Rightmove shares have soared since its announcement on Friday of half-year results which highlighted an 11% fall in revenue but only a 4% fall in profits.
Its performance was mainly due to cost cutting – and partly down to charging advertisers more to list their properties.
The results have gone down well with the City – but have left its rivals wondering where they can go next to challenge the leader, and giving the Connells management bald patches as they tear their hair out in frustration, having sold their Rightmove shares last December.
Analyst Keith Bowman, of Hargreaves Lansdown Stockbrokers, said: “Rightmove has announced impressively resilient results. The move to online adverting remains at the core of the group’s success, whilst management has acted quickly to cut costs. Furthermore, whilst the number of home sales has fallen, advertising in relation to the rental market has clearly counterbalanced the downturn.
“Finally, the group’s brand strength and established market position is proving hard to match, with rivals such as Property Finder recently retreating.
Overall, Rightmove is underlining the strength of its business model, with the current difficulties in the property market even serving to elevate its long-term success.”
Overall, Rightmove is underlining the strength of its business model, with the current difficulties in the property market even serving to elevate its long-term success.”
He added: “Management and the business are proving their worth, with profit forecasts likely to be upgraded and consensus market opinion growing increasingly more favourable.”
The results also highlighted the fact that 50% of estate agents on Rightmove now also advertise lettings – up from less than 20% two years ago.
Rightmove’s Miles Shipside, the commercial director, also pointed out that the recession had ended a 50-year local newspaper habit among estate agents. In the last year, 86 local weekly papers have closed, according to the Newspaper Society.
Comments
Wooden Top.
Thank goodness there are agents out there that are looking ahead and can see sense.
If only there were more out there like you and I that understood the value of what we give to RM.Without us they are nothing,but do they appreciate that fact!Unlikely the way they treat us.I sometimes think we are nothing but pariahs to them.
Feed the hand that bites, how very true. Once Rightmove have the market, they can change over to private listings .... end of Estate Agency as we know it and yet it is the estate agents that Rightmove needs, so wake up, not the other way around! Rightmove will only go in the direction it is profitable for shareholders. Don't when it's too late, say I didn't tell you so.
As more and more local papers close so Rightmove will get stronger.They know they will be able to continue to up their fees year on year to satisfy their shareholders.None of who are Estate Agents now.
Findaproperty and Primelocation (Digital Property Group owned by the Daily Mail) will undoubtedly do the same to try and make up for lost revenue from the fall in newspaper sales.
As you all continue to make Rightmove stronger and stronger they may even decide in the future to take private listings,especially as it is us that keep telling the public how important it is to be on Rightmove,watch their shareprice soar then.
Wait for the bubble to burst. Interesting that brokers see a loss as way to push up shares. They did the same with the banks and we all know what happend next. Shareholders will probably sell out before the prices fall.