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TODAY'S OTHER NEWS

Rightmove 'may drop out of FTSE-100 within days'

Speculation is growing that Rightmove could drop out of the prestigious FTSE-100 within the next few days as the stock exchange index undergoes a reassessment of entries.

The financial services publication Mortgage Strategy cites investment advisory service the Share Centre as saying Rightmove is in pole position to drop out of the FTSE-100 as a result of the portal’s recent share price dip and longer-term uncertainty over the housing market and the wider economy.

Such a move is not in itself a critical reflection of the portal or its future prospects; other currently-listed FTSE-100 companies named as facing possible removal from the index is Direct Line, Royal Mail and Marks & Spencer.

The FTSE-100 consists of the 100 largest companies by market capitalisation listed on the London Stock Exchange; the level of the overall FTSE-100 index is measured on the basis of the total market capitalisation of its entries, as well as the index value, so there is a vested interest in reviewing entries to ensure only the largest firms are included. 

Companies dropping from the FTSE-100 then typically go into the FTSE-250 - this is not, contrary to popular perception, the top 250 companies - it is in fact the ‘next largest’ 250 companies after those in the FTSE-100. 

Despite the possible change of status, Rightmove remains hugely successful: it floated on the London Stock Exchange on March 15 2006 and in recent years has reported an increase in both profits and revenue.

However, market analysts have expressed growing concern over the long-term future of portals such as Rightmove.

At the end of July we reported that international portal analyst Mike DelPrete was raising question marks over the long-term profitability of Rightmove under its current strategy; at the start of August, investment service Berenberg cut its rating on Rightmove shares to 'buy' from 'hold' and cut its price target for the share.

"We have for some time been of the view that a business model so reliant on price increases is ripe for disruption” Berenberg analysts said at the time. 

"Clearly, Rightmove has built a position whereby it has strong pricing power and highly recurring revenues ... However, with traditional agents margins under pressure from a whole host of structural factors, macro uncertainties and increasing competitive pressures we believe the current share price and consensus estimates fail to appropriately reflect reality."

  • Simon Shinerock

    To simplify, Portals were great because they made it simple for consumers to find Property and agents, they were also great because they provided a simple way for agents to advertise on the web. Things however move on, consumers and agents are more savvy now. Local property markets are hyper local, which means national portals aren’t really that relevant to your local property search. Consumers are realising that local agents have access to new instructions which they can call and send out to pre qualified applicants before they go to portals. The serious ones are therefore increasingly registering with agents again. Equally, agents are starting to build up huge databases of local people and are beginning to be able to promote properties quite efficiently without the portals and then there is the ubiquitous Facebook and google to fall back on where needed. I’m not saying that Rightmove is going to fail but it will have to evolve, much like Zoopla is evolving and become a broader based company if it is going to continue to really prosper. One day it will realise it can’t keep putting up its prices and at that point it’s prices will begin to fall. It’s a cycle and this one is past its zenith

  • Phil Hathway

    It would be so easy for RM to offer a back office CRM system to add value for money and perhaps some loyalty. It's all over the internet that people are reducing their spend on RM.
    They aren't just biting the hand that feeds them they're chewing it off!!

  • Babonday Brian

    Rightmove are killing their own customers by allowing payanyway agents on the portal. rightmove have bitten the hand that feeds....good job on the market don't know how to market themselves or they would be in trouble.

  • John Evans

    rightmove only respect profits, not their customers. their smoke and mirrors style marketing to play agents off against each other is crumbling. agents need to use rightmove as a tool not as their main weapon.

  • Tony Sinclair

    I will make one of my 'Out There' Predictions where most folks chuckle until they manifest into reality.. Like the 2008 and crash for instance... to name only one.

    In 2019 AD, Rightmove will enter a do or die phase caused new competition from hybrid portals who are more user friendly and affordable. One of which will rise from seemingly nowhere to become a serious competitor. Let's say it's more of a 'new concept. than an actual company per se. Plus technology not yet available will play a major part.

    That's when Rightmove will shock the industry and rattle it's very foundations with a massive groundbreaking change. It will have no choice because it will simply will not be able to compete in it's present state or form. And so it will come to pass that Rightmove will attempt to capitalise on it's name and database before it's too late by launching a new model.

    It will reinvent itself by opening up it's portal to the property selling Public leaving the 'Agent Only' portals to slog it out between themselves for the empty Property Portal Throne. Whether they will they be wasting time and resources on this distraction is another story for another day.

    This move by Rightmove will have a serious domino effect on the industry in general. Especially if it works and turns around it's ailing fortunes. The answer to that my friends is blowing in the wind.. so will remain a secret for the time being.

    Now before you laugh and mock at my Future insight, think deeply first and partake of logic and wisdom because the world is changing and changing fast.

    Therefore while agents and the like preach about Rightmove et al having to update and change in order to stay at the top, maybe they should look to put their own houses in order first for when those changes come. Because if something like this happens... which it will... Estate Agencies Hybrid or otherwise will suddenly become less of a necessity to the public.

    Especially when said public can suddenly cut out the middle man and save money while having more control over the sale of their property.

    So you see my friends, never underestimate the speed and effectiveness of new technology and a new breed of ambitious entities who are more tech savvy than we can ever hope to be.

    And never laugh or mock something that could possibly happen in the future just because it sounds uncomfortable to you. Remember, this.

    Some of us can see what you cannot see yet, so take it onboard whether you believe it or nay because Knowledge is Power and you never know when you may need it...

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    A huge amount of wisdom here.

     
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    Rightmove still makes profits, it’s still used by buyers and sellers week in week out... the only way is up.

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