 May 20 24 May 20 07 Jun 20 21 Jun 20 05 Jul 20 19 Jul 20
Government Stamp duty
allows holiday
agents to announced
Rightmove leads open
1.6
Millions
1.4
Lead volume per week
1.2
1.0 July 2020 leads 50%
0.8 higher than July 2019
0.6
0.4
0.2
0.0
02 Feb 20 16 Feb 20 01 Mar 20 15 Mar 20 29 Mar 20 12 Apr 20 26 Apr 20 10 May 20 24 May 20 07 Jun 20 21 Jun 20 05 Jul 20 19 Jul 20
Week Commencing
24The place consumers ‘turn to first’
and engage with most
Market Share of top 4 property portals1 Visits2
100% 1.8
1.6
90% 1.4
Billions of Visits
1.2
80% 0.89
1.0 0.85
0.8
70%
0.6
60% 0.4
0.2
50% 0.0
Comscore methodology change 2015 2016 2017 2018 2019 H1 2019 H1 2020
40%
• Rightmove is the only place to find virtually the whole
30% of the UK property market in one place. The listings
lead over any other UK website has widened to over
20%
50%
10%
• Over 890 million visits, up 5% year on year
0% • Traffic to our research tools grew 4% with
consumers spending over 300 million minutes on
features such as sold prices in the first six months of
Rightmove Zoopla Primelocation OnTheMarket 2020
• 21.3 million leads sent to our customers, 3% up year
on year
25 Source: 1. Comscore 2. Google AnalyticsInnovating for property advertising
New property details page live
for Overseas properties and in
beta for rental properties
• 50% bigger images
• Integrated video content
• Property size for the majority
of UK properties
• 40% faster than previous page
• Overseas properties have
seen a 40% increase in home
hunter engagement
26Innovating for future growth
Help home Help property
movers
Opportunity professionals
be “transaction be more
ready” efficient
27Lettings appointment booking will make the process more
efficient and Van Mildert more attractive to agents
• Allows tenants to request a viewing
appointment with dates and times they are
available
• Viewing request includes the next version of the
tenant passport allowing the agent to prioritise
those tenants most likely to pass referencing
• Tenant automatically receives a text message
reminder to help avoid missed appointments
• System automatically gathers feedback from
tenant after the appointment
• One click ordering from RightmovePlus will
automatically transfer tenant passport and
property details to Van Mildert from the autumn
285. Outlook
Peter Brooks-Johnson, CEO
29Outlook
• Rightmove’s network effects benefiting from a stronger than
expected property market
• Positive trading in June and July, but momentum in the second half
dependent on wider economy and possibility of further lockdowns
• Capital return policy unchanged, all free cash flow to be returned to
shareholders through a mix of dividend and share buybacks when
prudent
• More product innovation on track for delivery in 2020
• The Board has confidence in Rightmove’s long term growth outlook
30
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