Rightmove Results Hit Hard By Covid-19 Discounts Despite £61 million Profit

Rightmove has published its results for the six months to June 30th 2020 and for once they will not have shareholders dancing in the streets. Highlights of the results published this morning include:

• Revenue down 34% year on year from £143 million to £94 million

• Profit down 43% year on year from £108 million to £61 million

• Membership numbers down 3.3% since the start of the year from 19,809 to 19,158

• ARPA (average revenue per advertiser) down 34% from £1,077 per month to £712

Commenting on the results, Rightmove CEO Peter Brookes-Johnson said:

“In recent months Covid-19 has disrupted the lives of everyone across the UK. Our customers have shown incredible resilience and ingenuity to continue to trade through this exceptional period. I am grateful for both their continued support and also their proactive engagement to ensure that home hunters have been well informed and protected. I’m also immensely proud of the Rightmove team for the unerring dedication which has seen Rightmove operate seamlessly throughout this challenging period and offer unprecedented support to the industry through discounts and accelerated innovation.

 

“Following the reopening of the housing market on 13 May housing market activity is at record levels, with evidence of new home hunters coming into the market with changing needs as they reassess their priorities and further incentivised by the temporary stamp duty holiday. Rightmove has extended its lead as the place home hunters turn to first for their move. It’s quite incredible that 65 of our record days have been since 13 May. I’m pleased that our customers are choosing to invest in our digital solutions to take advantage of this record demand.

 

“Despite the current strong market we’re mindful that potential economic challenges and further Covid restrictions in the second half of the year make it hard to predict how sustained the increase in activity will be.

 

“Rightmove’s purpose is to make home moving easier in the UK and the restrictions placed on our daily lives because of Covid have shown the value of the innovations we are delivering to better enable this.”

The losses can largely be attributed to the 75% discount offered to agents in light of the lockdown measures enacted in the wake of the global pandemic. Before offering its agent customers the discount period, Rightmove had offered a much-derided deferral of payment scheme and it seems that the portal giant is more than able to withstand the hefty discounts, having made a profit of £61 million despite the concessions.

The two KPIs which may be more indicative of the relative health of the company and which Rightmove shareholders will be keeping a close eye on are ARPA and membership numbers. Having reached the holy grail of over £1,000 ARPA back in 2018, growth in this metric has slowed somewhat in the face of the industry pressure. The same pressure, from groups such as Say No To Rightmove, has contributed to a small but significant decline in the number of paying advertisers. A 3.3% drop, although not yet the surge of dissatisfied agents some had wanted or predicted, is a significant enough figure to get people talking.

However, the fact that a portal company has made a six month profit of £61 million in a time of global pandemic when the entire industry was in lockdown for months should not be played down and is a testament to the rock-solid market leadership position Rightmove enjoys. Brooks-Johnson was also right to highlight the fact that 65 of Rightmove’s best days have come since the end of lockdown. This morning’s press release did not contain any mention of or concession to the pressure groups who had urged the portal to use the opportunity to address its customers on the issue of sustainable pricing. Although it remains to be seen how the stock market reacts to them, these results show that Rightmove does not yet have to lower itself to conceding on anything with regards to its long term pricing.