Full Year Results for the year ended 31 December 2017 Disclaimer - - PowerPoint PPT Presentation

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Full Year Results for the year ended 31 December 2017 Disclaimer - - PowerPoint PPT Presentation

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23 February 2018 Full Year Results for the year ended 31 December 2017 Disclaimer This presentation may contain forward- looking statements, including forward - looking statements within the meaning of the United States Private

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Full Year Results

for the year ended 31 December 2017

23 February 2018

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SLIDE 2

This presentation may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future

  • performance. Because these forward-looking statements involve risks and uncertainties, there are

important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Further details of potential risks and uncertainties affecting the Group are described in the Group’s filings with the London Stock Exchange including the Prospectus. These forward-looking statements speak only as of the date of this presentation. This presentation and a press release will be posted on the investor section of the Rightmove website.

Disclaimer

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SLIDE 3
  • 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
  • 3. For Agency and New Homes customers

Revenue up to £243.3m (2016: £220.0m)

+11%

Revenue:

Underlying operating profit1 increased to £184.4m (2016: £166.2m)

+11%

Profit:

Underlying basic EPS2 grew to 163.3p (2016:142.8p)

+14%

EPS:

Final dividend increased by 4p to 36p (2016: 32p) making a total dividend of 58p (2016: 51p) per ordinary share

+14%

Dividend:

Free cash flow returned to shareholders through dividends and buybacks (2016: £131.3m)

£140.4m

Cash returned:

As at 31 December 2017, up 2% (2016: 20,121)

20,427

Advertisers3:

Time in minutes flat year on year (2016: 11.7bn)

11.7bn

Site traffic:

Per month, up 10% (2016: £842)

£922

ARPA3:

Highlights

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SLIDE 4

Revenue

Revenue

£ millions 167.0 192.1 220.0 243.3 25 50 75 100 125 150 175 200 225 250 275 2014 2015 2016 2017

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Revenue bridge

220.0 19.6 2.9 0.8 243.3 50 100 150 200 250 2015 ARPA growth Customer growth Other growth 2016 £ millions 2016 2017

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SLIDE 5

Source: Rightmove

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

Profit and margin

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Costs

1

£ millions

Underlying operating profit

1

124.6 144.3 166.2 184.4 20 40 60 80 100 120 140 160 180 200 2014 2015 2016 2017 £ millions 74.6% 75.1% 75.5% 75.8% Margin: 42.4 47.8 53.8 58.9 10 20 30 40 50 60 70 2014 2015 2016 2017

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SLIDE 6

Income statement

Source: Rightmove

Year ended 31 December 2017 £m Year ended 31 December 2016 £m Revenue 243.3 220.0 Operating costs (58.9) (53.8) Underlying operating profit Underlying operating profit margin 184.4 75.8% 166.2 75.5% Share-based payments (4.9) (4.1) NI on share-based incentives (1.2) (0.5) Operating profit 178.3 161.6 Net financial expense (0.1) (0.1) Profit before tax 178.2 161.5 Tax (34.1) (32.0) Profit for the year 144.1 129.5

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Balance sheet

Source: Rightmove

As at 31 December 2017 £m As at 31 December 2016 £m Property, plant and equipment 2.7 2.3 Intangible assets 3.3 3.5 Deferred tax assets 5.7 7.0 Total non-current assets 11.7 12.8 Trade and other receivables 35.1 29.9 Cash and money market deposits 25.0 17.8 Total current assets 60.1 47.7 Trade and other payables (38.9) (35.8) Income tax payable (14.7) (16.3) Provisions (0.7) (0.2) Total current liabilities (54.3) (52.3) Provisions being non-current liabilities (0.3) (0.2) Net assets 17.2 8.0 Share capital 0.9 1.0 Other reserves 0.5 0.4 Retained earnings 15.8 6.6 Total equity 17.2 8.0

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SLIDE 8 17.8 185.1 (1.3) (33.2) (2.2) (91.6) (49.6) 25.0 50 50 100 100 150 150 200 200 Cas ash Dec 2016 EBITD TDA bef efore re IFRS 2 Wo Work rkin ing cap apital ital Tax Tax pay ayments Cap apex Share are buy y bac acks in incl costs Div ivid iden ends ds Cas ash Dec 2017

Cash bridge and dividend

Full year 2017

Source: Rightmove

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  • £140.4m (2016: £131.3m)

returned to shareholders in the period

  • 2.2m (2016: 2.2m) shares

bought back and cancelled

  • Closing cash and money

market deposits of £25.0m (2016: £17.8m)

  • Final dividend increased by

4p to 36p (2016: 32p)

£ millions

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SLIDE 9

Making home moving easier in the UK

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

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SLIDE 10

More customers, more choice

19,304 19,752 20,121 20,427 10 12 14 16 18 20 22 2014 2015 2016 2017

Thou

  • usands

sands

Thousands

Source: Rightmove

Agency and New Homes Further growth in customer numbers, up 2% to over 20,400

  • Growth driven by both Agency and New Homes
  • Agency branches up 164
  • Agency retention rates in line with historical highs
  • New Homes developments at their highest level

since 2009

  • Customers advertising 1 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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SLIDE 11

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Rightmove Zoopla.co.uk Primelocation OnTheMarket

The place consumers ‘turn to first’ and engage with most

Source: 1. Google Analytics & Rightmove 2. comScore

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Market share of top 4 property portals

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Traffic

1 10.2 11.1 11.7 11.7 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 2 4 6 8 10 12 2014 2015 2016 2017 Billions of Visits Time Visits

Billions of Minutes

Over 1.5 billion visits in 2017, up 4%

  • Growth driven by continued mobile adoption with over

70% of time spent on mobile

  • Traffic to our research tools grew 15% with consumers

spending over 420 million minutes on features such as sold prices

  • We sent over 43 million leads to our customers, 7% down
  • n 2016 as we continue to focus on quality over quantity
  • The quality of our leads continue to stand out. We

generate six times as many sales and lets for our Agency customers as our nearest competitor

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SLIDE 12

1,600 1,744 1,990 1,467 1,283 1,225 1,031 1,114 1,168 1,047 1,123 1,297 1,220 1,368 1,327 1,342 1,450 1,205 1,628 1,260 1,476 1,430 790 772 798 800 844 969 1,101 1,105 1,111 1,091 £0 £50,000 £100,000 £150,000 £200,000 £250,000 £300,000 £350,000

  • 200

400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 HMRC Housing Transactions in England & Wales (000's) Rightmove Asking Prices

The housing market is stable at a macro level

Housing transactions for England & Wales – all of UK data only available from HMRC 2005 onwards

Housing Transactions 1986-2017 and House Prices 2001 - 2017

  • The number of housing transactions in 2017 was the same as 2016, 2015 and 2014
  • Housing transactions are 40% higher than the lows of 2008 – 2011 and house prices are up by 45%

in the same period

  • Despite the softening in commission rates the estate agency revenue pool is now above 2005 levels
  • Two-thirds of our estate agency customers also generate recurring revenue from lettings

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However, the property market is local

Source: HM Land Registry & Rightmove

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Annual transactions 2017 vs 2014

+30%

  • 20%

0%

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Agents’ priorities change at the extremes

  • f the market

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Agents’ priorities where there is more demand than supply:

  • Getting in front of potential sellers first
  • Finding the opportunities in buyer leads
  • Being the one chosen on first round of market appraisals is vital
  • Marketing their points of differentiation and value proposition

Agents’ priorities when there is more supply than demand:

  • Building reputation and fees in a more challenging market
  • Finding motivated sellers
  • Spotting the secondary market opportunities which might now be “right

priced”

  • Realigning vendor’s pricing expectations to meet the market
  • Finding buyers

Under Supply Over Supply

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SLIDE 15

Driving efficiency regardless of market structure

* H2 2018

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Under Supply Over Supply

Generate new business

  • pportunities

Win business Retain business Sell properties

Instruction lead products

Value to customer Value to customer

Branding products Local market summary Opportunity manager* Best price guide Property products Marketing report Property products Property products

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Driving efficiency regardless of market structure

* H2 2018

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Branding Products Local Market Summary

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SLIDE 17

Driving efficiency regardless of market structure

* H2 2018

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24 Acacia Avenue

Best Price Guide Marketing Report

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Driving efficiency in rental

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  • Tenant fee ban likely in 2019
  • Much of the process of referencing can be streamlined with data
  • Currently executing a low volume trial, assessing potential with view to roll out

by end of 2018

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SLIDE 19

ARPA Optimiser sales

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 2014 2015 2016 2017

  • ARPA

1 up £80 to £922 per month (2016: £842)

  • ARPA growth driven by package sales and pricing
  • Continued segmentation of our customer base

and ongoing adoption of our highest value packages

  • Headroom to grow revenue through more product

sales, product innovation and pricing and delivering efficiency savings for our customers

  • New Enhanced package meeting expectations

with nearly 500 sales with an average uplift of around £175 as at 31 December 2017

  • First six months of Rightmove Discover sales on

track

  • 2018 product sales and pricing progressing

according to plan

£684 £754 £842 £922 per month

Simplifying helps customers choose to spend more

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500 1,000 1,500 2,000 2,500 2015 H2 2016 H1 2016 H2 2017 H1 2017 H2

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January 2010 January 2012 January 2014 January 2017 January 2018 £1000/m+ £1500/m+ 45% 36% 9% 14% 10% 1% 1% 4% Percentage of Independent Estate Agency Offices Total spend per month

Driving efficiency drives growth

Source: Rightmove

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Summary

  • Record customer numbers at over 20,400
  • Record traffic, over 1.5bn visits
  • ARPA growth driven by pricing and customers spending

more on packages

  • Revenue and underlying operating profit

1 both up 11%

  • £140m cash returned in the year
  • 1. Before share-based payments and NI on share-based incentives

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Outlook

  • Strong traffic with visits and time spent on site up 8% in

January year-on-year

  • Stable membership in January
  • Continued development of the consumer proposition
  • Continued investment in software tools, data and support

to help customers be more efficient

  • Average spend per advertiser continuing to grow in line

with expectations

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Full Year Results

for the year ended 31 December 2017

APPENDIX

23 February 2018

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Key performance indicators

Source Rightmove

FY 2014 FY 2015 FY 2016 FY 2017 Period end membership

  • Agency branches

16,843 17,336 17,462 17,626

  • New Home developments

2,461 2,416 2,659 2,801 Total 19,304 19,752 20,121 20,427 Growth +5% +2% +2% +2%

  • Overseas advertisers

2,057 2,581 2,476 2,297 Average monthly revenue per advertiser (£)

  • Agency

648 715 801 879

  • New Home developments

943 1,020 1,126 1,201 Total 684 754 842 922 Growth +13% +10% +12% +10%

  • Overseas advertisers

174 183 200 221 Retention rate

  • Agency (% of agents at start still listing at end of period)

91% 89% 89% 89%

  • New Home developments (monthly churn rate)

6.5% 5.2% 6.3% 5.4%

  • Overseas advertisers (monthly churn rate)

6.8% 6.5% 7.4% 7.6%

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Revenue sources

Source: Rightmove

2017 2016 Agency 76% 77% New Homes 16% 15% Other 8% 8%

2017

percentage

  • f revenue

2016

percentage

  • f revenue

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Capital Structure

Source: Rightmove

Share capital

FY 2017 m FY 2016 m In issue at 1 January 95.5 97.7 Purchase and cancellation of own shares (2.2) (2.2) Total issued share capital 93.3 95.5 Shares held in treasury (1.9) (2.3) Voting rights share capital 91.4 93.2 Own shares held by the EBT/SIP (0.3) (0.4) Issued ordinary shares less shares held by SIP/EBT 91.1 92.8

Weighted average number of shares

Number of shares brought forward 92.8 95.0 Effect of share buybacks (1.0) (1.0) Effect of share-based incentives exercised 0.1

  • Number of shares used in basic EPS calculation

91.9 94.0 Dilutive impact of share-based incentives outstanding 1.0 1.0 Number of shares used in diluted EPS calculation 92.9 95.0

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