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Rightmove predicts strong UK housing activity despite drop in revenue

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Suban Abdulla
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Operating profits at the FTSE 100 company dropped by 37% to £135m for the year ending 31 December 2020. Photo: Getty
Operating profits at the FTSE 100 company dropped by 37% to £135m for the year ending 31 December 2020. Photo: Getty

Rightmove (RMV.L) announced it expects a continued robust market activity this year ahead of a possible tax break extension and reinstated dividend payment.

It comes as revenues at the UK's biggest property portal slumped by 29% last year to £205.7m ($287m) compared with £289.3m in the same time in 2019.

Operating profits at the FTSE 100 (^FTSE) company dropped by 37% to £135.1m for the year ending 31 December 2020.

The company has felt the weight of providing a 75% discount to agency and new home customers in April-July at the height of the coronavirus pandemic. It said that annual Average Revenue Per Advertiser (ARPA) fell to £778 per month — a 28% decline.

Britain is poised to extend the stamp duty holiday, which was due to end in April, by three months to 30 June, which could further alleviate any pressure on the housing market.

Last week, prime minister Boris Johnson announced a step-by-step exit out of lockdown, which could see England return to "normal" by 21 June.

Rightmove sees the housing market moving past the impact of COVID-19. “The UK housing market has, for the most part, shaken off pandemic-related challenges to forge an optimistic start to 2021," the company said.

WATCH: What do stamp duty cuts mean for buyers and house prices?

CEO of the company, Peter Brooks-Johnson, remains positive about the firm's outlook despite a challenging 2020.

He said: “We remain mindful that 2021 may bring further Covid-related challenges, but we will continue to deliver our strategy to help make home moving easier, delivering the best solutions to our customers and the most engaging experience for our users.”

READ MORE: European stocks continue sell-off as rate rise fears spook markets

Shares in the company dropped more than 1% to 599.4p on Friday morning.

Chart: Yahoo Finance
Chart: Yahoo Finance

The company advertised over million residential homes, more than anywhere else in Britain, while traffic to its website grew by 31% as users spent 16 billion minutes browsing Rightmove.

“In a year when we stayed in our homes more than ever before, people continued to turn to Rightmove for their next move and for real-time information, helping us to extend our lead in the market,” the CEO said.

Brooks-Johnson added: “The record traffic and enquiries that followed the reopening of the market led to us sending 51 million property leads to our customers.”

The company also unveiled a final dividend of 4.5 pence-per-share, it was due to pay out 4.4pps in 2019, but it was cancelled. "In 2020 we returned £30.1m (2019: £148.8m) to shareholders in the first quarter through share buybacks," the company said.

WATCH: What UK government COVID-19 support is available?