Full Year Results for the year ended 31 December 2018 Disclaimer - - PowerPoint PPT Presentation

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Full Year Results for the year ended 31 December 2018 Disclaimer - - PowerPoint PPT Presentation

1 March 2019 Full Year Results for the year ended 31 December 2018 Disclaimer This presentation has been prepared by Rightmove plc (the Company). No representation or warranty (express or implied) of any nature is given nor is any


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Full Year Results

for the year ended 31 December 2018

1 March 2019

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SLIDE 2

2

Disclaimer

This presentation has been prepared by Rightmove plc (the “Company”). No representation or warranty (express or implied) of any nature is given nor is any responsibility or liability of any kind accepted by the Company or any of its directors, officers, employees, advisers, representatives or other agents, with respect to the truthfulness, completeness or accuracy of any information, projection, representation or warranty (expressed or implied), omissions, errors or misstatements in this presentation, or any other written or oral statement provided. In particular, no responsibility or liability is or will be accepted and no representation or warranty is or is authorised to be given as to the accuracy, reliability or reasonableness of any forward-looking statement, including any future projections, management targets, estimates or assessments of future prospects contained in this presentation, or of any assumption or estimate on the basis of which they have been given (which may be subject to significant business, economic or competitive uncertainties and contingencies beyond the control of the management

  • f the Company). Any such forward looking statements have not been independently audited, examined or otherwise reviewed or verified and

nothing in this presentation should be construed as a profit forecast. All views expressed in this presentation are based on financial, economic, market and other conditions prevailing as of the date of this

  • presentation. The Company does not undertake to provide access to any additional information or to update any future projections,

management targets, estimates or assessment of future prospects or any other forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation, or to correct any inaccuracies in this presentation which may become apparent. Past performance is not indicative of future results and forward-looking statements are not guarantees of future performance. This presentation is for information purposes only and does not constitute an offering document or an offer of transferable securities to the public in the UK. This presentation is not intended to provide the basis for any credit or other evaluation of any securities of the Company and should not be considered as a recommendation, invitation or inducement that any investor should subscribe for, dispose of or purchase any such securities or enter into any other transaction with the Company or any other person. The merits and suitability of any investment action in relation to securities should be considered carefully and involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of such securities. This presentation is being communicated or distributed within the UK only to persons to whom it may lawfully be communicated, and has not been approved for the purposes of section 21 of the Financial Services and Markets Act 2000. It may not be reproduced (in whole or in part), distributed or transmitted to any other person without the prior written consent of the Company. In particular this presentation is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or

  • regulation. Any recipients of this presentation outside the UK should inform themselves of and observe any applicable legal or regulatory

requirements in their jurisdiction, and are treated as having represented that they are able to receive this presentation without contravention of any law or regulation in the jurisdiction in which they reside or conduct business.

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  • 1. Before share-based payments and NI on share-based incentives
  • 2. Before share-based payments, NI on share-based incentives and no related adjustment for tax customers
  • 3. For Agency and New Homes customers
  • 4. Source: Google Analytics

Revenue up to £267.8m (2017: £243.3m)

+10%

Revenue:

Underlying operating profit1 increased to £203.3m (2017: £184.4m)

+10%

Profit:

Underlying basic EPS2 grew to 18.3p (2017:16.3p*)

+12%

EPS:

Final dividend increased by 0.4p to 4.0p (2017: 3.6p*) making a total dividend of 6.5p (2017: 5.8p*) per ordinary share

+12%

Dividend:

Free cash flow returned to shareholders through dividends and buybacks (2017: £140.4m)

£168.5m

Cash returned:

Stable membership as at 31 December 2018 (2017: 20,427)

20,454

Advertisers3:

Time in minutes up 5% year

  • n year (2017: 11.7bn)

12.3bn

Site traffic4:

Per month, up £83 (2017: £922)

£1,005

ARPA4:

Highlights

3

* 2017 comparatives have been restated for ease of comparability to reflect the 10:1 share split effective 31 August 2018

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SLIDE 4

Revenue

£ millions 192.1 220.0 243.3 267.8 25 50 75 100 125 150 175 200 225 250 275 2015 2016 2017 2018

4

Revenue bridge

£ millions 243.3 20.4 2.1 2.0 267.8 50 100 150 200 250 300 2017 ARPA growth Customer growth Other growth 2018

Revenue

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SLIDE 5

Source: Rightmove

  • 1. Before share-based payments and NI on share-based incentives

5

Costs

1

£ millions

Underlying operating profit

1

144.3 166.2 184.4 203.3 50 100 150 200 250 2015 2016 2017 2018 £ millions 75.1% 75.5% 75.8% 75.9% Margin: 47.8 53.8 58.9 64.5 10 20 30 40 50 60 70 2015 2016 2017 2018

Cost, profits and margins

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Source: Rightmove

Year ended 31 December 2018 £m Year ended 31 December 2017 £m Revenue 267.8 243.3 Operating costs (64.5) (58.9) Underlying operating profit Underlying operating profit margin 203.3 75.9% 184.4 75.8% Share-based payments (4.3) (4.9) NI on share-based incentives (0.4) (1.2) Operating profit 198.6 178.3 Net financial expense (0.3) (0.1) Profit before tax 198.3 178.2 Income tax expense (37.8) (34.1) Profit for the year 160.5 144.1

6

Income statement

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SLIDE 7

Source: Rightmove

As at 31 December 2018 £m As at 31 December 2017 £m Property, plant and equipment 15.2 2.7 Intangible assets 2.9 3.3 Deferred tax assets 2.8 5.7 Total non-current assets 20.9 11.7 Trade and other receivables 22.5 35.1 Contract assets 0.4

  • Cash and money market deposits

19.9 25.0 Total current assets 42.8 60.1 Trade and other payables (18.1) (38.9) Contract liabilities (2.1)

  • Lease liabilities

(13.0)

  • Income tax payable

(16.8) (14.7) Provisions (1.1) (1.0) Total liabilities (51.1) (54.6) Net assets 12.6 17.2

7

15.2 22.5 (18.1) (13.0)

Summary balance sheet

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Full year 2018

Source: Rightmove

  • 1. 2017 comparatives have been restated for ease of comparability to reflect the 10:1 share split effective 31 August 2018

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£ millions

  • £168.5m (2017: £140.4m)

returned to shareholders in the year

  • 25.0m (2017: 22.2m1)

shares bought back and cancelled

  • 10:1 share split effected on

31 August 2018

  • Closing cash and money

market deposits of £19.9m (2017: £25.0m)

  • Final dividend increased by

0.4p to 4.0p bringing the full year dividend to 6.5p (2017: 5.8p1) up 12%

Cash bridge and dividend

25.0 206.8 (6.3) (32.8) (1.7) (114.3) (55.0) (1.5) (0.3) 19.9 50 100 150 200 250 Cash Dec 2017 EBITDA before IFRS 2 Working capital Tax payments Capex Share buy backs incl costs Dividends Lease payments Other Cash Dec 2018

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The three pillars of our strategy:

  • The place consumers ‘turn to first’ and engage with most
  • Offer unrivalled exposure, leads and products for our customers
  • Innovate to create a better marketplace

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Our aim is to create a simpler and more efficient property marketplace

Making home moving easier in the UK

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SLIDE 10

95% 96% 97% 98% 99% 100% 101% 102% 2018 Q1 2018 Q2 2018 Q3 2018 Q4

Year on Year Transactions

The UK housing market is stable

Source: HMRC

10

  • The number of housing transactions in

2018 was only 2% lower than 2017

  • Second half of 2018 showed more

positive momentum

  • Commission rates are unchanged and

the overall Agency revenue pool is stable

  • Two-thirds of our Agency customers also

generate recurring revenue from lettings

1,670 1,613 900 858 886 885 933 1,073 1,219 1,230 1,235 1,220 1,192 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Transactions (thousands)

Housing Transactions 2006-2018 (UK)

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SLIDE 11

0.90 0.92 0.94 0.96 0.98 1.00 1.02 1.04 06 June 2016 13 June 2016 20 June 2016 27 June 2016 04 July 2016 11 July 2016 Index to Week of 6 June 2016

Leads June – July 2016

  • Underlying demand is stable. The time spent on site in January 2019 was the

same as 2018

  • January leads are 10% down showing an increasing hesitation to commit
  • However, history shows the market recovers quickly once certainty returns
  • Lettings market is unaffected

Source: Rightmove

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EU Referendum

Uncertainty is causing hesitation

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Source: 1. Google Analytics & Rightmove

  • 2. Rightmove

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Instant property alerts sent2 Traffic

1

11.1 11.7 11.7 12.3 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 4 6 8 10 12 14 2015 2016 2017 2018 Billions of Visits Time Visits Billions of Minutes

Record engagement, up 5% to 12.3 billion minutes

  • Nearly 1.6 billion visits in 2018, up 4%

year on year

  • Growth driven by continued mobile

adoption with 70% of time spent on mobile

  • Traffic to our research tools grew 8%

with consumers spending 450 million minutes on features such as sold prices

  • We sent over 42 million leads to our

customers, 3% down on 2017 mirroring property market transaction levels

510 638 600 781 200 400 600 800 1000 2015 2016 2017 2018 Millions of alerts

Consumer demand remains strong

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Source: comScore (time spent on all platforms)

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Market share of top 4 property portals

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

Rightmove Zoopla.co.uk Primelocation OnTheMarket

More consumers and more engagement

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SLIDE 14

Britain moves at Rightmove

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19,752 20,121 20,427 20,454 10 12 14 16 18 20 22 2015 2016 2017 2018

Thou

  • usands

sands

Thousands

Source: Rightmove

Agency and New Homes Stable membership numbers

  • Agency branches down 2% to 17,328
  • New Homes developments at their highest

level since 2009, up to 3,126

  • Customers advertising one million UK

residential properties on Rightmove

  • We continue to be the only place to see

virtually the whole UK property market

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Single Branch Single Branch Single Branch Single Branch 2 Branches 2 Branches 2 Branches 2 Branches 3-20 Branches 3-20 Branches 3-20 Branches 3-20 Branches 21-100 Branches 21-100 Branches 21-100 Branches 21-100 Branches 100+ Branches 100+ Branches 100+ Branches 100+ Branches

January 2013 December 2016 December 2017 December 2018

Agency customer size

Customers are resilient

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Rightmove’s audien ience ce and data data

Growth th package ges The e market ketplace lace Effic icienc iency y tools

  • ls

Train inin ing g & support

Rightmove enables businesses to be more efficient

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Awareness

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Source: Rightmove

Decision

0.0 2.0 4.0

Essential Enhanced Optimiser Visibility (index)

Brand visibility on Rightmove

0.0 1.0 2.0 3.0

Essential Enhanced Optimiser Leads (index)

Valuation leads

0.0 1.0 2.0

Essential Enhanced Optimiser Instructions (index)

New instructions

The marketing funnel Performance of Rightmove customers

Average across all customers

Agent conversion performance Rightmove package performance

Consideration

Helping agents win business efficiently

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Embedded in ways of working

  • 90% of agents log into the Rightmove

reporting and insight software every month

  • Spending over 100 million minutes
  • The Best Price Guide was used over ten

million times in 2018

  • The Marketing Report was run on

700,000 unique properties, 50% more than 2017

  • Rightmove has delivered over one million

minutes of training to agents in 2018:

  • Over half a million minutes spent

watching live webinars

  • Half a million minutes on the Rightmove

Hub watching on demand videos

24 Acacia Avenue

Helping agents operate efficiently

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Innovating for efficiency

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Phase one of the Tenant Passport, “pre- qualification” in roll out

  • Includes full property requirements and basic

household details

  • Reduces wasteful repetition for both agent and

tenant

  • Early roll out with no above the line marketing
  • Passport creation rate illustrates demand

Contact Bell & Daughter, Tamworth

Send Email

Orchard Grove, Tamworth

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Nov-18 Dec-18 Jan-19

Cumulative Passports Created

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Featured Property doubles the interest a property receives creating more leads, more sales and more opportunities to win the next instruction

Auto Featured Property will make it easier for larger customers to make the most of their valuable asset – their stock:

  • Automatically features properties in

their first week of marketing when interest is highest

  • Automatically relaunches properties

which fall through

  • Automatically supports price

reductions by maximising exposure to buyers at a new price point

  • Simpler pricing for larger agents,

approximately four times the cost of a single Featured Property

  • Launching Q2 2019

Product innovation

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ARPA Optimiser and Enhanced packages

Source: Rightmove

  • 1. Agency and New Homes customers

£ per office/development per year 2,000 4,000 6,000 8,000 10,000 12,000 2015 2016 2017 2018

  • ARPA

1 up £83 to £1,005 per month

(2017: £922)

  • ARPA growth driven by package sales and

membership price increases

  • First full year of Enhanced package sales

ahead of plan with over 1,500 upgrades in the year at an average uplift of over £175

  • Opportunity to grow revenue through more

product sales, product innovation and pricing

  • Delivering efficiency savings for our

customers allows more spend on marketing

  • 2019 product sales and pricing progressing

according to plan

£754 £842 £922 £1,005 per month

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500 1,000 1,500 2,000 2,500 3,000 2015 2016 2017 2018

Optimiser Enhanced

Customers value efficiency in uncertain times

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  • Record traffic, over 12 billion minutes
  • Resilient customer numbers at over 20,400
  • Record ARPA driven by pricing and customers spending more on

packages to secure efficient marketing in uncertain times

  • Revenue and underlying operating profit

1 both up 10%

  • £168m cash returned in the year
  • 1. Before share-based payments and NI on share-based incentives

22

Summary

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The proportion of revenue spent on Rightmove varies

Source: Rightmove

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Businesses who spend a higher proportion of revenue on Rightmove tend to be newer businesses and greater users of efficiency tools

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Spend on Rightmove as a proportion of revenue

Proportion of branches Proportion of commission pool Agent Commission Spend on Rightmove

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January 2010 January 2014 January 2018 January 2019

£1000/m+ £1500/m+ 56% 45% 9% 19% 14% 1%

Percentage of Independent Estate Agency Offices Total spend per month

Driving efficiency drives growth

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Source: Rightmove

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  • Underlying housing demand unchanged with traffic stable in January

year on year

  • Political and economic noise leading to consumers hesitant to commit
  • Overall membership stable in January. Continued uncertainty and

tenant fee ban may impact the viability of small numbers of agents at the margins, conversely tighter market increases number of new home developments advertised

  • Efficiency of Rightmove advertising continues to support growth in

ARPA

  • Rightmove Tenant Passport phase one – “pre-qualification” a focus on

innovation to make renting process more efficient

  • Confident of meeting our expectations for the year

25

Outlook