Rightmove is improving guidance as the property portal’s advertising revenue increases

Rightmove has increased its annual guidance on the back of improved advertising revenue, as it saw ‘greater optimism’ among its partners.

Britain’s largest property portal now predicts that average revenue per advertiser (ARPA) will rise by £85 to £95 from last year’s £1,431, up from previous estimates of £75 to £85.

It said the upgrade reflected strong sales and brokers migrating to the premium Optimiser Edge package, now used by more than 3,000 properties.

The London-based company also expects sales of approximately £390 million and an adjusted underlying operating margin of 70 percent.

However, Rightmove believes that overall membership will only increase by 1 per cent, lower than the 2 per cent target, due to a ‘slower than expected’ recovery in new-build developments.

The Bank of England has raised British interest rates fourteen times in a row between the end of 2021 and the summer of 2023 in an attempt to reduce inflation.

Although this dampened house building figures and property prices, Rightmove continued to deliver a healthy performance.

It reported “increased optimism among our partners looking to 2025”, supported by positive house price growth, stable mortgage rates and a “favorable outlook” for additional rate cuts from the BoE.

The British central bank lowered the base interest rate by 0.25 percentage points to 4.75 percent on Thursday, the second cut this year.

Johan Svanstrom, CEO of Rightmove, said: “This has been another period of strong progress for Rightmove, and it is pleasing to see our product development and sales revenues driving greater consumer and partner adoption.

“As a result, we remain confident in achieving meaningful strategic and financial growth in 2024.”

Rightmove’s trading update is the first since a failed takeover bid for the company by REA Group, an online property advertising company backed by Rupert Murdoch’s News Corporation.

REA made four bids, the last of which was worth £6.2 billion; However, Rightmove rejected this final deal as it ‘materially undervalued’ the company and its future prospects.

Anthony Codling, head of European housing and building materials for RBC Capital Markets, said Rightmove’s results are a “testament to the strength, stability and robustness of its business model.”

‘While its clients… often face choppy seas and troubleshooting issues at the mill, Rightmove has a knack for charting calm waters and keeping the ship in good condition.’

Rightmove shares were 0.3 percent lower at 594.8p on Friday morning, meaning they have grown by around 27 percent over the past 12 months.