Rightmove this morning announced large rises in both revenue and profits – and the retirement of boss Nick McKittrick.
The giant portal, giving its results for last year, announced a 15% leap in revenue to £220m.
Operating profits were up 18% to £161.6m. Its profitability rose to 73.45%, up from 71.42%.
Overall advertiser numbers, including both agents and developers, were up 2%, standing at a record 20,121.
Between them, they advertised 1m UK residential properties, one third more than any other portal.
Average revenue per advertiser stood at £842 per month, up £88 on 2015, and with every sign of further growth.
Rightmove said: “Average revenue per advertiser (ARPA) growth will continue to be driven by increased product penetration, pricing and innovation and is underpinned by the value of our unrivalled audience and data, our substantial product inventory and our culture and track record of innovation.
“To put the immediate advertising opportunity into context, the ARPA for newspapers back in 2007 was circa £2,500 per month compared to our 2016 ARPA of £842 per month and this is before we consider further growth in marketing spend and the business efficiencies that customers gain from using Rightmove.”
Traffic to the site was up 10%, averaging over 120m visits per month throughout last year, with time on site up 5%, to nearly 1bn minutes per month.
Chief executive McKittrick said that Rightmove was “the only place you can see almost the entire UK property market”.
He said: “Our continued innovation and audience growth is delivering even greater exposure for our customers’ brands and properties.”
McKittrick is to stand down as both CEO and as a board director in May, staying on until the end of June to ensure a “smooth transition process”. He has been with Rightmove for 16 years and will be succeeded by Peter Brooks-Johnson, chief operating officer and a board director since 2011.
Comments (45)
From the CMA website
Businesses abusing their ‘dominant position’
This is another mayor type of anti-competitive activity be businesses that you can report to the CMA.
A business might have a ‘dominant position’ in the market if:
A) It has more than 40% market share
B) It’s not affected by normal competitive restraints
It might be abusing a dominant position if it is unfair to customers or other businesses.
Making a formal complaint is easy, just follow the link
https://www.gov.uk/government/publications/report-anti-competitive-or-market-issues-to-the-cma
I for one have already complained. The more the merrier.
Thinking aloud; one way to manage and control RM and its behaviours would be to buy it. At current stock prices it would cost the equivalent to £186,000 per agency business in the UK.
Cheaper still to create a competitor that could and would compete on a level playing field…..
The truth of the RM matter is;
An oligopoly exists in the market (RM & Zoopla) and as such price increases for its products will not adversely affect demand for its services.
RM have a duty to its shareholders to grow revenue and profits, they are not a charity.
The situation is exacerbated by the near complete inability of the agent community or other portal player to get its act together in an effective way to compete with the duopoly/oligopoly.
As someone pointed out, historically agents spent typically £2.5K per month on print therefore there is still a lot of room for revenue growth for RM, dragging Zoopla along as prices increase. Why else are investors willing to pay £30 for every £1 of profit currently for RM shares. (p/e ratio of 29.6).
Answer: investors can see the potential for growth going forward.
OTM was a mediocre attempt at addressing this market issue but failed because of its fear of open competition via the OOP rule.
OTM hasn’t failed it is 2 years into the first 5 years phase of its existence, any project or product evolves. From where I am sat OTM doesn’t have the legacy issues of ZPG to deal with and doesn’t have the fear of breaking itself of Rightmove.
Once the court case is out of the way, everyone will have learned lessons and those that can will move forwards.
“OTM was a mediocre attempt at addressing this market issue but failed because of its fear of open competition via the OOP rule.”
Surely if OTM “feared competition” as you suggest, then the OOPR – which actually made it HARDER to get Agents on board due to their existing arrangements – was restrictive upon THEMSELVES from Day #1 and was actually the bravest thing they could have done?
REPOST OF MY ORIGINAL POST FROM 26 FEBRUARY 2016
“OKAY… So lets look at these winning figures and the claims from those chucking the banana skins around that it’s all OTM’s fault that RM are steaming ahead of the game, shall we?
ADVERTISER NUMBERS:
2010: +2%; 2011: +1%; 2012: +0%; 2013: +4%; 2014: +5%; 2015 +2%
LOWEST % GROWTH FOR 3 YEARS
REVENUE PER ADVERTISER:
2010: +23%; 2011: +17%; 2012: +19%; 2013: +15%; 2014: +13%; 2015: +10%
LOWEST % GROWTH FOR AT LEAST 6 YEARS
REVENUE:
2010: +26%; 2011: +19%; 2012: +23%; 2013: +17%; 2014: +20%; 2015: +15%
LOWEST (JOINT) % GROWTH FOR AT LEAST 6 YEARS
UNDERLYING OPERATING PROFIT:
2010: +39%; 2011: +23%; 2012: +26%; 2013: +19%; 2014: +20%; 2015: +16%
LOWEST % GROWTH FOR AT LEAST 6 YEARS
UNDERLYING OPERATING MARGIN:
2010: 69.4%; 2011: 71.5%; 2012: 73.3%; 2013: 74.3%; 2014: 74.6%; 2015: 75.1%
% STILL INCREASED DESPITE OTHER KRA DECREASES
Anybody else, like me, wonder what these figures WOULD HAVE READ if OTM hadn’t stepped in and p!$$ed on the RM firework?
And anyone care to forecast what they will be in 12 months time?”
SO… the answers are now out – and here they are:
ADVERTISER NUMBERS: +2%
REVENUE PER ADVERTISER: +11.6%
REVENUE: +15%
UNDERLYING OPERATING PROFIT: +15%
UNDERLYING OPERATING MARGIN: 75.5%
Reads very similar to a year ago – KRAs ALL under those from pre-OTM period EXCEPT the Operating Profit Margin.
Funny, that…
Oooh, I do love a good stat. Cracking work PeeBee.
Until we as agents come together rightmove will keep ripping us off. They keep using the “if you increase you yearly spend, your rates wont go up” not this time!
Fact: rightmove exist because of agents but sadly we agents don’t stick together when it comes to these sorts of matters. Why are we not outside rightmove HQ protesting to this? the end consumer goes to rightmove because almost every agents listings are there, where would rightmove be without OUR stock, which we PAY to have listed!
RM spends very little in terms of marketing, hence the eye watering profit margins (which is every agents hard earned commission). why do we not do anything about this? what is it that prevents us from taking action? Personally, I think rm have done their numbers and known due the market conditions there maybe branch closures and this hike in rates is going to makeup for those! otherwise, why risk rates hikes in what is likely to be a tough market..oh wait it’s because they know we agents will do nothing about it!
There really needs to be a serious structured approach to addressing this issue otherwise we’ll be paying 3/4k per month to list there. Sodding Am really below it but again they were not in it for the agents! Now where’s that rm rep of mine….
That’s what happens when you’re number 1, you have the luxury of making money and demanding more…little help to those on the streets trying to sell houses with limited stock.
You just keep on growing Rightmove! We’ll be fine…
‘the ARPA for newspapers back in 2007 was circa £2,500 per month compared to our 2016 ARPA of £842 per month’
THIS is why rates will continue to increase, they believe they represent astonishingly good value for money.
I, for one, welcome our new online overlords.
That comment did make me laugh!
HA! Excellent 🙂
It is what it is now….and will be forever.
I think if RM allowed private listings for £495 we would still roll over (sorry bend over).
Lets just hope the outcome in the ZooCon -v- AM goes the right way.
Out of interest what is the ‘right way’ and why?
AM win. More Agents Join. Agents decide OTM is the only portal required (of their own accord!!) Bing bang bosh!
Move over Rivero and let Gibbo play on the keyboard..
Oh OK, that all sounds feasible – where do I sign?
Rivero… you have to be an Agent to sign….
come on you know that. Honestly what are you like.
I prefer your tantrum type responses. X
I assure you I am an agent, a weak one by your definition.
I console myself with the 25K in our bank rather in the bank of expensive lawyers fighting a case that doesn’t matter.
Play nice, kids.
Meanwhile Agents Mutual spend their members’ investment fighting spurious court cases.
Agents Mutual = literally one of the best things to ever happen to Rightmove shareholders.
This is possibly the oddest post ever Rivero!
You can criticise OTM for many things, but they were the ONLY thing that have even attempted apply a brake to Rightmove and frankly I don’t see anything else trying to do that. If they haven’t achieved that yet and you want to blame someone, then blame all the agents who haven’t joined in to try and make that happen!
Oh unless of course you think agents should have continued to support Zoopla who were their closest rivals, because if that had been the case, you’d be reading about TWO companies announcing huge rises in profits today!
So you don’t think OTM weakening Zoopla has strengthened Rightmove’s ability to increase fees then?
And you don’t think that OTM investors are being betrayed by Agents Mutual in having their investment spent on court cases rather than marketing etc?
An absurd and ill conceived concept is an absurd and ill conceived concept regardless of how honourable it’s ambitions.
Agents Mutual reminds me of Blair and his dodgy dossier…on the face of it maybe well intended but just made everything 10 times worse.
You are completely correct Rivero.
My RM fees had never increased since 2001.
They reduced them in 2009 to 2011 as they recognised times were tough.
Only in Jan 2015 did they hike it…..
OH NO WAIT it was ONLY in 2015 they fixed mine for 2 years after 14 years or so of Yr on Yr rises…… no doubt a double rise will now be due this year…. as they now know the braver agents were outnumbered by the weak and OTM is no longer a threat.
ZooCon have become the issue.
I think you confuse bravery with naivety.
Tell you what Rivero…
Give me a simple summary of 2001 to 2017 RM profit and fees to agents.
If you can show me anything to suggest the entry of OTM has been the reason for an increase in fees you win your point.
Just spouting OTM are the reason is utter tosh without the evidence.
OTM will become a factor if they do not succeed and get the support…that is fact… but that support is in the hands of the industry.
I don’t care about winning my point, or how many douches click on the ‘thumbs down’, OTM is garbage and that’s why it won’t get the support, nothing to do with ‘bravery’.
The perfect response in true Kevin n Perry style. (You may not be old enough to remember).
Even I clicked ‘thumbs up’ on that. You are right this debate does seem to bring out the juvenile in me. I find it frustrating that what I see as plain as day cannot be seen by so many others.
“OTM is garbage and that’s why it won’t get the support…”
Come on then, Rivero – explain why it’s “garbage”.
Christ you people don’t half try and tear each other apart…no wonder the industry is facing such hard times – no solidarity between agents, just individual point-scoring at the expense of the bigger picture.
Still, lovely weather we’re having.
Because it hasn’t hit any of it’s targets or achieved any of it’s goals, and it is currently embroiled in an undignified court case spending money invested by it’s members to grow the model. It is an abject failure. If you are not ready to acknowledge that yet, fine, but it doesn’t stop it from being so.
But it is the largest group of independent agents that has ever joined together in a commercial venture, it is learning curve for everyone. It isn’t sensible to throw in the towel just because some things didn’t go so well or as planned.
The court case was necessity, expensive but in my opinion valuable as a lesson for the future.
If AM and OTM is rubbish no-one wants I’ll have it and will build it into something agents not only want to join but have to join.
Rivero: “OTM is garbage and that’s why it won’t get the support…”
Me: ‘Come on then, Rivero – explain why it’s “garbage”.’
Rivero: “Because it hasn’t hit any of it’s targets or achieved any of it’s goals, and it is currently embroiled in an undignified court case spending money invested by it’s members to grow the model.”
Sorry, Rivero – but NONE of that is a passable attempt at explaining your original comment.
How’s about you give it another go – if I may be as bold as to suggest this time trying a bit harder in order to avoid certain cynical sorts thinking you’re a bit of a numpty…
RM are masters at 15%/22% annual revenue increases.
With near agent saturation their growing focus will be to tap into increased comsumer visitor revenue opportunities.
Agents property stock is very key to keep Joe Public visiting to engage new revenue sources.
RM should be paying the agents 🙂 for all that lovely stock they keep adding.
73.45%!!…they really have got us by the nuts haven’t they? The monster just keeps getting bigger, and just keeps taking the p*%s.
Great results. Continued innovation is mentioned twice and will certainly be needed by Peter Brooks-Johnson to keep the share holders happy. Good luck!
Let’s hope the legacy left at the retirement of the next CEO isn’t an insignificant company upsurged by an agressive ‘online lister’ it allowed and encouraged to once market on its portal, but whom gradually became far more powerful than it was…..the google yahoo syndrome!!!!!
73.45% NET margin. Happy with that?
Happiness is 73.45% net. However, forward performance to maintain that margin plus increasing revenues will need a great U.S.P.
How about real time prospecting products?
How about real time instant alerts for prospecting?
How about rating agencies on performance as an additional ‘Optimiser’ product?
Is it just me or are these USP’s now covered?
Time for an increase in fees then, oh wait I’ve just had the letter through Thanks RM
Me too! Funny that, disgraceful really…….
Dear estate agents, this return on capital at 73.4% is at your expense. Very very few businesses can make that claim and why the stock market loves them. Vote with your feet, OTM has issues but ultimately, take out all the noise from those who are against them, its about protecting our data which draws the public to the RM and Zoopla…your money makes them wealthier whilst we all get squeezed. Joined up thinking for the long term!
Now here’s a contrarian view and something that Robert May and others could help with, how many of the visits to the portals are from estate agents looking for instructions to tout….take those visits out…I suspect that would be an interesting read and would put a cat amongst the pigeons!!
Robert would point out that Rightmove (and Zoopla and On The Market) are obsolete technology anyway and Portals 2.0 will be based on veracious searching.