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

RightmoveAnnouncement

23/06/2020 07:30

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 £17m-£20m, in addition to the £65m-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 £12m.

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 
Press@rightmove.co.uk

Investor relations
Investor.relations@rightmove.co.uk



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