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Rightmove builds market share

Increased competition doesn't seem to have affected Rightmove, but its shares aren't cheap
July 29, 2015

Any worries about increased competition from agency-led onthemarket.com were firmly put to rest as Rightmove (RMV) delivered a strong first-half performance that demonstrated its increasing dominion. The online property website's share of traffic to the top four UK property websites has grown from 77 per cent a year earlier to 82 per cent, according to figures from analytics provider comScore.

IC TIP: Hold at 3,511p

Agency and new homes customers grew by 1 per cent over the period to a record 19,590, with the number of UK residential listings up by 10 per cent at 1.1m. Visits to Rightmove's website rose by 17 per cent to an average of 110m per month, while page impressions were up 13 per cent to an average 1.52bn per month. Crucially, average revenue per advertiser rose by 10 per cent to £740 per month.

Brand awareness among homeowners across the regions of the UK was demonstrated in an independent survey by the Property Academy that found 90 per cent of home sellers expected their property to be marketed on Rightmove. A 16 per cent increase in total revenue was driven by an increase in advertising products as well as membership fee price increases.

Increased marketing pushed up underlying costs from £20.8m to £22.9m, but the group still managed to boost its underlying profit margin from 74.1 per cent to 75.5 per cent.

Analysts at Numis Securities have upgraded their forecasts and now expect full-year pre-tax profits of £142m and EPS of 116p (from £125m and 99p in 2014).

RIGHTMOVE (RMV)
ORD PRICE:3,511pMARKET VALUE:£3.38bn
TOUCH:3,510,3,516p12-MONTH HIGH:3,639pLOW: 1,935p
DIVIDEND YIELD:1.1%PE RATIO:39
NET ASSET VALUE:5.8p*NET CASH:£11.7m

Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201480.458.846.813
201593.166.655.216
% change+16+13+18+23

Ex-div: 8 Oct

Payment: 6 Nov

*Includes intangible assets of £1.4m, or 1.5p a share