REG - Rightmove Plc - Final Results <Origin Href="QuoteRef">RMV.L</Origin> - Part 9
24/02/2017 07:06
- Part 9: For the preceding part double click ID:nRSX7347Xh
weighted
average exercise price was nil in both years.
The PSP awards outstanding at 31 December 2016 have a weighted average contractual life of 2.7 years (2015: 3.1 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) Exercise price Expected term Risk free rate Dividend yield(%) Employee turnoverbefore vesting/non-vesting condition(%) Fair value per share(pence)
(pence) (years) (%)
8 March 2013 3 March 2014 1781.00 nil 3.0 0.4 1.4 5.3 1708.00
3 March 20142 March 2015 2 March 20151 March 2016(1) 2688.003044.00 nilnil 3.03.0 1.00.8 1.01.2 5.66.0 2605.002941.00
1 March 2016 - (2) 4069.00 nil 3.0 0.4 1.1 5.7 3942.00
(1) Following the achievement of 100% of the 2015 internal performance targets, 36,276 nil cost deferred shares were
awarded to executives and senior management on 1 March 2016 (the Award Date) with the right to the release of the shares
deferred until March 2018.
(2) Based on the 2016 internal performance targets, the Remuneration Committee determined that 92% of the maximum award in
respect of the year will be made in March 2017. The number of shares to be awarded will be determined based on the share
price at the Award Date in March 2017.
Group 2016 2015
Number Number
Outstanding at 1 January 68,309 90,909
Awarded 36,276 33,864
Forfeited (1,677) -
Exercised (26,736) (56,464)
Outstanding at 31 December 76,172 68,309
Exercisable at 31 December 7,709 -
The weighted average market value per ordinary share for deferred shares exercised in 2016 was £38.60 (2015: £32.42). The
weighted average exercise price was nil in both years.
The DSP awards outstanding at 31 December 2016 have a weighted average contractual life of 1.5 years (2015: 0.7 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 (2015: 100)
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 Exercise price (pence) Expected volatility (%) Option Risk free rate Dividend yield Employee turnover before vesting/ Fair value per option (pence)
price at life (years) (%) (%) non-vesting condition (%)
grant
date
(pence)
1 January 2015 2245.00 nil 24.7 3.0 0.8 nil 45.0 2245.00
1 January 2016 4093.00 nil 27.8 3.0 0.4 nil 45.0 4093.00
Expected volatility is estimated by considering historic average share price volatility at the grant date.
Group 2016 2015
Number Number
Outstanding at 1 January 30,200 -
Granted 20,550 38,300
Forfeited (5,850) (7,600)
Released (600) (500)
Outstanding at 31 December 44,300 30,200
Exercisable at 31 December - -
The weighted average market value per ordinary share for SIP awards released in 2016 was £37.90 (2015: £34.45). 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 2016 have a weighted average contractual life of 1.4 years (2015: 2.0 years).
25 Operating lease commitments
Non-cancellable operating lease rentals are payable as follows:
2016 2015
Group Plant & machinery £000 Land & Total£000 Plant & machinery £000 Land & Total
buildings£000 buildings £000
£000
Less than one year 234 491 725 359 949 1,308
Between one and five years 157 1,172 1,329 165 1,370 1,535
More than five years - 3 3 - 296 296
391 1,666 2,057 524 2,615 3,139
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 Note 2016 2015
£000 £000
Net trade receivables 17 26,633 24,609
Accrued interest receivable 17 - 25
Other debtors 17 127 59
Cash and cash equivalents 18 13,749 8,418
Money market deposits 18 4,026 4,000
44,535 37,111
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 2016 2015
£000 £000
UK 26,124 24,220
Rest of the world 509 389
17 26,633 24,609
The maximum exposure to credit risk for trade receivables at the reporting date by type of customer was:
Group Note 2016 2015
£000 £000
Property advertisers 25,361 23,055
Other 1,272 1,554
17 26,633 24,609
The Group's most significant customer accounts for £1,589,000 (2015: £1,305,000) of the trade receivables carrying amount
as at 31 December 2016.
Impairment losses
The ageing of trade receivables at the reporting date was:
2016 2015
Gross Impairment Gross Impairment
Group £000 £000 £000 £000
Not past due 24,010 (7) 21,227 (5)
Past due 0 - 30 days 1,876 (70) 2,654 (55)
Past due 30 - 60 days 880 (56) 593 (19)
Past due 60 - 90 days 58 (58) 104 (7)
Past due older 237 (237) 477 (360)
27,061 (428) 25,055 (446)
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
Group 2016 £000 2015
£000
At 1 January 446 490
Charged during the year 437 365
Utilised during the year (455) (409)
At 31 December 428 446
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 £000 Contractual cash flows£000 6 months or less£000
At 31 December 2016
Trade payables being non-derivative financial liabilities 1,266 (1,266) (1,266)
At 31 December 2015
Trade payables being non-derivative financial liabilities 592 (592) (592)
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 2016 all the Group's sales and more than 97.0% (2015: 95.0%) 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 2016 the
Group had total cash of £13,749,000 (2015: £8,418,000) and money market deposits of £4,026,000 (2015: £4,000,000).
Fair values
The fair values of all financial instruments in both years are equal to the carrying values.
27 Acquisition of subsidiary
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. The Outside View have developed an algorithm to predict which homeowners
are most likely to sell their property in the next 180 days. Rightmove plans to launch an enhanced version of the product
using its combined know how and unique dataset. The product will help customers to identify and market to their target
audience and will complement the Local Valuation Alert product. The total cash consideration paid of £2,096,000 excludes
acquisition costs of £42,000 which have been recognised as an expense in the period 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:
Net assets acquired Carrying values pre-acquisition Fair value adjustments Fair values
£000 £000 £000
Non-current assets
Property, plant and equipment 9 - 9
Intangible assets - market appraisal technology(2) - 309 309
Current assets
Trade and other receivables(3) 191 (2) 189
Cash and cash equivalents 50 - 50
Current liabilities (145) - (145)
Non-current liabilities
Deferred tax liabilities(2) - (49) (49)
Fair value of net assets acquired 105 258 363
Cash consideration 2,096
Total consideration 2,096
Goodwill(1) 1,733
(1) The goodwill recognised on acquisition represents value arising from intangible assets that are not separately
identifiable under IFRS 3. These items include the skills and knowledge of the Outside View's workforce as well as the
ability to develop an enhanced product and service offering that the Board believe will drive an increase in the quantity
and quality of predictive analytical data services provided to customers.
(2) In addition to the goodwill recognised on consolidation, the market appraisal algorithm and supporting technology
obtained through the acquisition met the requirements to be separately identifiable under IFRS 3. The fair value has been
obtained by estimating the cost of independently building similar technology. The asset will be amortised over its useful
economic life of three years. A deferred tax liability has been recognised in respect of this asset and will be unwound
over the useful economic life.
(3) The receivables acquired (which principally comprised trade receivables) with a fair value of £191,000 had gross
contractual amounts of £210,000. The best estimate at acquisition date of the contractual cash flows not expected to be
collected is £21,000 resulting in a fair value adjustment of £2,000.
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 £527,000 (2015: £547,000) under this agreement and at 31 December 2016, the inter-group loan balance
was £25,317,000 (2015: £31,908,000) including capitalised interest (refer Note 19).
On 30 June 2016 Rightmove Group Limited declared an interim dividend of 55p per ordinary share to the Company.
Additionally, on 13 December 2016, Rightmove Group Limited declared a further interim dividend of 54p per ordinary share to
the Company. The dividends of £141,046,000 (2015: £129,400,000) 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
£517,000 (2015: £863,000), representing the cost of the SIP shares transferred from the EBT to the SIP during
the year.
Inter-group transactions between subsidiaries
During the year, following its acquisition on 31 May 2016, the Outside View became a related party to the Company. Since
acquisition Rightmove Group Limited has settled liabilities on behalf of the Outside View and the balance owing under an
inter-group loan agreement dated 13 June 2016 was £15,000 as at 31 December 2016.
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 53 to 84.
During the year, the directors in office in total had gains of £1,566,000 (2015: £9,263,000) arising on the exercise of
share-based incentive awards. The total share-based payments charge in relation to the directors in office was £2,404,000
(2015: £2,105,000).
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 53 to 84.
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 2016 and the
reporting date.
ADVISERS AND SHAREHOLDER INFORMATION
Contacts Registered office Corporate advisers
Chief Executive Officer: Nick McKittrick Rightmove plc Financial adviser
Chief Operating Officer: Peter Brooks-Johnson Turnberry House UBS Investment Bank
Finance Director: Robyn Perriss 30 Caldecotte Lake Drive Joint brokers
Company Secretary: Sandra Odell Milton Keynes UBS Limited
Website: www.rightmove.co.uk MK7 8LE Numis Securities Limited
Registered in Auditor
England no. 6426485 KPMG LLP
Bankers
Financial calendar 2017 Barclays Bank Plc
2016 full year results 24 February 2017 HSBC Bank plc
Final dividend record dateAnnual General Meeting 5 May 20179 May 2017 Santander UK PlcSolicitors
Final dividend payment 2 June 2017 Slaughter and May
Half year results 28 July 2017 Pinsent Masons
Interim dividend 3 November 2017 Registrar
Capita Asset Services*
*Shareholder enquiries
The Company's registrar is 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:
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Capita Asset Services is a trading name of Capita Registrars Limited.
Capita shareholder helpline: 0371 664 0300 (calls cost 10p per minute plus network extras) (Overseas: +44 20 8639 3399)
Email: shareholderenquiries@capita.co.uk
Share portal: www.capitashareportal.com
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facilities include electronic communications, account enquiries, amendment of address and dividend mandate instructions.
This information is provided by RNS
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