Rightmove traffic surges ahead of stamp duty deadline

Rightmove’s (RMV) operating profit dropped by almost two-fifths in 2020 on the back of a 75 per cent discount offered to its clients from April to July last year. Yet average revenue per advertiser soon bounced-back following the introduction of the stamp duty holiday in July,  standing at £1,103 in December, compared to £1,083 at the same point in 2019.

Traffic has been propelled by the tax holiday, which is currently slated to end on March 31. The property portal said that it enjoyed its busiest ever January for site visits, and with reports that chancellor Rishi Sunak is preparing to extend the tax break until the end of June, such high levels of traffic could be set to continue.  

While potential buyers currently perusing Rightmove’s website may miss out on completing a deal if the deadline is not extended, the company still seems confident that demand will hold steady in 2021. The board has decided to resume its share buyback programme next month and, having cancelled the final dividend for 2019 and interim payout for 2020, is now recommending a dividend of 4.5p a share. 

Rightmove’s fortunes move in lockstep with the UK property market, so it will no doubt be relieved that this week’s Budget delivered further support for the sector. While the company has acknowledged significant ongoing macroeconomic uncertainty, ultimately, a robust balance sheet and leading market position still make it an attractive holding in the long-run. Buy.

Last IC View: Buy, 661p, 30 Dec 2020