ii view: Rightmove remains bullish about 2025 results

Trading update for the four months to 30 April

• Continues to expect full-year revenue growth of between 8-10%

Chief executive Johan Svanstrom said:

“We're pleased to have started 2025 with good financial, operational and strategic momentum. In particular, we're making strong strides forwards in delivering new tools and products to make the property journey smoother for both consumers and our partners.

“In the current uncertain global climate, our UK-focused, subscription-based and B2B-oriented business model means that we are comparatively well insulated from the volatility that some other companies and industries are having to contend with."

• Invest with ii: What is a Managed ISA? | Open a Managed ISA | Transfer an ISA

ii round-up:

Rightmove (LSE:RMV) today maintained its forecast for growth in 2025 revenues, with customer numbers such as those for estate agents increasing year to date.

Lower mortgage rates and the online property advertiser’s move into areas such as mortgages, rental services, and commercial real estate, are all expected to feed into revenue growth through 2025 of 8-10%.

Shares in the FTSE 100 company rose marginally in UK trading having come into this latest news up by close to a fifth in 2025. That’s comfortably ahead of a near 4% gain for the FTSE 100. Estate agents and potential customers, Savills (LSE:SVS) and Foxtons Group (LSE:FOXT), are down 6% and 13% respectively. 

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

Rightmove continues to expect customer numbers, or membership to increase by around 1% over the full year. 

Since the beginning of April, property listings had risen to a 10-year high, and at the end of April were 13% ahead of the same point last year. 

The group continues to expect Average Revenue Per Advertiser (ARPA) for the year to increase by between £95 and £105 on 2024's £1,524 per month, aided by members taking up its high-end Optimiser Edge advertising package.   

First-half results are due 25 July. 

ii view:

Rightmove highlights itself as the fourth-busiest UK-based digital platform in 2024, behind only the BBC, digital publisher and owner of the Daily Mirror, Reach, and the UK government's own website. Agency related sales generated its biggest slug of revenues in 2024 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, a possible global trade war and its likely impact on driving up prices and therefore keeping interest rates elevated, should not be forgotten. The fall in housing transactions to 1 million in 2023 from 1.5 million in 2021 will have pressured customer or agency numbers, with some having failed. A forecast price earnings ratio above the three-year average may suggest the shares are not obviously cheap, while a forward dividend yield of under 2% compares to over 5% for property owners and real estate investment trusts Land Securities Group (LSE:LAND) and British Land Co (LSE:BLND).

• Bank of England cuts interest rates in surprise split vote
• Where to invest in Q2 2025? Four experts have their say
• Stock market winners and losers during Trump’s first 100 day

More favourably, a takeover approach by Australia's REA Group in 2024 suggests potential for M&A activity. Hopes for further UK interest rate cuts persists, potentially increasing housing transaction numbers and encouraging more homeowners to try and sell. A diversity of customer types is present from buyers and renters under agency customers to new home sales from developers, while targeted areas of growth away from its core include mortgages, rental services and digitalising the rental process, as well as commercial real estate.

On balance, and despite ongoing risks, Rightmove’s dominant market position continues to justify its place in many diversified investor portfolios. 

Positives: 

• Strong market position
• Diversity of customers

Negatives:

• Uncertain economic outlook
• Costs generally remain elevated 

The average rating of stock market analysts:

Hold