Interim Results for the half year ended 30 June 2018 Disclaimer - - PowerPoint PPT Presentation

Interim Results

for the half year ended 30 June 2018

27 July 2018

Disclaimer

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

• ther 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.

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Highlights

• 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 £131.1m (2017: £119.5m)

+10%

Revenue:

Underlying operating profit1 increased to £101.0m (2017: £91.0m)

+11%

Profit:

Underlying basic EPS2 grew to 90.6p (2017: 80.3p)

+13%

EPS:

Interim dividend increased by 3.0p to 25.0p (2017: 22.0p) per

• rdinary share

+14%

Dividend:

Free cash flow returned to shareholders through dividends and buybacks (2017: £72.0m)

£76.9m

Cash returned:

As at 30 June 2018, stable (31 December 2017: 20,427)

20,450

Advertisers3:

Time in minutes for 6 months to 30 June 2018 (2017: 6.2bn)

6.5bn

Site traffic:

Per month, up £76 (2017: £911)

£987

ARPA3:

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Revenue

Revenue

£ millions

192.1 220.0 243.3 119.5 131.1 25 50 75 100 125 150 175 200 225 250 2015 2016 2017 H1 2017 H1 2017

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Revenue bridge

£ millions

119.5 9.3 1.3 1.0 131.1 20 40 60 80 100 120 140 Revenue HY 2017 ARPA growth Customer growth Growth in other revenue Revenue HY 2018

Costs, profit and margin

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

Source: Rightmove

Underlying operating profit1

124.6 144.3 184.4 91.0 101.0 20 40 60 80 100 120 140 160 180 200 2015 2016 2017 H1 2017 H1 2018

£ millions 75.1% 75.5% 75.8% 76.2% 77.0% Margin:

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Costs1

47.8 53.8 58.9 28.5 30.1 10 20 30 40 50 60 70 2015 2016 2017 H1 2017 H1 2018

£ millions

Income statement

Source: Rightmove

6 months ended 30 June 2018 £m 6 months ended 30 June 2017 £m Revenue 131.1 119.5 Operating costs (30.1) (28.5) Underlying operating profit Underlying operating profit margin 101.0 77.0% 91.0 76.2% Share-based payments (2.1) (2.7) NI on share-based incentives (0.7) (0.7) Operating profit 98.2 87.6 Net financial expense (0.1) (0.1) Profit before tax 98.1 87.5 Tax (18.8) (16.8) Profit for the period 79.3 70.7

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Balance sheet

Source: Rightmove

As at 30 June 2018 £m As at 30 June 2017 £m Property, plant and equipment 16.1 2.5 Intangible assets 3.1 3.7 Deferred tax assets 5.5 7.4 Total non-current assets 24.7 13.6 Trade and other receivables 21.1 34.5 Contract assets 0.3

• Cash and money market deposits

28.1 17.6 Total current assets 49.5 52.1 Trade and other payables (17.8) (38.7) Contract liabilities (2.0)

• Income tax payable

(18.1) (16.8) Lease liabilities (13.6)

• Provisions

(1.0) (0.5) Total liabilities (52.5) (56.0) Net assets 21.7 9.7 Share capital 0.9 0.9 Other reserves 0.5 0.5 Retained earnings 20.3 8.3 Total equity 21.7 9.7

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21.1 (17.8) 16.1 (13.6)

Half year 2018

Source: Rightmove

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Cash bridge and dividend

25.0 102.2 (5.5) (14.7) (1.0) (44.6) (32.6) (0.7) 28.1 20 40 60 80 100 120 140 Cash Dec 2017 EBITDA before IFRS 2 Working capital Tax payments Capex Share buy backs incl costs Dividends Lease payments Cash June 2018

• £76.9m (2017:£72.0m)

returned to shareholders in the period

• 1.0m (2017: 1.0m) shares

bought back and cancelled

• Closing cash and money

market deposits of £28.1m (31 Dec 2017: £25.0m)

• Interim dividend increased by

3p to 25p (2017: 22p)

• 10 for 1 share split

announced effective 31 August 2018

Housing market

Source: 1. HMRC England, Scotland and Wales 2. Rightmove

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• 1,500,000
• 1,000,000
• 500,000

500,000 1,000,000 1,500,000

• 5.00%
• 3.00%
• 1.00%

1.00% 3.00% 5.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

CumulativeTransactions in England, Scotland and Wales1

2017 2018 YTD 2018 vs 2017

• 10.0%
• 5.0%

0.0% 5.0% Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18

Sales Agreed in England, Scotland and Wales vs 20172

The housing market is regional

Source: Rightmove

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• 40.0%
• 30.0%
• 20.0%
• 10.0%

0.0% 10.0% 20.0% 30.0% 40.0%

London – Year on Year Change

Demand Available Stock Asking price

More customers, more choice

19,752 20,121 20,427 20,358 20,450 19 19.5 20 20.5 21 2015 2016 2017 2017 H1 2018 H1

Thousands

• Period end membership of 20,450 broadly unchanged

since the end of 2017

• Agency membership broadly unchanged at 17,585

and retention rates in line with historical highs

• New Homes Developments up 64 (+2%)
• Customers advertising 1.2 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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Agency and New Homes

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 Janurary 2013 June 2017 December 2017 June 2018

Agency Customer Size

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

Sources: 1. Google Analytics & Rightmove 2. comScore

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Market share of top 4 property portals2 Time1

11.1 11.7 11.7 6.2 6.5 2 4 6 8 10 12 2015 2016 2017 H1 2017 H1 2018

Billions of Minutes

Visits1

1.3 1.5 1.5 0.79 0.83 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 2015 2016 2017 H1 2017 H1 2018

Billions

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 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 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Rightmove Zoopla.co.uk Primelocation OTM

Keyword Sort – Innovation in the detail

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• Keyword Sort live May 2018, used by nearly 200,000 people in June
• Home hunters look at 26% more properties when the search includes a keyword

Data drives advertising effectiveness

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• The ‘Active’ product suite uses Rightmove data to target a relevant audience across multiple touch points
• ‘Rightmove Active Campaigns’, launched in 2017 augment an email campaign by repeating the advertiser’s

message through social media and SMS

• First phase of ‘Rightmove Active Display’ launched at the start of 2018 focusses new home developer’s

advertising to home hunters on Rightmove based on their search behaviour

• Second phase is now in trial which microtargets home hunters on other websites based on their search

behaviour

Active Display phase 2 Active Campaigns Active Display phase 1

Restless innovation with data drives efficiency

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• Early trials of a new ‘Opportunity Manager’ tool have
• begun. Opportunity Manager helps agents prioritise

leads to make the most of the enquiries they already receive

• The Best Price Guide helps an agent justify their

valuation to a potential vendor:

• In the first half of 2018 agents generated an

average of nearly a million Best Price Guides per month

• A new, faster, version including significantly

enhanced market data due for launch in Q4 2018

• The new version will save agents up to a further

15 minutes per valuation

• Tenant passport is now in the next phase of trialling.

The passport aims to make the process of renting a property faster and more efficient by enabling potential tenants to collate in advance all the information needed for the process of applying for a tenancy

ARPA

• 1. Agency and New Homes customers.

£ per office/development per year

2,000 4,000 6,000 8,000 10,000 12,000 14,000 2015 2016 2017 H1 2017 H1 2018

• ARPA1 up £76 (+8%) to £987 per month per
• ffice/development (2017: £911)
• Full year ARPA growth expected to be around

£80 with phasing driven by timing of pricing activities

• ARPA driven by pricing and product growth
• More product penetration driven by uptake of
• ur Enhanced package
• RightmoveDiscover progressing to plan,

average monthly revenue 75% higher in H1 2018 than H2 2017

£754 £842 £922 £911 £987 per month

Driving efficiency drives growth

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500 1000 1500 2000 2500 3000 2015 2016 2017 H1 2017 H1 2018 Optimiser Enhanced

Premium Packages

January 2010 January 2012 January 2014 January 2018 June 2018 Percentage of Independent Estate Agency Offices Total spend per month

Driving efficiency drives growth

Source: Rightmove

17 £1000/m+ £1500/m+ 51% 45% 9% 16% 14% 1% 1% 4%

Summary and outlook

• Stable customer numbers at 20,450
• Traffic continuing to grow, with 6.5bn minutes spent on the

Rightmove platforms in H1 2018

• ARPA growth driven by pricing and customers spending

more on packages – full year expected to be around £80 higher than 2017

• Continued development of the consumer proposition
• Continued investment in software tools, data and support to

help customers be more efficient

• Confident in delivering the board’s full year expectations

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Interim Results

for the half year ended 30 June 2018

27July 2018

APPENDIX

Key performance indicators

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

Source: Rightmove

FY 2015 FY 2016 FY 2017 H1 2017 H1 2018 Period end membership

• Agency offices

17,336 17,462 17,626 17,589 17,585

• New Homes developments

2,416 2,659 2,801 2,769 2,865 Total 19,752 20,121 20,427 20,358 20,450 Growth +2% +2% +2% +1%1

• 1
• Overseas advertisers

2,581 2,476 2,297 2,548 2,412 ARPA

• Agency

715 801 879 865 940

• New Homes developments

1,020 1,126 1,201 1,210 1,286 Total 754 842 922 911 987 Growth +10% +12% +10% +10%1 +8%1

• Overseas advertisers

183 200 221 208 228 Retention rate

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

89% 89% 89% 94% 94%

• New Homes developments (monthly churn rate)

5.2% 6.3% 5.4% 5.8% 4.7%

• Overseas advertisers (monthly churn rate)

6.5% 7.4% 7.6% 7.2% 6.5%

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Revenue sources

Source: Rightmove

H1 2018 H1 2017 Agency 76% 76% New Homes 16% 16% Other 8% 8%

H1 2018

percentage

• f revenue

H1 2017

percentage

• f revenue

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Capital Structure

Source: Rightmove

Share capital

HY 2018 m HY 2017 m In issue at 1 January 93.3 95.5 Purchase and cancellation of own shares (1.0) (1.0) Total issued share capital 92.3 94.5 Shares held in treasury (1.7) (2.2) Voting rights share capital 90.6 92.3 Own shares held by the EBT/SIP (0.3) (0.4) Issued ordinary shares less shares held by the SIP/EBT 90.3 91.9

Weighted average number of shares

Number of shares entitled to a dividend b/fwd 91.0 92.8 Effect of share buybacks (0.6) (0.5) Effect of share-based incentives exercised 0.2 0.1 Number of shares used in basic EPS calculation 90.6 92.4 Dilutive impact of share-based incentives outstanding 0.6 1.0 Number of shares used in diluted EPS calculation 91.2 93.4

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