FULL YEAR ANNOUNCEMENT FOR RIGHTMOVE PLC – YEAR ENDED 31 DECEMBER 2022
Rightmove plc, the UK’s largest property portal, today announces its audited results for the year ended 31 December 2022.
| Financial Highlights | 2022 | 2021 | Change vs 2021 | % Change vs 2021 |
| Revenue | £332.6m | £304.9m | £27.7m | +9% |
| Operating profit | £241.3m | £226.1m | £15.2m | +7% |
| Underlying operating profit (1) | £245.4m | £231.0m | £14.4m | +6% |
| Underlying operating profit excludingprior year ‘other income’ (2) | £245.4m | £228.6m | £16.8m | +7% |
| Final dividend | 5.2p | 4.8p | 0.4p | +8% |
| Total dividend for the year | 8.5p | 7.8p | 0.7p | +9% |
| Basic earnings per share | 23.4p | 21.3p | 2.1p | +10% |
| Underlying earnings per share (3) | 23.8p | 21.8p | 2.0p | +9% |
· Revenue up £27.7m/9% on 2021 to £332.6m, as customers continued to upgrade their packages and to increase their use of digital products
· Operating profit of £241.3m; up 7% on 2021 (2021: £226.1m)
· Excluding the one-off impact of ‘other income’ of £2.4m in the prior year (in relation to the release in 2021 of the contingent consideration for the acquisition of Van Mildert), underlying operating profit(2) is up 7% compared to 2021.
· Final dividend for 2022 up 8% to 5.2p (2021: 4.8p) per ordinary share. Total dividend for 2022 up 9% to 8.5p (2021: 7.8p)
· £197.7m of cash returned to shareholders through share buybacks and dividends during 2022 (2021: £238.8m)
· Cash and cash equivalents, including money market deposits, at the end of the period of £40.1m (31 December 2021: £48.0m).
Operational highlights
· Average revenue per advertiser (ARPA) (4) up 11% to £1,314 per month (2021: £1,189); second-highest year ever for absolute ARPA growth
· Total membership flat at 19,014 (2021: 18,969), with Agency branches down 178 and New Homes Developments up 223 since the start of the year
· Resilient traffic despite a significantly less frenetic property market than 2021, with a total of 16.3 billion(5) minutes spent on the platform in the year (2021: 18.3 billion). Time on platform 34% higher than the pre-pandemic record of 2019
· Continued uptake of our premium Optimiser 2020 package, with 34% of independent agents now subscribing, up from 21% in December 2021
· Ongoing strategic innovation, with the launch of the Rental Lead-to-Keys flow and increased consumer usage of the integrated Mortgage in Principle capability both digitising more of the home-moving transaction.
· Approval of our medium term emissions reduction targets by the Science-Based Targets initiative (SBTi).
(1) Underlying operating profit is operating profit before the share-based payments including the related National Insurance charge
(2) Underlying operating profit excluding prior year ‘other income’ removes the impact of £2.4m ‘other income’ in 2021, which represented the release of a one-off contingent consideration provision
(3) Underlying EPS is profit for the year before share-based payments charges (including the related National Insurance and appropriate tax adjustments), divided by the weighted average number of ordinary shares outstanding in the period
(4) Average Revenue per Advertiser (ARPA) is calculated as revenue from Agency and New Homes advertisers in a given month divided by the total number of advertisers during the month, measured as a monthly average over year
(5) Source: Google analytics
O utlook
Rightmove’s network effects continue to position us at the heart of the UK property market and our visibility of property market data remains unrivalled. Our financial performance in 2022 reflects the trust that our customers continue to place in our digital products to help drive their businesses in both faster and slower markets.
While we remain alert to the ongoing economic uncertainty, Rightmove is not materially impacted by the property market cycle, other than in the most extreme circumstances.
The strong ARPA growth in H2 2022, and the momentum it provides for 2023, gives us increased confidence in ARPA growth in 2023.
We expect customer numbers to follow a similar pattern to that of the second half of 2022.
In 2023, we will maintain our disciplined cost management and focus on profitable revenue growth, as we continue to invest in innovation. The increased inflationary backdrop is not expected to materially impact costs, and we expect an Underlying Operating Margin for 2023 of c73%.
Our capital returns policy, whereby substantially all cash generated in the year is returned to shareholders, remains unchanged.
The strength of our proposition, coupled with our on-going innovation, underpins the Board’s confidence in Rightmove’s outlook for 2023 and beyond.
Peter Brooks-Johnson, Chief Executive Officer, said:
“The year’s changing housing market conditions demonstrated our customers’ resilience and ability to adapt and to continue to succeed. The softening from the covid-induced frenetic market towards a more normal market earlier in the year was disrupted in the final few months by the unexpected rapid mortgage rate increases. The strength of our results is a reminder of how effective and integral our new and existing products and services are in helping our customers in both faster and slower markets.
“Rightmove continues to be the place that people turn to and return to first, with an average of over 1.35bn minutes spent on our platform every month in 2022. The continuing love home movers have for Rightmove is testament to the team’s focus on providing an easy to use leading edge platform, enhanced with innovation which home movers want. This is exemplified by the ability to create Property Lists which we launched in 2022. Over one million lists, and counting, have been created since launch.
“There’s much more to come and exciting plans ahead for Rightmove. As a company that will always be close to my heart, and as a shareholder, I look forward to watching Rightmove’s ongoing progress as it continues to make home moving easier.”
The Company will publish a pre-recorded audio results presentation at 7.00am today, followed by an audio Q&A session for analysts and investors at 9.30am with Peter Brooks-Johnson, CEO, and Alison Dolan, CFO.
| Enquiries: | Investor Relations | Investor.Relations@rightmove.co.uk |
| Rightmove Press Office | Press@rightmove.co.uk |
Chair’s review
It is my pleasure to present Rightmove’s results for the year ended 31 December 2022. In a year of continued economic challenge and global change, our results demonstrate the resilience of Rightmove’s business model and the clear value we provide to our customers and to the UK’s home hunters. Rightmove remains the first place that consumers turn to time after time as they look for their next home.
In spite of the Russian invasion of Ukraine, increased inflation and the challenges in world markets, UK housing transaction numbers remained resilient in 2022, particularly in the first half of the year, with c1.2m transactions. Traffic to the Rightmove site remained considerably higher than pre-pandemic levels as consumers showed how they continue to trust and rely on us to find a property, even in less certain times. I am proud that our teams continued to deliver such a high quality of service to our customers and to home hunters throughout the year.
2023 will see a transition in leadership for Rightmove as Peter Brooks-Johnson steps down after more than 17 years in the business and as our CEO for the last six years. I would like to thank Peter for his dedication and service. He has been fundamental in helping Rightmove become the successful business it is today and the UK’s largest property portal. Under his leadership, the Company has increased the value it provides to customers and to home hunters, with time spent on the portal increasing from 11.7bn minutes in 2016 to over 16bn minutes in 2022. This has delivered sustained growth for our shareholders, increasing annual revenues from £220m to £333m in the same period and returning more than £1 billion through dividends and share buybacks over that time.
During 2022, the Board focused on supporting the management team with the ongoing delivery of Rightmove’s strategic plan. In addition to the growth in the core business, we continued to make progress with other strategic initiatives, including increasing the digitisation of tenants’ rental journeys, simplifying the process for them; growing the value of the Commercial real estate business; and providing an enhanced experience for consumers seeking a mortgage. Our ambition remains for Rightmove to be an innovative and sustainable growth business for the benefit of all stakeholders as we continue to evolve our product offering and value proposition for the benefit of our customers, consumers and shareholders.
Financial Results
The Group’s results reflect the strength of our business model and core value proposition, delivering underlying operating profit(1) of £245.4m (2021: £231.0m) and operating profit of £241.3m (2021: £226.1m) from revenue of £332.6m (2021: £304.9m). Underlying earnings per share(2) were 23.8p (2021: 21.8p) and basic earnings per share 23.4p (2021: 21.3p). Our cash(3) position at the year-end was £40.1m (2021: £48.0m), having returned all surplus cash to shareholders.
Returns to shareholders and dividend
In keeping with our policy of returning free cash to our shareholders, £197.7m (2021: £238.8m) was returned through the share buyback programme and dividend payments.
The Board remains confident in our ability to deliver sustainable returns to shareholders and is recommending a final dividend of 5.2p per share for 2022 (2021: 4.8p). The final dividend will be paid, subject to shareholder approval, on 26 May 2023, taking the total dividend for the year to 8.5p, an increase of 9% on 2021 (2021: 7.8p).
Board changes
Johan Svanstrom was appointed to the Board on 20 February 2023 and will become CEO in March 2023. He will bring significant experience of growing established business to business to consumer online marketplace businesses. Following his appointment as Global President of Hotels.com and Expedia Affiliate Network brands in 2013, he served on the Expedia Group global leadership team for over five years – growing revenues to over $3 billion and leading direct teams of 1,500 people across four continents. A Swedish national based in the UK, Johan most recently served as a Partner, EQT Growth Advisory Team, which is part of EQT, the global investment organisation.
Other Board changes
Rakhi Goss-Custard leaves the Board in May 2023, having served her maximum term of nine years as a Non-Executive Director. Rakhi has made a significant contribution to the Board, bringing extensive knowledge of the customer and consumer experiences from a range of other digital product and mobile platforms. We have commenced a search for her successor and will keep the market appraised of our progress. I would like to thank Rakhi for her contribution to the Board and to the business throughout her tenure.
Board governance
The recently established Board sub-committee, the Corporate Responsibility Committee, has continued to guide and oversee progress in the execution of our Environmental, Social and Governance (ESG) strategy, and I am delighted with the approval of our Net-Zero target by the Science-Based Targets initiative (SBTi).
This is our second year of reporting under the framework of the Taskforce for Climate-Related Financial Disclosures and we have updated our climate-related risk assessments. Further detail can be found in the Sustainability Report.
The Audit Committee has overseen the implementation of the new Enterprise Resource Planning (ERP) finance system, as well as a revised Risk Management Framework.
The Remuneration Committee has reviewed and revised the Company’s Remuneration Policy during the year. Consultation with Rightmove’s largest shareholders has been broadly positive and the Policy will be put to shareholders at our Annual General Meeting in May 2023.
Looking ahead
Our ambition to innovate continually to make home moving easier in the UK and to create long-term sustainable growth for the benefit of all stakeholders is undeterred as we move into 2023 and continue to execute on our long-held strategy for the benefit of our customers, consumers and shareholders.
On behalf of the Board, I would like to thank all our customers for their confidence and support and our employees, who continue to serve our customers and consumers so well through their dedication and hard work.
I am looking forward to welcoming Johan into the business and to working with the Board and the Rightmove team in 2023.
Andrew Fisher
Chair
(1) Underlying Operating Profit is defined as operating profit before share-based payments charges (including the related National Insurance)
(2) Underlying EPS is defined as profit for the year before share-based payments charges (including the related National Insurance and appropriate tax adjustments), divided by the weighted average number of ordinary shares in issue for the period
(3) Cash including money market deposits
Chief Executive’s review
Rightmove’s purpose is to make home moving easier in the UK, and the trusted place that we hold at the heart of Britain’s home moving journeys was evident during 2022. Against a backdrop of macro-economic uncertainty, particularly in the second half of the year, home movers continued to turn to Rightmove not only as the place to find their next home, but as the most reliable source of information about the housing market. For the twelfth consecutive year, Google report that more people start their home search with ‘Rightmove’ rather than ‘Property’; this popularity led to home-movers spending over 16 billion minutes on our platform searching for their next property.
Our customers continued to invest in our digital products, to showcase their expertise and to build their businesses, in what was a year of contrast for our customers, with the underlying post-pandemic robust market of the first quarter returning to a more normal market over the course of the year. This theme was punctuated by the rapid rise in mortgage rates following the mini budget. The robustness of our business model and the return of investment on our products for agents and developers are evidenced by the high ARPA growth of £125 – our second-highest year ever for absolute ARPA growth after the 2021 Covid-recovery year.
I am proud that we have emerged from the pandemic disruption with deeper relationships than ever with our customers, who have seen our products deliver such strong returns for them, not just through the buoyant market conditions of Q1 2022, but in the more normal conditions over the remainder of the year.
2022 has very much demonstrated the semi-countercyclical nature of the Rightmove Agency and New Homes businesses. Estate Agents started the year with a seller-led, stock-constrained market that then evolved to one in which realistic pricing was key to concluding sales. Throughout the year, agents continued to purchase additional Rightmove Products to drive their businesses forward, by winning the right instructions, and the average revenue per advertiser (ARPA) for Agency grew 11% to £1,278.
New Homes developers began the year with many developments fully sold off-plan and therefore not advertised. The fall in demand in the fourth quarter saw Developers turn to Rightmove’s digital products to help to boost sales, which resulted in a 8% increase in the number of developments listed on Rightmove at the end of 2022 and increased take-up by developers of our products, particularly Native Search Adverts and Digital Marketing. ARPA for New Homes grew by 11% to £1,513 in the year.
Rightmove’s key smaller businesses – Commercial Property, Data Services, Overseas Listings and Third-Party Advertising – which leverage the strength of our property advertising business – also continued their impressive growth rates throughout 2022. These business units all maintained double-digit growth in 2022 and contributed £31.5m to revenue (2021: £26.8m). Our more nascent businesses, Tenant Services and Mortgages, continue to evolve their proposition for consumers as well as for agents and landlords, and we have learnt an enormous amount during 2022 about the right next steps as we build these businesses.
Rightmove’s commitment to innovation remains undimmed. One of many examples of our innovation to help our customers be more efficient is the launch of our Certification for Estates and Lettings Agents – a series of online training courses with a bespoke learning management system that enables agents to receive an Ofqual-regulated Level 3 certificate. We help our customers to reach the UK’s largest audience of home hunters more effectively through continuous improvements to our market-leading products, such as Local Valuation Alert and Native Search Adverts, and we are playing a leading role in digitising the processes of buying and renting a home through our Lead-to-Keys and Mortgage in Principle flows.
I am delighted that our products and our teams have delivered such strong value for our customers and our consumers throughout the entirety of what has been a turbulent year for the country and the economy. Our progress is testament to our disciplined focus and the huge efforts that ‘Rightmovers’ have put into building this business together with our industry customers. We look forward to delivering further growth as we continue to shape the UK property market and support our customers in 2023.