Rightmove has embarked on a £23m share buy-back programme as its share price yesterday hit a record high.
The shares finished at £45.42p, having earlier hit a new high of £45.57p.
The price has powered up by £5 since the start of last month and first hit a new closing high on December 13. After a minor retreat they have now continued their relentless rise.
The share buy-back move comes during its close period, ahead of publication of its results for the calendar year on February 23.
Earlier this week the firm announced its intention to buy up to 511,111 of its own shares worth up to a maximum of £23m. Rightmove is paying the full market value.
Rightmove’s share price puts its current market capitalisation at more than £4.1bn.
At its flotation in 2006 it priced its IPO at 335p, making it then worth £425m. The price, seemingly huge at the time, was followed by the housing crash which wiped millions of value off Rightmove, while there were also early investors who cashed in too soon.
Investors who missed out famously include Connells, the estate agency group owned by Skipton Building Society, which sold its 18% stake in Rightmove in 2008, raising some £32.55m when Rightmove shares were priced at 155p – a fraction of today’s price.
Rightmove has been buying back its own shares since 2007 and the scale of the latest share buy-back fits what it has done latterly in previous years before results are announced. However, its sheer scale looks unprecedented.
Companies buy back shares for many reasons, including where they simply have too much cash but cannot see where to invest it in current expansion opportunities, or where they want to take advantage of perceived under-valuation.
Rightmove’s current valuation looks to leave others trailing by vast margins.
For example, yesterday Purplebricks shares closed at 435p, valuing the company at over £1.1bn.
Shares in ZPG, which operates Zoopla, were trading at 335p at yesterday’s close, giving a market capitalisation of just under £1.5bn.
OnTheMarket announced its stock market flotation in December and is expected to raise around £50m of new capital when it debuts on AIM, raising questions as to whether this will be nearly enough.
Comments (10)
Having seen a major demonstration of the Beta model, I honestly do not believe it an exaggeration when I say that when other agents see what Robert has been building, they will view the event in retrospect in a similar light to how Rightmove changed the world of agency when they first launched but with one major (positive) difference.
I can’t wait, Chris!
What a bunch of suckers estate agents are collectively to have allowed this ludicrous state of affairs to evolve. We line Rightmove’s pockets with one hand while the failing market takes what’s left from the other.
Bigger fools us.
As others line yours – it’s all relative. Stop living in the 1980’s and making out you are the poor guy in Rightmove’s success for goodness sake.
It does make you wonder how long portals can keep increasing prices each year, what more can they add? Makes me think of apple and their iphone X pile of youknowwhat, when will the tide turn?
06:30 11th January 2018
Can I be part of it now (this week) Robert?
Nice to hear just as we are about to receive our annual 1st March price increase
Maybe investors must be anticipating another round of rate increases, can’t be far away.
VERY impressive!