Rightmove profit and revenue rise; acquisition announced

Property website Rightmove reported a jump in first-half profit on Friday as it announced the acquisition of Van Mildert - a company that provides tenant referencing services and rent guarantee insurance products - for up to £20m.

In the six months to the end of June, pre-tax profit rose to £108.08m from £98.05m in the same period a year ago, on revenue of £143.9m, up 10%. Rightmove said revenue was driven by continued growth in its agency and new homes businesses.

The interim dividend was lifted by 0.3p a share to 2.8p and average revenue per advertiser rose £90 on the same period a year ago to £1,077 per month.

Membership numbers slipped 1% since the start of the year to 20,209 from 20,454 at the end of December, reflecting a 3% drop in mainly low-stock agency branches, offset by strong growth in new homes development numbers.

Housing transactions in the first half of 2019 fell 4.6% year-on-year against the first half of last year.

The company said it saw continued traffic growth, with visits up 2% year-on-year, averaging nearly 141 million visits per month, driven by growth in mobile traffic.

Chief executive officer Peter Brooks-Johnson said: "In the first half of 2019 home hunters visited Rightmove a record 845 million times. Home hunters continue to turn to Rightmove first to search and research properties in the only place you can see virtually the whole of the UK market. Our restless innovation delivers the fastest and easiest way to ‘find your happy’ from the 1.1 million UK residential properties on Rightmove.

"A 4.6% drop in transactions compared to 2018 has put pressure on some low-stock agency branches and created opportunity for others. We’re focused on helping all our customers succeed by delivering the most significant and effective exposure for their properties and brands to compete to win home sale instructions and also by being the largest source of high quality leads. We’ve seen strong adoption of our new digital solutions and existing packages by new homes developers and agents as they recognise the value of the UK’s largest property audience and Rightmove’s unique data insight."

Rightmove also announced the acquisition of Van Mildert, which it said has a strong brand and is well positioned within the rental marketplace.

The Newcastle-based business delivered audited net revenues of £3.6m and pre-tax profit of £1.4m for the year ended 30 November 2018.

Rightmove will pay an initial cash consideration of £16m for the company, with a future deferred consideration capped at £4m covering the two-year period from January 2020 to December 2021 and based on the revenue performance of the business.

The deal is expected to be enhancing to Rightmove's earnings per share in the first full year of ownership.