23 June
2020
Rightmove plc
Pre-close Trading Statement and Covid-19 update
Rightmove plc, the UK’s largest property portal, is providing a
trading update to the market prior to entering its closed period
for the six months ending 30 June
2020. Financial and operating information relates to the
period 1 January 2020 to 31 May 2020 unless otherwise stated.
Supporting our customers
To support our customers through the unprecedented shut down of
the UK property market due to Covid-19 we offered all our Agency
and New Homes customers a 75% discount between April and
July. The government advised on 13 May that agents and new
homes developers could reopen in England.
Despite the positive consumer reaction to the re-opening of the
housing market, it takes three months on average for housing
transactions to complete which impacts the cash flows of our
agents. It will also take time for agents to build a pipeline
of vendors and new sales instructions. Given this, we have today
communicated our continued support to our Agency customers in
England by offering a 60% discount
for August and 40% for September. The property market in
Wales started to reopen on 22 June
and Scotland is set to reopen on
29 June and we will continue to support customers in these markets
with a 75% discount for August and 60% for September. The financial
impact of this extended support over August and September will
result in a reduction in revenue of £17m-£20m, in addition to the
£65m-75m revenue impact of the
discount for the period April to July.
Beyond financial support we have continued to provide advice and
deliver innovative new tools to help the property market function
whilst adhering to the social distancing guidelines and minimising
unnecessary travel. Practical support includes:
· Making a new tool available to all customers
to enable them to securely deliver online viewing videos to home
hunters in line with government advice. The integrated tool also
offers usage reporting and functionality to make the process of
responding to home hunter enquiries quicker and more efficient for
agents;
· Bespoke local market data to help agents
target resources most efficiently and also to use with home buyers
and sellers;
· Consumer webinars and an accompanying
consumer advice hub giving practical tips on home hunting within
the government guidelines. This hub has been accessed over 400,000
times since the beginning of April. Our weekly email update is read
by an average of 800,000 home hunters every week; and
· A series of 40 Covid-19 related advice
webinars for agents, which have been attended by over 30,000
property professionals from over 5,000 branches.
The housing market
There is longer term uncertainty around the impact of the pandemic
on the economy; however home hunter demand following the reopening
of the housing market has been strong. We have seen all ten of our
busiest days ever on the platform since 13 May. We have also seen
the ten days with the most leads sent over the same period. Sales
agreed are currently over 10% higher in England than a year ago, albeit that some of
this is the result of activity being paused due to lockdown.
Other market indicators are also positive. New property listings
are returning to the market and in the last seven days the number
of properties added to Rightmove in England is over 10% higher than the same
period last year. Usage of the market leading Surveyors Comparable
Tool, which is used when valuing a property for a mortgage, is
rapidly returning to normal with usage in England over the last week now only down 2%
compared to a year ago.
Membership numbers and competitive position
Since the beginning of the year we have seen a decline in our
membership base, principally from lower stock Agency customers
experiencing cash flow issues, exacerbated by the severe financial
shock of the Covid-19 pandemic, and a reduction in the
stock-based-branch-equivalent-measure of hybrid agents.
Overall membership at 31 May of 19,054 is down 3.8% since the
end of 2019. This decline is made up of 620 fewer agency branches,
together with a reduction of 135 New Homes developments.
Traditional agents have thus far generally proven to be
resilient, with the number of traditional agency members only
falling by around 2% since the start of the year. Of the 620 fewer
agency branches just over half are traditional agency branches with
the balance being stock-based virtual branches from hybrid
agencies.
Rightmove’s position as the place home hunters turn to first
continues unabated with the market share of time spent according to
Comscore unchanged in May at over 85%. Rightmove now has over 50%
more available stock listed for sale in the UK than anywhere
else.
Measures to reduce operating costs and conserve cash
We have taken a number of steps to manage our cost base and
preserve cash over the past three months including:
· Board and Senior Leadership Team
remuneration: In recognition of the impact of Covid-19 on
our stakeholders the entire Board and the Group's Senior Leadership
Team have taken a voluntary 20% reduction in salary, with effect
from 1 April to 31 July.
· Furlough: From 6 April the Group
furloughed around a third of its employees, predominantly in
customer facing roles under the Coronavirus Job Retention Scheme.
The Group has topped up salaries for those affected to 90%. As
housing market activity resumes we plan to bring all employees back
from furlough by 31 July.
· Deferral of indirect taxation (VAT)
payments: The UK government announced in March that
all UK VAT-registered businesses have the option to defer any VAT
payments due between 20 March 2020
and
30 June 2020. Payments must be made
on or before 31 March 2021. By
30 June 2020 we will have deferred
VAT payments of £12m.
Liquidity
As previously announced the Group was granted access to the Covid
Corporate Financing Facility in April, however we now do not expect
to issue Commercial Paper under the scheme.
Outlook
Whilst the housing market re-opened on 13 May and early demand
indicators have been strong, it is too early to assess whether this
momentum will be sustained. We are therefore unable to provide
guidance on future profitability.
Commenting on the Group's response to the Covid-19 pandemic,
Peter Brooks-Johnson, Chief
Executive Officer of Rightmove, said:
"In these unprecedented times, I continue to be impressed by the
ingenuity of our customers to continue operating in difficult
circumstances and I thank them for the wealth of ideas which have
inspired our recent innovations. I’m encouraged by the strong
bounce back in home hunter demand since 13 May as England starts to move again and we look
forward to welcoming our Scottish and Welsh customers back to the
market. Rightmove is committed to continuing to innovate to make
home moving easier and to play our part in supporting our
customers’ long-term success.
I‘m immensely proud of the dedication and resilience shown by
our employees throughout our business in responding to the
challenging circumstances presented by the Covid-19 pandemic. The
transition to remote working has been seamless and across the
organisation our teams have worked tirelessly to ensure that we’ve
been able to support our customer base and respond quickly to the
changing needs of home hunters at these times.”
Contact:
Rightmove press office
Press@rightmove.co.uk
Investor relations
Investor.relations@rightmove.co.uk