Rightmove profits climb despite competition from property portal rival OnTheMarket | City A.M.
Property giant Rightmove reported a 12 per cent rise in profit in the six months to June, hitting a record number of prospective buyers visiting its online platform.
However, shares fell more than three per cent in early morning trading.
Pre-tax profit rose to £98m in the first half of the year and revenues climbed 10 per cent to £131m, driven by a growth in earnings from agents willing to pay more for advertisements on its website.
Average revenue per advertiser rose by £76 from a year ago to £987 a month, despite many estate agents fighting off tough conditions from subdued activity in the property market.
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Equity analyst Anthony Codling said the results “defy gravity again” with Rightmove demonstrating “the power of its business model.”
Codling added: “Once again Rightmove has demonstrated the power of its business model, whilst estate agents are facing challenging markets and tightening their belts, Rightmove has raised average prices by £76 to £987 per month.”
Despite enjoying a 74 per cent share of traffic across both desktop and mobile, the agent-led portal has faced stiff competition from the likes of OnTheMarket, which has grown since its listing in February.
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“Rightmove is indisputably feeding the UK’s property obsession, with the company revealing we spent a record 1.1bn minutes a month in the first half of 2018 alone poring over properties for sale across the UK. That’s no mean feat in a subdued property market,” said Fidelity International associate director Emma-Lou Montgomery.
Peter Brooks-Johnson, chief executive of Rightmove, said: “The continued stable membership numbers and our subscription advertising model, together with the strength of the Rightmove offer for both customers and consumers, give us confidence in delivering expectations for the current year despite muted sentiment towards the UK property market.”