The UK's Number One Property Website
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Rightmove plc annual report Rightmove plc annual report 2014 the UK’s number one property website Rightmove plc Turnberry House 30 Caldecotte Lake Drive Caldecotte, Milton Keynes MK7 8LE rightmove plc Registered in England no 6426485 annual report 2014 the biggest home moving audience and the largest number of properties in the UK Rightmove is the UK’s largest property portal. The service is directed at four key membership groups: Our aim is to be the place for all UK home hunters to • estate agents find details of all properties available to buy or rent. • lettings agents Our platforms provide an easy to use but sophisticated • new homes developers online property search. With the depth of information • overseas homes agents offering properties outside that they provide, home hunters can immediately identify the UK but interested in advertising to UK-based their preferred properties. home hunters. Designed and produced by The Team www.theteam.co.uk Contents Strategic report Strategic report Strategic 3 Highlights 6 Chief Executive’s review 17 Principal risks and 18 Our people 4 Chairman’s statement 13 Financial review uncertainties 19 Corporate responsibility continuing investing in Governance developing to innovate supporting our people our brand our customers Financial statements Financial page 8 page 10 page 12 page 14 Governance 24 Directors and officers 37 Directors’ report 41 Directors’ remuneration 67 Auditor’s report 26 Corporate governance 40 Statement of directors’ report report responsibilities Financial statements 70 Consolidated statement 72 Company statement of 75 Consolidated statement 77 Notes forming part of comprehensive financial position of changes in of the financial income 73 Consolidated statement shareholders’ equity statements 71 Consolidated statement of cash flows 76 Company statement 108 Advisers and of financial position 74 Company statement of of changes in shareholder information cash flows shareholders’ equity Rightmove plc annual report 2014 1 leading with mobile Our innovation lab is launching our Move or Improve app in 2015. over % of50 all our visits now come from mobile devices 2 rightmove.co.uk Highlights “ Rightmove’s popularity with the British home report Strategic moving public has gone from strength to strength as more home movers visited more often and spent more time on Rightmove than ever in 2014.” Nick McKittrick, Chief Executive Officer Governance Financial highlights • Revenue up 19% to £167.0m (2013: £139.9m) • Underlying operating profit(1) up 20% to £124.6m (2013: £104m) Financial statements Financial • Underlying operating margin(1) of 74.6% (2013: 74.3%) • Basic earnings per share up 32% to 97.7p (2013: 74.1p) • Underlying earnings per share(2) up 24% to 100.3p (2013: 81.0p) • Final dividend of 22p (2013: 17p) per ordinary share making a total dividend of 35p for the year (2013: 28p), up 25% • £103.4m (2013: £85.6m) of cash returned to shareholders through dividends and share buybacks in the year Operational highlights • Traffic growth up 10% year on year to 15.4bn pages (2013: 14.0bn) • Leads up 19% to 42.8m (2013: 36.0m) • Number of Agency and New Homes advertisers up 5% to 19,304 (31 December 2013: 18,425) • Average revenue per advertiser (ARPA)(3) up £77 (+13%) to £684 per month (2013: £607) with around 70% of ARPA growth driven by customers spending more on our additional advertising products and packages (1) Before share-based payments and NI on share-based incentives. (2) Before share-based payments and NI on share-based incentives and no related adjustment for tax. (3) For Agency and New Homes customers. Rightmove plc annual report 2014 3 Strategic report | Chairman’s statement Scott Forbes Chairman I am pleased to present Rightmove plc’s results for the year Rightmove is the marketplace for property in the UK. ended 31 December 2014. This has been built from both the consumer’s desire to Rightmove has demonstrated a characteristic and search for property habitually with us and our leadership in unwavering focus on improving its market leading customer property listings. The latter has substantially increased proposition and consumer experience. It has proven a wise in early 2015. We are committed to the never-ending need strategy as customers continue to invest more for greater to evolve and innovate to continue to drive our clear returns, reflecting the value of our immense and growing leadership position. popularity with Britain’s property searching public, our The Board and I are grateful for the confidence of our customers’ customers. 19,300 Agency and New Homes customers and also to our We have built our brand over 15 years and become the employees whose efforts have positioned Rightmove as the undisputed leader in the online property marketplace by essential marketplace for home hunters to find their next providing consumers with one place to search and research home and for property advertisers to reach by far the widest UK property and by providing our customers one place to possible audience. reach all home hunters. We at Rightmove take no greater satisfaction than providing a great value service to the Financial results organised property industry, by connecting them to most The strength of our business model and core value vendors and home searchers efficiently and effectively. proposition underpin record financial results in 2014. Rightmove is perennially ranked as one of the top ten most Underlying operating profit(1) was up 20% to popular websites in the UK. This popularity was highlighted £124.6m (2013: £104.0m) driven by strong organic when Google identified Rightmove as the most searched revenue growth of 19% to £167.0m (2013: £139.9m) for business in the UK in 2014. The attraction of our more and continued focus on cost control. Underlying basic than 15 billion and growing page impressions demonstrates earnings per share (EPS)(2) was up 24% to how compelling Rightmove is to consumers and ultimately to 100.3p (2013: 81.0p), even greater than the percentage our customers. increase in profits and in part attributable to £73.9m of share repurchases as part of our policy of returning cash to shareholders. 4 rightmove.co.uk Google identified Rightmove report Strategic as the most searched for business in the UK in 2014 Governance Returns to shareholders Board changes Our commitment to return excess cash promptly to investors During the past year, we welcomed Peter Williams and Rakhi continues to be as strong as ever. Cash conversion remains Parekh to the Board. Peter and Rakhi have already made in excess of 100% of operating profit. In 2014, we returned substantial contributions drawing upon their collective a further £103.4m (2013: £85.6m) to shareholders through consumer and digital experience and Peter’s extensive board Financial statements Financial dividends and share buybacks while retaining only experience. During an overlapping transition period, the £11.2m (2013: £6.8m) at the end of the year. This brings Board continued to benefit from the sage contributions of the total cash returned to shareholders since our flotation Jonathan Agnew and Judy Vezmar as we have for each of the in March 2006 to £482.1m. past nine years. Having completed three terms and no longer deemed independent, Jonathan and Judy will not stand for Dividend re-election to the Board in May 2015. We are grateful for their The Board previously announced that it would increase the insights throughout their service, perhaps most nostalgically interim dividend to 13p (H1 2013: 11.0p) per ordinary share, during Rightmove’s early days as a public company when which was paid on 7 November 2014. Consistent with our online marketing was less accepted as the norm and best policy of increasing the total dividend for the year broadly in way to reach home movers. line with underlying operating profit, the Board proposes to pay a final dividend of 22.0p (2013: 17.0p) per ordinary share Outlook for a total dividend for the year of 35.0p (2013: 28.0p), an Our results for 2014 show us continuing to outperform increase of 25%. The final dividend, subject to shareholder expectations. Based upon strong customer numbers, traffic approval, will be paid on 5 June 2015 to all shareholders on and healthy growth in average spend per advertiser at the the register on 8 May 2015. start of the year, the Board remains confident of continued success in 2015. Scott Forbes Chairman (1) Before share-based payments and NI on share-based incentives. (2) Before share-based payments and NI on share-based incentives and no related adjustment for tax. Rightmove plc annual report 2014 5 Strategic report | Chief Executive’s review Nick McKittrick Chief Executive Officer Rightmove’s popularity with the British home moving Our culture, of course, comes from our people and I am public has gone from strength to strength, as more home proud of the business we have built together. We strive to movers visited more often and spent more time on make Rightmove a great place to work and this enables us Rightmove than ever in 2014. Today they come to search to attract and retain the best talent and provide the best and research the only marketplace with over one million service for consumers and customers. I am delighted that in properties in the UK. our 2014 ‘Have Your Say’ people survey, again over 90% of We count nearly every agent in the UK as a customer respondents think Rightmove is a great place to work. I would and we care about all of our customers’ business success like to thank everyone for everything they have done over the and focus on building strong relationships that support their past year. ambitions. This approach continues to serve us well as we We have seen increased adoption of our additional have grown our customer base by 5% during 2014 to a advertising products and packages as customers invest record high.