REG - Rightmove Plc - Final Results <Origin Href="QuoteRef">RMV.L</Origin> - Part 8
23/02/2018 07:05
- Part 8: For the preceding part double click ID:nRSW7131Fg
SIP 517 (517) - -
Share-based incentives exercised in the year 108 - 241 349
SIP releases in the year - 17 - 17
Own shares held as at 31 December 2016 (2,291) (1,352) (10,804) (14,447)
Own shares held as at 1 January 2017 (2,291) (1,352) (10,804) (14,447)
Shares purchased for SIP (761) - - (761)
Shares transferred to SIP 741 (741) - -
Share-based incentives exercised in the year 333 - 1,886 2,219
Reduction in shares released due to net settlement - - (81) (81)
SIP releases in the year - 75 - 75
Shares held as at 31 December 2017 (1,978) (2,018) (8,999) (12,995)
Own shares held - number of shares
Number of shares
EBT shares reserve SIP shares reserve Treasury
shares Total
Own shares held as at 1 January 2016 386,057 37,800 2,322,314 2,746,171
Shares purchased for SIP 20,250 - - 20,250
Shares transferred to SIP (12,950) 12,950 - -
Share-based incentives exercised in the year (50,082) - (50,589) (100,671)
SIP releases in the year - (600) - (600)
Own shares held as at 31 December 2016 343,275 50,150 2,271,725 2,665,150
Own shares held as at 1 January 2017 343,275 50,150 2,271,725 2,665,150
Shares purchased for SIP 17,500 - - 17,500
Shares transferred to SIP (20,000) 20,000 - -
Share-based incentives exercised in the year (77,008) - (396,192) (473,200)
Reduction in shares released due to net settlement - - 16,923 16,923
SIP releases in the year - (2,450) - (2,450)
Shares held as at 31 December 2017 263,767 67,700 1,892,456 2,223,923
23 Reconciliation of movement in capital and reserves (continued)
(a) EBT shares reserve
This reserve represents the cost of own shares acquired by the EBT less any
exercises of share-based incentives.
At 31 December 2017, the EBT held 263,767 (2016: 343,275) ordinary shares
in the Company of £0.01 each, representing 0.3% (2016: 0.4%) of the ordinary
shares in issue (excluding shares held in treasury). The market value of the
shares held in the EBT at 31 December 2017 was £11,870,000
(2016: £13,398,000).
(b) SIP shares reserve (Group and Company)
In November 2014, the Company established the Rightmove Share Incentive Plan
Trust (SIP). This reserve represents the cost of acquiring shares less any
exercises or releases of SIP awards. Employees of the Group were offered 50
free shares (2016: 50), subject to a three year service period, with effect
from 5 January 2018 (2016: 3 January 2017). 2,450 (2016: 600) shares were
released by the SIP during the year in relation to good leavers and retirees.
20,000 (2016: 12,950) shares were transferred to the SIP reserve from the EBT.
At 31 December 2017 the SIP held 67,700 (2016: 50,150) ordinary shares in
the Company of £0.01 each, representing 0.07% (2016: 0.05%) of the ordinary
shares in issue (excluding shares held in treasury). The market value of the
shares held in the SIP at 31 December 2017 was £3,047,000 (2016:
£1,957,000).
(c) Treasury shares (Group and Company)
This represents the cost of acquiring shares held in treasury less any
exercises of share-based incentives. These shares were bought in 2008 at an
average price of £4.76 and may be used to satisfy certain share-based
incentive awards. An additional 6,277 shares were issued as a result of rolled
up dividend payments in relation to performance shares.
Other reserves This represents the Capital Redemption Reserve in respect of
own shares bought back and cancelled. The movement of £22,000
(2016: £22,000) is the nominal value of ordinary shares cancelled during the
year.
Retained earnings
The loss on the exercise of share-based incentives of £1,485,000 (2016:
£7,000 gain) is the difference between the value that the shares held by the
EBT, SIP and treasury shares were originally acquired at and the exercise
price at which share-based incentives were exercised or released during the
year. Details of share buybacks and cancellation of shares are included in
Note 22.
Company
Reverse acquisition reserve This reserve resulted from the acquisition of
Rightmove Group Limited by the Company and represents the difference between
the value of the shares acquired at 28 January 2008 and the nominal value of
the shares issued.
Other reserves Awards relating to share-based incentives made to Rightmove
Group Limited employees have been treated as a deemed capital contribution.
The principal movement in other reserves for the year comprises £2,625,000
(2016: £1,738,000) in respect of the share-based incentives charge for
employees of Rightmove Group Limited.
In addition, other reserves include £361,000 (2016: £339,000) of Capital
Redemption Reserve. A movement of £22,000 (2016: £22,000) has been recorded
in relation to the nominal value of ordinary shares cancelled during the year.
24 Share-based payments The Group and Company operate a number of
share-based incentive schemes for executive directors and employees.
All share-based incentives are subject to a service condition. Such conditions
are not taken into account in the fair value of the service received. The fair
value of services received in return for share-based incentives is measured by
reference to the fair value of share-based incentives granted. The estimate of
the fair value of the share-based incentives is measured using either the
Monte Carlo or Black Scholes pricing model as is most appropriate for each
scheme.
The Group recognised a total share-based payments charge for the year of
£4,836,000 (2016: £4,142,000) with a Company charge for the year of
£2,211,000 (2016: £2,404,000), as set out below:
Group Company
2017 2016 2017 2016
£000 £000 £000 £000
Sharesave Plan 310 204 - 4
Performance Share Plan (PSP) 2,297 2,755 1,544 1,879
Deferred Share Bonus Plan (DSP) 1,441 884 667 521
Share Incentive Plan (SIP) 788 299 - -
Total share-based payments charge 4,836 4,142 2,211 2,404
NI on applicable share-based incentives at 13.8% 1,228 451 876 232
A 2% reduction or increase in the employee leaver assumption (excluding
executive directors) for the DSP and the PSP would have increased/decreased
the share-based payments charge in the year by £34,000 (2016: £36,000).
Approved and Unapproved Plans
There has been no award of share options for Approved and Unapproved Plans
since 5 March 2010.
2017 2016
Group Number Weighted average exercise price (pence) Number Weighted average exercise price (pence)
Outstanding at 1 January 546,527 307.42 546,527 307.42
Exercised (214,755) 328.07 - -
Outstanding at 31 December 331,772 294.06 546,527 307.42
Exercisable at 31 December 331,772 294.06 546,527 307.42
The weighted average market value per ordinary share for options exercised in
2017 was £41.77 (2016: nil). The options outstanding at 31 December 2017
have an exercise price in the range of £2.24 to £6.66 in both years and a
weighted average contractual life of 1.3 years (2016: 2.1 years).
24 Share-based payments (continued)
Sharesave Plan The Group operates an HMRC Approved Sharesave Plan under which
employees are granted an option to purchase ordinary shares in the Company at
up to 20% less than the market price at invitation, in three years' time,
dependent on their entering into a contract to make monthly contributions into
a savings account over the relevant period. These funds are used to fund the
option exercise. No performance criteria are applied to the exercise of
Sharesave options. The assumptions used in the measurement of the fair value
at grant date of the Sharesave Plan are as follows:
Grant date Share price at grant date (pence) Exercise price (pence) Expected volatility (%) Option life (years) Risk free rate (%) Dividend yield (%) Employee turnover before vesting/ non-vesting condition (%)
Fair value per option (pence)
1 October 2013 2371.00 1896.00 27.3 3.0 0.7 1.1 25.0 659.00
1 October 2014 2144.00 1972.00 25.3 3.0 1.0 1.4 25.0 430.00
1 October 2015 3639.00 2960.00 24.7 3.0 0.8 1.0 25.0 933.00
1 October 2016 4293.00 3315.00 27.8 3.0 0.4 1.1 25.0 1233.00
1 October 2017 4045.00 3289.00 30.1 3.0 0.1 1.3 25.0 1195.00
Expected volatility is estimated by considering historic average share price
volatility at the grant date.
The requirement that an employee has to save in order to purchase shares under
the Sharesave Plan is a non-vesting condition. This feature has been
incorporated into the fair value at grant date by applying a discount to the
valuation obtained from the Black Scholes pricing model. The discount has been
determined by estimating the probability that the employee will stop saving
based on expected future trends in the share price and past employee
behaviour.
2017 2016
Group Number Weighted average exercise price (pence) Number Weighted average exercise price (pence)
Outstanding at 1 January 116,933 2712.71 104,019 2273.13
Granted 36,939 3289.00 43,451 3315.00
Forfeited (19,620) 2938.14 (9,939) 2695.91
Exercised (37,112) 1961.61 (20,598) 1809.87
Outstanding at 31 December 97,140 3182.54 116,933 2712.71
Exercisable at 31 December 3,299 1972.00 4,601 1896.00
The weighted average market value per ordinary share for Sharesave options
exercised in 2017 was £41.36 (2016: £38.34).
The Sharesave options outstanding at 31 December 2017 have an exercise price
in the range of £19.72 to £33.15 (2016: £18.96 to £33.15) and a weighted
average contractual life of 2.4 years (2016: 2.3 years).
24 Share-based payments (continued)
Performance Share Plan (PSP)
The PSP permits awards of nil cost options or contingent shares which will
only vest in the event of prior satisfaction of a performance condition.
34,720 PSP awards were made on 1 March 2017 (the Grant Date) subject to
Earnings Per Share (EPS) and Total Shareholders Return (TSR) performance. A
further 3,457 awards were made to Peter Brooks-Johnson on 9 May 2017 to bring
his 2017 PSP award in line with his Chief Executive Officer salary.
Performance for all 2017 awards will be measured over three financial years (1
January 2017 - 31 December 2019). The vesting in March and May 2020 (Vesting
Date) of 25% of the 2017 PSP award will be dependent on a relative TSR
performance condition measured over a three year performance period and the
vesting of the 75% of the 2017 PSP award will be dependent on the satisfaction
of an EPS growth target measured over a three year performance period.
The PSP awards have been valued using the Monte Carlo model for the TSR
element and the Black Scholes model for the EPS element and the resulting
share-based payments charge is being spread evenly over the three year period
between Grant Date and Vesting Date. PSP award holders are entitled to receive
dividends accruing between the Grant Date and the Vesting Date and this value
will be delivered in shares. The assumptions used in the measurement of the
fair value at grant date of the PSP awards are as follows:
Exercise price (pence) Option life (years) Risk free rate (%) Employee turnover before vesting/ non-vesting condition (%)
Grant date Share price at grant date (pence) Expected volatility (%) Dividend yield (%)
Fair value per option (pence)
3 March 2014 (TSR dependent)((1))
2688.00 nil 25.3 3.0 1.0 0.0 4.8 1219.00
3 March 2014 (EPS dependent)((1))
2688.00 nil n/a 3.0 1.0 0.0 4.8 2688.00
2 March 2015 (TSR dependent)((1) (2))
2 March 2015 (EPS dependent)((1) (2)) 3044.00 nil 24.7 3.0 0.8 0.0 5.2 2258.00
3044.00 nil n/a 3.0 0.8 0.0 5.2 3044.00
1 March 2016 (TSR dependent)((1))
1 March 2016 (EPS dependent)((1)) 4069.00 nil 27.8 3.0 0.4 0.0 4.4 1985.00
4069.00 nil n/a 3.0 0.4 0.0 4.4 4069.00
1 March 2017
(TSR dependent)((2)) 4065.00 nil 30.1 3.0 0.1 0.0 0.0 2111.00
1 March 2017
(EPS dependent)((2)) 4065.00 nil n/a 3.0 0.1 0.0 0.0 4065.00
9 May 2017
(TSR dependent)((2)) 4244.00 nil 30.1 3.0 0.1 0.0 0.0 2111.00
9 May 2017
(EPS dependent)((2)) 4244.00 nil n/a 3.0 0.1 0.0 0.0 4065.00
(1) For details of TSR and EPS performance conditions refer to the Directors'
Remuneration Report on pages 61 to 94.
(2) Both the TSR and EPS performance conditions for PSPs with a grant date of
2 March 2015 have been met in full and 100% of the awards are expected to vest
in March 2018.
Expected volatility is estimated by considering historic average share price
volatility at the grant date.
Group 2017 Number
2016 Number
Outstanding at 1 January 402,952 388,002
Granted 38,177 89,041
Forfeited (23,635) (22,688)
Exercised (175,160) (51,403)
Outstanding at 31 December 242,334 402,952
Exercisable at 31 December 25,140 82,467
The weighted average market value per ordinary share for options exercised in
2017 was £41.25 (2016: £38.86). The weighted average exercise price was nil
in both years.
The PSP awards outstanding at 31 December 2017 have a weighted average
contractual life of 2.7 years (2016: 2.7 years).
24 Share-based payments (continued)
Deferred Share Bonus Plan (DSP)
In March 2009 a DSP was established which allows executive directors and other
selected senior management the opportunity to earn a bonus determined as a
percentage of base salary settled in nil cost deferred shares. The award of
shares under the plan is contingent on the satisfaction of pre-set internal
targets relating to underlying drivers of long-term revenue growth (the
Performance Period). The right to the shares is deferred for two years from
the date of the award (the Vesting Period) and potentially forfeitable during
that period should the employee leave employment. The deferred share awards
have been valued using the Black Scholes model and the resulting share-based
payments charge is being spread evenly over the combined Performance Period
and Vesting Period of the shares, being three years.
The assumptions used in the measurement of the fair value of the deferred
share awards are calculated at the date on which the potential DSP bonus is
communicated to directors and senior management (the grant date) as follows:
Grant date Award date Share price at grant date (pence) Expected term (years) Risk free rate (%) Fair value per share
Exercise price (pence) Employee (pence)
turnover
before vesting/
non-
vesting condition
Dividend yield (%)
(%)
3 March 2014 2 March 2015 2688.00 nil 3.0 1.0 1.0 5.6 2605.00
2 March 2015 1 March 2016 3044.00 nil 3.0 0.8 1.2 6.0 2941.00
1 March 2016 1 March 2017((1)) 4069.00 nil 3.0 0.4 1.1 5.7 3942.00
1 March 2017 1 March 2018((2)) 4065.00 nil 3.0 0.1 1.3 10.0 3915.00
(1) Following the achievement of 92% of the 2016 internal performance targets,
38,416 nil cost deferred shares were awarded to executives and senior
management on 1 March 2017 (the Award Date) with the right to the release of
the shares deferred until March 2019.
(2) Based on the 2017 internal performance targets, the Remuneration Committee
determined that 60% of the maximum award in respect of the year will be made
in March 2018. The number of shares to be awarded will be determined based on
the share price at the Award Date in March 2018.
Group 2017 Number 2016 Number
Outstanding at 1 January 76,172 68,309
Awarded 38,416 36,276
Forfeited (3,579) (1,677)
Exercised (39,896) (26,736)
Outstanding at 31 December 71,113 76,172
Exercisable at 31 December - 7,709
The weighted average market value per ordinary share for deferred shares
exercised in 2017 was £41.07 (2016: £38.60). The weighted average exercise
price was nil in both years.
The DSP awards outstanding at 31 December 2017 have a weighted average
contractual life of 1.7 years (2016: 1.5 years).
24 Share-based payments (continued)
Share Incentive Plan
In 2014, the Group established the Rightmove Share Incentive Plan Trust (SIP).
Employees were offered 50 shares (2016: 50) as a gift, subject to a three year
service period (the Vesting Period). The SIP awards have been valued using the
Black Scholes model and the resulting share-based payments charge spread
evenly over the Vesting Period of three years. The SIP shareholders are
entitled to dividends paid in cash over the Vesting Period. No performance
criteria are applied to the exercise of SIP options. The assumptions used in
the measurement of the fair value at grant date of the SIP awards are as
follows:
Grant date Share price at grant date (pence) Exercise price (pence) Expected volatility (%) Option life (years) Risk free rate (%) Dividend yield (%) Employee turnover before vesting/ non-vesting condition (%)
Fair value per option (pence)
1 January 2015 2245.00 nil 24.7 3.0 0.8 nil 33.0 2245.00
1 January 2016 4093.00 nil 27.8 3.0 0.4 nil 33.0 4093.00
1 January 2017 3945.00 nil 30.1 3.0 0.1 nil 33.0 3945.00
Expected volatility is estimated by considering historic average share price
volatility at the grant date.
Group 2017 Number 2016 Number
Outstanding at 1 January 44,300 30,200
Granted 23,600 20,550
Forfeited (6,250) (5,850)
Released (2,450) (600)
Outstanding at 31 December 59,200 44,300
Exercisable at 31 December - -
The weighted average market value per ordinary share for SIP awards released
in 2017 was £41.66 (2016: £37.90). The weighted average exercise price in
both years was nil.
The SIP shares released relate to good leavers and retirements from the SIP,
in accordance with the terms of the Trust.
The SIP options outstanding at 31 December 2017 have a weighted average
contractual life of 0.9 years (2016: 1.4 years).
25 Operating lease commitments Non-cancellable operating lease rentals are
payable as follows:
2017 2016
Group Plant & machinery £000 Land & buildings Plant & machinery £000 Land & buildings £000 Total £000
£000 Total
£000
Less than one year 304 929 1,233 234 491 725
Between one and five years
287 5,048 5,335 157 1,172 1,329
More than five years
- 5,700 5,700 - 3 3
591 11,677 12,268 391 1,666 2,057
During 2017 the Group entered into three new operating lease arrangements for
additional space at the London office. These leases will be capitalised on
transition to IFRS 16 on 1 January 2018. For further detail please see Note 3.
The Company had no operating lease commitments in either year.
26 Financial instruments Credit risk The carrying amount of financial
assets represents the maximum credit exposure. The maximum exposure to credit
risk at the reporting date was:
Group 2017 £000 2016 £000
Note
Net trade receivables 17 30,293 26,633
Accrued interest receivable 17 16 -
Other debtors 17 74 127
Cash and cash equivalents 18 20,930 13,749
Money market deposits 18 4,045 4,026
55,358 44,535
The Company had no exposure to credit risk in either year.
The maximum exposure to credit risk for trade receivables at the reporting
date by geographic region was:
Group Note 2017 £000 2016 £000
UK 29,885 26,124
Rest of the world 408 509
17 30,293 26,633
The maximum exposure to credit risk for trade receivables at the reporting
date by type of customer was:
Group Note 2017 £000 2016 £000
Property advertisers 29,020 25,361
Other 1,273 1,272
17 30,293 26,633
The Group's most significant customer accounts for £1,408,000
(2016: £1,589,000) of net trade receivables as at 31 December 2017.
Impairment losses The ageing of trade receivables at the reporting date was:
2017 2016
Gross Impairment Gross Impairment
Group £000 £000 £000 £000
Not past due 26,725 (4) 24,010 (7)
Past due 0 - 30 days 2,750 (68) 1,876 (70)
Past due 30 - 60 days 659 (30) 880 (56)
Past due 60 - 90 days 336 (75) 58 (58)
Past due older 286 (286) 237 (237)
30,756 (463) 27,061 (428)
The movement in the allowance for impairment in respect of trade receivables
during the year was as follows:
Group 2017 2016 £000
£000
At 1 January 428 446
Charged during the year 466 437
Utilised during the year (431) (455)
At 31 December 463 428
The Group has identified specific balances for which it has provided an
impairment allowance on a line by line basis across all ledgers, in both
years. No general impairment allowance has been provided in either year.
The allowance accounts in respect of trade receivables are used to record
impairment losses unless the Group is satisfied that no recovery of the amount
owing is possible; at that point the amounts considered irrecoverable are
written off against the financial asset directly.
26 Financial instruments (continued)
Liquidity risk The contractual maturities of undiscounted financial
liabilities, including undiscounted estimated interest payments, as at year
end were:
Group Carrying amount Contractual cash flows 6 months
£000 £000 or less
£000
At 31 December 2017
Trade payables being non-derivative financial liabilities 1,424 (1,424) (1,424)
At 31 December 2016
Trade payables being non-derivative financial liabilities 1,266 (1,266) (1,266)
The Company had no non-derivative financial liabilities in either year.
It is not expected that the cash flows included in the maturity analysis could
occur earlier or at significantly different amounts and all payables are due
within six months of the balance sheet date.
Currency risk During 2017 all the Group's sales and more than 95.0% (2016:
97.0%) of the Group's purchases were Sterling denominated and accordingly it
has no significant currency risk.
Interest rate risk The Group has exposure to interest rate risk on its cash
and money market deposit balances. As at 31 December 2017 the Group had
total cash of £20,930,000 (2016: £13,749,000) and money market deposits of
£4,045,000 (2016: £4,026,000).
Fair values The fair values of all financial instruments in both years are
equal to the carrying values.
27 Acquisition of subsidiary
Acquisition in 2016
On 31 May 2016, Rightmove Group Limited acquired the entire ordinary share
capital of The Outside View Analytics Ltd ("Outside View"), a predictive
analytics business. Full details of the acquisition are included in the Annual
Report 2016. The total cash consideration paid of £2,096,000 excludes
acquisition costs of £42,000 which were recognised as an expense in 2016 in
the Consolidated Statement of Comprehensive Income.
The following table provides a reconciliation of the amounts included in the
Consolidated Statement of Cash Flows:
Net cash flow on acquisition 2016 £000
Cash paid for subsidiary (2,096)
Transaction costs on acquisition (42)
Cash acquired 50
Net cash outflow (2,088)
In the seven month period to 31 December 2016, Outside View contributed
revenue of £174,000 and profit of £80,000 to the Group's results.
27 Acquisition of subsidiary (continued)
The following table details the fair values of the assets and liabilities
acquired at the date of acquisition:
Carrying values pre-acquisition £000 Fair value adjustments £000
Net assets acquired Fair values £000
Non-current assets
Property, plant and equipment 9 - 9
Intangible assets - market appraisal technology - 309 309
Current assets
Trade and other receivables 191 (2) 189
Cash and cash equivalents 50 - 50
Current liabilities (145) - (145)
Non-current liabilities
Deferred tax liabilities - 49 49
Fair value of net assets acquired 105 258 363
Cash consideration 2,096
Total consideration 2,096
Goodwill 1,733
28 Related party disclosures Inter-group transactions with subsidiaries
Under the inter-group loan agreement dated 30 January 2008, Rightmove Group
Limited settles all expenses on behalf of the Company, including dividends
paid to shareholders and share buybacks and related costs. During the year,
the Company was charged interest of £330,000 (2016: £527,000) under this
agreement and at 31 December 2017, the inter-group loan balance was
£20,017,000 (2016: £25,317,000) including capitalised interest (refer Note
19).
On 12 June 2017 Rightmove Group Limited declared an interim dividend of 55p
per ordinary share to the Company. Additionally, on 5 December 2017, Rightmove
Group Limited declared a further interim dividend of 60p per ordinary share to
the Company. The dividends of £148,810,000 (2016: £141,046,000) were settled
via a reduction in the inter-group loan balance owed by Rightmove plc to
Rightmove Group Limited. Rightmove Group Limited also declared a dividend in
specie of £741,000 (2016: £517,000), representing the cost of the SIP shares
transferred from the EBT to the SIP during the year.
Inter-group transactions between subsidiaries
Following its acquisition on 31 May 2016, The Outside View Analytics Ltd
became a related party to the Company. During the year, Rightmove Group
Limited has settled liabilities on behalf of The Outside View Analytics Ltd
and the balance owing under an inter-group loan agreement dated 13 June 2016
was £25,000 (2016: £15,000) as at 31 December 2017.
Directors' transactions There were no transactions with directors in either
year other than those disclosed in the Directors' Remuneration Report.
Information on the emoluments of the directors who served during the year,
together with information regarding the beneficial interest of the directors
in the ordinary shares of the Company is included in the Directors'
Remuneration Report on pages 61 to 94.
During the year, the directors in office in total had gains of £5,574,000
(2016: £1,566,000) arising on the exercise of share-based incentive awards.
The total share-based payments charge in relation to the directors in office
was £2,211,000 (2016: £2,404,000).
Key management personnel
No other Rightmove employees are considered to meet the definition of key
management personnel other than those disclosed in the Directors' Remuneration
Report on pages 61 to 94.
29 Contingent liabilities The Group and the Company had no contingent
liabilities in either year.
30 Subsequent events There have been no subsequent events having a material
impact on the financial statements between 31 December 2017 and the
reporting date.
ADVISERS AND SHAREHOLDER INFORMATION
Contacts Registered office Corporate advisers
Chief Executive Officer: Peter Brooks-Johnson Rightmove plc Financial adviser
Finance Director: Robyn Perriss Turnberry House 30 Caldecotte Lake Drive UBS Investment Bank Joint brokers
Company Secretary: Sandra Odell
Website: www.rightmove.co.uk Milton Keynes UBS Limited
MK7 8LE Numis Securities Limited
Registered in Auditor
England no. 6426485 KPMG LLP
Bankers
Financial calendar 2018 Barclays Bank Plc
2017 full year results 23 February 2018 Santander UK Plc
Final dividend record date 4 May 2018 Solicitors
Annual General Meeting 4 May 2018 EMW LLP
Final dividend payment 7 June 2018 Slaughter and May
Half year results 27 July 2018 Pinsent Masons
Interim dividend 2 November 2018 Registrar
Link Asset Services*
*Shareholder enquiries
The Company's registrar is Link Asset Services (formerly Capita Asset
Services). They will be pleased to deal with any questions regarding your
shareholding or dividends. Please notify them of your change of address or
other personal information. Their address details are:
Link Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Link
Asset Services is a trading name of Link Market Services Limited.
Shareholder helpline: 0371 664 0300 (calls cost 10p per minute plus network
extras) (Overseas: +44 20 8639 3399) Email: enquiries@linkgroup.co.uk
Share portal: www.signalshares.com
Through the website of our registrar, Link Asset Services, shareholders are
able to manage their shareholding online and facilities include electronic
communications, account enquiries, amendment of address and dividend mandate
instructions.
This information is provided by RNS
The company news service from the London Stock Exchange
Group Limited and are therefore reflected in the Group's consolidated financial statements. In particular, at a
consolidated level, the EBT's purchases of shares in the Company are charged directly to equity.
(iv) Own shares held by The Rightmove Share Incentive Plan Trust (SIP)
The SIP is treated as an agent of Rightmove plc, and as such SIP transactions are treated as being those of Rightmove plc
and are therefore reflected in the Group's consolidated financial statements. In particular, at a consolidated level, the
SIP's purchases of shares in the Company are charged directly to equity.
(v) National Insurance (NI) on share-based incentives
Employer's NI is accrued, where applicable, at a rate of 13.8%, which management expects to be the prevailing rate when
share-based incentives are exercised. In the case of share options, it is provided on the difference between the share
price at the reporting date and the average exercise price of share options. In the case of nil cost performance shares and
deferred shares, it is provided based on the share price at the reporting date.
(i) Treasury shares and shares purchased for cancellation
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly
attributable costs, is recognised as a deduction from equity. Repurchased shares are either held in treasury or cancelled.
(j) Revenue
Revenue principally represents the amounts receivable from customers in respect of membership of the Rightmove platforms.
Agency, New Homes, Overseas and Commercial revenue comprises subscriptions for core listing fees and amounts paid for
additional advertising products. Contracts for these services are per branch location or branch equivalent for Agency and
per development for New Homes. They vary in length from one month to five years, but are typically for periods of six to 12
months. Revenue is recognised over the period of the contract or as advertising products are used. Membership offers take
place from time to time and may include discounted products and free periods. These are recognised on a monthly basis over
the contract term.
Agency, Overseas and Commercial services are typically billed in advance with revenue deferred until the service
commencement date. New Homes developers are billed monthly in arrears. Where invoices are raised on other than a monthly
basis, the amounts are recognised as deferred or accrued revenue and released to the profit or loss on a monthly basis in
line with the provision of services as stipulated in the contract terms.
Data Services revenue relates to fees generated for data and valuation services under a variety of contractual
arrangements. Revenue is recognised when the service has been provided. Third party advertising revenue represents amounts
paid in respect of non-property advertising on the Rightmove platforms and is recognised in the month in which the service
is provided. Consumer Services revenue principally relates to payment for leads and is recognised when the lead is
generated. Data Services, third party advertising and Consumer Services revenue is typically billed in arrears.
(k) Segmental reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. An
operating segment's operating results are reviewed regularly by the Group's Chief Executive Officer to make decisions about
resources to be allocated to the segment and assess its performance and for which discrete financial information is
available.
(l) Leases
Operating lease rentals are charged to profit or loss on a straight-line basis over the period of the lease. The value of
any lease incentive received, for example a rent-free period, is deferred and released on a straight-line basis over the
lease term.
(m) Financial income and expenses
Financial income comprises interest receivable on cash balances and money market deposits and dividend income. Interest
income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the
Company's right to receive payment is established.
Financial expenses comprise banking facility fees and bank charges and the unwinding of the discount on provisions.
2 Significant accounting policies (continued)
(n) Taxation
Income tax on the results for the year comprises current and deferred tax. Income tax is recognised in profit or loss
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the period net of any charge or credit posted directly to
equity, using tax rates enacted or substantially enacted at the reporting date and any adjustment to tax payable in respect
of previous periods.
Deferred tax is provided in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit other than in a business combination, and the differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantially enacted by the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised.
In accordance with IAS 12, the Group policy in relation to the recognition of deferred tax on share-based incentives is to
include the income tax effect of the tax deduction in profit or loss to the value of the income tax charge on the
cumulative IFRS 2 charge. The remainder of the income tax effect of the tax deduction is recognised in equity.
(o) Dividends
Dividends unpaid at the reporting date are only recognised as a liability (and deduction to equity) at that date to the
extent that they are appropriately authorised and are no longer at the discretion of the Company. Unpaid dividends that do
not meet these criteria are disclosed in the notes to the financial statements.
(p) Earnings per share (EPS)
The Group presents basic, diluted and underlying basic and diluted EPS data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted average number of
ordinary shares outstanding during the year, adjusted for own shares held. Diluted EPS is determined by adjusting the
profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding,
adjusted for own shares held, for the effects of all potential dilutive instruments, which comprise share-based incentives
granted to employees. The calculation of underlying basic and diluted EPS is disclosed in Note 11.
3 IFRSs not yet applied
A number of new standards, amendments to standards and interpretations have been issued but are not yet effective for the
year ended 31 December 2017 and have not been applied in preparing these consolidated financial statements.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts with Customers was issued in 2014 and was endorsed by the EU in 2016. IFRS 15 establishes a
comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue
recognition guidance, including IAS 18 Revenue. IFRS 15 is effective for annual periods beginning on or after 1 January
2018, with early adoption permitted. The Group plans to adopt IFRS 15 in its financial statements for the year ending 31
December 2018 and to use the practical expedients for completed contracts.
At present revenue is recognised either over time where there is continuing service provided by Rightmove to the customer
or at the point in time when the risks and rewards of ownership transfer to the customer. Under IFRS 15 revenue will be
recognised when performance obligations are satisfied. For the Group the transfer of control under IFRS 15 and satisfaction
of performance obligations is over time. We have undertaken a detailed analysis of the impact of IFRS 15 on the Group which
has shown that the recognition of revenue will be consistent with the transfer of risks and rewards to the customer under
IAS 18. We have concluded following this assessment that the implementation of IFRS 15 will not have a significant impact
on the Group's consolidated financial statements.
IFRS 16 Leases
IFRS 16 Leases was issued in January 2016, and was endorsed by the EU in 2017. IFRS 16 introduces a single on-balance sheet
lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right to use the underlying
asset and a corresponding lease liability representing its obligation to make lease payments. There are optional exemptions
for short-term leases and leases of low value items.
IFRS 16 replaces existing leases guidance including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a
Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a
Lease. The standard is effective for annual periods beginning on or after 1 January 2019. Early adoption is permitted for
entities that apply IFRS 15 Revenue from Contracts with Customers at or before the date of initial application of IFRS 16.
The Group has completed a detailed assessment to quantify the impact on its reported assets and liabilities of adoption of
IFRS 16. The Group will transition to IFRS 16 using the modified retrospective application approach with no restatement of
prior year comparatives. On 1 January 2018 the Group expects to recognise new right-of-use assets of £10,730,000 and lease
liabilities of £10,824,000 for its operating leases in respect of office premises and company cars. The nature of expenses
related to those leases will also change as the straight-line operating lease expense will be replaced with a depreciation
charge for right-of-use assets and interest expense on lease liabilities, in the first year of adoption these are expected
to be approximately £1,775,000 and £301,000 respectively.
IFRS 9 Financial Instruments
IFRS 9 Financial Instruments was issued in July 2014 and was endorsed by the EU in 2016. It replaces existing financial
instruments guidance, including IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 is effective for annual
periods beginning on or after 1 January 2018 and the Group plans to adopt IFRS 9 in its financial statements for the year
ending 31 December 2018. IFRS 9 will simplify the classification of financial assets for measurement purposes, but is not
anticipated to have a significant impact on the financial statements.
Other amendments
There are no other new or amended standards expected to have a significant impact on the Group's consolidated financial
statements.
4 Risk and capital management
Overview
The Group has exposure to the following risks from its use of financial instruments:
· credit risk
· liquidity risk
· market risk
This note presents information about the Group and Company's exposure to each of the above risks, the Group's objectives,
policies and processes for measuring and managing risk and the Group's management of capital. Further quantitative
disclosures are included throughout these consolidated financial statements.
The Board of directors has overall responsibility for the establishment and oversight of the Group's risk management
framework. The primary method by which risks are monitored and managed by the Group is through the monthly Executive
Management Committee, where any significant new risks or change in status to existing risks will be discussed and actions
taken as appropriate.
The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and
management standards and procedures, aims to develop a disciplined and constructive control environment in which all
employees understand their roles and obligations.
The Audit Committee oversees how management monitors compliance with the Group's internal controls and reviews the adequacy
of the risk management framework in relation to the risks faced by the Group.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or banking institution fails to meet its contractual
obligations.
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group
provides credit to customers in the normal course of business. The Group provides its services to a wide range of customers
in the UK and overseas and therefore believes it has no material concentration of credit risk.
More than 88.0% (2016: 90.0%) of the Group's Agency and New Homes customers pay via monthly direct debit, minimising the
risk of non-payment. The Group establishes an allowance for impairment that represents its estimate of incurred losses in
respect of trade and other receivables based on individually identified loss exposures.
The Group's treasury policy is to monitor cash and deposit balances on a daily basis to ensure that no more than £30
million is held with any single institution.
4 Risk and capital management (continued)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated with its
financial liabilities that are settled by delivering cash. The Group and Company's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
The Group's revenue model is largely subscription-based, which results in a regular level of cash conversion allowing it to
service working capital requirements.
The Group and Company ensure that they have sufficient cash on demand to meet expected operational expenses excluding the
potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Throughout the
year, the Group typically had sufficient cash on demand to meet operational expenses, before financing activities, for a
period of 107 days (2016: 95 days).
The Group agreed to extend a 12 month agreement with Barclays Bank plc for a £10,000,000 committed revolving loan facility.
This agreement will expire on 12 February 2019.
Market risk
Market risk is the risk that changes in market prices such as foreign exchange and interest rates will affect the Group's
income. The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk.
(i) Currency risk
All of the Group's sales and more than 95.0% (2016: 97.0%) of the Group's purchases are Sterling denominated, accordingly
it has no significant currency risk.
(ii) Interest rate risk
The Group and Company have no interest bearing financial liabilities. The Group is exposed to interest rate risk on cash
and money market deposit balances.
Capital management
The Board of directors' policy is to maintain an efficient statement of financial position so as to maintain investor,
creditor and market confidence and to sustain future development of the business. The Board of directors considers that the
future working capital and capital expenditure requirements of the Group will continue to be low and accordingly return on
capital measures are not key performance targets. The Board of directors monitors the spread of the Company's shareholders
as well as underlying basic EPS.
The Board's policy is to return surplus capital to shareholders through a combination of dividends and share buybacks.
(i) Dividend policy
The Board of directors has a progressive dividend policy and monitors the level of dividends to ordinary shareholders in
relation to the growth in underlying basic EPS. The Board has adopted this policy in order to align shareholder returns
with the underlying growth achieved in the profitability in the Group.
The capacity of the Group to make dividend payments is primarily determined by the level of available retained earnings in
the Company, after deduction of own shares held, and the cash resources of the Group. The retained earnings of the Company,
after deduction of own shares held, are £411,276,000 (2016: £405,801,000) as set out in the Company statement of changes in
shareholders' equity on page 106. The Group has cash and money market deposits at 31 December 2017 of £24,975,000 (2016:
£17,775,000), the majority of which are held by the principal operating subsidiary Rightmove Group Limited. The Group is
well positioned to fund its future dividends given the strong cash generative nature of the business and in 2017 cash
generated from operating activities was £183,891,000 (2016: £169,250,000) representing an operating cash conversion in
excess of 100%.
(ii) Share buybacks
The Company purchases its own shares in the market; the timing of these purchases depends on available free cash flow and
market conditions. In 2017, 2,224,059 (2016: 2,251,711) shares were bought back and were cancelled at an average price of
£40.83 (2016: £39.12).
There were no changes in the Group's approach to capital management during the year. Neither the Company nor any of its
subsidiaries are subject to externally imposed capital requirements.
4 Risk and capital management (continued)
Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group's
processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity
risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour.
Operational risks arise from all of the Group's operations.
The Group's objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the
Group's reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and
creativity.
The primary responsibility for the development and implementation of controls to address operational risk is assigned to
senior
management within each business unit. This responsibility is supported by the development of overall Group standards for
the management of operational risk in the following areas:
· requirements for appropriate segregation of duties, including the independent authorisation of transactions;
· requirements for the reconciliation and monitoring of transactions;
· compliance with regulatory and other legal requirements;
· documentation of controls and procedures;
· requirements for the periodic assessment of operational risks faced and the adequacy of controls and procedures to
address the risks identified;
· requirements for reporting of operational losses and proposed remedial action;
· development and regular testing of business continuity and disaster recovery plans;
· regular testing of the security of the IT systems and platforms, regular backups of key data and ongoing threat
monitoring to protect against the risk of cyber attack;
· training and professional development; and
· risk mitigation, including insurance where this is effective.
5 Operating segments
The Group determines and presents operating segments based on internal information that is provided to the Chief Executive
Officer, who is the Group's Chief Operating Decision Maker.
The Group's reportable segments are as follows:
· The Agency segment which provides resale and lettings property advertising services on Rightmove's platforms; and
· The New Homes segment which provides property advertising services to new home developers and housing associations
on Rightmove's platforms.
The Other segment which represents activities under the reportable segments threshold, comprises Overseas and Commercial
property advertising services and non-property advertising services which include our third party advertising and Consumer
Services as well as Data Services. Management monitors the business segments at a revenue and trade receivables level
separately for the purpose of making decisions about resources to be allocated and of assessing performance. All revenue in
both years is derived from third parties and there is no inter-segment revenue.
Operating costs, financial income, financial expenses and income taxes in relation to the Agency, New Homes and the Other
segment are managed on a centralised basis at a Rightmove Group Limited level and as there are no internal measures of
individual segment profitability, relevant disclosures have been shown under the heading of Central in the table below.
The Company has no reportable segments.
Agency New Homes £000 Subtotal Other Central Adjustments Total £000
£000 £000 £000 £000 £000
Year ended
31 December 2017
Revenue 185,217 39,478 224,695 18,578 - - 243,273
Operating profit(1) - - - - 184,365(2) (6,064)(2) 178,301
Depreciation and amortisation - - - - (1,784) - (1,784)
Financial income - - - - 129 - 129
Financial expenses - - - - (214) - (214)
Trade receivables(3) 21,282 6,610 27,892 2,283 - 118(4) 30,293
Other segment assets - - - - 41,501 19(4) 41,520
Segment liabilities - - - - (54,493) (137)(4) (54,630)
Capital expenditure - - - - 2,196 - 2,196
Year ended
31 December 2016
Revenue 168,311 33,893 202,204 17,789 - - 219,993
Operating profit(1) - - - - 166,240(2) (4,593)(2) 161,647
Depreciation and amortisation - - - - (1,619) - (1,619)
Financial income - - - - 109 - 109
Financial expenses - - - - (209) - (209)
Trade receivables(3) 19,040 5,266 24,306 2,188 - 139(4) 26,633
Other segment assets - - - - 33,753 68(4) 33,821
Segment liabilities - - - - (52,205) (207)(4) (52,412)
Capital expenditure - - - - 1,759 - 1,759
(1) Operating profit is stated after the charge for depreciation and amortisation.
(2) Central operating profit does not include share-based payments charge of £4,836,000 (2016: £4,142,000) and NI on
share-based incentives charge of £1,228,000 (2016: £451,000).
(3) The only segment assets that are separately monitored by the Chief Operating Decision Maker relate to trade receivables
net of any associated provision for impairment. All other segment assets are reported on a centralised basis.
(4) The adjustments column reflects the reclassification of credit balances in accounts receivable and debit balances in
accounts payable made on consolidation for statutory accounts purposes.
Geographic information
In presenting information on the basis of geography, revenue and assets are based on the geographical location of
customers.
2017 2016
Group Revenue Trade receivables Revenue Trade receivables
£000 £000 £000 £000
UK 236,718 29,885 214,536 26,124
Rest of the world 6,555 408 5,457 509
243,273 30,293 219,993 26,633
6 Operating profit
2017 2016
£000 £000
Operating profit is stated after charging:
Employee benefit expense 28,338 27,423
Depreciation of property, plant and equipment 1,311 1,241
Amortisation of intangibles 473 378
Bad debt impairment charge 466 437
Operating lease rentals
Land and buildings 1,361 898
Other 547 549
Auditor's remuneration
2017 2016
£000 £000
Fees payable to the Company's auditor in respect of the audit
Audit of the Company's financial statements 19 18
Audit of the Company's subsidiaries pursuant to legislation 122 131
Total audit remuneration 141 149
Fees payable to the Company's auditor in respect of non-audit related services
Half year review of the condensed financial statements 18 18
Tax compliance services and advisory - 1
All other services 12 2
Total non-audit remuneration 30 21
7 Employee numbers and costs
The average number of persons employed (including executive directors) during the year, analysed by category, was as
follows:
2017 2016
Number of employees Number of employees
Administration 449 440
Management 30 29
479 469
The aggregate payroll costs of these persons were as follows:
2017 2016
£000 £000
Wages and salaries 24,249 23,760
Social security costs 3,168 2,793
Pension costs 921 870
28,338 27,423
Social security costs do not include a charge of £1,228,000 (2016: £451,000) relating to NI on share-based incentives which
has been disclosed in the Statement of Comprehensive Income.
8 Financial income
2017 2016
£000 £000
Interest income on cash and cash equivalents 110 83
Interest income on money market deposits 19 26
129 109
9 Financial expenses
2017 2016
£000 £000
Financial expenses 214 209
10 Income tax expense
2017 2016
£000 £000
Current tax expense
Current year 34,582 33,048
Adjustment to current tax charge in respect of prior years (292) (407)
34,290 32,641
Deferred tax credit
Origination and reversal of temporary differences (170) (636)
(170) (636)
Total income tax expense 34,120 32,005
Income tax credit recognised directly in equity
2017 2016
£000 £000
Current tax
Share-based incentives (2,666) (441)
Deferred taxShare-based incentives (refer Note 16) 1,367 436
Total income tax credit recognised directly in equity (1,299) (5)
Total income tax recognised directly in equity in respect of the Company was a credit of £586,000 (2016: £24,000 credit).
Reconciliation of effective tax rate
The Group's income tax expense for the year is lower in both years than the standard rate of corporation tax in the UK of
19.3% (2016: 20.0%). The differences are explained below:
2017 2016
£000 £000
Profit before tax 178,216 161,547
Current tax at 19.3% (2016: 20.0%) 34,307 32,309
Non-deductible expenses 103 70
Share-based incentives 2 33
Adjustment to current tax charge in respect of prior years (292) (407)
34,120 32,005
The Group's consolidated effective tax rate on the profit of £178,216,000 for the year ended 31 December 2017 is 19.1%
(2016: 19.8%).
The difference between the standard rate and effective rate at 31 December 2017 of 0.2% (2016: 0.2%) is primarily
attributable to an adjustment in respect of prior periods for research and development tax relief.
11 Earnings per share (EPS)
Pence per share
£000 Basic Diluted
Year ended 31 December 2017
Earnings 144,096 156.75 155.15
Underlying earnings 150,160 163.34 161.67
Year ended 31 December 2016
Earnings 129,542 137.87 136.41
Underlying earnings 134,135 142.76 141.24
Weighted average number of ordinary shares (basic)
2017 2016
Number of shares Number of shares
Issued ordinary shares at 1 January less ordinary shares held by the EBT and SIP Trust 95,096,841 97,318,120
Less own shares held in treasury at the beginning of the year (2,271,725) (2,322,314)
Effect of own shares purchased for cancellation (1,034,015) (1,069,275)
Effect of share-based incentives exercised 139,011 34,560
Effect of shares purchased by the EBT (911) (738)
Issued ordinary shares at 31 December less ordinary shares held by the EBT and SIP Trust 91,929,201 93,960,353
Weighted average number of ordinary shares (diluted)
For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all
potentially dilutive shares. The Group's potential dilutive instruments are in respect of share-based incentives granted to
employees, which will be settled by ordinary shares held by the EBT, the SIP and shares held in treasury.
2017 2016
Number of shares Number of shares
Weighted average number of ordinary shares (basic) 91,929,201 93,960,353
Dilutive impact of share-based incentives outstanding 948,184 1,007,190
92,877,385 94,967,543
The average market value of the Group's shares for the purposes of calculating the dilutive effect of share-based
incentives was based on quoted market prices for the period during which the share-based incentives were outstanding.
Underlying EPS
Underlying EPS is calculated by taking basic earnings for the year and adding back the charge for share-based payments and
the charge for NI on share-based incentives but without any adjustment to the tax charge in respect of these items. A
reconciliation of the basic earnings for the year to the underlying earnings is presented below:
2017 2016
£000 £000
Basic earnings for the year 144,096 129,542
Share-based payments 4,836 4,142
NI on share-based incentives 1,228 451
Underlying earnings for the year 150,160 134,135
12 Dividends
Dividends declared and paid by the Company were as follows:
2017 2016
Pence per share £000 Pence per share £000
2015 final dividend paid - - 27.0 25,442
2016 interim dividend paid - - 19.0 17,764
2016 final dividend paid 32.0 29,507 - -
2017 interim dividend paid 22.0 20,104 - -
54.0 49,611 46.0 43,206
After the reporting date a final dividend of 36.0p (2016: 32.0p) per qualifying ordinary share being £32,758,000 (2016:
£29,696,000) was proposed by the Board of directors.
The 2016 final dividend paid on 2 June 2017 was £29,507,000 being £189,000 lower than that reported in the 2016 Annual
Report, which was due to a decrease in the ordinary shares entitled to a dividend between 31 December 2016 and the final
dividend record date of 5 May 2017.
The 2017 interim dividend paid on 3 November 2017 was £20,104,000 being £115,000 lower than that reported in the 2017 Half
Year Report, which was due to a decrease in the ordinary shares entitled to a dividend between 30 June 2017 and the interim
dividend record date of 6 October 2017.
The terms of the EBT provide that dividends payable on the ordinary shares held by the EBT are waived. No provision was
made for the final dividend in either year and there are no income tax consequences.
13 Property, plant and equipment
Group Office equipment, Computer equipment Leasehold improvements Assets in progress£000 Total
fixtures & fittings £000 £000 £000
£000
Cost
At 1 January 2017 829 7,053 451 - 8,333
Additions 232 906 430 187 1,755
Disposals (204) (135) (47) - (386)
At 31 December 2017 857 7,824 834 187 9,702
Depreciation
At 1 January 2017 (678) (5,101) (266) - (6,045)
Charge for year (88) (1,159) (64) - (1,311)
Disposals 199 117 47 - 363
At 31 December 2017 (567) (6,143) (283) - (6,993)
Net book value
At 31 December 2017 290 1,681 551 187 2,709
At 1 January 2017 151 1,952 185 - 2,288
The assets in progress consist of capitalised costs relating to the leasehold improvements for the London office that are
yet to be brought into use.
Leasehold improvements include capitalised costs relating to the renovation of leased properties. Full details are
disclosed in Note 2.
13 Property, plant and equipment (continued)
Group Office equipment, Computer equipment Leasehold improvements Total
fixtures & fittings £000 £000 £000
£000
Cost
At 1 January 2016 769 5,823 451 7,043
Additions 58 1,223 - 1,281
Acquired through a business combination 2 7 - 9
At 31 December 2016 829 7,053 451 8,333
Depreciation
At 1 January 2016 (586) (4,010) (208) (4,804)
Charge for year (92) (1,091) (58) (1,241)
At 31 December 2016 (678) (5,101) (266) (6,045)
Net book value
At 31 December 2016 151 1,952 185 2,288
At 1 January 2016 183 1,813 243 2,239
The Company had no property, plant or equipment in either year.
14 Intangible assets
Group Goodwill £000 Computer software £000 Asset in progress £000 Market appraisal algorithm£000 Total £000
Cost
At 1 January 2017 2,465 4,639 203 309 7,616
Additions - 441 - - 441
Disposals - - (203) - (203)
At 31 December 2017 2,465 5,080 - 309 7,854
Amortisation
At 1 January 2017 - (4,031) - (60) (4,091)
Charge for year - (370) - (103) (473)
At 31 December 2017 - (4,401) - (163) (4,564)
Net book value
At 31 December 2017 2,465 679 - 146 3,290
At 1 January 2017 2,465 608 203 249 3,525
14 Intangible assets (continued)
Group Goodwill Computer software Asset in progress £000 Market appraisal algorithm£000 Total £000
£000 £000
Cost
At 1 January 2016 732 4,364 - - 5,096
Additions - 275 - - 275
Internally generated - - 203 - 203
Acquired through a business combination 1,733 - - 309 2,042
At 31 December 2016 2,465 4,639 203 309 7,616
Amortisation
At 1 January 2016 - (3,713) - - (3,713)
Charge for year - (318) - (60) (378)
At 31 December 2016 - (4,031) - (60) (4,091)
Net book value
At 31 December 2016 2,465 608 203 249 3,525
At 1 January 2016 732 651 - - 1,383
Goodwill acquired in 2016 of £1,733,000 relates to the goodwill recognised on the acquisition of The Outside View Analytics
Ltd ('Outside View'), being intangible assets that were not separately identifiable under IFRS 3. The market appraisal
algorithm relates to the intangible asset recognised on the acquisition of Outside View.
The Company had no intangible assets in either year.
Impairment testing for cash generating units containing goodwill
For the purpose of impairment testing, goodwill is allocated to the Group's Agency segment which represents the lowest
level within the Group at which goodwill is monitored for internal management purposes, which is not higher than the
Group's operating segments as reported in Note 5.
The carrying value of £2,465,000 goodwill, comprises £732,000 of purchased goodwill arising pre-transition to IFRS and
£1,733,000 on acquisition of the Outside View. Goodwill arising from the acquisition of the Outside View has been allocated
to the Agency segment as the revenue expected from the Outside View product is attributable to Agency customers.
Given the low level of significance of the total goodwill balance and strong growth in the Agency segment revenue in the
year, with no impairment indicators present, the disclosures as required by IAS 36 Impairment of Assets have not been
made.
15 Investments
The subsidiaries of the Group as at 31 December 2017 are as follows:
Company Nature of business Country of incorporation Holding Class of shares
Rightmove Group Limited Online property advertising England and Wales 100% Ordinary
The Outside View Analytics Ltd Property analytics services England and Wales 100% Ordinary
Rightmove.co.uk Limited Dormant England and Wales 100% Ordinary
Rightmove Home Information Dormant England and Wales 100% Ordinary
Packs Limited
All the above subsidiaries are included in the Group consolidated financial statements. The registered office for all
subsidiaries
of the Group is Turnberry House, 30 Caldecotte Lake Drive, Caldecotte, Milton Keynes, MK7 8LE.
Company 2017 2016
£000 £000
Investment in subsidiary undertakingsAt 1 January 546,202 544,464
Additions - subsidiary share-based payments charge (refer Note 23) 2,625 1,738
At 31 December 548,827 546,202
15 Investments (continued)
In 2008, the Company became the holding company of Rightmove Group Limited (formerly Rightmove plc, Company no. 3997679)
and its subsidiaries pursuant to a Scheme of Arrangement under s425 of the Companies Act 1985 by way of a share-for-share
exchange. Following the Scheme of Arrangement, the Company underwent a court-approved capital reduction. The consolidated
assets and liabilities of the Group immediately after the Scheme were substantially the same as the consolidated assets and
liabilities of the Group immediately prior to the Scheme.
Following the capital reconstruction in 2008 all employees' share-based incentives were transferred to the new holding
company, Rightmove plc. In addition certain directors' contracts of employment were transferred from Rightmove Group
Limited to Rightmove plc, whilst all other employees remained employed by Rightmove Group Limited. Accordingly the
share-based payments charge has been split between the Company and Rightmove Group Limited with £2,625,000 (2016:
£1,738,000) being recognised in the Company accounts as a capital contribution to its subsidiary.
16 Deferred tax asset
Deferred tax is presented net on the balance sheet in so far as a right of offset exists. The net deferred tax asset is
attributable to the following:
Group Company
Share-based incentives£000 Property, plant and equipment£000 Provisions£000 Market appraisal algorithm£000 Total£000 Share-based incentives£000
At 1 January 2017 6,604 252 125 (39) 6,942 3,757
Recognised in income (15) 63 106 16 170 (142)
Recognised directly in equity (1,367) - - - (1,367) (1,125)
At 31 December 2017 5,222 315 231 (23) 5,745 2,490
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