2nd Mar 2007 07:30
Rightmove Plc02 March 2007 2 March 2007 RIGHTMOVE plc PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 Rightmove plc, the UK's number one property website, today announces results forthe year ended 31 December 2006, its first full year results following flotationon 15 March 2006. Highlights: • Revenue grew 85% from £18.2m to £33.6m • Underlying pre-tax profits(1) increased 101% from £8.8m to £17.7m • Final dividend proposed of 3p per share making 4.5p for the full year • Website usage up more than 80% over 2005 and consistently a top 10 website(2) • Overall advertiser membership increased by 42% from 11,483 to 16,321 • Pipeline of new advertising products and services on track for Q1 2007 delivery Notes: (1) Pre-tax profits from continuing operations and before flotation costs and share based payments expense (2) Source: Hitwise: ranking of UK websites by page impressions from UK visitors Ed Williams, Group Managing Director, said: "2006 was a landmark year in Rightmove's history. Not only did we make asuccessful transition from being a privately owned business into a publiccompany and a member of the FTSE250 index, but we also delivered strong growthin all areas. Indeed the rate of growth exceeded our expectations at the time ofthe flotation in March 2006, resulting in two upgrades to our profit forecastssince then. All our growth was organic and driven by increases in revenue. "More than anything though I am pleased that we have preserved the creativityand entrepreneurialism that defines our company. We have a strong pipeline ofnew products and services to serve the housing market that now stretches through2007. We remain committed to increasing the value that estate agents and newhome developers get from our service. More than ever Rightmove is the placewhere home hunters find their next home. "The outlook for continued growth remains strong. Membership numbers continue togrow, with very high retention rates. The recent launch of RightmoveChoice, ourpremium search service, has proved an immediate success with our customers. Weare also making our very first footsteps into attracting a wider base ofadvertisers with the launch of advertising around our new interactive mapservice, Aboutmyplace. "These and other developments, and continued strong growth in our core business,makes us as confident about the future of our business as we were at the time ofthe IPO." For more information please contact: Rightmove For Ed Williams, Group Managing Director, and Graham Zacharias, Finance Director please contact Maud Rousseau 020 7318 9095 Maitland Neil Bennett / Brian Hudspith / Charlotte Barker 020 7379 5151 Barker Introduction Revenue increased by 85% to £33.6 million (2005: £18.2 million) and pre-taxprofits from continuing operations (before flotation costs and share basedpayments expense) doubled to £17.7million (2005: £8.8 million). Net cashbalances at the year end were £14.9 million (2005: £5.6 million). Theseimpressive financial results were underpinned by strong performance against keymetrics. Customer members increased by nearly 5,000 to 16,321 (2005: 11,483), up42%. We continued to increase the value we deliver to our members and this wasreflected in turn by a healthy increase in their average spend with us. Customerretention rate remained around 93% for the third year in succession. Operating Review Rightmove's aim is to be the place for all UK home movers to find details of allproperties available to buy or rent. We provide an easy-to-use but sophisticatedon-line property search. With the depth of information that we provide,including photographs, brochures, location maps, virtual tours, measurements andfloor plans, home hunters can immediately identify a preferred property andcontact the advertiser by phone or email. Our service is directed at four key membership groups: • estate agents • letting (rental) agents • new homes developers • overseas homes agents offering properties outside the UK but interested in advertising to UK-based home hunters. By providing the tools and marketing support to boost our members' own marketingeffectiveness, we help improve their accuracy in pricing properties and helpthem win business from vendors and landlords. Our service therefore goes farbeyond traditional advertising. This is an important part of our membershipservice and builds loyalty with both our members and home hunters. Keys to success Rightmove's success is the result of our contribution to our advertisers'success. We help our advertisers by providing quality enquiries at asignificantly lower cost than their traditional advertising alternatives. Forestate agents and letting (rental) agents, Rightmove also plays a key role ingenerating new opportunities to win instructions (the right to offer a propertyfor sale or for rent on behalf of the owner). Many home movers and landlords nowexpect that their properties should appear on Rightmove's website in order toreach the largest market. Connecting more people with more property than anyone else We are able to make the contribution that we do to our members' businesses as aresult of having become the destination for home hunters. In a typical month in2006, three million people visited the website, each averaging more than onevisit a week and spending around 18 minutes on the site during each visit. In 2006, the usage of the Rightmove.co.uk website grew more than 80% compared to2005. Rightmove.co.uk was consistently among the top 10 most used UK websites bypage impressions (according to Hitwise). This generated over 14 millionenquiries tracked through our systems from agents and developers. The UK property business is cyclical. While our members value our enquiries,Rightmove often makes its biggest contributions at times in the cycle whenenquiries in general are most scarce. Hence enquiries generated is not animmediate driver of success for our members and not, we believe, an appropriatebasis for charging for our service. Strong top-line growth Rightmove's growth in profits is driven by top-line revenue growth. This hasbeen achieved through: • Increases in the number of advertisers • Increases in the value our advertisers see from their spending with us. 2006 saw substantial success in relation to both sales and value. Overalladvertiser membership increased by 42% from 11,483 to 16,321. The retention rateof over 93% was towards the top end of our historical range of 91-94%. Themajority of the estate agents and lettings agents who left Rightmove did sobecause their own business ceased to trade or there was a significant change intheir business focus. Based on our estimate of the market of approximately 24,000 potentialadvertisers, this represents an increase in our customer base from 48% to 68% ofthe total addressable UK market. The value that our advertisers see in being a Rightmove member also increasedsignificantly. For the first time we charged lettings (rental) only agents andnow have around half of all lettings agents as members. New members during theyear paid more than our existing members, continuing the Rightmove approach ofseeking to reward the loyalty of long standing members. This is in contrast tomany other companies in our sector who frequently offer their best deals to newcustomers in order to win their business. Rightmove's cost to its members continues to represent a small proportion of thetotal industry spend on advertising, a total of around £30m compared to £500macross traditional media. Overall the average monthly spend on us per advertiserin 2006 rose from £157 to £192 (an increase of 22%). This increase is in thecontext of Rightmove increasing its own audience of home movers by 83% (visits)and a much higher percentage increase in Rightmove's own marketing spend tobring home hunters onto the site to view our advertisers' properties. Wecontinued to invest in technology over the year, increasing our internetbandwidth ten-fold, doubling our storage capacity, doubling the size of thesupport team and upgrading our systems software. We have also investedsubstantially in the new RightmovePlus infrastructure by which our membersaccess the membership services, information services and property datamaintenance facilities we provide. Customer service teams have been expandedsignificantly and the level of customer service support offered to customersextended. Driving the business forward With over 16,000 property advertisers, the opportunity still remains to increaseour advertising base by up to 50%, with the largest single opportunity beingamongst new home developers. A range of new advertising services has been launched in the few weeks of 2007which allows our members to boost the value they get from Rightmove. Known asthe RightmoveChoice suite of products, they allow advertisers to differentiatethemselves from their competitors and offer an enhanced service to their ownclients. These services should contribute to moving Rightmove forward fromaround 6% of the total industry spending on advertising. We are also making ourvery first footsteps into attracting a wider base of advertisers with the launchof advertising around our new interactive map service, Aboutmyplace. The particular circumstances of the government U-turn on Home Information Packswas disappointing given the substantial investment of effort we had made. Theactual progress that had been achieved on the pre-selling of our proposition andthe development of the operational and IT infrastructure had been encouraging.In the circumstances, we were able to act swiftly and decisively, followed by arapid winding up of our activity at minimal further cost, albeit with a totalabortive investment of £8.3 million. Financial review Revenue in 2006 totalled £33.6 million, an increase of 85% over 2005. 94% of ourrevenue came from advertising services relating to our Rightmove.co.uk website,with the remaining 6% from the provision of business and information services.Revenue grew significantly in all segments of our advertising business. 2006 saw two major one-off costs. £6.7 million was incurred in writing off ourabortive investment in producing a Home Information Pack platform. We ceased toinvest in this area as a result of the government U-turn in July 2006. Inaddition, £1.6 million (2005: £1.7 million) of expenses relating directly to theflotation of the Company on the London Stock Exchange in March 2006 wereincurred, comprising for the main part, fees and expenses paid to legal andfinancial advisers. These costs are gross of any non-recoverable VAT. There was also a step increase in our normal operating costs during the latterpart of 2006 due to a number of factors which included: • The additional costs of operating as a public company • The trebling of the size of our sales force (much of which was originally done to allow us to sell our Home Information Pack service but which we decided to retain in full in order to maintain close relationships with our much increased membership base and to sell our new advertising products) • A doubling of our technology resources to speed up our ability to create and deliver new products • A decision to increase our TV advertising expenditure to reinforce and expand our leadership position. These costs were substantially reflected in our cost base during the second halfof 2006 which at £9.4 million was significantly higher than the £6.8 millionincurred in the first half. All of these increases in activity were achieved whilst strengthening overalloperating margins from continuing operations and excluding flotation costs andshare based payments from 48% to 52%. Rightmove is also in the fortunate position of being able to grow revenuerapidly without placing a burden on working capital due to the predominantlysubscription based revenue model. Sales growth directly drives cash generationwhich is generally collected in advance and accounts for our low levels of baddebts. Taxation The Group's consolidated effective tax rate for the six months ended 31 December2006 is 40% (31 December 2005: 39%). The difference between this and thestandard rate of corporation tax of 30% is mainly due to the high level ofexpenditure on which no tax deduction is available, notably flotation costs andshare based charges. The income tax expense for the year is notional for the reasons explained below.As a consequence, the year end cash position benefited from nil corporation taxpayments in the year and a refund of 2005 tax paid of £1.4 million. A significant corporate tax deduction of approximately £21.1 million arose onshare options exercised in the period. An element of this tax deduction wascarried back to offset the corporation tax liability in respect of the yearended 31 December 2005 with a resulting tax refund of £1.4 million received inJuly. The remaining tax deduction will be set against taxable profits arisingfor the year ended 31 December 2006 resulting in an overall tax loss for theyear. A deferred tax asset was created for the tax loss carried forward, whichthe directors believe will crystallise in the short term. The deferred tax asset of £1.2 million was recognised and a notional tax chargeapplied for the period ended 31 December 2006 in line with the requirements ofIFRS 2. No corporation tax is due at 31 December 2006. Capital reconstruction At an Extraordinary General Meeting of the shareholders held on 30 October 2006,it was resolved to apply to the Court for permission to cancel the Share PremiumAccount and credit the balance to distributable reserves. The Court approved thecancellation in November 2006 and thereafter the Company paid an interimdividend of 1.5p on 21 December 2006. The costs of carrying out this exerciseamounting to approximately £50,000 were expensed in 2006. Share based payment IFRS2 In accordance with IFRS2, a non-cash charge of £2.2 million (2005: nil) isincluded in the income statement representing amortisation of the value of theshare options granted since November 2002. Earnings per share Earnings per ordinary share is based upon profit after taxation and on aweighted average of 122,468,206 shares in issue during the period (2005:118,019,573). Underlying earnings per ordinary share based on continuingoperations and before flotation expenses and share option charges was 10.45p(2005: 5.24p). Board Changes In January 2006, Graham Zacharias was appointed Group Finance Director, bringing33 years of public company experience to the Board. Jonathan Agnew, Nigel Cooperand Judy Vezmar were appointed as Independent Non-executive Directors withJonathan Agnew appointed as the Senior Independent Director. Due to interest in a potential public to private acquisition of Countrywide plc,the largest of our founding shareholders, their director representative, HarryHill, resigned from the Rightmove Board on 12 December 2006. Reappointment ofCountrywide's director representative is ultimately contingent upon Countrywidemaintaining a significant interest in Rightmove. We continue to benefit from allaspects of the commercial agreements entered into between Rightmove andCountrywide including the agreement to list all Countrywide estate agencyproperties on Rightmove until at least March 2009. Jane Pridgeon will retire from the Board at the close of the Annual GeneralMeeting and I would like to thank Jane for her commitment and contribution toRightmove and wish her well for her retirement. Colin Kemp of Halifax EstateAgencies will be appointed to the Board as Jane's replacement on 3 July 2007. Appointment of adviser The Board is pleased to announce the appointment of Numis as joint broker. UBSremains joint broker to the company. Dividend The Board announced a 1.5p per ordinary share interim dividend which was paid on21 December 2006 following a capital reconstruction approved by shareholders on30 October 2006. The Board proposes to pay a final dividend of 3p per ordinaryshare, which combined with the interim dividend of 1.5p gives a total dividendfor the year of 4.5p. The final dividend, subject to shareholder approval, willbe paid on 9 May 2007 to members on the register on 13 April 2007. Current positioning against strategic goals and opportunities Rightmove is in excellent shape in terms of its being the place on the internetthat UK home hunters go to find all the property available. From the viewpointof advertisers Rightmove remains a small proportion of their marketing spend anddelivers results that we believe typically out-perform the next best alternativemarketing investment dramatically. Accordingly, our primary focus is on completing the task in hand and increasingour membership while focusing on the value for money we provide to our members.This includes the focus on the introduction of new services which allow ourmembers to achieve even greater marketing effectiveness as they convert fromtraditional advertising media to on-line. We believe there are numerous opportunities to add additional services andofferings. Indeed as a business we are in continuous receipt of approaches fromother businesses who would wish to partner with us to access home movers, estateagents and developers. We will balance these opportunities and their value toour existing members and home hunters against projected returns on thesepotential investments. Outlook The outlook for continued growth remains strong. There remain many agents anddevelopers who have yet to take the Rightmove service and we are making headwayin all areas. The average amount spent on Rightmove by our advertisers typicallyremains a small percentage of their total marketing spend. Our new RightmoveChoice products allow us to increase the value we bring agents and developers.Opportunities are opening up for Rightmove to widen its base of advertisers andextend the service we provide to the home hunter. Consolidated income statementfor the year ended 31 December 2006 Year ended 31 December 2006 Year ended 31 December 2005 Note Continuing Discontinued Continuing Discontinued operations operations Total operations operations Total £000 £000 £000 £000 £000 £000 Revenue 33,626 - 33,626 18,199 - 18,199 Administrative expenses (19,869) (6,668) (26,537) (11,253) (1,572) (12,825) Operating profit before share based payments and flotation costs 17,530 (6,668) 10,862 8,657 (1,572) 7,085 Share based payments 6 (2,168) - (2,168) - - - Flotation costs (1,605) - (1,605) (1,711) - (1,711) --------------- --------------- ------------ --------------- --------------- ------------Operating profit 13,757 (6,668) 7,089 6,946 (1,572) 5,374 --------------- --------------- ------------ --------------- --------------- ------------Financial income 322 - 322 189 - 189 Financial expenses (66) - (66) (27) - (27) --------------- --------------- ------------ --- --- ------------Net financial income 256 - 256 162 - 162 --------------- --------------- ------------ --------------- --------------- ------------Share of associate profit less loss on disposal (77) - (77) - - - --------------- --------------- ------------ --------------- --------------- ------------Profit before tax 13,936 (6,668) 7,268 7,108 (1,572) 5,536 Income tax expense 5 (4,917) 1,993 (2,924) (2,630) 472 (2,158) --------------- --------------- ------------ --------------- --------------- ------------Profit for the year 9,019 (4,675) 4,344 4,478 (1,100) 3,378 --------------- --------------- ------------ --------------- --------------- -----------Attributable to: Equity holders of the parent 9,019 (4,675) 4,344 4,478 (1,100) 3,378 --------------- --------------- ------------ --------------- --------------- ------------Earnings/ (loss) per ordinary share (pence) Basic 4 7.37 (3.82) 3.55 3.79 (0.93) 2.86 Diluted 4 7.27 (3.77) 3.50 3.63 (0.89) 2.74 Consolidated and company statement of recognised income and expensefor the year ended 31 December 2006 Note Group and Group and Company Company Year ended Year ended 31 December 31 December 2006 2005 £000 £000 Tax in respect of share options recognised directly in equity 5 4,681 1,666 -------------- --------------Net income recognised directly in equity 4,681 1,666 Profit for the year 4,344 3,378 -------------- --------------Total recognised income and expense for the year 9,025 5,044 -------------- -------------- Consolidated and company balance sheetsas at 31 December 2006 Group and Group and Company Company 31 December 31 December 2006 2005 £000 £000 Non-current assets Property, plant and equipment 1,375 1,137 Intangible assets 1,471 2,222 Deferred tax asset 1,241 1,666 -------------- --------------Total non-current assets 4,087 5,025 -------------- --------------Current assets Trade and other receivables 2,921 2,450 Income tax receivable 163 - Cash and cash equivalents 14,881 5,580 -------------- --------------Total current assets 17,965 8,030 -------------- --------------Total assets 22,052 13,055 -------------- -------------- Current liabilities Trade and other payables (5,835) (6,674) Income tax payable - (692) Provisions (96) - -------------- --------------Total current liabilities (5,931) (7,366) -------------- --------------Non current liabilities Deferred tax liabilities - (67) Provisions (112) - -------------- --------------Net assets 16,009 5,622 -------------- -------------- Equity Share capital 1,327 1 Retained earnings 14,682 5,621 -------------- --------------Total equity attributable to the equity holders of the parent 16,009 5,622 -------------- -------------- Consolidated statement of cash flowsfor the year ended 31 December 2006 Note Year ended Year ended 31 December 31 December 2006 2005 £000 £000 Cash flows from operating activities Profit for the year 4,344 3,378 Adjustments for: Depreciation charges 385 261 Amortisation charges 304 150 Impairment of tangible and intangible 1,011 - assets Loss on sale of property, plant and - 5 equipment Loss on sale of investment in associate 7 206 - Investment income 7 (129) - Interest income (322) (189) Interest expense 1 27 Share options charge 6 2,168 -Income tax expense 5 2,924 2,158 -------------- --------------Operating profit before changes in working capital 10,892 5,790 Increase in trade and other receivables (471) (153) (Decrease)/increase in trade and other (839) 4,890 payables Increase in provisions 208 - -------------- --------------Cash generated from operations 9,790 10,527 Income taxes received/(paid) 1,259 (2,196) -------------- --------------Net cash from operating activities 11,049 8,331 -------------- -------------- Cash flows from investing activities Interest received 322 189 Acquisition of property, plant and (938) (864) equipment Acquisition of intangible assets (249) (656) Acquisition of investment in associate 7 (3,319) - Proceeds from sale of investment in 7 3,243 - associate Proceeds from sale of property, plant & equipment - 36 -------------- --------------Net cash from investing activities (941) (1,295) -------------- -------------- Cash flows from financing activities Interest paid (1) (27) Dividends paid (1,861) (5,000) Share issue 1,055 - -------------- --------------Net cash from financing activities (807) (5,027) -------------- -------------- Net increase in cash and cash equivalents 9,301 2,009 Cash and cash equivalents at 1 January 5,580 3,571 -------------- --------------Cash and cash equivalents at 31 December 14,881 5,580 -------------- -------------- NOTES 1. General information The Group accounts have been prepared in accordance with internationalaccounting standards and international financial reporting standards that wereeffective at 31st December 2006 and adopted by the EU. The financial information set out above does not constitute the Company'sstatutory accounts for the years ended 31 December 2006 or 2005. Statutoryaccounts for 2005 have been delivered to the registrar of companies, and thosefor 2006 will be delivered following the Company's Annual General Meeting. Theauditors have reported on those accounts; their reports were (i) unqualified,(ii) did not included references to any matters to which the auditors drewattention by way of emphasis without qualifying their reports and (iii) did notcontain statements under section 237(2) or (3) of the Companies Act 1985. 2. Discontinued operations On 18 July 2006, the Government announced fundamental changes to the contents ofHome Information Packs (HIPs), specifically that the Home Condition Reportwithin the HIP would be voluntary for the foreseeable future. As a consequence,the Board decided to discontinue the HIPs business. The total spend during theyear was £6,668,000 including exit costs of £1,900,000 and research costs of£2,060,000. During the year ended 31 December 2006, the HIPs division had cash outflows fromoperating activities of £5,226,000 (2005: £1,540,000). The net book value of computer and office equipment (£315,000) and the net bookvalue of computer software relating to HIPs (£696,000) have been written off. 3. Segmental reporting Segmental information is presented in respect of Group's business segments. TheGroup does not have geographical segments. Segmental results, total assets and total liabilities include items directlyattributable to the segment as well as those that can be allocated on areasonable basis. Segmental capital expenditure is the total cost incurred during the year toacquire segment assets that are expected to be used for more than one period. Segmental reporting details are provided below: For the year ended 31 December 2006 Property HIPs Total advertising £000 £000 £000 Income statement information Segmental revenue 33,626 - 33,626 Depreciation and 550 139 689 amortisation ------------ ------------ ------------Segmental operating profit/ 13,757 (6,668) 7,089 (loss) Financial income 322 - 322 Financial expenses (66) - (66) Income tax expense (4,917) 1,993 (2,924) Share of associate profit less loss (77) - (77) on disposal ------------ ------------ ------------Profit for the year 9,019 (4,675) 4,344 Balance sheet information Capital expenditure 901 286 1,187 Property, plant and 1,375 - 1,375 equipment Intangible assets 1,471 - 1,471 Total assets 22,052 - 22,052 Total liabilities (5,612) (431) (6,043) For the year ended 31 December 2005 Property HIPs Total advertising £000 £000 £000 Income statement information Segmental revenue 18,199 - 18,199 Depreciation and 379 32 411 amortisation ------------ ------------ ------------Segmental operating profit/ 6,946 (1,572) 5,374 (loss) Financial income 189 - 189 Financial expenses (27) - (27) Income tax expense (2,630) 472 (2,158) ------------ ------------ ------------Profit for the year 4,478 (1,100) 3,378 Balance sheet information Capital expenditure 1,235 902 2,137 Property, plant and 1,068 69 1,137 equipment Intangible assets 1,421 801 2,222 Total assets 12,185 870 13,055 Total liabilities (7,433) - (7,433) All revenue is derived from external operations arising in the UK, and there isno inter-segmental revenue. There are no other separately identifiable business segment income statement orbalance sheet items. 4. Earnings per share Weighted average Per share number of Earnings amount shares £000 pence Year ended 31 December 2005 Basic EPS 118,009,573 3,378 2.86 Diluted EPS 123,438,584 3,378 2.74 Underlying EPS 118,009,573 6,189 5.24 Year ended 31 December 2006 Basic EPS 122,468,206 4,344 3.55 Diluted EPS 123,959,764 4,344 3.50 Underlying EPS 122,468,206 12,792 10.45 Underlying earnings per ordinary share is calculated before the charge for HIPscosts, flotation costs and share option charges. A reconciliation of the basicearnings for the year to the underlying earnings is presented below: 2006 2005 £000 £000 Basic earnings for the year 4,344 3,378 HIPs costs (net of tax) 4,675 1,100 Flotation costs 1,605 1,711 Share options charge 2,168 - ---------------- ----------------- Underlying earnings for the year 12,792 6,189 ================ ================= 5. Taxation Analysis of charge in year: Year ended Year ended 31 December 31 December 2006 2005 £000 £000 UK corporation tax Income tax for the year 3,544 2,114 Adjustment for prior period - 2 ---------------- ---------------- Total current tax 3,544 2,116 Deferred tax Origination/reversal of timing (620) 42 differences ---------------- ---------------- Total tax in income statement 2,924 2,158 ================ ================ Factors affecting the tax charge for the current period The current tax charge for the year is higher (2005: higher) than the standardrate of corporation tax in the UK 30% (2005: 30%). The differences are explainedbelow: Year ended Year ended 31 December 31 December 2006 2005 £000 £000 Current tax reconciliation Profit before tax 7,268 5,536 ---------------- ---------------Current tax at 30% (2005: 30%) 2,180 1,661 Effects of: Expenses not deductible for tax purposes 744 499 Adjustment in respect of prior years - (2) ---------------- ---------------Total tax charge (see above) 2,924 2,158 ================ =============== A notional tax charge of £3,544,000 was applied for the year ended 31 December2006 and recognised directly in equity in line with the requirements of IFRS 2.No corporation tax liability is due at 31 December 2006. The effective tax rate for the year ended 31 December 2006 is 40% (2005:39%).The difference between this and the corporation tax of 30% is mainly due to thehigh level of expenditure on which no tax deduction is available, notablyflotation costs and the share option charge. During the year a significant tax deduction of £21,101,000 arose on shareoptions exercised on flotation. An element of this tax deduction was carriedback to eliminate the corporation tax charge of £2,114,000 in respect of theyear ended 31 December 2005. The tax credit was recognised directly in reservesas it arose on share options exercised for which the related IFRS 2 charge wasnil. Movement in current and deferred tax 31 January 1 Recognised Recognised (Paid)/ December 2006 in income in equity received 2006 £000 £000 £000 £000 £000 Deferred tax Property, plant and equipment 68 (300) - - (232) Equity settled share options (1,666) (320) 1,666 - (320) Tax losses - - (689) - (689) ------- ------- ------- ------- -------Deferred tax asset (1,598) (620) 977 - (1,241) Current tax Income tax for the year - 3,544 (3,544) (163) (163) Adjustments for prior period 692 - (2,114) 1,422 - ------- ------- ------- ------- -------Tax creditor/(debtor) 692 3,544 (5,658) 1,259 (163) ------- ------- ------- ------- ------- (906) 2,924 (4,681) 1,259 (1,404) ------- ------- ------- ------- ------- 6. Share based payments The Company operates a performance related share incentive scheme for keymanagement personnel and senior employees, comprising of the RightmoveUnapproved Executive Share Option Plan ("Unapproved Plan") and the RightmoveApproved Executive Share Option Plan ("Approved Plan"). The Company alsooperates a Savings Related Share Option Scheme ("SAYE"). In July 2004, the Company granted options under the Rightmove.co.uk LimitedEnterprise Management Incentive Scheme ("EMI Plan") to key management personneland senior employees. Additionally, one EMI share option plan was granted prior to 7 November 2002.The recognition and measurement principles in IFRS 2 have not been applied tothis share option plan in accordance with the transitional provisions in IFRS 1. The fair value of services received in return for share options granted ismeasured by reference to the fair value of share options granted. The estimateof the fair value of the services received is measured based on the BlackScholes model. The contractual life of the options is used as an input into thismodel. All share incentive schemes are granted under a service condition. Suchconditions are not taken into account in the fair value of the servicesreceived. There are no market conditions associated with the above grants. The employee turnover before vesting has not been included in calculating thefair value of options. The total charge for the year relating to employee share based payment plans was£2,168,000 (2005: £nil), all of which related to share options granted in 2006. 7. Acquisition and disposal of associate During the year, the Company acquired 25% of the ordinary share capital of TMGHoldings Limited ("TM") for a consideration of £3,243,000 and acquisition costsof £77,000. This gave rise to positive goodwill of £2,140,000 and an intangibleasset relating to customer lists of £1,124,000. The Group's share in the fairvalue of net assets of the associate at the date of acquisition was £56,000. As a result of the discontinuance of the HIPs business, it was no longerconsidered appropriate to retain this shareholding. Accordingly, the holding wasdisposed of for £3,243,000, before costs. The sale gave rise to a loss ondisposal of £206,000. Whilst TM was an associate and before the decision to sellwas made, the results of the associate were equity accounted for. The Grouprecognised a profit of £129,000 representing its share of TM's profit for thatperiod. The directors decided to present the loss on disposal of £206,000 andthe share of associate's profit of £129,000 on the face of the income statement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Rightmove