Rightmove shrugs off housing market blues to report robust annual result
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Rightmove shakes off the housing market blues with a dividend increase as profits reach nearly £200m despite the slowdown
- Britain’s largest property website said profits rose 6.9% to £195.7m
- Visitor minutes on the platform were still a third higher than before the pandemic
- Rightmove said it was ‘not materially affected by the real estate market cycle’
Rightmove has increased its final dividend after another strong year-on-year performance despite a slowing UK housing market.
Britain’s largest property website revealed that turnover rose 9 percent to £337.6 million last year, while profits jumped 6.9 percent to £195.7 million.
Following the results, it has recommended a final dividend of 5.2 pence per share, an increase of 8 percent from the previous year, bringing the total dividend for 2022 to 8.5 pence per share.
Recovery: Britain’s largest real estate website revealed turnover is up 9 per cent to £337.6m in 2022, while profits are up 6.9 per cent to £195.7m
Trading was robust during the first few months of the year, as housing transactions were supported by a Covid-induced boom in remote working, cheap loans and a desire to live in more spacious homes.
Conditions then began to normalize as successive Bank of England rate hikes and inflationary pressures caused by skyrocketing energy prices began to bite.
The UK housing sector suffered another blow after former Prime Minister Liz Truss’s controversial ‘mini-budget’ sent mortgage rates soaring, seriously eroding consumer confidence.
Rightmove said the number of minutes visitors spent on the platform fell by about 2 billion to 16.3 billion last year as the volume of real estate deals declined amid “a significantly less frenetic” real estate market.
Yet this was still more than a third more than before the pandemic, as the number of advertisers on the platform ticked above 19,000, with a decline in real estate and rental brokers offset by a rise in homebuilders.
Average monthly revenue per advertiser grew 11 percent to £1,314, the second-fastest year of absolute growth, thanks to strong demand for the company’s digital products and membership price increases.
“The strength of our results is a reminder of how effective and integral our new and existing products and services are in helping our customers in both faster and slower markets,” said outgoing CEO Peter Brooks-Johnson.
On Monday, figures published by the Nationwide Building Society showed that house prices in the UK fell 1.1 percent in the 12 months ended February, the biggest annual decline in 11 years.
Two days later, the Bank of England announced that mortgage approvals in January had fallen for the fifth consecutive month to the lowest level since the global financial crisis of 2008/2009.
But even against this more challenging backdrop, Rightmove insisted it was “not materially affected by the real estate market cycle except in the most extreme circumstances.”
It predicts that each advertiser’s average revenue will grow again in 2023 and total customer volumes will be similar to what they were in the second half of last year.
Sophie Lund-Yates, the lead equity analyst at Hargreaves Lansdown, said: ‘While a cooling market won’t directly affect Rightmove, it will impact the brokers it relies on for fees.
‘At the moment things still look healthy in that respect, with price increases as it were a guarantee.
“As the market changes and the number of brokers continues to decline, Rightmove may need to monetize in more creative ways in the future.”
Rightmove Shares were down 2.5 percent to 549.6 pence in early trading on Friday and are down about 18 percent over the past 12 months.