Yahoo Finance Rightmove boosts profits as agents spend more on property listings
Estate agents are spending more listing properties on Rightmove, pushing profits at the online company up 12pc since the start of the year despite wider concerns about the state of the housing market.
The company said that its average spend per advertiser was £76 higher in the six months to the end of June compared to the same period last year. Estate agents pay to list their properties on the site.
As a result, pre-tax profits at the online property company jumped 12pc in the period to almost £98.1m, while revenues climbed 10pc to £131m.
Anthony Codling, analyst at Jefferies, said the latest results showed the “power of Rightmove’s business model”.
He added: “Whilst estate agents are facing challenging markets and tightening their belts, Rightmove has raised average prices.”
Peter Brooks-Johnson, chief executive of Rightmove, said a record 1.1 billion minutes per month were spent on the website in the first half of the year, suggesting that the UK’s obsession with house hunting has not abated.
He added: “The continued stable membership numbers and our subscription advertising model, together with the strength of the Rightmove offer for both customers and consumers, give us confidence in delivering expectations for the current year despite muted sentiment towards the UK property market.”
However, membership numbers grew by just 0.5pc over the past 12 months to 20,450 agents and developers, and some analysts questioned whether Rightmove’s growth is sustainable.
Shares in the company were down 2.44pc on Friday to £49.68.
Despite enjoying a 74pc share of traffic across both desktop and mobile property searching, Rightmove has faced stiff competition from new entrants to the sector including OnTheMarket, which listed in February, as well as other listing sites such as Zoopla.
It is also having to battle against a wider slowdown in the property market, particularly in London where prices have been falling at their fastest rate since 2009.
Russ Mould, investment director at AJ Bell, said: “Rightmove will have to think up new ways to engage with its clients and extract more money from them. It will also have to create new ways to help consumers in their quest to find suitable properties. Another possible route could be to expand interests into other industry sectors.”
