Bit of background
Rightmove was conceived as a joint venture between four of the UK's largest property agents: Halifax, Countrywide plc, Royal & Sun Alliance, & Connells in 2000 and got listed in 2006.
Its bread & butter is selling advertising space to estate agents and offering additional advertising products. Now it displays up to 1.2m properties in the UK.
Now it is the biggest UK property internet portal with a 77% of the online real estate market and gives the shares are at all-time highs regarding market value, is there room for more growth?
Here are 10 crucial facts about its operating + financial performance:
Fact number 1: In 2004, Rightmove had sales worth £9m. Now, turnover grew to £192m, a 2000% increase.As mentioned, it has 77% of market share Rightmove’s niche looks small.
Fact number 2: The website displays 1.2m UK properties which are put up by 19,000 advertisers (real estate agents).
Fact number 3: In 2004, net margins were 20% and that rose to a high of 70% before settling at around 57%.
Not surprisingly, its operational expenses have fallen from 72.4% of sales to 28.6% in ten years.
Fact number 4: Estate agents are drawn to Rightmove because it has huge website traffic numbers of 127m unique visitors per month, compare it to Foxton’s 500,000 visitors a month.
Fact number 5: With huge traffic, Rightmove can increase its advertising fees from £117 in 2004 to £830 per advertiser.
However, the levels of fees depend on the amount of fees an estate agent is getting.
For example, a typical Foxton real estate agent would make his/her fees from the following categories:
1. Selling off your property, it’s an average fee of £12,990.
2. To let out your property, that would be £3,355.
3. And getting a mortgage, Foxton would charge an average £2,167.
These numbers looked good, but it depends on whether if Foxton and other estate agents are making money.
Fact number 6: Rightmove’s cash in bank is £8m because it paid out a total of £170m in cash dividends and in addition it bought back shares for treasury and cancellations of a total £424m since 2005.
This makes it a total of £594m being returned to shareholders. Though it gives investors’ confidences of a superior…
