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Summary
- Rightmove PLC had reported a revenue decline of around 29% in FY20.
- The agency segment revenue and new homes division revenue had witnessed a significant reduction of 32% and 27%, respectively.
- RMV will pay a final dividend of 4.5 pence per share on 28 May 2021.
Rightmove PLC (LON:RMV) is the LSE listed real estate stock. RMV’s shares have generated a return of approximately -7.37% in the last 12 months. It is listed on the FTSE 100 Index. The Company was incorporated in 2007.
Business Model
Rightmove Plc is the UK-based provider of property portal. The primary business segments include Agency, New Homes and the Other.
The Agency division delivers advertising services related to resale and lettings property on RMV’s platform. The New Home division renders advertising services to several housing associations and new home developers through its platform.
(Source: Company presentation)
Housing Industry in the UK
The total housing transactions had dropped by 11% from 1,176 thousand during FY19 to 1,043 thousand for 2020.
(Source: Company presentation)
FY20 Financial and Operational Highlights (as of 26 February 2021)
(Source: Company result)
- The revenue had demonstrated a decline of 29% from £289.3 million for FY19 to £205.7 million during FY20, reflecting discounts provided to support customers.
- RMV had given approximately 75% discount to Agency and New Homes customers on invoice values for the period from April 2020 to July 2020. Moreover, it had provided a 60% discount in August 2020 and a 40% discount in September 2020.
- RMV had reported an overall adverse impact of £88.9 million in its revenue due to the combined discounts given during the year.
- The agency segment revenue and New Homes division revenue had witnessed a significant reduction of 32% and 27%, respectively, during FY20.
- RMV’s administrative cost had illustrated a decline of 7% to £70.6 million because of the significant reduction of operating costs.
- Regarding the profitability, the operating profit of RMV was decreased by 37% during the year.
- Furthermore, RMV had shown a decline of 36% in cash generated from operating activities from £221.7 million in FY19 to £141.5 million during FY20 caused by customer discounts given during FY20.
- Meanwhile, RMV had incurred £3.5 million of capital expenditure during FY20.
- RMV will pay an FY20 final dividend of 4.5 pence per share on 28 May 2021. Earlier, it had cancelled the final FY19 dividend to maintain the liquidity levels.
- Moreover, the share buyback program is going to resume in March 2021.
Share Price Performance Analysis of Rightmove PLC
(Source: EODHD/Others, chart created by Kalkine group)
Shares of Rightmove PLC were trading at GBX 574.00 and were down by close to 5.28% against the previous closing price as on 26 February 2021 (before the market close at 12:36 PM GMT). RMV's 52-week Low and High were GBX 373.10 and GBX 690.00, respectively. Rightmove PLC had a market capitalization of around £5.29 billion.
Business Outlook
The Company is well-positioned with well-defined strategic objectives for accelerating future growth. Moreover, the reports regarding the extension of stamp duty holiday would further boost the prospects of the housing industry. However, the Company remained cautious regarding the upcoming business challenges presented by the Covid-19 pandemic. RMV is hoping that the current shortage of new listings would recover after the lifting of lockdowns. UK Prime Minister Boris Johnson had already unveiled the plans to lift Covid-19 related restrictions gradually.
The Company had anticipated ARPA to raise from December 2020 levels and reach growth levels witnessed during 2019. Nevertheless, the Company had resumed dividend payments in FY20, illustrating its long-term confidence. Overall, RMV would continue to deliver strategic objectives and provide an engaging experience for the customers.
