Rightmove Plc · LSE:RMV
Rightmove — H1 2024 Earnings Presentation
41 slides from Rightmove's earnings presentation, Jul 26, 2024
Slide 1: Half Year Results
Half Year Results for the 6 months ended 30 June 2024
Slide 2: Overview
Overview • Rightmove’s platform and network effects remain unrivalled • H1 in line with expectations – strategically, operationally, financially • Financial guidance unchanged • Delivery and innovation continuing at pace • Underlying markets starting to look more supportive 2
Slide 3: H1 2024 Highlights
H1 2024 Highlights
Slide 4: H1 KPIs
(2022: £100.3m) H1 KPIs Adjusted Underlying Revenue ARPA1 Membership 1 Operating Profit2 +7% £192.1m £1,497 19,061 +4% £138.7m (FY 2023: £1,431 = +5%, (31 December 2023: 18,785, (H1 2023: £179.5m) H1 2023 £1,411 = +6%) 30 June 2023: 19,116) (H1 2023: £133.2m) Adjusted Underlying Dividend per share C
Slide 5: H1 operational progress
H1 operational progress +150% growth in monthly c.4m Enhanced profiles (+75% Consumer Track a Property additions >40% leads from app uptake YTD1) Optimiser Edge Core Partner almost 1,400 branches c.350 net new Lettings branches Vendor leads +8% Mortgages: >2x MiPs1 Rental Services: c.290 Commercial:
Slide 6: Property Market Update
Property Market Update
Slide 7: Property market: Tentative recovery
Property market: Tentative recovery Resale Lowest year H1s over 10-year period2 Highest year Lettings H1s over 10-year period2 Mortgage rates 2019 2024 Average price 2014 2024 Demand 2014 2022 Available listings 2022 2019 New listings 2022 2014 Demand 2014 2023 Sales agreed 2023 2021 (SSTC)1 New Hom
Slide 8: Resale: Continue to expect an average year for transaction volumes
Resale: Continue to expect an average year for transaction volumes Transactions1 and Average Asking Price2 £400k Average Asking Price 1,478 1,196 1,258 1,192 1,177 1,045 1,100 1,019 £200k 892 £0k 2008-2012 2013-2017 2018 2019 2020 2021 2022 2023 2024E HMRC Transactions Average Asking Price • Market
Slide 9: Rental: Slight rebalancing of supply/demand
Rental: Slight rebalancing of supply/demand Rental enquiries per available property 40 Max: 34 30 20 Today: 17 Pre-COVID average: 8 10 0 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 • Supply
Slide 10: New Homes: Slower for longer
New Homes: Slower for longer Housing starts to completions (x) 1 2.0 1.5 1.0 0.5 0.0 Q1 2017 Q4 2017 Q3 2018 Q2 2019 Q1 2020 Q4 2020 Q3 2021 Q2 2022 Q1 2023 Q4 2023 Select developer unit completions 2 “Coming Soon” developments on Rightmove3 180 160 61,400 140 65,166 120 63,857 59,800 100 80 Last FY
Slide 11: In summary
In summary • Expected mortgage rate reduction and stable market generally positive for consumer moving activity • Resale: Average transaction year; good agent pipelines yet cashflow lag • Rental: Tentative rebalancing of supply/demand • New Homes: Slower for longer but expect recovery 11
Slide 12: Financials
Financials
Slide 13: Broad-based revenue growth
Broad-based revenue growth % of H1 2024 Revenue (£m) H1 2024 H1 2023 YoY growth +7% revenue growth revenue6 Resale1 115.0 108.3 6% 60% Lettings (including RS) 2 23.5 21.1 12% 12% Agency +7% • Lettings strength Agency 138.5 129.4 7% 72% • Strong retention and upgrades New Homes 33.9 32.7 4% 18% Core
Slide 14: Revenue drivers reflect differing underlying markets
Revenue drivers reflect differing underlying markets 1 Estate Agency: Estate Agency: New Homes Resale and Dual Lettings-Only +£5.3m / +6% +£3.4m / +12% +£1.2m / +4% • Group ARPA £1,497 (+£86 vs H1 2023) • Agency ARPA growth of £76 / 6% to £1,417 • Product remains primary growth driver (53%) • New Ho
Slide 15: Membership: Strongest Lettings growth in years
Membership: Strongest Lettings growth in 10 years Agency and New Homes membership New Homes: Developments lower; all major developers on website2 1900 15 Developments per 19,014 19,116 18,785 19,061 No. of large developers 3,082 3,023 2,946 2,868 1850 10 month 15,932 16,093 16,193 1800 5 15,839 1750
Slide 16: Costs in line with expectations
Costs in line with expectations Adjusted underlying operating costs £99.7m +£7m (15%) YoY1 Majority is investment in headcount resource £53.5m £53.4m Other Costs £46.3m Marketing >80% of team will be in Technology or Other Payroll Partner-facing roles by end-2024 Tech Payroll c.60% payroll Sales Pay
Slide 17: Summary income statement
Summary income statement (£m) 6 months ended 30 June 2024 6 months ended 30 June 2023 Coadjute treated as a research charge Revenue 192.1 179.5 upon investment Adjusted underlying operating costs1 (53.4) (46.3) Adjusted underlying operating profit 1 138.7 133.2 Effective tax rate 25.4% Adjusted unde
Slide 18: Continued strong cash generation
Continued strong cash generation Cash bridge 1 Adjusted operating cash conversion4 of 106% (June 2023:102%) Interim dividend declared: 3.7p Total cash returned to shareholders £100.2m (H1 23: £97.6m) 3 2 Source: Rightmove. 1. Cash in bridge includes cash equivalents of 95-day money market deposits o
Slide 19: Reaffirming capital allocation and guidance for 2024
Reaffirming capital allocation and guidance for 2024 Capital allocation • Organic investment prioritised • Includes bolt-on M&A and investment (e.g. Homeviews, Coadjute) • Progressive dividend policy • All surplus cash to be returned FY24 Guidance Reiterated1 • Revenue growth of +7% to +9% • Up to +
Slide 20: Business & Strategic Update
Business & Strategic Update
Slide 21: Network effect strengthening every day
Network effect strengthening every day Marketing products that Knowing more about deliver outstanding, our consumers measurable results Consumer Partner Product Data Increasingly Increasing relevance tailored products and personalisation for specific partner segments Technology Demand Supply Going S
Slide 22: Exceptional partner value
Exceptional partner value Innovative products High-quality outcomes Unique benefits Total Partner Chargeable Products Insight 85% 76% 73% “Building Training Success 2016 2017 2018 2019 2020 2021 2022 2023 2024 Together” Agent Sale Lettings 1 2 3 perception outcomes outcomes Advocacy 7x 5x 8x Consume
Slide 23: Continued consumer leadership
Consumer Continued consumer leadership Consumer time 1 • Clear #1: >80% Comscore, Ipsos, >70% SimilarWeb1 100% 80% • Direct: 85% direct; >40% of leads sent from Rightmove app 60% • Personalised: >4m enhanced profiles; adding >300k each month 40% 20% • Engaged: Time +1% YoY; visits +2% YoY; leads +39
Slide 24: Innovation deepening our moat every day
Consumer + Partner Innovation deepening our moat every day Q1 Q2 Q3 Q4 > 130 features and Company Report suite enhancements underway in H1 2024 Tenancy Manager Phase 2 24 Product Teams, all AI- Agent broker enabled; >300 technologists Commercial Homepage All while maintaining Renovation Calculator 9
Slide 25: Consumer innovation: connecting Find into Affordability
Consumer innovation: connecting Find into Affordability Idea stage Track a Property: Renovation calculator: launching Mortgages accelerating since launch Q3 2024 • Strong take-up • Personalised lending decision • High consumer engagement • Scale and pace • Enriching consumer data set enable us to se
Slide 26: Consumer marketing: We grow and engage our consumer base
Consumer Consumer marketing: We grow and engage our consumer base Comprehensive marketing strategy on our brand platform “Believe It” 1. Building the 2. Playing a more 3. Using our data to 4. Engaging the next brand active role in target and engage generation consumers’ lives • High performing brand
Slide 27: Partner innovation: Solutions to Partners beyond marketing
Partner Partner innovation: Solutions to Partners beyond marketing Within Rental Services we expand with Lead to Keys product suite Differentiated end-to-end digital solution c.290 partners at end-June (Lead to Keys revenue, £m) Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Existing Partne
Slide 28: Business partnering: Building Success Together
Customer → Partners Business partnering: Building Success Together Enhancing our partnership model and the value that we can bring Insight Training Control Advocacy • Insights via Account Managers • CPD Webinars • Sharing what we’re testing and • Understanding what matters thinking of launching next
Slide 29: Conclusion
Conclusion rightmove ~
Slide 30: Outlook
Outlook • Our market data and platform network effects remain unrivalled • We continue product innovation & digitisation of the property ecosystem • 8 months into our expanded strategy, we are on track with our value-enhancing plans • We adopt AI with thoughtful determination, and deliver data drive
Slide 31: A compelling investment case
A compelling investment case Rightmove has built a central Dual focus on consumer and partner UK property online classifieds is a position within that market over solutions, fueling a platform with highly attractive market c.25 years powerful data and network effects …drives revenues, profits and ca
Slide 32: Q&A
Q&A rightmove ~
Slide 33: Appendix
Appendix rightmove ~
Slide 34: Income Statement
Income Statement (£m) 6 months ended 30 June 2024 6 months ended 30 June 2023 Revenue 192.1 179.5 Operating costs (exc. share-based incentives charges and investment costs) (53.4) (46.3) Adjusted underlying operating profit 138.7 133.2 Margin 72% 74% One-off Coadjute investment and acquisition charg
Slide 35: Balance Sheet
Balance Sheet As at 30 June 2024 As at 31 Dec 2023 As at 30 June 2023 £m £m £m Property, plant and equipment 9.1 9.4 9.2 Intangible assets 34.0 21.8 22.0 Deferred tax assets 1.7 2.4 2.1 Total non-current assets 44.8 33.6 33.3 Trade and other receivables 29.9 31.5 31.8 Contract assets 1.1 0.8 0.8 Inc
Slide 36: Capital Structure
Capital Structure Share Capital HY 2024 m HY 2023 m FY 2023 m In issue at 1 January 813.4 837.4 837.4 Purchase and cancellation of own shares (10.1) (10.0) (24.0) Total issued share capital 803.3 827.4 813.4 Shares held in Treasury (11.4) (12.0) (11.7) Voting rights share capital 791.9 815.4 801.7 O
Slide 37: Key performance indicators
Key performance indicators Period end membership HY 2024 HY 2023 HY 2022 FY 2023 FY 2022 Agency branches 16,193 16,093 16,116 15,839 15,932 New Home developments 2,868 3,034 2.818 2.946 3,082 Total 19,061 19,116 18,934 18,785 19,014 Growth 1% 1% (0%) (1%) 0% Commercial partners 997 919 816 933 830 A
Slide 38: Revenue by business segment
Revenue by business segment H1 2024 Percentage of revenue H1 2023 Percentage of revenue Agency New Homes Other Agency New Homes Other 3% Commercial 3% Commercial 1% Mortgages 0.4% Mortgages 10% 10% 18% 18% 1% 1% Rental services 72% Rental services 72% 38 Source: Rightmove
Slide 39: Package breakdown
Package breakdown Agency Packages (Independent agents) New Homes Packages Essential Essential Extra Enhanced Optimiser 20 Optimiser Edge Standard Gold Advanced 12,000 3,000 10,000 2,500 8,000 2,000 6,000 1,500 4,000 1,000 2,000 500 - - Jun-22 Jun-23 Jun-24 Jun-22 Jun-23 Jun-24 39 Source: Rightmove
Slide 40: 2023-2024YTD consumer time
Consumer 2023-2024YTD consumer time Comscore1 100% 80% 60% 40% • Panel data and website tags 20% 0% Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Zoopla Rightmove Prime Location OnTheMarket SimilarWeb + Data.ai2 • Simila
Slide 41: Globally attractive financial metrics
Globally attractive financial metrics Revenues (£m) EBIT (£m) 15% CAGR since IPO One of the highest margins in the FTSE 100 while investing for future growth2 2211 2961 364 258 333 241 305 214 226 289 90 199 90 268 178 243 162 220 206 192 137 135 167 122 140 97 119 83 82 97 52 63 34 57 74 69 14 39 3