Rightmove Plc Pre-close Trading Statement and Covid-19 update

 
TIDMRMV 
 
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 GBP17m-GBP20m, 
in addition to the GBP65m-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 GBP12m. 
 
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 
[e-mail] 
 
Investor relations 
[e-mail] 
 
 
 
END 
 

(END) Dow Jones Newswires

June 23, 2020 02:30 ET (06:30 GMT)