Rightmove upgrades steerage as property portal’s advert revenues soar

Rightmove has boosted annual guidance thanks to improved advertising revenue, as it noted ‘greater optimism’ among its partners.

Britain’s largest property portal now forecasts its average revenue per advertiser (ARPA) to increase by £85 to £95 on the £1,431 made last year, compared to previous estimates of £75 to £85.

It said the upgrade reflected strong sales and estate agents migrating to its premium Optimiser Edge package, which is now used by over 3,000 branches.

Upgrade: Britain’s largest property portal now forecasts its average revenue per advertiser (ARPA) to increase by £85 to £95 on the £1,431 made last year

The London-based company also anticipates revenue of around £390million and an adjusted underlying operating margin of 70 per cent.

However, Rightmove believes its overall membership numbers will only rise by 1 per cent, lower than its 2 per cent target, due to a ‘slower-than-expected’ rebound in new housing developments.

The Bank of England hiked UK interest rates on 14 successive occasions between late 2021 and the summer of 2023 in efforts to bring down inflation.

Although this dampened housebuilding levels and property prices, Rightmove has continued to post healthy performances.

It noted ‘greater optimism among our partners looking into 2025’, supported by positive house price growth, stable mortgage rates and a ‘favourable outlook’ for additional rate cuts by the BoE.

Britain’s central bank lowered the base rate by 0.25 percentage points to 4.75 per cent on Thursday, its second reduction this year.

Johan Svanstrom, chief executive of Rightmove, said: ‘This has been another period of strong progress for Rightmove, and it’s pleasing to see our product development and sales delivery generating increased uptake from consumers and partners.

‘As a result, we remain confident in achieving meaningful strategic and financial growth in 2024.’

Rightmove’s trading update is the first since a failed takeover bid for the company by REA Group, an online real estate advertising firm backed by Rupert Murdoch’s News Corporation.

REA made four offers, with the last worth £6.2billion; however, Rightmove rejected this final deal because it continued to ‘materially undervalue’ the business and its future prospects.

Anthony Codling, head of European housing and building materials for RBC Capital Markets, said Rightmove’s results were a ‘testament to the strength, stability and robustness of its business model.

‘Whilst its customers…often have to negotiate choppy seas and deal with troubles at the mill, Rightmove has a canny knack of charting calm waters and keeping its ship in good order.’

Rightmove shares were 0.3 per cent lower at 594.8p on Friday morning, meaning they have grown by around 27 per cent over the past 12 months.