We've expressed concern in the past with Rightmove's business model given the competition it faces from next-generation sites that don't charge estate agents to advertise, including the mighty Google. However, it is undeniable that the granddaddy of property websites continues to keep the young tykes at bay for now.
In the first six months of the year, Rightmove not only captured more UK property hunters' mouse clicks (up from 80 to 82 per cent of all page impressions on the four biggest property websites), but it also increased average spend per customer by 20 per cent to £365 per month, as estate agents spent 89 per cent more on additional advertising products. Despite low property transaction levels, there was a 7 per cent increase in advertiser numbers. Smaller developers are a notable area of weakness, though.
A £15.2m first-tranche payment of a potential £19.1m on the sale of its 67 per cent stake in a holiday letting website helped boost strong cashflow. Dividends will continue to rise with underlying operating profits but have been rebalanced for a bigger first-half payout.
Broker Investec forecasts full-year profits before tax of £52.2m and EPS of 36.9p (from £38.4m and 27.2p in 2009).
| RIGHTMOVE (RMV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 620p | MARKET VALUE: | £710m | |
| TOUCH: | 619-620 | 12-MONTH HIGH: | 724p | LOW: 464p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 21p | NET CASH: | £22.9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 31.2 | 17.6 | 11.6 | 3.00 |
| 2010 | 39.2 | 24.5 | 16.4 | 5.00 |
| % change | +17 | +19 | +21 | +50 |
Ex-div: 13 Oct Payment: 12 Nov | ||||
