Rightmove continues to grow astonishingly fast by extracting more and more cash from estate agents. Average revenue per advertiser – its key operating metric – rose 20 per cent to £518 per month. Agents seem willing to spend even more than they need to: revenue from additional advertising products – 'premium listings' and the like – was up 53 per cent to £17m.
That's presumably because Rightmove remains extremely popular with house-hunters. It completely dominates its market niche, with an 83 per cent market share of page impressions on the top four property portals, making it Britain's seventh most popular website. And the internet is an ever more popular way of searching for homes – even with flat market share, page impressions on Rightmove rose 23 per cent over the half. Interestingly, this is the same as its top-line growth, suggesting that the company can continue to raise agent fees as long as the internet continues to percolate through the population.
Underlying costs increased by only £1.8m over the period, so profits rose even faster than revenues. In many ways, Rightmove is the dream tech stock, with rapid cash flow growth flowing straight into shareholder pockets via massive share buy-backs and dividends.
Broker Brewin Dolphin expects to upgrade its full-year forecast for adjusted operating profit by 6 per cent to £83m-£85m (£69.4m in 2011).
RIGHTMOVE (RMV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,588p | MARKET VALUE: | £1.68bn | |
| TOUCH: | 1,583-1,590p | 12-MONTH HIGH: | 1,637p | 987p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 15p | NET CASH: | £14.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 47.0 | 28.7 | 20.4 | 7.0 |
| 2012 | 57.9 | 38.9 | 28.6 | 9.0 |
| % change | +23 | +35 | +40 | +22 |
Ex-div: 10 Oct Payment: 9 Nov | ||||
