Rightmove can easily withstand higher costs

The rise and rise of Rightmove continues apace.

Figures for the first half of 2022 released at the start of the weekend show that the portal returned an eye-watering £100m to shareholders.

In the six months to June it made £122m profit on £167m revenue, up nine and seven per cent respectively on H1 21, buoyed by a hefty 11 per cent rise in ave large advertiser income to £1,290 per month.

One analyst - Charlie Huggins, head of equities at the Wealth Club - says: “Even if the housing market stalls, there are reasons to think Rightmove could prove resilient.

“This doesn’t mean Rightmove is immune to any housing market travails. In a downturn, some customers may go out of business, as we saw during the financial crisis.

“Rightmove may also be forced to offer discounts to its customers when conditions get really bad, as it did during the pandemic.

“The reality though is that Rightmove’s exceptionally dominant market position means estate agents simply can’t do without it. With a market share of 88 per cent it’s the first place people go when looking for a house to buy or rent.

“In addition, Rightmove’s business model ought to be relatively well placed to deal with inflation. It has considerable pricing power and the business model is highly scalable (after-all it’s basically a website with some tools layered on top).

“That translates to exceptionally high operating margins of around 76 per cent giving the group more ability to shoulder cost increases.”

Accompanying the Rightmove results, the portal’s chief executive Peter Brooks-Johnson told shareholders: “Our success during the first half of the year demonstrated the ongoing resilience of our customer base and the continuing love for and trust in our brand.

“Despite the housing market cooling slightly, activity on our platform was significantly higher than in the pre-pandemic market of 2019, with home-hunters using Rightmove for 1.5 billion minutes every month.

“Our continuous improvements and innovation have helped to increase engagement from home-hunters in tools such as sold prices, along with further investment from agents and developers as they continue to believe in the effectiveness of our digital products and tools to help them run and grow their businesses.

“I’m excited by our recent developments to make the process of renting a property easier for tenants and agents.

“The new lead-to-keys workflow will give tenants the ability to search, view, secure and contract on a property, all from their mobile phones. I hope that this will alleviate some of the stress in this very competitive rental market”.