Full Year Results
for the year ended 31 December 2018
1 March 2019
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
for the year ended 31 December 2018
1 March 2019
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
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
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
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.
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
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
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
Source: Rightmove
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
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
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
19.9 25.0 Total current assets 42.8 60.1 Trade and other payables (18.1) (38.9) Contract liabilities (2.1)
(13.0)
(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
Full year 2018
Source: Rightmove
8
£ millions
returned to shareholders in the year
shares bought back and cancelled
31 August 2018
market deposits of £19.9m (2017: £25.0m)
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
The three pillars of our strategy:
9
Our aim is to create a simpler and more efficient property marketplace
Making home moving easier in the UK
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
2018 was only 2% lower than 2017
positive momentum
the overall Agency revenue pool is stable
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)
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
same as 2018
Source: Rightmove
11
EU Referendum
Uncertainty is causing hesitation
Source: 1. Google Analytics & Rightmove
12
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
year on year
adoption with 70% of time spent on mobile
with consumers spending 450 million minutes on features such as sold prices
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
Source: comScore (time spent on all platforms)
13
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
Britain moves at Rightmove
14
19,752 20,121 20,427 20,454 10 12 14 16 18 20 22 2015 2016 2017 2018
Thou
sands
Thousands
Source: Rightmove
Agency and New Homes Stable membership numbers
level since 2009, up to 3,126
residential properties on Rightmove
virtually the whole UK property market
15
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
16
Rightmove’s audien ience ce and data data
Growth th package ges The e market ketplace lace Effic icienc iency y tools
Train inin ing g & support
Rightmove enables businesses to be more efficient
Awareness
17
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
18
Embedded in ways of working
reporting and insight software every month
million times in 2018
700,000 unique properties, 50% more than 2017
minutes of training to agents in 2018:
watching live webinars
Hub watching on demand videos
24 Acacia AvenueHelping agents operate efficiently
Innovating for efficiency
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Phase one of the Tenant Passport, “pre- qualification” in roll out
household details
tenant
Contact Bell & Daughter, Tamworth
Send Email
Orchard Grove, Tamworth1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Nov-18 Dec-18 Jan-19
Cumulative Passports Created
20
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:
their first week of marketing when interest is highest
which fall through
reductions by maximising exposure to buyers at a new price point
approximately four times the cost of a single Featured Property
Product innovation
ARPA Optimiser and Enhanced packages
Source: Rightmove
£ per office/development per year 2,000 4,000 6,000 8,000 10,000 12,000 2015 2016 2017 2018
1 up £83 to £1,005 per month
(2017: £922)
membership price increases
ahead of plan with over 1,500 upgrades in the year at an average uplift of over £175
product sales, product innovation and pricing
customers allows more spend on marketing
according to plan
£754 £842 £922 £1,005 per month
21
500 1,000 1,500 2,000 2,500 3,000 2015 2016 2017 2018
Optimiser Enhanced
Customers value efficiency in uncertain times
packages to secure efficient marketing in uncertain times
1 both up 10%
22
Summary
The proportion of revenue spent on Rightmove varies
Source: Rightmove
23
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
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
24
Source: Rightmove
year on year
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
ARPA
innovation to make renting process more efficient
25
Outlook