7th Aug 2020 08:55
(Alliance News) - Rightmove PLC on Friday reported a knock to earnings in the first half of 2020, due to discounts it offered to estate agents to help them get through the lockdown.
The Milton Keynes, England-based property portal reported pretax profit of GBP61.6 million in the six months ended June 30, down 43% from GBP108.0 million a year prior.
Revenue was down 34% to GBP94.8 million from GBP143.9 million a year before. The company said this reflected the impact of the 75% discount it offered to its estate agent customers for four months from April.
Rightmove extended its discounts through to the end of September, with a 60% discount in fees will be offered from August, reducing to a 40% discount in September.
Despite this support, the company faced a campaign against it dubbed 'Say No To Rightmove', created by a group of agents.
The agents felt disenfranchised by Rightmove's charging matrices, the way in which they claim its services clients, and the "abject disregard for agents' feedback". The movement had over 1,750 agents sign up.
Average revenue per advertiser was down by 34% to GBP712 per month from GBP1,077 last year.
Membership numbers are down 3.3% since the start of the year to 19,158 from 19,809 a year prior, the company said Friday. This reflects a 3.5% decline in agency branches together with a 2.1% fall in new homes developments, the company said.
Rightmove did not declare an interim dividend, having paid out 2.8 pence per share last year. The company also cancelled its final dividend of 4.4p per share for the year ended December 31, given the uncertainties presented by Covid-19.
Rightmove, though recognising the importance of payouts, said its priority now is to preserve cash and strengthen its liquidity.
The company has seen strong demand since May 13, when the housing market in the UK reopened. Demand of sales of properties surged by 50% between June 1 and July 31 when compared to the same period a year prior. This strong demand has led to a good trading momentum coming out of the lockdown and going forward.
Chief Executive Officer Peter Brooks-Johnson said: "The positive metrics in June and July allied to the stamp duty holidays give grounds for cautious optimism that housing transaction levels will increase from the low point in second quarter. Rightmove data suggests that the significant increase in activity is being driven not only from the pent-up demand from the period of lock down, but an increased number of home hunters who have decided to move following the experience of lock down.
"However, it is too early to assess whether the strength of this positive momentum in the housing market will be maintained against the threat of further lock downs and wider economic slowdown."
Rightmove shares were up 6.7% at 616.35 pence each in London on Friday morning.
By Greg Roxburgh; [email protected]
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