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News Story

Rightmove shares take a tumble

Friday 4th December 2009

Rightmove was the biggest faller on the stock market yesterday when its shares plunged on news that Google is to launch into the UK property market.

The chairman of Rightmove, Scott Forbes, made nearly £1.25m on Monday by exercising options and then selling 600,000 shares. He still has 619,000.

Ed Williams, managing director, and Nick McKittrick, finance director, have also recently sold shares. At the beginning of November, Williams made a profit of just over £590,000, whilst McKittrick gained just under £10,000.

Those share sales were just after Rightmove issued an interim management statement and said it had experienced “healthy growth in revenue and strong cash generation” in the four months to October 2009.

Lorna Tilbian at brokers Numis issued a note playing down the threat from Google.

She said: “Google has launched a property site in Australia, and could extend this to the UK in 2010. We believe that such a move would be an attempt to drive traffic through its site, but do not believe that it poses a material threat to Rightmove.

“In our view, Rightmove has a firmly established position as one of the UK’s leading websites and has a commanding share of more than 80% of the four leading property portals. The value added by Rightmove in generating leads is clearly proven, and the cost of the product is a small component of an estate agent's cost base and remains modest in comparison with newspaper advertising.

“We note that Rightmove has proven effective at defending its market position against Globrix/NewsCorp, Prime Location/DMGT and Tesco. We believe that Rightmove’s market position is secure, and have been encouraged by the group’s recent initiatives to drive display advertising.

“We retain our buy recommendation and would view any near-term impact on the shares as a buying opportunity.”

Investors appeared to heed this advice and the shares, which at one point were down more than 15%, rallied off their low to end the day 10% down at £5.

This mornng, Rightmove revealed it bought back 397,000 of its shares yesterday, at an average price of 497.86p, through its brokers Numis.

Since the buy-back programme was first announced two years ago, Rightmove has purchased over 12m of its own shares.

This morning, the price of its shares was little changed in early trading.

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Posted By D on Friday 4th December 2009 13:43:03

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Whether Chris does or doesnt work for rightmove doesnt seem relevant here - he has only pointed out facts which are in the public domain - it took me all of 2 mins to check and clarify. I can't veryify some of the other points on other posts regards figures (wouldnt know where to start) but I was at the very same event where this was presented and was never once lined up as a portal it was about PPC.

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Posted By Steve on Friday 4th December 2009 11:42:17

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Chris can be ignored just seen on othe posts he works for rightmove anyway

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Posted By justanoutsider on Friday 4th December 2009 11:06:21

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Rightmove might be spectacularly upbeat about the arrival of Google in their space. Chairman Scott Forbes is also unequivocal in his message when he sold £1.25m of shares on Monday. How prescient of him to gaze into his crystal bowl and see that his comapny's shares were about to tumble. This man should be running the country - but perhaps not Righmove.

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Posted By D on Friday 4th December 2009 10:51:26

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I guess the reason for selling shares is not anyone elses business really and unfair in someways to speculate why. But if he was worried why would he of retained over 50% of them?

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Posted By robert howard on Friday 4th December 2009 10:46:42

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Chris - why is this poor journalism? Forbes did not have to sell all his option shares, did he?

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Posted By Angus Shield on Friday 4th December 2009 10:36:32

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“Healthy growth in revenue and strong cash generation” - too flipping' right! - we are just about to have our branch subscription arbitraly increased from £175 to £270 - I look forward to strong 'Brand identifiable' alternatives such as Google.

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Posted By Robbo on Friday 4th December 2009 10:23:14

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Rightmove has 80% of the share of the 4 leading portals? !
Surely this is a monopoly postion, and someone should instigate an investigation. Irrespective of what rightmove say, they have the market well and truly stitched up.

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Posted By Chris_Sparrow on Friday 4th December 2009 10:20:32

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This is really poor journalism. As D has already commented on an earlier post, the shares matured that very same day - this is completely normal share selling practice.

I thought EA today was better than this but it appears not.

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Posted By Simon Baker on Friday 4th December 2009 10:20:28

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Propertyportalwatch.com has been tracking the progress of Google's foray into the online real estate game since its launch in Australia in July this year.

As with the UK, many predicted the down fall of the incumbents. However since then, realestate.com.au has gone from strength to strength with traffic up from 4.6m UB's to 5.4m and its market cap increasing 53% to AUD$ 1.07bn.

For Google to be successful, it has to overcome a number of hurdles:
1) Aggregating enough listings to be relevant
2) Ensuring the the listings are of high quality
3) Making the site user friendly - maps arent always
4) Driving traffic to their maps section - it is not promoted on the main search
5) Finding a way to monetise it without losing existing revenue streams
6) They have to drive leads not just clicks

Suffice to say, Mark Twain was right, "the news of my death has been greatly exaggerated"

For more thoughts on Google, check out www.propertyportalwatch.com

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Posted By Michael Brain on Friday 4th December 2009 10:12:51

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why would the main board sell there shares at a day before gooles announcment and making a serious profit, it just shows the commitment to us estate agents is zero and that if the going got tuff, the tuff would get going and leave us in the lurch, surely a show of commitment would be for them to buy more shares, or at least hold on to the ones that they have, it would bedifferent if they were not connected to rightmove and were speculators in the market but they are not.

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Posted By share watcher on Friday 4th December 2009 09:25:52

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... but look how Tom Tom's shares have crashed by over 50% when google announced they were going to offer FREE sat nav within their mapping service. Tom Tom shares have not recovered since the announement mid Sept and now sit at less than 50% from date of announcement. Rightmove should take note.

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