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Property website Rightmove generates fewer client leads in 2016
February 24, 2017 / 7:39 AM / 6 months ago

Property website Rightmove generates fewer client leads in 2016

(Reuters) - Rightmove (RMV.L), Britain's largest property selling website operator by market share, reported higher profits on Friday as a record number of estate agents used its site to list their properties, although a 10 percent rise in consumer visits to the website generated fewer leads as the market slowed.

The number of leads generated for its clients fell 6 percent to nearly 47 million, which the company blamed on a slowdown in housing market activity following Britain's vote to leave the European Union.

This eclipsed an 18 percent rise in operating profit to 161.6 million pounds, in line with analysts' expectations, and a 5 pence increase in the final dividend to 32 pence a share.

Rightmove's shares were down 4 percent at 4,068 pence by 0849 GMT. Ahead of the results, its stock was trading near its pre-Brexit level.

"I believe this is the first time leads generated has fallen, and it's what agents actually pay for - so a sign of maturity," Panmure Gordon analyst Jonathan Helliwell said in a note.

"Rightmove has shown continued strong delivery (of results), but lack of blowout may cause a bit of mild profit-taking following a very strong run," he added.

While strong demand from first-time buyers has meant most builders have seen housing sales in much of Britain recover from an initial dip after the June 23 Brexit vote, estate agents continue to smart from the slowdown in the secondary housing market that accounts for close to 90 percent of transactions.

However, Rightmove struck a positive note on its outlook on Friday, saying that its largely subscription-based online business model should prove more resilient than that of its shop-based customers, with Countrywide (CWD.L) and Foxtons (FOXT.L) having issued profit warnings due to the slowdown.

Earlier this month Rightmove said asking prices for homes in England and Wales were rising more slowly.

"We believe the outlook for the UK online property advertising market remains positive, despite the uncertainties stemming from the result of the EU referendum," Chief Executive Nick McKittrick said in a statement.

The company also announced on Friday that its chief operating officer, Peter Brooks-Johnson, would become chief executive on May 9 to replace McKittrick, who is retiring.

McKittrick would remain in the business until June 30, it added.

Editing by Jason Neely, Greg Mahlich

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