Int Inter erim Res im Results ults for the half year ended 30 - - PowerPoint PPT Presentation

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Int Inter erim Res im Results ults for the half year ended 30 - - PowerPoint PPT Presentation

26 July ly 2 2019 Int Inter erim Res im Results ults for the half year ended 30 June 2019 Di Discla laim imer er This presentation has been prepared by Rightmove plc (the Company). No representation or warranty (express or


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Int Inter erim Res im Results ults

for the half year ended 30 June 2019

26 July ly 2 2019

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SLIDE 2

Di Discla laim imer er

2

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 of 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

  • f 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

  • bserve 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.

This presentati tion and a press release will be p posted on t the i investor r section of the Rightmove website.

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3

Agenda enda

1.

  • 1. HY 2019 Highligh

ights ts Peter Brooks-Johnson, CEO 2.

  • 2. Finan

ancials cials Robyn Perriss, FD 3.

  • 3. Housin

ing market t updat ate Peter Brooks-Johnson, CEO 4.

  • 4. Strat

ateg egic ic updat ate Peter Brooks-Johnson, CEO 5.

  • 5. Q & A
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4

  • 1. HY 201

019 9 Highligh hlights ts

Peter Brooks-Johnson, CEO

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Hi Highlights lights

  • 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
  • 4. Source: Google Analytics

Revenue up to £143.9m (2018: £131.1m)

+10% +10%

Revenue:

Underlying operating profit1 increased to £111.0m (2018: £101.0m)

+10% +10%

Profit:

Underlying basic EPS2 grew to 10.2p (2018: 9.1p)

+12% +12%

EPS:

Interim dividend increased by 0.3p to 2.8p (2018: 2.5p*) per ordinary share

+12% +12%

Dividend:

Free cash flow returned to shareholders through dividends and buybacks (2018: £76.9m)

£54 £54.0m 0m

Cash returned:

As at 30 June 2019 down 1% (31 December 2018: 20,454)

20 20,20 209

Advertisers3:

Time in minutes for the 6 months ended 30 June unchanged year on year (2018: 6.5bn)

6. 6.5bn 5bn

Site traffic4:

Per month, up £90 (2018: £987)

£1 £1,07 077

ARPA3:

5

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

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Access to our unique in-market audience of home hunters saw new homes developers spend a record £4.6m on our digital marketing solutions up from £3.8m in H1 2018 Auto Featured Property launched in May with nearly 500 branches now signed up. June saw the early roll out of our next generation digital marketing product, Rightmove Active Extension (RAE) Further progress helping agents to be more efficient with the launch of a new suite of tools to help agents identify their most valuable markets and a new version of our Best Price Guide Continued focus on innovating in the rental market; including Version 2 of the Rightmove Tenant Passport including a credit check and agreement to acquire Van Mildert, a tenant referencing company Penetration of the Enhanced and Optimiser packages has reached 35% of estate agency customers, up from 27% in December 2018

St Stra rate tegic gic Hi Highl hlights ights

6

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7

2. . Fina nanci ncials als

Robyn Perriss, FD

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Revenue enue

Source: Rightmove

£ millions

220.0 .0 243.3 .3 267.8 .8 131.1 .1 143.9 .9

  • 5

20 45 70 95 120 145 170 195 220 245 270 2016 2017 2018 H1 2018 H1 2019

8

Revenue enue bridge ge

£ millions

Reven evenue ue

131.1 .1 11.0 0.7 1.1 143.9 .9 20 40 60 80 100 120 140 160 Revenue HY 2018 ARPA growth Customer growth Increase in Other revenue streams Revenue HY 2019

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£842 £842 £922 £922 £1,00 005 £987 £987 £1,07 077

2,000 4,000 6,000 8,000 10,000 12,000 2016 2017 2018 H1 2018 H1 2019 20,121 20,121 20,427 20,427 20,45 454 20,45 450 20,209 20,209 10 12 14 16 18 20 22 2016 2017 2018 H1 2018 H1 2019

Thou

  • usa

sands nds

Thousands

Agency ncy and New Homes

Memb mbership ership numb mbers ers down wn 1%

  • Agency branches down 3% since the start of

the year to 16,768

  • New Homes developments up 10% to 3,441
  • Customers advertising 1.1m UK residential

properties on Rightmove

9

ARPA

Record

  • rd absolu
  • lute

te ARPA PA growth wth

  • ARPA up £90 year on year to £1,077(1) per

month

  • ARPA growth driven by package upgrades

and core membership price increases

1: For Agency and New Homes customers Source: Rightmove

Me Membership bership an and ARPA PA

+9% +9% +10% £80 £83 £90

£ per office/development per year

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

Source: Rightmove

Underlying erlying opera ratin ting profit it1

166.2 .2 184.4 .4 203.3 .3 101.0 .0 111.0 .0 50 100 150 200 250 2016 2017 2018 H1 2018 H1 2019

£ millions 75.5% 75.5% 75.8% 75.8% 75.9% 75.9% 77.0% 77.1% 77.1% Margin:

10

Costs ts1

53.8 58.9 64.5 30.1 32.9 10 20 30 40 50 60 70 2016 2017 2018 H1 2018 H1 2019

£ millions

Costs, s, operati erating ng pro rofit it an and mar argin in

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In Income me stat atement ement

Source: Rightmove

6 m months ended 30 J June 2019 £m £m 6 m months ended 30 June 2018 2018 £m £m Revenue 143.9 131.1 Operating costs (32.9) (30.1) Underlyi ying g operating g profit 111.0 101.0 Underlying operating profit margin 77.1% 77.0% Share-based payments (2.2) (2.1) NI on share-based incentives (0.6) (0.7) Operating g profit 108.2 98.2 Net financial expense (0.1) (0.1) Profit t before e tax 108.1 98.1 Tax (20.6) (18.8) Profit t for the period 87.5 79.3

11

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Source: Rightmove

As As at 30 June e 201 019 £m £m As at 30 30 June 201 018 £m £m Property, plant and equipment 14.1 16.1 Intangible assets 2.9 3.1 Deferred tax assets 3.1 5.5 Tota tal l non

  • n-curr

current asset ets 20.1 .1 24.7 .7 Trade and other receivables 25.6 21.1 Contract assets 0.4 0.3 Cash and money market deposits 54.1 28.1 Tota tal l current t asset ets 80.1 .1 49.5 .5 Trade and other payables (17.1) (17.8) Contract liabilities (2.0) (2.0) Income tax payable (20.5) (18.1) Lease liabilities (12.6) (13.6) Provisions (0.7) (1.0) Tota tal l liabilitie bilities (52. 2.9) 9) (52. 2.5) 5) Net t asset ets 47.3 .3 21.7 .7 Share capital 0.9 0.9 Other reserves 0.5 0.5 Retained earnings 45.9 20.3 Tota tal l equity ity 47.3 .3 21.7 .7

12

Bal alance ance sheet eet

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Half year r 2019

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

13

  • £54.0m (2018:£76.9m)

returned to shareholders in the period

  • 3.6m (2018: 10.0m*) shares

bought back and cancelled

  • Closing cash and money

market deposits of £54.1m (2018: £28.1m)

  • Initial consideration of

£16.0m in relation to Van Mildert will be financed from existing cash balance

  • Interim dividend increased by

0.3p to 2.8p (2018: 2.5p*)

Cas ash h br brid idge ge an and div ividend idend

19.9 112.2 .2 (4.5) (16.9 .9) (0.6) (35.5 .5) (18.6 .6) (1.1) (0.8) 54.1 20 40 60 80 100 120 140 Cash Dec 2018 EBITDA before IFRS 2 Working capital Tax payments Capex Dividends Share buybacks (incl costs) Purchase

  • f shares

Lease payments Cash HY 2019

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14

  • 3. Housin

using g mark rket et upd pdate te

Peter Brooks-Johnson, CEO

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SLIDE 15 Source: 1. HMRC England, Scotland and Wales
  • 2. Rightmove * Provisional data

15

  • 2,500,000
  • 1,500,000
  • 500,000

500,000 1,500,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

  • 5.00%
  • 3.00%
  • 1.00%

1.00% 3.00%

Cumulat lative ve tran ansact sactions ions in England, land, Scotl tlan and and Wales1

2018 2019 YTD 2019 vs 2018

Transaction volumes have held up well in the first half, but the hesitancy from H1 will flow through to transaction completions in H2.

  • 8.0%
  • 6.0%
  • 4.0%
  • 2.0%

0.0% Jan Feb Mar Apr May Jun

Sales s agreed ed in Englan gland, , Scotl tlan and and Wales es vs 20182

The e housing sing market arket is is u unr nremar emarkable, kable, bu but unc ncer ertainty ainty is is cau ausing sing some e bu buyer r hesit sitati ation

  • n

* *

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16

Source: Rightmove 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 1-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100 100+

Branch stock level

Branch nch distribu ribution tion by sales s stock ck

June 2018 June 2019

Lo Long nger er tim ime e to se sell l has as be been en fel elt more re ac acutely utely by by l low-stoc stock k estate ate ag agent nt br bran anches ches

  • 2%

0% 2% 4% 6% 8% 10% 12% 14% Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19

Time to sell (YoY change) ge)

  • Buyer hesitancy has increased time to

secure a buyer by 10% in the first half of 2019 versus 2018

  • Anecdotal evidence that time to complete is

also increasing

  • Low-stock branches are more vulnerable to

the cash flow impact of increased transaction times

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Source: Rightmove

The e ba ban o n on t n tena nant nt fees s an and reduced duced bu buy to let has as im impacted acted low-stock stock ag agent nts

  • Impact of tax changes and stamp duty

changes has significantly reduced new lettings stock coming to market

  • Many rental agents have plans in place to

replace the lost revenue, but the new revenue sources convert to cash later in the process

115,000 120,000 125,000 130,000 135,000 140,000 145,000 150,000 155,000 160,000 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19

Available lable renta tal prop

  • perti

erties es

0% 10% 20% 30% 40% 50% 60% 70% 80% 1-10 11-20 21-30 31-40 41-50 50+ Branch stock level

Distribu ribution tion of renta tal l agent nt bran anch ches s leaving ing the indust stry

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Sources: HMLR, Rightmove

New ew home e “starts” remain stable at near 8 8 year ar hig ighs hs

0.60 0.80 1.00 1.20 1.40 1.60 1.80 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011 2012 2013 2014 2015 2016 2017 2018 2019

The impact ct of the housing ing market ket on new home "star arts ts"

New home "starts" (12m rolling average) New homes listed on Rightmove (12m rolling average)

  • The unremarkable transaction numbers have encouraged developers to continue to grow at

their recent high pace of development although “starts” were 10% higher on average in the 5 years before 2008

  • Rightmove products, in particular our digital marketing suite are used by developers to

maintain and grow sales rates in all but the most supply constrained market conditions

Help to buy introduced UK housing transactions reach 1.2m Article 50 invoked

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19

4.

  • 4. Str

trate tegic gic upd pdate te

Peter Brooks-Johnson, CEO

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The three pillars s of our strategy gy:

20

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

Mak aking ing home e moving ing eas asier ier in in t the UK

BUYERS SELLER ERS RENTERS LANDLOR ORDS AGENTS TS DEVELO LOPER ERS

  • 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

The place consumers s turn to first and engage with most Unriva valled lled exposure, , leads and products s for our custome

  • mers
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The place consumers ‘turn to first’ and engage wit ith h most

Sources: 1. Google Analytics & Rightmove 2. comScore

21

Market et share e of t top p 4 prop

  • perty

rty porta tals ls2 Time1

11.7 11.7 12.3 6.5 6.5 2 4 6 8 10 12 2016 2017 2018 H1 2018 H1 2019

Billions of Minutes

Visits its1

1.5 1.5 1.6 0.83 0.85 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2016 2017 2018 H1 2018 H1 2019

Billions

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Rightmove Zoopla.co.uk Primelocation OTM

ComScore methodology change

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Source: Rightmove 1: Estate and rental agents 2: New Homes developers

  • 35% of agency branches now taking either the

Enhanced or Optimiser package

  • Record revenue from digital marketing solutions

for new homes developers gaining targeted access to our unique in-market audience of home hunters

  • Opportunity to grow revenue through more

product sales, product innovation and pricing

  • Delivering efficiency savings for our customers

allows more spend on marketing

22

500 1,000 1,500 2,000 2,500 3,000 3,500 2017 2018 H1 2018 H1 2019

Enhanced ed package ge1

Unr nriv ivalled alled exposure,

  • sure, lead

ads an and products ducts for our customers stomers

1 2 3 4 5 6 7 8 9 2015 2016 2017 2018 H1 2018 H1 2019 £ Milli llion

  • ns

Digital al marketing ng soluti tions ns revenue2

500 1,000 1,500 2,000 2,500 3,000 3,500 2015 2016 2017 2018 H1 2018 H1 2019

Optimi miser ser package1

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  • Auto Featured Property launched in May
  • Nearly 500 branches signed up since launch representing a run rate of over £3m pa
  • Delivers double the detail property views at the key points in the marketing lifecycle

agents use it to win and retain business

  • Aimed at larger stock branches with average stock of branches signed up at over

110 properties

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Product innovation which delivers growth…

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Product innovation which delivers growth…

  • Active Display launched at the start of 2018 now delivering nearly 50% more impressions for

New Homes developers at a run rate of £7m pa

  • Next generation digital marketing product Rightmove Active Extension (RAE) in early roll out
  • During trialling RAE demonstrated 33x performance of equivalent Google keyword audience
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… for the long term

Source: Rightmove

Branding products – allow a customer to talk directly about their brand to differentiate themselves Property products – make an individual property stand out Direct response products – directly create and channel a potential home seller lead for an agent

+18% +19% +22% +33% +24% +29% +21% +24% +11% +7% +35% +20% +10% +22% +21%

Product revenue

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  • The Tenant Passport has been enhanced with an Equifax credit check which also includes an

automated anti-money laundering check, identity validation and CIFAS (fraud protection database) check

  • Rightmove have agreed to purchase Van Mildert for an initial consideration of £16m subject to

FCA regulatory approval. Completion expected by end of October

  • Van Mildert will give us in-house tenant referencing capabilities and a market leading Rent

Guarantee Insurance product

  • Opportunities to leverage the scale of the Rightmove platform and create integration

efficiencies across the process for tenants and agents

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Product duct in inno novat atio ion n which ich creates eates change ange

Search Pre Qualify Enquire Reference

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Su Summary mary an and outlook look

  • ARPA growth driven by pricing and customers spending

more on packages

  • Customer numbers 1% lower at 20,209
  • Rightmove continues to be the place consumers turn to first
  • Second half expected to follow a similar pattern for ARPA

and branch numbers with development numbers stable

  • More product innovation on track for delivery in 2020
  • Confident in delivering the Board’s full year expectations

27

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28

  • 5. Q&A

&A

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Int Inter erim Res im Results ults

for the half year ended 30 June 2019

26 July ly 2 2019

APP APPEN ENDI DIX

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  • 1. Growth in H1 compared to H1 in the previous year

Source: Rightmove

FY 2016 16 FY 2017 17 FY 2018 18 H1 H1 2018 2018 H1 201 019 Period iod end member bersh ship ip

  • Agency offices

17,462 17,626 17,328 17,585 16,768

  • New Homes developments

2,659 2,801 3,126 2,865 3,441 Tota tal l 20,1 ,121 20,4 ,427 20,4 ,454 20,4 ,450 20,2 ,209 Growth th +2% +2% +2% +2% 0% 0% 0% 0%1 (1%)1

  • Overseas advertisers

2,476 2,297 2,234 2,412 2,218 ARPA

  • Agency

801 879 953 940 1,023

  • New Homes developments

1,126 1,201 1,323 1,286 1,346 Tota tal 842 842 922 922 1,00 005 987 987 1,07 077 Growth th +12% 2% +10% 0% +9% +9% +8% 8%1 +9% +9%1

  • Overseas advertisers

200 210 228 228 247 Reten tention tion rate te

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

89% 89% 88% 94% 92%

  • New Homes developments (monthly churn rate)

5.7% 6.7% 4.2% 4.7% 3.8%

  • Overseas advertisers (monthly churn rate)

7.4% 7.6% 6.7% 6.5% 4.8%

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Key ey per erforman

  • rmance

ce in indicat icators

  • rs
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Reven evenue ue sourc rces es

Source: Rightmove

H1 201 019 H1 201 018 Agen ency 73% 73% 76% 76% New Homes es 19% 19% 16% 16% Other 8% 8% 8% 8%

H1 2019 019

percentage

  • f revenue

H1 2018 018

percentage

  • f revenue

31

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January 2010 January 2014 January 2018 January 2019 June 2019

Percentage of Independent Estate Agency Offices Total spend per month Source: Rightmove

32 £1000/m+ £1500/m+ 61% 56% 46% 25% 19% 15% 1% 9%

Dis istribut tributio ion n of in independent ependent ag agen ent t spend end

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Cap apit ital al St Stru ructure cture

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

Source: Rightmove

Sha hare capit ital al

H1 201 019 m H1 201 018 resta state ted m In issue at 1 January 907.7 932.7 Purchase and cancellation of own shares (3.6) (10.0) Total issued share capital 904.1 922.7 Shares held in treasury (14.3) (16.7) Voting rights share capital 889.8 906.0 Own shares held by the EBT/SIP (3.1) (3.1) Issued ed ordin inary shares less s shares s held ld by the e SIP/EBT EBT 886. 6.7 902. 2.9

Weighte hted average age number er of shares es

Number of shares entitled to a dividend b/fwd 889.8 910.4 Effect of share buybacks (1.8) (6.1) Effect of share-based incentives exercised 0.4 1.6 Effect of shares purchased by the EBT (0.2)

  • Number

ber of shares es used in basic ic EPS calc lcula latio tion 888. 8.2 905. 5.9 Dilutive impact of share-based incentives outstanding 3.6 5.7 Number ber of shares es used in dilute ted EPS calc lculation lation 891. 1.8 911. 1.6

33