Rightmove Shares Rise as Strong H1 Drives Revenue Growth

UK property portal business Rightmove plc (LON: RMV) reported a robust financial performance for the first half of 2024, driving its shares over 2% higher.

The company's revenue rose by 7%, or £12.6 million in the six months ended June 30, reaching £192.1 million, fueled by strong demand from agents and new homes developers who renewed contracts, upgraded packages, and invested in additional products.

Operating profit saw a modest increase of 2%, reaching £131.6 million, while underlying operating profit grew by 1% to £135.1 million. After adjusting for one-off acquisition costs and strategic investments, these figures show a 4% increase in both operating and underlying operating profits.

Basic earnings per share rose by 2% to 12.4p, and underlying basic earnings per share increased by the same margin to 12.8p. The company declared an interim dividend of 3.7p per ordinary share, up 3% from the previous year.

Operationally, Rightmove maintained its market share leadership at 86% and said it experienced resilient platform traffic with 8.3 billion minutes spent on the site. Membership numbers grew by 1% to 19,061, driven by growth in Agency Lettings members.

The company also reported a 6% increase in Average Revenue Per Advertiser (ARPA), reaching £1,497 per month, with significant growth in both New Homes and Agency ARPA. Continued product innovation and a focus on strategic growth areas contributed to a 30% revenue increase in these segments.

Rightmove's CEO, Johan Svanstrom, expressed confidence in the company's long-term prospects, highlighting ongoing product expansion and innovation.

“Our performance came against the backdrop of the sustained challenging mortgage rate environment. The period saw a pick-up in existing-homes listings and transactions, a continued yet softening imbalance of demand and supply for rentals, and a tentative outlook for new homes development volumes,” said  Svanstrom.

“With the election now concluded, the property market looks forward to potential interest rate reductions which will further stimulate activity.”

The company reiterated its full-year 2024 guidance, expecting revenue growth of 7-9% with membership growth of up to 2% across Estate Agency and New Homes, and full-year ARPA growth of £78-85.

At the time of writing, Rightmove shares are up 2.18% at 580.4p apiece.

In May, Deutsche Bank initiated coverage of Rightmove with a Buy rating and a 745p price target. The bank noted that Rightmove is by far the dominant property portal in the UK, highlighting its market share of 86% of the traffic of the top four property portals in the UK.