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News Story

Rightmove could be ripe for take-over, says broker

Monday 16th February 2009

An investment broker is tipping the purchase of shares in Rightmove.

Despite speculating on whether there will be a 32%, 50% or 70% drop in estate agency clients between 2007 and the end of this year, Teathers says that Rightmove will still produce profits.

And it says that Rightmove is exposed to a strategic bidder “more than at any other time”.

The report speculates that both the Guardian – which has money to spare since selling AutoTrader – and the owners of The Times could be interested. Both groups already own property portals, and Teathers argues that there is room for all portals to grow, given the migration of advertising from print.

However, with its striking lead in estate agency numbers and consumer traffic, Rightmove looks by far the most attractive.

Teathers says that Rightmove has maintained its lead despite the “considerable resources” of its competition in the form of the Daily Mail, Guardian and News International groups. It also argues that a recessionary period should limit new entrants.

The report adds that Rightmove is not the most expensive of portals, estimating that existing users of Rightmove pay an average £326 a month and new entrants £495. It estimates that typical users of Primelocation pay £519, although their properties also appear on FindaProperty.

The report also bases its buy recommendation on an assumption that there will be evidence “of some form of housing recovery … before the end of the year”.

However, it admits that the main risk to Rightmove is the loss of subscribers.

It is expecting that when Rightmove reports its interim results on February 27, with the full results out on May 6, it will reveal an overall 10% fall in customers, down to 17,400, but a 20% fall in estate agents.

Teathers also expects a further 10% fall in overall customers this year, with a further 15% drop in estate agents.

However, the report also looks at the possibility of a 50% fall in estate agency and developer clients, and a 70% fall. It believes that 50% would be a more plausible worse case scenario than 70%.

Even with an unlikely 70% fall, Teathers says that Rightmove would still be capable of delivering profits.

It also points to the fact that two out of Rightmove’s top six clients are due to renew their long-term agreements this April, but that the rest run until 2010 or later. These top six account for 27% of Rightmove’s total branches.

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Posted By Rightmove - STILL HERE on Saturday 28th February 2009 11:15:00

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QUESTION FOR EVERYONE?

Why is everyone so anti-rightmove and dead against it for making large profits?

The estate agency industyry is worth £6bn a year in fees

If agents don't want to see rightmove and others make large profits why are they in business themselves because surely those agents themselves would like to and/or are making large profits!

My point is that we hate rightmove making large profits i think this is clear, BUT, if we make large profits again in our estate agency businesses we'll enjoy that and if a competitor or customer complained then we would say that's because of our hard work.

if we are ok with building good solid profitable businesses why are we not happy to allow others.

for those that say in commenting that rightmove should only cover its costs and break even - how many of you agents would be happy to lower your fees so that you only ever cover your costs and break even, even in boom times - i think not - no one would want to do any business if there maximum opportunity was they wer eonly allowed to break even - agents would not exist.

SO, agents need to stop having double standards - i they like to make money and a big profit why are they anti profit for others like rightmove and all the others?

comments please....

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Posted By Chancer Groves on Thursday 19th February 2009 20:08:14

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rightmove is certainly ripe for a buy out. The exposure to revenue predominantly from listings limits its revenue options and makes it vulnerable to a significant exodus whether through dissatisfaction or market change. I am not so sure about the underlying value of rightmove to a media group unless it is intertwined with physical publications. Whilst there is scope for this many would consider it a regressive step, particularly for property marketing. Rightmove however remains an extremely powerful brand in the eyes of consumers and users and this where the inherent value of rightmove would seem to exist. rightmove could exploit its position and start accepting advertising to bolster diminishing revenue perhaps funding or in conjunction with a conversion to a free to list portal. In the face of agents jumping ship rightmove may even reinvent itself as a private sale portal – it has the end user recognition to make this transformation a reality. It should not be forgotten that there are a number of non-industry players seeking to break into the estate agency market providing a no thrills low cost based service particularly where it offers a route to lucrative financial and insurance services as well as an effective marketing medium for core products. Who fits this bill? Why Tesco of course after its initial ill fated foray into the estate agency market – it even has its own property development arm in Spenfield. What better way to further its stranglehold on communities by developing mixed use schemes where a supermarket happens to be at the heart of a large residential development. Very green as people will be able to walk to Tesco – now that will appeal to the planners! Better perhaps the devil you know than the one whose only aim would be to destroy the low to mid range estate agency market for its own profits. Still, every little helps!

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Posted By Rightmove Bye bye on Tuesday 17th February 2009 09:16:53

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Rightmove is the Foxtons of the property world. There days are numbered.

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Posted By Brightmove on Monday 16th February 2009 18:32:07

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There will always be subscribers to Rightmove. Fewer Estate Agents will mean less revenue but as the article suggests - Rightmove will still make a profit. Who dares to leave Rightmove may find themselves in a right pickle!

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Posted By phil on Monday 16th February 2009 18:01:58

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Rightmoves daily leads from the public are dropping but leads from our other 2 portals are increasing i think this says it all ourselves and others we talk to will be leaving them soon

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Posted By Vossy on Monday 16th February 2009 12:00:30

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Righmoves fundamental miscalculation is that when they started they had a virtual monopoly however this is not the case now and I predict more, not less, competition in years to come. RIP Rightmove

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Posted By ifonlythey'dknown on Monday 16th February 2009 11:04:37

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With the share price up 30% at £1.95 and still rising it makes someone at Connells decision to bale out and sell up at only £1.50 last year look an increasingly costly call.

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Posted By Jim Parker on Monday 16th February 2009 11:00:27

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Rightmove will; eventually move to a FREE list web portal. It's only a matter of time. The broker has maybe forgotten that if the Estate Agency chain goes out of business never mind 2010 & longterm agreements. They can't pay!!!

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Editorial Contact Details - Rosalind Renshaw | rosalind.renshaw@estateagenttoday.co.uk | 01252 843 566.