Interactive Investor

ii view: Rightmove forecast goes the wrong way

Shares in this giant of the UK property advertising market have significantly underperformed the FTSE 100 index year-to-date. We assess prospects.

10th May 2024 11:46

by Keith Bowman from interactive investor

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AGM trading update for 1 January to 30 April

  • Now expects full-year 2024 Average Revenue Per Advertiser (ARPA) to increase by up to £95 year-over-year, down from a previous £100-£110
  • Now expects full-year 2024 customer numbers to grow by 2%, up from a previous estimate for a slight fall  

Chief executive Johan Svanstrom said:

"Overall, we continue to expect a better year for the UK property market in 2024 than in 2023.  Within that, we see different dynamics across the many segments that we serve, with particular strength in resales.  

“We remain confident in achieving a year of good financial and strategic progress and are focused on driving further long-term platform growth."

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ii round-up:

Online property advertiser Rightmove (LSE:RMV) today maintained estimates for annual sales and the profit margin but adjusted the mix of metrics feeding into the expected performance.

Customer numbers, such as estate agents, are now expected to grow by up to 2% year-over-year compared to its previous forecast for a slight fall. However, average revenue per advertiser (ARPA) is now forecast to increase by between £85 and £95 from £1,431 in 2023, which is less than its previous estimate for an improvement of between £100 and £110. 

Shares in the FTSE 100 company fell 5% in UK trading having come into this latest news little changed year-to-date. That’s similar to property owner and residential landlord Grainger (LSE:GRI) and below an 9% gain for the FTSE 100 index in 2024. 

Property professionals, such as estate agents, lettings agents and new homes builders, pay a subscription fee to advertise their properties on Rightmove.

Net new customer numbers for the four-month trading period to late April of 250 comprised largely of letting only agents (170), which typically advertise less than estate agents and therefore pay a lower ARPA. 

Of the 90 new customer developers acquired during the period, many were housing associations as opposed to builders, which again typically pay a lower ARPA. Total new developer customers for 2024 is expected to remain relatively flat year-over-year.  

Overall, Rightmove's annual revenues is still expected by management to grow by between 7% and 9% on 2023, with adjusted profit margin steady at 70%. 

Broker UBS retained its ‘buy’ stance post the update but cut its fair value estimate to 732p from 764p. First-half results are scheduled for 26 July.  

ii view:

Floated on the London Stock Exchange in 2006, Rightmove is today a constituent of the FTSE 100 index. Estate agent related sales generated its biggest slug of revenues in 2023 at 72%, new home developer demand made up a further 18%, with other businesses such as commercial property, data services, overseas listings, and third-party advertising accounting for the balance of 10%. 

For investors, elevated interest rates continue to pressure mortgage affordability. The fall in housing transactions to 1 million in 2023 from 1.2 million the previous year will have pressured customer, or agency numbers with some having failed. Time spent on its website by consumers fell to 15.4 billion minutes in 2023 from 16.3 billion, while a forecast dividend yield of under 2% compares to over 5% for property owners and REITs Land Securities Group (LSE:LAND) and British Land Co (LSE:BLND).

More favourably, hopes for interest rate cuts easing pressure across the UK housing market persist, and a diversity of customer types use Rightmove, from buyers and renters under agency customers to new home sales from developers. It's also targeting areas of growth away from its core business to include mortgages, rental services such as digitalising the process and commercial real estate. 

For now, and while the near- to medium-term outlook for its share price may be uncertain, Rightmove's dominant market position will remain an attractive selling point for prospective investors.  


  • Strong market position
  • Diversity of customers


  • Uncertain economic backdrop
  • Costs generally remain elevated 

The average rating of stock market analysts:


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