Full Year Results for the year ended 31 December 2016 Disclaimer - - PowerPoint PPT Presentation

Full Year Results

for the year ended 31 December 2016

24 February 2017

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

2

• 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 £220.0m (2015: £192.1m)

+15%

Revenue:

Underlying operating profit1 increased to £166.2m (2015: £144.3m)

+15%

Profit:

Underlying basic EPS2 grew to 142.8p (2015: 121.4p)

+18%

EPS:

Final dividend increased by 5p to 32p (2016: 27p) making a total dividend of 51p (2015: 43p) per ordinary share

+19%

Dividend:

All free cash flow returned to shareholders through dividends and buybacks (2015: £112.5m)

£131.3m

Cash returned:

As at 31 December 2016, up 2% (2015:19,752)

20,121

Advertisers3:

Time in minutes up 5% year

• n year (2015: 11.1bn)

11.7bn

Site traffic:

Per month, up 12% (2015: £754)

£842

ARPA3:

Highlights

3

Revenue and costs

Revenue

£ millions 139.9 167.0 192.1 220.0 25 50 75 100 125 150 175 200 225 2013 2014 2015 2016

4

220.0 192.1 21.1 3.5 3.3 25 50 75 100 125 150 175 200 225 2015 ARPA Growth Customer Growth Other Growth 2016 £ millions

Revenue Bridge

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

Source: Rightmove

Profit and margin

5

Costs1

35.9 42.4 47.8 53.8 10 20 30 40 50 60 2013 2014 2015 2016 £ millions

Underlying Operating profit1

104.0 124.6 144.3 166.2 20 40 60 80 100 120 140 160 180 2013 2014 2015 2016 £ millions 74.3% 74.6% 75.1% 75.5% Margin:

Income statement

Source: Rightmove

Year ended 31 December 2016 £m Year ended 31 December 2015 £m Revenue 220.0 192.1 Operating costs (53.8) (47.8) Underlying operating profit Underlying operating profit margin 166.2 75.5% 144.3 75.1% Share-based payments (4.1) (3.8) NI on share-based incentives (0.5) (3.3) Operating profit 161.6 137.2 Net financial expense (0.1) (0.1) Profit before tax 161.5 137.1 Tax (32.0) (27.6) Profit for the year 129.5 109.5

6

Balance sheet

Source: Rightmove

As at 31 December 2016 £m As at 31 December 2015 £m Property, plant and equipment 2.3 2.2 Intangible assets 3.5 1.4 Deferred tax assets 7.0 6.8 Total non-current assets 12.8 10.4 Trade and other receivables 29.9 27.5 Cash and money market deposits 17.8 12.4 Total current assets 47.7 39.9 Trade and other payables (35.8) (31.6) Income tax payable (16.3) (11.9) Provisions (0.2)

• Total current liabilities

(52.3) (43.5) Provisions being non-current liabilities (0.2) (0.2) Net assets 8.0 6.6 Share capital 1.0 1.0 Other reserves 0.4 0.4 Retained earnings 6.6 5.2 Total equity 8.0 6.6

7

Cash bridge and dividend

Full year 2016

Source: Rightmove

8

• £131.3m (2015: £112.5m)

returned to shareholders in the period

• 2.2m (2015: 2.3m) shares

bought back and cancelled

• Closing cash and money

market deposits of £17.8m (2015: £12.4m)

• Final dividend increased by

5p to 32p (2015: 27p)

Housing Market

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

Housing Transactions 1986-2016 and House Prices 2002 - 2016

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

nearly 30% the estate agency fee pool has significantly increased

• Two-thirds of our estate agency customers now also generate revenue from lettings
• Agency is an attractive business – the number of agents has grown c20% since 2011 to record levels

*

9

*

Stable Housing Market

• 40%
• 20%

0% 20% 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

Housing Transactions (YoY change) Sold Subject to Contract (YoY change)

10

Source : Rightmove and HMRC

x

+6% vs Jan ‘15

x

+6% vs Jan ‘15

More customers

18,425 19,304 19,752 20,121 10 12 14 16 18 20 22 2013 2014 2015 2016

Thou

• usands

sands

Thousands

Source: Rightmove

Agency and New Homes Record customer numbers, up 2% to over 20,000

• Growth driven by both Agency and New Homes
• Agency offices up 126
• Agency retention rates in line with historical highs
• New Homes developments up 243, their highest

level since 2012

• Customers advertising 1 million UK residential

properties on Rightmove

• We continue to be the only place to see virtually

the whole UK property market

11

More consumers and engagement

Time

Sources: Google Analytics & Rightmove

8.1 10.2 11.1 11.7 2 4 6 8 10 12 2013 2014 2015 2016 Billions of Minutes

12

Record engagement, up 5% to 11.7 billion minutes

• Nearly 1.5 billion visits in 2016, up 10%
• Growth driven by continued mobile adoption with

two-thirds of time spent on mobile

• Traffic to our research tools grew 20% with

consumers spending 350 million minutes on features such as sold prices

• We sent nearly 47 million leads to our customers,

6% down on 2015, but up on 2014

• 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

Source: Comscore (Market share of time on desktop and mobile)

More consumers and engagement

Market share of top 4 property portals

73% 77%

13

ARPA

Source: Rightmove

• 1. Agency and New Homes customers.

£ per office/development per year 1,500 3,000 4,500 6,000 7,500 9,000 10,500 2013 2014 2015 2016

Record ARPA

• ARPA1 up £88 (+12%) to £842 per month

(2015: £754)

• ARPA growth driven by product sales and pricing
• Continued healthy adoption of our highest value

Optimiser package

• Significant headroom to grow revenue through

more product sales, product innovation and pricing

• 2017 product sales and pricing progressing

according to plan

£607 £684 £754 £842 per month

Customers choosing to spend more

14

Summary

• Record customer numbers at over 20,000
• Record traffic
• Record absolute ARPA growth driven by customers

spending more on products

• Revenue and underlying operating profit

1 up 15%

• £131m cash returned in the year with almost £750m

returned in total since IPO

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

15

• 90% of customers use our Intel

Software and usage is up 30% YoY

• A comprehensive toolset that

focuses on what matters most to customers

• Unique whole of market view
• New Marketing Report Tool tracks

and analyses the performance of a property against the whole market

• Already being used on 100,000

properties each month

• The tool enables agents to clearly

demonstrate their marketing efforts and expertise to a vendor

Data driving market efficiency and transparency

The power of data

16

• The Best Price Guide helps an agent

justify their valuation to a potential vendor

• In 2016 agents generated an average
• f 620,000 Best Price Guides per

month

• A property is 40% more likely to be

sold by the agent who first marketed it, if it is priced in line with our AVM

• 90% of customers use our Intel

Software and usage is up 30% YoY

• A comprehensive toolset that

focuses on what matters most to customers

• Unique whole of market view
• New Marketing Report Tool tracks

and analyses the performance of a property against the whole market

• Already being used on 100,000

properties each month

• The tool enables agents to clearly

demonstrate their marketing efforts and expertise to a vendor

• The Best Price Guide helps an agent

justify their valuation to a potential vendor

• In 2016 agents generated an average
• f 620,000 Best Price Guides per

month

• A property is 40% more likely to be

sold by the agent who first marketed it, if it is priced in line with our AVM

Data driving market efficiency and transparency

The power of data

17

= +

Opportunity – Market Worth Rightmove Products Demonstrable Product Value

+

The power of data

Data driving success

18

= +

Opportunity – Market Worth Rightmove Products Demonstrable Product Value

+

The power of data

Data driving success

19

• Our unrivalled whole of market view

allied to artificial intelligence techniques enables us to identify patterns in consumer behaviour

• On 31 May 2016 we acquired the

Outside View. They had developed an algorithm that identifies the properties most likely to come to market in a local area, so an agent can target their marketing efforts at those potential vendors

• We have been trialling an enhanced

version of the product that we will be launching in 2017

20

The power of data

Data driving predictions

Machi hine Learnin ing Algorit ithm hm

400 400 Features on

each property

10,000

Properties in an Outcode

~150 ~150

Properties go

• n to sell

~800 ~800

Potential vendors emailed

Percentage of Independent Estate Agency Offices Total spend per month

We’ve only just begun

Source: Rightmove

21

Outlook

• Strong traffic with over 1bn minutes in January
• Stable housing market
• Further product and data innovation driving efficiency,

transparency and success for consumers and customers

• We’ve only just begun - average spend per advertiser

continuing to grow in line with expectations

22