Rightmove’s full year results for 2008, issued today, show that it grew revenue by 31% and profits by 33%, despite the huge slump in the property market – with agents paying more for the service.
But although the report emphasises the market conditions, there are no statistics regarding a fall-off in estate agency numbers on Rightmove. Instead, by combining estate agency and letting agency numbers, Rightmove has been able to show an actual gain of 2,000 agents.
The site does however hint at the likely attrition rate among its selling agents, saying: “We believe that around 20% of estate agent offices have left the industry since the start of the downturn in July 2008. In many, though by no means all cases, these were smaller businesses that always spent less on advertising. Therefore the majority of the overall decline in property advertising spend has come from a reduction in newspaper spending by agents who continue to trade and not as a result of agents leaving the industry.”
It continues: “The overall decline in the number of agents, coupled with a sharp reduction in house building across the UK in 2008, has inevitably resulted in shrinkage in our advertiser base. This had an impact on revenue in the second half of 2008 and will inevitably impact 2009 as we experience the full-year financial consequence of the disappearance of these advertisers.
“Nonetheless, during 2008 we gained more than 2,200 individual estate agent and letting agent offices, with lettings representing an area of particularly rapid growth. Setting aside the substantial contraction in the overall base of agents in the market, the gains in agents far outweighed the loss of agents who remain in business.”
Those agents on Rightmove last year were paying more than ever before to be on the site: Rightmove’s success came about as its advertisers paid an average of 26% more than in 2007, their average fee being £307 a month compared with £243 the year before.
However, its debts have grown from £11.8m in 2007 to £16.9m in 2008.
Rightmove has bought back 11.9m shares at a cost of £45m. It proposes to reward shareholders with a dividend of 10p, up from 8p in 2007.
The company expects to make £5m in savings this year after a restructure which saw redundancies across the business but mainly in its sales operation.
It highlights in the results the success of its Rightmove Choice products, saying these now have more than 30% take-up.
In his chairman’s statement, Scott Forbes said: “2008 was another year of growth for Rightmove despite difficult economic conditions and the worst UK housing market in modern history.
“With new-build starts at an 85-year low in 2008, record low home sales resulting in 2,500 to 3,000 estate agency office closures and widespread job losses, 2008 has been a challenging marketplace. Nevertheless, a combination of clear online market leadership, management dedicated to providing continuously improved customer value and a strong financial position has enabled Rightmove to continue to perform and deliver for customers and home hunters.”
He said that general property advertising spend fell ‘dramatically’ last year, but the compelling benefits of internet advertising benefited Rightmove. Revenue increased from £56.7m in 2007 to £74m last year.
He went on to praise staff, whose numbers were reduced by 23% last November. He said: “I would like to thank our former and current employees for their dedication, performance and the way in which they conducted themselves during this difficult time.”
In the rest of the statement, Rightmove made clear that its market dominance gave its advertisers cost-effective service.
Rightmove hinted that times to come will be tough, conceding that the housing market downturn and the credit crunch will be “too pronounced” to insulate the business.
But it added: “However, we believe the underlying strength of the business, and our ability to invest in marketing and product development in the tough times, will reward us with a substantial share of the industry’s marketing spend as the housing market starts to return towards more normal levels of activity.
“As we start 2009, our objective is to communicate unequivocally to home hunters that we remain the place to look for property and to the property industry that we are the place to advertise.”
The statement added: “We wish to thank all our customers for their loyalty at a time when the dramatic fall in number of housing transactions has led them to reduce staff levels and their other marketing spend to an extent not witnessed in living memory.
“We also wish to express our thanks to the many former Rightmove employees who made such a big contribution to the growth of our business but who also lost their jobs as a result of the collapse of the UK property market.”
Initial stock market reaction to the results was positive, with the shares rising 6% in the first hour of trading.
Record results for Rightmove announced today
27 February 2009
Latest Features
-
Property Natter - Here comes Summer.... or maybe Autumn?
We all know that first-time buyers have had a tough time...
-
Renters Reform? What about the tax bill?
There was a long-awaited return to the House of Commons this...
-
Clarity needed on Leasehold and Freehold Reform Bill report
Last weekend a story by The Sunday Times’ Deputy Political Editor...
Sponsored Content
-
A Market-leading ecosystem for estate agents ...
At iamproperty we are excited to share the announcement of our...
-
Ready or not, the digitally enabled consumer is here...
Changes to consumer behaviour usually arrive in waves. Most of the...
-
Buying a home with battery storage is a 'powerful'...
As domestic battery storage systems become increasingly prevalent in UK homes,...
-
AML warning as hundreds of agents hit with HMRC fines
An anti-money laundering (AML) expert has queried why there is a...
-
Industry Views - Airbnb Crackdown - this time it's not just Michael Gove...
It’s tempting to think that Michael Gove’s proposed clampdown on Airbnb-style...
-
Property Natter - Buyers 'tak' the high road to stronger market
When we talk in general terms about the UK housing market,...
-
Law Society faces backlash over material information forms
The Law Society is facing backlash from conveyancers after issuing new...
-
AML warning as hundreds of agents hit with HMRC fines
An anti-money laundering (AML) expert has queried why there is a...
-
Average estate agent fees hit £4,500 to £10,300 - claim
A new analysis of the cost-of-moving suggests that the typical seller...
60 second interview
Jake Gann, Sales Director at Bamboo Auction
Who are you and what does it say on...
Ashley Day - Director of Bristol Property Centre
Who are you, and what does it say on...
Graham Paterson ‘Co-founder and CEO of Jitty’
Who are you and what does it say on your...
Comments
Well, we have just ditched our franchise on the sales side, our lettings has always been independent. Our Rightmove fee increases from £140 per month to £495 just for sales. We've never used or needed it for lettings. We won't be using it for sales either. The other sites bring us plenty of leads and hard work brings us sales. Rightmove is a sop to vendors. Promote the other sites.
I also agree this site is very anti Rightmove...
Why??
I guess if they help to slag off Rightmove they will get favoured among the its competitors like Find a property and Property Finder against other publications like Estate Agency Times and The Negotiator (who are both the definition of unbiased)
I do agree, this site is very anti rightmove, there should be a fair emphasis out on all portals. If rightmove ever opened up to the public sector, they are going to spend a huge amount of time and effort monitoring peoples details. I have been involved with a couple of sites that allowed private sellers and the infromation that some of them provide is rubbish. Not only will it make the site look completely unprofessional with thousands of incorrect, photo-less details, it iwll also loose the support of many agents. I would imagine that the income that they have from their agents outways the income (as well as the time and effort) that they will receive from allowing private sellers to use the site.
SHEEP! You do talk crap. Rightmove is what makes Rightmove successful. Anyone else spent over £100 million. The fact that they have not allowed private sales and lets on the site in over 10 years should comfort you that they probably won't. But by all means promote sites owned by newspapers who do. Or your own sites as buyers will visit all 20 agents sites in one area (I don't think so), and its so much cheaper to promote your property direct (I still don't think so). Last comment newspaper advertising by agents has decreased by over £200 million pounds in the last 12 months, if Rightmove had not created an alternative the world of agents would be in a bigger mess right now. As I sai before why aren't EAT today writing about Propertyfinder, Findaproperty and Primelocation increasing fees right now?
On we go, make Rightmove stronger. OK, what if they accept private ads, like a newspaper, at considerably more per column inch than you pay for your property adds, that sell the paper and all the other adverts. What you going to do about it? Nothing! because you are so weak you are like sheep, “ I have to be on rightmove”. Go on then keep saying it, what’s to stop them doubling, trebling their fees, setting up a For Sale by Owner section, reselling your data, oh aren’t they doing that? Time to wake up agents, this property business is moving away from you and potentially for ever and you are paying! We are open 7 days a week, we are local, no sale no fee, we have nice colour pics “we are on rightmove”- fantastic USPs, I wonder when we will see the first Rightmove Board on a property?- surely only a matter of time. Sheep, wake up, this is not a go at rightmove, if I was a shareholder it would be, they are missing a massive opportune to harvest you lot!
Did people not move before the internet was invented?
RM is just another leach that feeds off our hard work.
Have faith in yourself and save ££££££
Righmove, Propertyfinder etc like to charge us silly amounts on money for what ? leads that are never closed, well we cancelled most of our internet advertising accounts last year and continue to do so when contracts expire its made no difference to customer confidence, the main item on the agenda for the vendor still remains the same can you sell my house ?
propertyfinder.com is much more effective!
we quit this week saving £650 per month from two offices. owners do one thing for a month or so as follow. direct the email leads to your own mailbox and check out how many are from tyre kickers out of the area simply looking for details with a house to sell not yet on the market.lets push our own sites and bury the portals. too much hot air and constant threats of leaving rightmove but not enough taking the plunge.
I agree with Vossy.
I get a lot from just looking at other sites so here are some snippets I picked up this week.
www.nma.co.uk
Ebay with the help of propertyindex are in advanced talks about launching a private house sales service on their auction site very soon (That helps things right now!)
On property portal watch. the REA group (owners of Propertyfinder) have increased net revenues by 47%!! I also got a visit from the local rep and was told my prices are going up but after a haggle got it down but still a £55 increase!
All of you paying £300 + per branch per month will be glad to know that the big agents pay half or even less than that per branch......
...or Phil Spencer's business going Ts up?
Once again a whole story just for Rightmove! Is this web site being paid by RM to write these articles? As an Agent who withdrew from RM and have seen NO loss of business I cant see what the interest is with RM...why not run a story on the numerous other portals?
TYPICAL we're being BLACKMAILED to stay advertsising under threat of the prices increasing if we left and re-join as have happened to some agents. aGNETS ARE LOSING MONEY AND GOING BUST BUT RIGHTMOVE MAKE MONEY I hope they loose big time in the future
I'm not sure that this Rightmove thing is all it is cracked up to be. I've been into quite a few newsagents and it never seems to be available.
I have to say, their press releases are far too long. I lose the will to live after the 2nd para.
I think agents need to realise (not everyone does) that plc property portals look after their shareholders and need to maximise shareholder value.
Doesn't their e mail system work then. Why do people send enquiries if they are not looking to buy? I guess it could be spam.
Taga who do you work for as the service which you quote has been available for less than 6 months but you have been off for over a year!!! If you want to know who has come off why not go to the site and look for yourself.
Question: how much do Findaproperty pay EAT to not write articles about their prices going up right now? Also I know fact they have lost more members in London than any other. Come on EAT play fair!!!
Rightmove has the most traffic of all portals, that's why is has the most agents. That's why it can charge the most. If anyone else wants to spend millions in marketing, or go back in time and compete when they were developing their brand - then do it. As for sale - not really the time to do that is it, unless they are about to fall off a cliff in terms of results.
If agents have come away from RIGHTMOVE please reply 'RIGHTMOVE IS NOT NEEDED' This should give some indication of fugures.
We have not advertised with them for over a year after they were giving us enquires in East when we where based in West London. The rightmove rep says 'agents were complaining about the level of enquiries', so we thought we introduce 'email all agents' which sends agents duff enquiries 'waste of time' How many agents have come away from right as I just dont believe waht they are saying.
Figures have been massaged in order to sell of business. Why has the debt increased ? I did not think DOMAIN space costed that so much
so rightmove continue to rip off estate agents whilst the industry suffers - good business plan until it all backfires. Oh for those of you paying over £300 month the corporates thank you for maintaining their discounts!
Glad I haven't contributed to that then! Doing just fine with findaproperty and propertyfinder thanks!
How much are the directors pensions worth?