Rightmove Plc Annual Report 2018 Rightmove Plc 2 Caldecotte Lake
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Rightmove plc Annual Report 2018 Rightmove plc 2 Caldecotte Lake Business Park plcRightmove Caldecotte Lake Drive Milton Keynes MK7 8LE Registered in England no 6426485 Annual Report Report Annual making 2018 home moving easier WorldReginfo - 65140789-7706-4a18-be8d-c2580dbd32fd Rightmove plc | Annual Report 2018 making home moving easier Rightmove is the UK’s largest property portal. Our aim is to make home moving easier by creating a simpler and more efficient property market place. Contents Strategic report Governance Financial statements 1 Highlights 36 Directors and officers 90 Consolidated statement of 96 Company statement of 2 Chairman’s statement 38 Corporate governance report comprehensive income changes in shareholders’ equity 4 Our strategy 44 Audit Committee report 91 Consolidated statement of 97 Notes forming part of the financial position financial statements 5 Chief Executive’s review 51 Nomination Committee report 92 Company statement of 136 Advisers and shareholder 14 Business model 54 Directors’ report financial position information 16 Key performance indicators 57 Directors’ responsibilities 93 Consolidated statement of 19 Financial review statement cash flows 24 Risk management 58 Directors’ remuneration 94 Company statement of report 25 Principal risks and cash flows uncertainties 85 Auditor’s report 95 Consolidated statement of 28 The EU referendum changes in shareholders’ equity 28 Viability statement 29 Corporate responsibility WorldReginfo - 65140789-7706-4a18-be8d-c2580dbd32fd Designed and produced by The Team www.theteam.co.uk Strategic report | Highlights Financial highlights Strategic report Strategic Revenue Underlying operating profit Underlying basic earnings per share +10% +10% +12% Revenue up 10% year on year to £267.8m Underlying operating profit(1) up Underlying basic earnings per share(2) (2017: £243.3m) with growth driven by 10% to £203.3m (2017: £184.4m) up 12% to 18.3p (2017: 16.3p(3)) our Agency and New Homes businesses Governance Total dividend Operating profit Basic earnings per share +12% +11% +13% Final dividend of 4.0p (2017: 3.6p(3)) per Operating profit up 11% Basic earnings per share up ordinary share making a total dividend of to £198.6m (2017: £178.3m) 14% to 17.8p (2017: 15.7p(3)) 6.5p for the year (2017: 5.8p(3)), up 12% (1) Before share-based payments and NI on share-based incentives. Financial statements (2) Before share-based payments, NI on share-based incentives and no related adjustment for tax. (3) 2017 comparatives have been restated for ease of comparability to reflect the 10:1 share subdivision effective 31 August 2018. Operational highlights Customer numbers Properties advertised Traffic: visits 20,454 1 million +4% Stable membership with Agency and UK residential properties advertised Visits up over 4% averaging nearly New Homes customers up slightly to on Rightmove, which is more than 132 million visits per month(4) 20,454 (2017: 20,427) any other UK portal Traffic: time on site Average Revenue Per Advertiser Employee engagement 1 billion £1,005 91% Time on site up 5% at over Average Revenue Per Advertiser (5) 91% of employee respondents think 1 billion minutes per month(4) up £83 to £1,005 per month (2017: £922) Rightmove is a great place to work (4) Source: Google Analytics. (5) Revenue from Agency and New Homes advertisers in a given month divided by the total number of advertisers during the month, measured as a monthly average over the year. “2018 was another strong year for efficient marketplace, constantly shown by our stable membership Rightmove. We extended our market innovating to provide deeper insights numbers, with particularly notable leadership and reinforced our position as to our agent and developer customers, growth coming from New Homes the place consumers turn to first when and an even simpler, more intuitive user developments. I’m excited by our thinking about moving home. In doing so, experience for home hunters. plans for 2019 as we continue to we demonstrated that Rightmove is a Visits and time spent on site both focus on innovation to make home business which can continue to grow continued to grow, with over 1.5 billion moving easier.” strongly even in uncertain times. We visits from consumers over the year. Peter Brooks-Johnson focus relentlessly on creating a more The resilience of our customer base is Chief Executive Officer WorldReginfo - 65140789-7706-4a18-be8d-c2580dbd32fd Rightmove plc annual report 2018 1 Strategic report | Chairman’s statement Scott Forbes Chairman I am pleased to present Rightmove plc’s results for the year Highlighting one example that underscores Rightmove’s ended 31 December 2018. vision and ethos, an increased propensity to rent in the UK is leading the industry to increase its focus on the lettings Having completed our thirteenth year as a listed company, market. This industry shift increases the demand for digital our founding principles remain the same despite the pace tools focused on improving the lettings experience for a of innovation and technological change. large addressable market of renters, landlords and estate We remain easy to use and free to home hunters. Our leading agents. After thoughtful research and development online brand entertains, informs and helps a consistently throughout 2018, Rightmove launched a Tenant Passport growing and industry leading audience across every local proposition designed to improve the reliability and housing market in Great Britain. completeness of information required to rent a home; thereby reducing the administrative burden and wasted We are advocates for the professional estate agency and time for all involved in the process. new home developer sectors; which the public rely on for local knowledge and quality service. Our value proposition is The Tenant Passport is the first in a number of innovations clear as in addition to delivering an unrivalled and relevant serving the lettings market and one of many useful digital audience every year, crucially, we invest and provide digital tools in our product pipeline that serve both home hunters innovations to our customers that enable them to compete and housing professionals. We look forward to many more for transactions and operate more efficiently. years of providing increasing value to these audiences as well as our supportive shareholders. As the marketplace for UK property, our customers are assured that our aim is to support them. Our business model Financial results is robust because the majority of our revenue comes from The strength of our business model and core value the subscriptions our customers pay to be part of that proposition once again underpins a healthy set of financial marketplace. As such, we are not directly linked to housing results in 2018. Underlying operating profit(1) was up 10% to transaction volumes and neither participate in the upside £203.3m (2017: £184.4m) and operating profit was up 11% nor downside of all but the most extreme events of the at £198.6m (2017: £178.3m) driven by revenue growth of cyclical home sales market. 10% to £267.8m (2017: £243.3m) and a disciplined approach to cost control. Underlying basic earnings per share(2) and Our ambition to remain a sustainable growth company basic earnings per share were up 12% and 13% respectively for the benefit of all stakeholders is undeterred as we at 18.3p (2017: 16.3p(3)) and 17.8p (2017: 15.7p (3)), even continually evolve our value proposition for the benefit of greater than the percentage increase in profits and in part our customers, consumers and shareholders. Our model as a result of 25.0m shares bought back during the year at a and approach has historically worked well and we believe cost of £113.5m as part of our policy of returning free cash it will continue to underpin our future success. flow to shareholders. (1) Before share-based payments charge of £4.3m (2017: £4.9m) and NI charge (3) 2017 comparatives have been restated for ease of comparability to reflect of £0.4m (2017: £1.2m) on share-based incentives. the 10:1 share subdivision effective 31 August 2018. (2) Before share-based payments charge of £4.3m (2017: £4.9m) and NI charge of (4) Cash generated from operating activities of £200.4m compared to operating £0.4m (2017: £1.2m) on share-based incentives and no related adjustment for tax. profit as reported in the profit or loss of £198.6m. WorldReginfo - 65140789-7706-4a18-be8d-c2580dbd32fd 2 rightmove.co.uk Returns to shareholders and dividend address concerns about the Board commitments of both report Strategic Our commitment to return excess cash promptly to myself and Peter. Following these conversations, I believe that investors continues to be as strong as ever and in 2018 we have consensus support for an orderly succession plan that we returned a further £168.5m (2017: £140.4m) to contemplates the further development of Chair candidates on shareholders through dividends and share buybacks, the Board and the recruitment of up to two non-executives bringing our total cash returned to shareholders, as a with appropriate profiles, prior to the May 2020 AGM, on which listed company to over £1bn. Operating date I intend to resign from the Board as Chairman. cash conversion(4) was again very strong and remains Peter Williams, after more than five years of exemplary Board in excess of 100% of operating profit. service, will not stand for re-election at the May 2019 AGM, Governance The Board increased the interim dividend to 2.5p to make room for a potential Chair candidate with the ability (H1 2017: 2.2p(3)) per ordinary share, which was paid on to serve as Board Chair for a longer tenure. Jacqueline de 2 November 2018. We are confident in our ability to deliver Rojas will be appointed as Senior Independent Director in sustainable returns to shareholders and consistent with our May 2019 and has agreed to oversee the committee process policy of increasing the total dividend for the year broadly of appointing a new Chair prior to the 2020 AGM.