Property listings site Rightmove (RMV) was one of the top risers in the FTSE 100 this morning after seeing a stronger than expected recovery in the housing market.
Its shares gained over 9% to 630p after the company said home hunter demand has been strong since its customers started re-opening their businesses from 13 May, supported by changes in consumer needs and the recent announcement of temporary stamp duty holidays across the UK.
Results for the six months to 30 June revealed a 43% pre-tax profits plunge to £61.6 million, as revenue slid 34% to £94.8 million, which came as Rightmove offered customers a 75% discount for April, May and June.
Average monthly revenue per advertiser (ARPA) fell by £365, or 34% year-on-year, to £712 compared to £1,088 during 2019. The company also chose not to pay an interim dividend.
ADVERTISER NUMBERS REMAIN RESILIENT
But those figures and scrapping the dividend were already anticipated by the market, and what was of more interest was that the company’s advertiser numbers remained more resilient than expected.
Membership was down 3.3% since the start of the year to 19,158, compared to 19,809 at the end of December, reflecting a 3.5% decline in agency branches, together with a 2.1% fall in new homes developments.
Its number of branch based agents remained resilient with a decline of just 300 (2%) since the start of the year, while the second quarter saw a decelerating trend in branch closures with agency branches and new homes developments being net positive in June.
The company also experienced continued traffic growth, with visits up 5% on a year ago.
CHALLENGES AHEAD?
Despite the current strong market, Rightmove chief executive Peter Brooks-Johnson said the company is ‘mindful that potential economic challenges and further Covid restrictions in the second half of the year make it hard to predict how sustained the increase in activity will be.’
While AJ Bell investment director Russ Mould noted Rightmove’s lack of dividend as he questioned whether the firm can continue its momentum.
Mould said, ‘Rightmove’s ability to keep eking out more from agents was already facing strain ahead of the pandemic and having offered discounts at the height of lockdown, there will be much focus on its ability to return to pre-Covid pricing structures without losing a significant number of subscribers.’
