23rd Jun 2020 08:47
(Alliance News) - Rightmove PLC on Tuesday said it would offer its customers discounts of up to 75% in August but said it expects the discounts offered to result in a revenue loss of up to GBP20 million for the two-month period.
The FTSE 100 online property website operator said despite the positive consumer reaction to the re-opening of the housing market following the lockdown, it takes about three months for housing transactions to complete. The delay is likely to hurt the cash flows of its agents, Rightmove noted.
It therefore said it will offer a 60% discount for August and 40% for September for its agency customers, adding that customers in Wales and Scotland will get a 75% discount for August and a 60% discount for September.
In March, Rightmove offered its Agency, New Homes and Commercial customers a 75% discount between April and July.
The company said it expects the discounts announced Tuesday to reduce revenue by between GBP17 million to GBP20 million. This is in addition to the GBP65 million to GBP75 million revenue loss forecast as a result of the discounts announced in March.
In efforts to preserve cash, its entire board and leadership team agreed to a 20% reduction in salary from the beginning of April until the end of July. While it was granted access to the Covid Corporate Financing Facility in April, it said it does not now expect to issue commercial paper under the government scheme.
Turning to current trading, Rightmove said sales agreed following the re-opening of the housing market are 10% higher than the same period in 2019. In the last seven days, the number of properties added to Rightmove in England is over 10% higher year-on-year.
However, customer membership has fallen, with overall membership as at the end of May down 3.8% since the end of 2019.
Looking ahead, the company said it intends to bring all employees back from furlough by the end of July. It added that while early demand indicators have been strong since the reopening of the housing market in May, it is unable to provide future guidance due to uncertainty regarding the sustainability of recent momentum.
Rightmove shares were trading 2.4% lower at 575.00 pence each on Tuesday morning in London, and 10% lower than at the start of the year.
By Ife Taiwo; [email protected].
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