This is it Annual Report 2020 Report Annual
Rightmove plc Annual Report 2020
Registered in England no. 6426485 Registered MK7 8LE Rightmove plcRightmove Lake 2 Caldecotte Business Park Drive Lake Caldecotte Keynes Milton Rightmove plc | Annual Report 2020 Rightmove’s purpose is to make home moving easier in the UK. We do this by creating a simpler and more efficient property marketplace. Rightmove is the UK’s number one property portal
Contents Strategic report Governance Financial statements 1 Highlights 46 Corporate governance report 98 Consolidated statement of 104 Company statement of 2 Chair’s statement 48 Directors and officers comprehensive income changes in shareholders’ equity 4 Chief Executive’s review 56 Audit Committee report 99 Consolidated statement of 105 Notes forming part of the 5 Our strategy 64 Nomination Committee report financial position financial statements 14 Business model 67 Directors’ remuneration report 100 Company statement of 140 Advisers and shareholder 16 Key performance indicators 87 Directors’ report financial position information 18 Financial review 90 Directors’ responsibilities 101 Consolidated statement of 22 Risk management statement cash flows 23 Principal risks and 91 Auditor’s report 102 Company statement of uncertainties cash flows 27 Withdrawal from the EU 103 Consolidated statement of 27 Going concern and viability changes in shareholders’ equity statement 28 Working with our stakeholders 31 Environmental, social and governance report Designed and produced by The Team www.theteam.co.uk STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS (4)
billion (4) ANNUAL REPORT 2020 | 1 REPORT | ANNUAL RIGHTMOVE PLC £96.7m £36.3m) end cash balance: (2019 year – visitsTraffic +31% 2.1 billion visits up over 31% to Site (2019: 1.6 billion) – timeTraffic on site 15.9 at up 31% over the year on site Time (2019: 12.1 billion) 15.9 billion minutes Basic earnings per share -36% 12.6p Basic earnings per share 36% (2019: 19.6p) down balance cash Year-end
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Chief Executive Officer Executive Chief Brooks-Johnson Peter down 28% to £778 per 28% to down (3) million Average Revenue Per Advertiser Per Revenue Average £778 Per Advertiser Revenue Average (2019: £213.7m) down 37% (2019: £213.7m) down advertisedProperties 1 properties Over one million UK residential advertised on Rightmove (2019: 0.9m), else in the UK than anywhere more (ARPA) Operating profit of £135.1m profit Operating shareholders to returned Cash £30.1m of cash returned £30.1m (2019: £148.8m) in buybacks share through shareholders to will programme buyback 2020; the share 2021 in March resume Operating profit -37% month (2019: £1,088) ) )
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he Board declared a he declared finalBoard dividend of 4.4pfor per 2019,total Thefor share dividend whichwas 2019 was cancelled. subsequently 2.8p paid in November 2019; no dividend payments were made in 2020. were no dividend payments August and September (60% and 40% respectively). August and September W T 93% think respondents 93% of employee Membership numbers down 3% to 19,197 3% to down numbers Membership Agency (2019: 19,809) with 425 fewer Homes New and 187 fewer Branches developments engagement Employee work to place that Rightmove is a great (2019: 81%) Customer numbers Customer 19,197
Total dividend Total 4.5p cancelled Final dividend of 4.5p (2019: -29% (2019: £289.3m) of £205.7m Revenue Revenue the impact of 29%, reflecting down the discount our customers per ordinary share; total dividend for 2020 dividend for total share; per ordinary 4.5p (2019: 2.8p In a y our lead in the extend helping us to information, real-time their next move and for Rightmove for sending us to led market the of reopening the followed that enquiries and traffic record The market. our customers.” leads to 51 million property (3) Revenue from (3) Agency from and Revenue New Homes in advertisers a given month divided by the number total of during advertisers the month, as measured a over average monthly the year. Google Analytics. (4) Source: (2) (1) in customers Agency to andafurtherdiscount AprilandJuly, between Homecustomers andnew Agency both valuesto oninvoice a75%discount e provided highlights Operational Strategic report | Highlights | report Strategic Financial highlights “ to turn to peoplecontinued thaneverbefore, inourhomesmore allstayed ear inwhichwe Strategic report | Chair’s statement
Reflecting on my first year as Rightmove’s Chair, I am struck by the resilience and adaptability of our people and business. Our ambition to make home moving easier in the UK has been undiminished by the challenges of the pandemic.
Andrew Fisher Chair
Our talented and committed teams are focused on exceeding Despite the significant impact on revenue of the pandemic, the expectations of Rightmove’s customers and consumers our business model and core value proposition produced a to deliver a best in class suite of digital advertising products to solid set of financial results in 2020. Operating profit was enhance the home-moving process. Against the challenging £135.1m (2019: £213.7m) from revenue of £205.7m background I’m delighted at the accelerating pace of (2019: £289.3m) with continued cost discipline resulting innovation the teams have delivered this year. Amongst many in an operating margin of 66% and basic earnings per share new developments, a particular highlight was the release of of 12.6p (2019: 19.6p). Our cash position at the year-end was phase one of the digitised rental journey in November to make £96.7m, with reduced returns to shareholders allowing us to home moving easier in the under-served rental market. fund our operations and customer discounts with no drawings Rightmove’s restless culture continues with the development on the CCFF or our revolving credit facility. of phase two now underway. Returns to shareholders and dividend The extraordinary challenges facing our customers in 2020 In 2020 we returned £30.1m (2019: £148.8m) to shareholders were significant and required us to take temporary action to in the first quarter through share buybacks. protect the interests of our customers, consumers and Given the unprecedented operating environment, the Board shareholders. The decisions to cancel or delay dividend has approved the ongoing maintenance of a cash balance of payments and suspend the share buyback programme were £50 million. The Board is confident in our ability to deliver unprecedented in Rightmove’s history and not taken lightly. sustainable returns to shareholders and is recommending a I am pleased that, thanks to the value of Rightmove’s services final dividend of 4.5p per share for 2020 (2019: 4.4p cancelled) . to our customers and consumers, we are again in a position to The final dividend will be paid, subject to shareholder approval, return free cash to our shareholders with the resumption of on 28 May 2021. The Board has also approved the resumption share buybacks in March and the dividend payment in May. of our share buyback programme in March 2021, confirming Customer support and financial position the resilience of the Rightmove business model and our The measures taken to contain the spread of Covid-19 have commitment to returning free cash to shareholders. had an unprecedented impact on the UK property market Board changes throughout 2020 and into 2021. The market closures in the Robyn Perriss, our Finance Director, stepped down from the first half of the year prompted us to take action to support our Board on 30 June 2020, after 12 years at Rightmove. Robyn Agency and New Homes customers, initially with a 75% was a great asset in developing strong financial management discount from April to July followed by 60% and 40% for and controls and keeping our investors well informed. Agency customers in August and September. Since markets Our thanks also to Georgina Hudson for her work as have reopened around the UK, the recovery in home moving interim Finance Director in 2020 and ensuring a smooth activity has been particularly strong, despite continued transition from Robyn to our new Chief Financial Officer. restrictions. Our customers have risen to the challenge of On 7 September, Alison Dolan joined the Board as Chief meeting that demand, using our digital solutions and data to Financial Officer and has already made a major contribution. optimise their marketing resources and increase efficiency.
2 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ANNUAL REPORT 2020 | 3 REPORT | ANNUAL RIGHTMOVE PLC Andrew Fisher Andrew Chair 26 February 2021 Environmental, Social and Governance (ESG) strategy (ESG) strategy and Governance Social Environmental, a for strategy ESG Rightmove’s revisited we During 2020, make to desire and culture our reflecting business, sustainable business system-positive a be and impact significant a out set are Details set of initiatives. a comprehensive through section of the Governance and Social in the Environmental, Report. Strategic Rightmove’s environmental reducing to committed are We Based the 1.5C Science have signed up to We footprint. ensure to with their scientists working initiative and are Targets behind the in line with the science are our ambitious targets with the UK’s Net Zero work to will continue We Paris Accord. for support the Government’s plans Business Champion to have expanded our by 2050, and carbon zero be net the UK to begin to journey our on year this reporting environmental for of the Taskforce under the recommendations reporting at the end of 2021. Disclosures Financial Climate-related Looking ahead thank all our customers to like I would On behalf of the Board, most the through support and confidence continued their for our determination reiterate and to circumstances exceptional and property home hunters for deliver the best marketplace to the widest possible audience. reach to advertisers has, 2020 in cash conserve to decisions difficult the Taking the supporting while liquidity preserve to helped I believe, create to required resources and technology the in investment continue to value. Our commitment shareholder long-term sustainability the long-term for that investment and innovate of Rightmove is embodied in our business strategy. and growth all our value for create to continuing to I am looking forward in 2021. stakeholders Strategic report | Chief Executive’s review
Twenty years on, our focus remains on making home moving easier in the UK and that clarity of purpose has helped to guide our business and the delivery of our strategy through the challenges of 2020.
Peter Brooks-Johnson Chief Executive Officer
Over the past 20 years Rightmove and the thousands of local Our customers have shown great resilience during 2020, businesses who make up our customer base have changed responding to the new rules and adopting new digital tools to the way Britain searches and researches property. The Covid- allow home movers to continue to find their dream next home 19 pandemic turned everybody’s lives upside down, and the in safety. We believe that the adoption of these tools will also resulting uncertainty and disruption has brought challenges make their businesses more efficient for the long term. unlike anything faced since we first started. Whilst much has Beyond supporting our customers financially, we rolled out a changed, 2020 has highlighted the trust Britain’s number of practical initiatives. These initiatives included over homemovers put in Rightmove as not only the place to find 2.2 million ‘kick start’ alerts to home hunters to refresh interest their next home, but also the source of reliable information in properties that had been available for sale or rent before the about the housing market. That Rightmove ends 2020 a first lockdown, helping agents to replenish the pipeline of stronger business than it entered is testament to the property transactions as the market reopened; a new bespoke adaptability and tenacity of our people. local market data tool to help agents target resources most Twenty years on, our focus remains on making home moving efficiently and a new platform for video viewings of properties. easier in the UK and that clarity of purpose has helped to guide We have worked to keep our customers informed of the rapidly our business and the delivery of our strategy through the changing market conditions and to help them to adapt. We challenges of 2020. hosted close to 100 webinars for agents in 2020, which were Our response to Covid-19 attended by over 29,000 property professionals from over Our priority during the pandemic has been the wellbeing of our 5,700 branches and viewed by a further 17,000 people using people, supporting our customers and continuing to drive the catch-up facility. Attendance at our webinars trebled in towards our strategic goals whilst making prudent decisions 2020, and customer engagement through the Hub increased, amid the uncertainty to maintain liquidity. with over 1 million pages viewed during the year. The Government measures taken to contain the spread of Recognising our role as a trusted source of housing market Covid-19 had an unprecedented impact on the UK property knowledge for UK home hunters, we increased the frequency market, which was effectively closed from 23 March until of our consumer email update from fortnightly to weekly. 13 May in England, 22 June in Wales and 29 June in Scotland. This update was read by an average of over 750,000 home This had an immediate impact on our customers’ cash flows hunters every week. For the first time ever, we ran webinars for and lengthened the time to resumption of normal cash flow, consumers to answer their questions about what the market since the average housing transaction takes around three closure and subsequent reopening meant for buyers, sellers months to complete. We responded by supporting all our and renters. customers with discounts between April and September, Since the property market reopened, we have seen record- conscious of the economic impact of market disruption on breaking traffic on our platforms and our customers their businesses. The revenue impact of customer discounts responding by investing in our digital solutions to meet that in the year was nearly £90m, contributing to a fall in Group demand. Since May we have had 231 record days of traffic revenue of £83.6m to £205.7m and a fall in operating profit by and on 12 of those days visits exceeded 8 million, peaking at 37% to £135.1m. Despite the challenging operational and 68.4 million minutes spent on our platforms in one day. economic conditions for our customers, Agency and New Homes customer numbers ended the year down just 3% at Our focus on innovation and delivering marketing solutions 19,197, with the number of Estate Agency members growing to our customers led to an increase in sales of our premium slightly in the second half of the year. packages, with 1,110 Agency customers investing in our Optimiser 2020 package launched in November 2019. We have continued to innovate to make moving easier for home
4 | RIGHTMOVE PLC | ANNUAL REPORT 2020 Strategic report | Our strategy Strategic report Rightmove’s purpose is to make home moving easier in the UK. STRATEGIC REPORT This is where Britain moves GOVERNANCE FINANCIAL STATEMENTS
Strategy Strategy Strategy Strategy 1 2 3 4 The place Unrivalled Innovate to Build great consumers turn exposure, leads create a simpler teams to first and engage and products for and more efficient with most our customers marketplace Page 6 Page 7 Page 8 Page 9
RIGHTMOVE PLC | ANNUAL REPORT 2020 | 5 Strategic report | Our strategy continued
Strategic report Our strategy
Strategy This is where 1 we found our The place consumers happy home turn to first and engage with most 2 billion visits
Rightmove is at the heart of the home-moving process in the UK, being the place consumers turn to first when thinking about their next move. In 2020, consumers made over 2 billion(1) visits to Rightmove across all our platforms and spent over 15.9 billion(2) minutes on Rightmove, up 31% on 2019.
(1) Source: Google Analytics. (2) Source: comScore.
6 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ANNUAL REPORT 2020 | 7 REPORT | ANNUAL RIGHTMOVE PLC
million Strategy Since Rightmove’s inception, helping Rightmove’s inception, Since the largest to market to our customers win more and to possible audience objectives. business have been our key specific 51 million property delivered We over in 2020. At our customers leads to this is a new 1.6 leads every second, of leads sent the number for record in a year. Rightmove from Unrivalled exposure, exposure, Unrivalled and productsleads our customers for 51 leads 2 This is where our This is where customers can market to the largest audience Strategic report | Our strategy continued
Strategic report Our strategy Strategy 3 Innovate to create a simpler and more This is where efficient marketplace innovation 50% happens more software releases every day Our product teams have delivered nearly 50% more updates to the Rightmove platforms than in 2019, despite the challenges of working from home for the majority of the year.
8 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Strategy Build great Build great teams in one team create endeavour to We with organisation, connected a highly and bureaucracy minimal hierarchy and growth rapid to barriers creating innovation. 93% survey, Say’ In the 2020 ‘Have Your that agreed respondents of employee work’. to place ‘Rightmove is a great 4 93% work to place a great ANNUAL REPORT 2020 | 9 REPORT | ANNUAL RIGHTMOVE PLC This is where is where This everyone can thrive Strategic report | Chief Executive’s review continued hunters. Further integration of Van Mildert has enabled us to Improvements include larger images, integrated video content, develop the next version of the tenant passport. The launch of better navigation and signposting and the introduction of the online appointments system, Viewings Manager, saw the property images alongside floorplans. Consumers have been completion of the first phase of our work to digitise the journey quick to adopt the new style pages, with the amount of time to a rental move, with the development of the second phase spent per property listed increasing by over 70%. Importantly, well underway. this has also increased the number of property enquiries sent to our customers. As a team and a business, we have emerged stronger from 2020, with a better relationship with our customers, Consumer preference for accessing property on mobile demonstration of the resilience of our business and a stronger platforms continues unabated, with our mobile-optimised site sense of common purpose. The resilience of our business and apps again showing the fastest growth of all our platforms. during 2020 was in no small way down to the adaptability and We saw a 42% increase in mobile site time and a 39% increase commitment of our teams. Our employees transferred to in app time during 2020. We have over four times more active remote working in March and have seamlessly continued to users on our mobile and tablet apps than our closest innovate and deliver customer service. Our product teams competitor, with each user spending nearly twice as much time have delivered nearly 50% more updates to the Rightmove on average(3). With over six times the total amount of time platform than in 2019, despite the challenges of working from spent on our apps relative to our closest competitor, our home for the majority of the year. I am delighted that, in spite unrivalled platform is even stronger with app users. of the difficult context and rapid change in everyone’s lives, Home hunters rely on our platforms to be available all the 93% of our people, responding to the annual ‘Have Your Say’ time and we have again recorded an industry-leading level of survey, believe that Rightmove is a great place to work. “uptime” of 99.99%, meaning our platforms were unavailable Our Strategy – making home moving easier for just 14 minutes during 2020. Researching the property market is a key activity for landlords, The place consumers turn to home owners, buyers and sellers. In 2020, our research tools, first and engage with most such as sold price data, were by far the most widely used in the Rightmove is at the heart of the home-moving process in the UK, with over 1.1 million UK properties currently listed for sale UK, being the place consumers turn to first when thinking or to rent and over 55 million historical property records. about their next move. Perhaps the simplest indication of this Perhaps reflecting the increased demand in the marketplace, is the speed at which home hunters turn to Rightmove when consumers spent over 497 million minutes using these tools conditions in the market change. Within an hour of the English in 2020 - an increase of 22% on 2019. stamp duty holiday being announced on 8 July 2020, traffic The shift in home-hunter behaviour when the market jumped by 15% above already high levels and went on to re-opened was noted by more people considering not only surpass over 8 million visits in a single day for the first time in what they need from a home, but also where they want to live. Rightmove’s history. Many home hunters are actively considering longer commute Our place in the market is hard won, the home-hunting times as they consider their working patterns in a post audience has high expectations of the technology and services pandemic world. Use of our tool ‘Where Can I Live?’, which uses we offer, and in turn we focus on continual improvement and sophisticated data analysis to help people work out which innovation to make the home-moving process a simple and locations they can afford and meet their new commute time compelling experience for them. criteria, was up by 45% in the second half of 2020 compared to the same period in 2019. In 2020, consumers made over 2 billion(1) visits to Rightmove across all our platforms and spent over 15.9 billion(2) minutes on Our market-leading data and analytical capability allows us to Rightmove, up 31% on 2019. publish the UK’s most accurate leading indicator of house prices in the UK. Our House Price Index is based on around We achieve this level of consumer engagement by delivering 95% of newly-advertised properties in the UK. Whilst always a the most up-to-date, engaging and comprehensive property widely used property research tool for consumers and property content, together with the best search and research tools. professionals alike, the rapidly changing market in 2020 Amongst the many improvements in 2020, we completed a demonstrated the unique real-time trends our data can reveal, ground-up rebuilding of our property details pages. based on hundreds of thousands of data points.
10 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 11 REPORT | ANNUAL RIGHTMOVE PLC Optimiser packages was unchanged at 38%, with the majority of majority the with 38%, at unchanged was packages Optimiser the from package the Optimiser 2020 to upgrading customers package. Optimiser lower-priced portal property Residential largest the only is not Rightmove in the UK, it is also the largest Commercial Real Estate (CRE) Estate Real Commercial is also the largest in the UK, it advertising property portal in the UK. Our Commercial of benefits efficiency the offer to continues business in the interested companies to Rightmove platforms of their commercial or divestment acquisition, occupation platform is established as assets. Rightmove Commercial CRE RICS-qualified for and occupiers, for both choice, of themselves defining users of majority the with professionals, or investors. developers landlord/owners, as agents/surveyors, and 15% by increased properties commercial to traffic Our to by 25% as the need increased customers CRE leads to the adoption of social distancing in 2020 accelerated respect in the growth Underlying CRE sector. digital media within the adoption of the encouraging driven by an CRE business was existing and customers, new by platform marketing Rightmove with us. spending more customers proprietary of amounts significant generate platforms Our Rightmove Data demand data. The and home hunter property industry by delivering the property business supports Services and insights based on our unparalleled valuation tools property to used by surveyors Tool, Comparable dataset. Our Surveyor used in over 75% of mortgage was valuations, property make were than 2.3 million reports the UK and more in transactions in fall 11% an despite 2019 on decrease 4% a only 2020, in run of data-driven solutions importance The housing transactions. in a 10% increase of 2020 led to world distanced in the socially and Valuation Model APIs by lenders the use of our Automated in of property than £2.5 trillion worth valued more we overall of the Automated usage of increased combination 2020. The demand and Valuation Model and the value of our real-time other our of usage lower the offset than more data property tools. transactional our for conditions trading difficult particularly presented 2020 travel with Covid advertising business, property Overseas of dream The uncertainty. Brexit continuing and restrictions amongst the British is still strong abroad a property owning the obstacles to public, with leads up 2% on 2019 despite restructure to the opportunity took We overseas. purchasing of pent-up the release for and prepare team the Overseas restrictions travel once properties overseas demand for Site stabilises. environment Brexit post the and lifted are time being spent on than 10% more more optimisations led to site 2019. The to compared section of the site the overseas demand for with the pent-up optimisation, in conjunction our busiest ever day us recording led to property, overseas in 2020. section of the website on the Overseas
products for our customers for products Unrivalled exposure, leads and leads exposure, Unrivalled market to helping our customers Rightmove’s inception, Since business have win more and to possible audience the largest to helped also vital that we objectives. In 2020, it was been our key of a variety navigate efficiently, more operate to customers our home hunters. demand from record and meet restrictions new strong the with coupled Rightmove, to traffic record The than made half of 2020, more in the second market property 51m delivered We in March. in the market the closure up for At 2019. on 27% up customers, our to leads specific property the for record this is a new over 1.6 leads every second, Rightmove in a year. number of leads sent from ‘Optimiser package premium launched our new 2019, we In late package. Optimiser existing the of success the on building 2020’, Manager’, an algorithm- includes ‘Opportunity package new The dynamically- By Me’ – a new ‘Sold and tool intelligence powered I am pleased that, sellers. potential attract to product targeted of our numbers the challenges of 2020, increasing despite benefitted and 2020, Optimiser buy to chose customers agency efficiencies operating the and Me by Sold of success the from of our Manager. In 2020, the proportion enabled by Opportunity and our Enhanced buying independent agency customers For 20 years, we have invested in our brand and we continue to to continue we and in our brand have invested we For 20 years, Happy’ campaign. ‘Find Your that with our always-on reinforce TV new our filmed we lockdown national first the after Shortly their find people moment the capture to it', is 'This advert, next happy home, to highlight the crucial role a home plays in plays home a role crucial the highlight to home, happy next is no there people that remind and to memories, creating move home. time to perfect national television, includes Our investment in brand-building online by supported 4, Channel with partnership our through 2020, we advertising. Throughout digital and outdoor video, publish positive and factual to used our unrivalled datasets help build to and in our housing reports, on site both content about speculation negative counter confidence, consumer and homemovers to confidence give and market housing the time insights. based on real customers from come platforms our to visits of 85% over Whilst or their browser ‘Rightmove’ into typing consumers initiatives, more have launched launching our app, we engine optimisation and on including on search the behaviour of our that engagement, recognising of these initiatives evolving. As a result is always audience 31% by increase traffic seen have we marketing, direct and of share Rightmove’s extending 31%, by site on time and portals. property other to time compared Strategic report | Chief Executive’s review continued
Since roll out began in November over 400 independent Innovation to create a simpler Agency branches have adopted Viewings Manager with over and more efficient marketplace 18,000 Passports completed in January 2021 and a similar Over the last 20 years, Rightmove has helped drive significant number of appointments already requested. Early feedback efficiencies within the property industry by providing our from agents on the improved efficiency of the process is customers with training, support and a suite of software as part encouraging, with a number reporting a significant reduction of their membership to help them in the day to day running of in wasted journeys to appointments. their businesses. However, we are restless and have much Once a viewing has been completed agents can seamlessly more to do, we are continually innovating to make the property order a full tenant reference from Van Mildert without the need marketplace more efficient for home hunters and customers. to re-enter the tenant’s details, saving time and reducing the We believe there are opportunities to improve the journey from risk of error. searching for a home to being ready to transact on it. Innovating for growth tomorrow The Covid restrictions introduced by the Government led When moving, tenants require a number of services such as both home hunters and customers to reassess how best to home contents insurance and broadband for their new homes. progress their property journey. We responded by accelerating Offering these services at the right time in the moving journey our plans to help the property market become more digital. is important in making the service useful to tenants and We believe making the journey more digital will increase the therefore valuable. In 2020 we took the first steps to expand long-term efficiency of our customers and reduce the the monetisation of the rental journey by offering these environmental impact of wasted journeys. services to tenants who had successfully passed a reference Innovating for efficiency now with Van Mildert. Despite our offering in 2020 being To help customers and home hunters adhere to the social experimental and not optimised we helped nearly 7,000 distancing guidelines and minimise unnecessary travel, we tenants with their needs. This is an area we intend to delivered a new tool which enables customers to securely experiment with further in 2021 by engaging the deliver online viewing videos to home hunters, in line with Rightmove audience throughout their tenant journey. government advice. The integrated tool also offers usage Whilst the majority of our efforts have been focused on reporting and functionality to make the process of responding improving the journey to renting a home, our partnership with to home hunter enquiries quicker and more efficient for agents. Nationwide Building Society continues to provide valuable The use of video viewings represents a significant shift in the insights into consumer interest in mortgage information. behaviour of UK agents and consumers, and adoption has been Through the re-design of our property details pages, we steady, with over 40,000 videos uploaded to the platform since increased consumer engagement with our mortgage launch. Where available nearly 50% of home movers engage affordability partnership with Nationwide by a factor of four with the video content as part of the lead sending process. between September and December 2020. We are early in the journey of enabling a more digital approach to mortgages, but Following two successful trial phases, Viewings Manager, our our experience in 2020 stands us in good stead. It underlines integrated appointment booking system for tenants, began full the need for more digitally led mortgage options evidenced roll out in 2020. Building on the knowledge gained as part of the through consumer engagement with our tools, and provides Van Mildert acquisition, Viewings Manager includes the next us with valuable insight into how users’ needs will evolve iteration of the Rightmove Tenant Passport. through the journey. The appointment booking functionality allows tenants to request an appointment electronically whilst enhancing the Our Environment and the lead information with the passport details. This allows agents Society in which we live to simply and easily assess the property's affordability and As an organisation we live by our values and we believe our suitability for the tenant, and potentially allow them to suggest values extend beyond how we do business. “Doing the right something more suitable. Once a viewing is confirmed, thing” is central to the values we espouse, and we believe tenants can cancel or reschedule the appointment at the click Rightmove can and should be a force for good within the of a button and receive automated reminders to help avoid communities in which we operate. missed appointments and unnecessary journeys for agents. Following the viewing, feedback is automatically gathered Doing the right thing encompasses our response to a range from the tenant saving the agent time and offering the home of issues. It was front of mind when we were one of the first hunter the chance to express their interest in progressing companies to choose to repay the grant from the Coronavirus towards tenancy. Job Retention Scheme (CJRS) when it became apparent that
12 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 13 REPORT | ANNUAL RIGHTMOVE PLC (1) Source: Google Analytics. (1) Source: comScore. (2) Source: App Annie. (3) Source: and social events. We were fortunate to be able to return all our return be able to to fortunate were We and social events. offer and period furlough initial the after work to employees them. needed who anyone to arrangements working flexible and support protect to have taken we of the actions Details in the can be found the pandemic through our employees Report. and Governance Social Environmental, these working, remote of periods extended during Even a of our people have maintained actions and the behaviours ‘Have In the 2020 sense of belonging and connection. strong that agreed 81%) (2019: employees of 93% survey, Say’ Your the for I am again grateful work’. to place ‘Rightmove is a great our people from feedback humorous honest and often direct, such a strong with organisation an in 2020, which has created purpose. sense of belonging and and is organisations many sets us apart from Our culture of part be to proud are who people, our of each by defined evolving which has been continuously Rightmove. It is a culture have of what we and I am very proud over the last 20 years thank every to like during 2020. I would achieved together commitment. and efforts extraordinary their for Rightmover our culture our values and preserved have been true to We driving challenging circumstances, the most through everyone where a place and creating innovation and success can thrive. Brooks-Johnson Peter Officer Executive Chief 26 February 2021
to the fore when considering their next home. next their considering when fore the to on an working is currently business Our Data Services Energy Business, for Department the with project exploratory low of difference value the assess to Strategy Industrial & digitise home to believe that by continuing carbon homes. We their understand to moving in the UK and helping consumers can we efficient, energy more homes making around options agenda. help drive the UK’s ‘net zero’ initiatives and our environmental about these information More and Social in the Environmental, policy can be found Report. Governance teams Build great ofteam current the to dozen a of team Rightmove first the From culture a create and Rightmove define people our 550, over where supportive, and open innovative, exciting, is which peopleOur explored. be can idea every and matters, everyone and consumers. our customers for achieve more strive to always connected in a highly one team create endeavour to We creating and bureaucracy with minimal hierarchy organisation, this to believe the key and innovation. We growth rapid to barriers the right people, then giving them the is employing success effectively. lead and innovate to confidence and tools freedom, and of working our ways have adapted In 2020, we environment. office normal the outside communicating all- with frequent connected stay to have learned how We ‘stand ups’ team Halls and smaller virtual online Town employee have been able to help Women’s Aid and Childline in addition Aid help Women’s have been able to charities in what has been a very our local for our support to we work the to all charities. I look forward for challenging year partnership as part of our new both have planned in 2021, of those who are more encourage Genius to with Generating and to in technology, a career consider disadvantaged to educational routes. non-traditional from recruit over emissions carbon own our reduced significantly have We do us to but doing the right thing requires years, the last three make supports initiatives to strategy Our environmental more. of our using the reach country the UK a carbon neutral improve to consumers and encourage inform to platforms factors these bring and homes their of efficiency energy the of those within the communities we serve, and it is front of serve, and it is front we the communities of those within live. in which we about the world think we mind when the have made in reducing we with the progress I am pleased years, over the last four gap within Rightmove gender pay do. 2020 has caused to more still have much we however inclusion and promote to steps take we how reassess us to that we I am delighted our company. beyond opportunity we did not require it. It is front of mind when we think about of mind when we it. It is front require did not we some for of opportunities inclusion and the lack and diversity Strategic report | Business model
The Rightmove network effect
EMPOWERING
EFFICIENCY
The place consumers BUYERS Unrivalled exposure, SELLERS AGENTS turn to first and RENTERS DEVELOPERS leads and products engage with most LANDLORDS for our customers
SIMPLICITY
What we do How we make the market more efficient for consumers Rightmove is the UK’s number one property portal and the Rightmove is free to consumers, and it is the only place where UK’s leading property marketplace, bringing together the UK’s home buyers and renters can see almost the entire UK largest and most engaged property audience with the largest property market in one place. Rightmove has become the inventory of properties. We benefit from strong network place consumers turn to first when they think about moving effects as our property audience and the properties our home because they can rely on the speed and availability of our customers advertise create a ‘virtuous circle’ enhancing the platforms to view more properties for sale and to rent than Rightmove value proposition. anywhere else. Our customers are primarily estate agents, letting agents and Finding your next home can be a stressful and frustrating new homes developers advertising properties for sale and to experience; the simplicity and ease of access to the property rent in the UK. information Rightmove offers can reduce that stress. Our carefully designed platforms avoid distractions in pursuit of Our purpose is to make home moving easier in the UK simplicity, putting home hunters in control of their search by creating a more efficient housing marketplace and research. The UK housing market, both in sales and rentals, is complex and often inefficient. Moving home can be a time consuming, It is not in our nature to stand still or to take Rightmove’s frustrating experience for consumers and professionals, often success for granted; we are continually investing to deliver the with elements of wasted effort and unavoidable manual most engaging experience for home movers. Our culture is processes. We believe that, by creating a simpler and more one of restless innovation, with a strong focus on driving efficient marketplace, we can make home moving in the UK improvement. We release hundreds of updates and easier. A better marketplace which empowers consumers and improvements to our platforms each month. Improved property professionals leads to a better housing market. By technology and new ways of working have accelerated the building long-term partnerships and creating value for property pace of new releases, with 50% more software releases in professionals and consumers, we are able to grow our revenue, 2020 over 2019. which in turn allows us to innovate to create more value for all.
14 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 15 REPORT | ANNUAL RIGHTMOVE PLC Our solutions for New Homes developers help them to reach reach help them to developers Homes New for Our solutions to help them UK. We in the serious home buyer almost every platform Rightmove’s off and on both buyers these target Extension Active Rightmove and Display Active our through packages build-to-rent launched new In 2020, we products. them to which will enable Homes customers, our New for properties. rental their of features premium the differentiate Agency our for efficiencies drive to help to continue We that delivers best in class software by providing customers their help inform to tools insight and analytical data, market our using customers Agency our of 85% with decisions, each month. software value How we create for our shareholders subscription is the monthly of revenue Our principal source on advertise all of their properties to paid by customers fees our additional for can also pay Rightmove. Our customers of share a customer’s which increase advertising solutions, our for critical factors are These and competitiveness. voice win the help to an agent to for and particularly customers a home, which remains sell or rent to instruction opportunity of their business. the lifeblood that digital – a process more industry becomes As the property leading – Rightmove’s market in the past year has accelerated are and data driven analytics best in class software audience, ARPA Future our customers. to valuable even more becoming and penetration product will be driven by increased growth our unrivalledpricing, which is underpinned by the value of and our inventory and data, our substantial product audience benefit to innovating constantly for record track and culture and consumers. our customers more become to believe that helping home hunters We of a valuable source into will, in time, grow ready’ ‘transaction insurance and rent-guarantee referencing Tenant revenue. partnership Van Mildert and our mortgage capabilities through journey. this in steps first the are Society Building Nationwide with a number of smaller adjacent develop to also continue We properties and overseas advertising commercial businesses, data and valuation services. property-related and providing
A vital part of innovation is a disciplined willingness to willingness to of innovation is a disciplined A vital part roadmap strategic Our results. the from learn and experiment an evolved from has journeys rental tenants’ improving for 2018 in Passport Tenant first the to 2017, in app experimental learnings and in 2019. The of Van Mildert and the acquisition the have informed these activities from data obtained it with integrating Passport, Tenant development of our new and the booking system Manager appointment our Viewings tenants. and agents lettings benefit to flow, lead rental for provide we tools the tenant, or buyer a finding Beyond to confidence and simplicity bring market the researching one of the largest consider as they and landlords sellers help them an agent to of their lives and choose transactions on their home- moving journey. on their home- moving the more How we make efficient for market our customers portal with the digital property UK’s largest the By creating together have brought we of properties, selection largest to want our customers hunting audience all the home virtually effective and significant most the offer to able are We attract. the in resulting properties, and brands their for exposure significantly thereby leads, high-quality of source largest efficiency. marketing customers’ our increasing their reach to Our digital solutions help our customers win to them enabling efficiently, and quickly more audiences business. Winning instructions is critical but timenew number a offer we and customers Agency our for consuming win instructions. to enable customers to and products of tools as many win twice our Optimiser packages buying Agents use our solutions. as those who do not instructions on average innovation and improvement of constant Rightmove’s culture our for opportunities efficiency more create to helps a Manager’, ‘Opportunity is this of example good A customers. available with our Optimiser 2020 lead management tool by an algorithm Manager is powered Opportunity package. spot intelligently to learning and improving that is constantly potential into turn to most likely who are the home hunters in an agent’s area. home sellers business challenges in 2020, new faced As our customers help to tools efficiency and products new with responded we is a Viewings Online manage leads and viewings. them to and upload video viewings agents to for simple tool which we home hunters, send them to automatically lockdown. first the of weeks within launched Strategic report | Operational key performance indicators
We use the metrics set out below to track our operational performance.
A
2020 performance 2020 performance % % -3 -28 Risks Risks 1 2 3 1 2 3
Source: Rightmove Source: Rightmove Definition Definition The total number of paid for UK estate and lettings Agency Revenue from Agency and New Home advertisers in a given branches/branch equivalents and New Home developer sites month divided by the total number of advertisers during the advertising properties on Rightmove month, measured as a monthly average over the year Strategic link Strategic link The place consumers turn to first and engage with most; and Unrivalled exposure, leads and products for our customers innovation to create a simpler and more efficient marketplace
Traffic E R
2020 performance 2020 performance % + + percentage 31 points 12 Risks Risks
2 3 4 5
Source: Google Analytics Source: Rightmove Definition Definition Total time measured in billions of minutes spent on Based on the number of employee respondents selecting Rightmove platforms during the year ‘Yes’ as a response to the question ‘Rightmove is a great Strategic link place to work’ in the annual employee survey The place consumers turn to first and engage with most Strategic link Build great teams with a culture to innovate
Risks relevant to our KPIs (read more on pages 23 to 26)
1 Macroeconomic environment 2 Competitive environment 3 New or disruptive technologies and changing consumer behaviours 4 Cyber security and IT systems 5 Securing and retaining the right talent
16 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
5 5
4 4
% % 3 3
2 2
80 37 1 1 2020 performance - Risks 2020 performance - Risks New or disruptive technologies and changing or disruptive technologies New behaviours consumer
3 ANNUAL REPORT 2020 | 17 REPORT | ANNUAL RIGHTMOVE PLC Source: Rightmove Source: Source: Rightmove Source: Operating profit decreased by to decreased 37%profit £135.2mOperating (2019: £213.7m) at with margin 66% operating (2019: 74%) in theto During returned shareholders cash the wasfree flow year totalling and dividends with cash returns buybacks of share form £30.1m (2019: £148.8m) the taken reflects measures shareholders to cash lower The returns cash preserve flowto in 2020 March when the buyback share paused and dividends were programme Operating profit £m Operating profit C
5 5
4 4
% % 3 3
Competitive environment Competitive the right talent and retaining Securing 2 2
36 29 2 5 1 1 2020 performance - Risks 2020 performance - Risks
Cyber security and IT systems security Cyber Macroeconomic environment Macroeconomic
4 1 Financial key performance indicators indicators performance key Financial | report Strategic R R Source: Rightmove Source: 12.6p (2019:19.6p) by 36% to Basic EPS fell Source: Rightmove Source: £205.7m to on year by 29% year decreased Revenue (2019: £289.3m) due the to significant discounts offered to customers offered We use the metrics set out below to track our financial performance. performance. financial our track to below out set metrics the use We Basic EPS Strategic report | Financial review
Rightmove delivered a robust financial performance in this challenging year whilst offering unprecedented financial support to the industry through significant subscription discounts.
Alison Dolan Chief Financial Officer
Revenue Agency revenue fell by £67.7m year on year to £141.6m 2020 2019 (2019: £209.3m). The financial impact of the discount to £m £m Change Agency customers (£69.6m) was partially offset by higher Agency 141.6 209.3 (32)% underlying revenues of £1.9m, mostly from the full year benefit New Homes 40.7 55.5 (27)% of Van Mildert revenues as well as additional one-off product Other 23.4 24.5 (4)% sales during Q1 and Q4. Full-year average monthly revenue per branch (ARPA)(1) fell to £730 (2019: £1,035) as a result of Total revenue 205.7 289.3 (29)% the discounts. Agency customer numbers declined by 3%, Membership ending 2020 at 15,922 (2019: 16,347), as many single, low- stock branches closed or mothballed their businesses. 2020 2019 Change Agency branches 15,922 16,347 (3)% New Homes revenue fell by £14.8m to £40.7m (2019: £55.5m) New Homes developments 3,275 3,462 (5)% also largely discount-driven, which for New Homes customers amounted to £15.2m, and meant that full-year ARPA(2) fell by Total membership at year end 19,197 19,809 (3)% £340 to £1,003 (2019: £1,343). This was partially offset by The significant discounts we provided to support customers increased revenues of £0.4m in the first quarter. The vast during the spring and summer, when government measures to majority of New Homes customers maintained their control the spread of Covid-19 temporarily closed the property Rightmove subscription throughout the year, but market, meant that revenue fell by 29% to £205.7m (2019: development numbers themselves ended the year down £289.3m). We provided a 75% discount on invoice values to 5% on December 2019, as the buoyant market saw the both Agency and New Homes customers between April and demand for developments outstripping the construction July, and further discount to Agency customers in August and of new developments. September (60% and 40% respectively). We also provided ARPA for the month of December 2020 was £1,103 and up 2% selective discounts across other business units. The revenue on the same month for December 2019 (Dec 2019: £1,083). impact of the combined discounts was £88.9m. It was partially offset by £5.3m of additional revenues, from revenue growth Other revenue, which includes Overseas, Commercial, Data during both Q1 and Q4, as well as the benefit of a full year of Services and Third-Party advertising services, fell by £1.1m to Van Mildert revenues. £23.4m (2019: £24.5m). Discounts totalling £4.1m were given to Overseas and Commercial customers between April and August. This was mostly offset by growth in Third-Party advertising revenues (£2.6m) and in Data Services (£0.3m), where increased H2 market activity drove Surveyor Comparable Tool volumes and data analytics spend. An underlying increase in Commercial revenues of £1.2m, which reflected a 12% increase in the number of portfolio customers, also helped to mitigate the impact of the discount, but underlying Overseas revenues fell by £1.1m, as viewings of overseas properties were limited due to travel restrictions.
18 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
% 205.7
7% (29)% (37)% Change
O
£m (78.6) Change
£m C 2019 74% 289.3 (83.6) 213.7 (75.6) 5.0
AR A £m 2020 66% 205.7 135.1 (70.6) Income tax expense Effective tax rate ANNUAL REPORT 2020 | 19 REPORT | ANNUAL RIGHTMOVE PLC R
£135.1m £213.6m
Profit before tax T of tax is paid and collected at the right time, in line with all with line in time, right the at collected and paid is tax of to taken steps the of part as March, In laws. tax applicable defer to elected we of uncertainty, in the face liquidity preserve 2020 and 30 June 2020 20 March due between payments VAT in repaid were due taxes all However, 2021. March 31 until end. year the at taxes overdue no are there and 2020 October of 66% (2019: 74%). (2019: 66% of and tax strategy Taxation ended year the for rate tax effective consolidated The amount right the that ensure to managed are matters tax All Revenue costs Admin Operating profit margin Operating £135.1m to £78.6m by decreased profit Operating margin profit operating resulting a with £213.7m), (2019: below slightly 19.0%), (2019: 18.5% was 2020 December 31 in received credits to due 19.0% of rate tax enacted UK the expenditure. development and research to relation Operating Operating profit 205.7 O C O AR A N A R R Administration costs Administration £70.6m by 7% (£5.0m) to decreased costs Administration £1.4m of costs operating in reduction a to due £75.6m), (2019: share-based the in reduction a and £69.6m) (2019: £68.2m to £6.0m). (2019: £2.4m to £3.6m of charge payments seen not was growth cost usual level of annual operating The made. were £1.4m of savings cost operating and 2020 during from £4.6m of savings Covid-driven one-off reflect These savings, marketing and expenses staff-related savings, salary the from increases cost of £3.2m by offset partially were which impact the full year of Van Mildert costs, inclusion of a full year asset intangible relationships of amortisation of the customer and investment in technology. of £3.6m primarily charge payments share-based lower The in revision downward a to led which results, 2020 the reflects some for criteria the EPS performance the assumptions for value and the related fair their estimated reducing awards, charge. statement income A N O R R Strategic report | Financial review continued
As in prior years, the total amount of UK taxes paid and Balance sheet collected by the Group is significantly more than the Summary consolidated statement of financial position corporation tax paid on UK profits. Rightmove’s total tax 2020 2019 Change contribution to the UK Exchequer in 2020 was £96.3m £m £m £m (2019: £106.8m). Of this, £50.2m (2019: £43.3m) related Property, plant and equipment 13.9 12.8 1.1 to taxes borne by the Group, while the remaining £46.1m Intangible assets 22.1 21.9 0.2 (2019: £63.5m) was collected in respect of payroll taxes and Deferred tax asset 2.8 2.7 0.1 VAT. The decrease in the total tax contribution against prior Trade and other receivables 23.5 24.0 (0.5) year is primarily due to lower operating profits as a result of the Contract assets 0.3 0.4 (0.1) significant Covid-19 discounts offered, which impacted both Income tax receivable 1.2 – 1.2 VAT and corporation tax. Cash and money market deposits 96.7 36.3 60.4 Trade and other payables (18.9) (19.5) 0.6 T T Contract liabilities (1.6) (2.1) 0.5 Lease liabilities (12.3) (12.2) (0.1)
Deferred tax liability (0.9) (0.9) – Provisions (3.6) (3.2) (0.4) Income tax payable – (18.9) 18.9
Net assets 123.1 41.3 81.8
Rightmove’s balance sheet at 31 December 2020 shows total equity of £123.1m (2019: £41.3m). C E VAT E The year on year increase of £81.8m reflects both the higher S year-end cash balance, after actions were taken to preserve liquidity, together with the reduction in income tax payable, Earnings per share (EPS) due to the full payment of the 2020 tax liability within the year Basic EPS decreased by 36% to 12.60p (2019: 19.57p), (which reflects changes in HMRC requirements to align tax reflecting the reduction in year on year profit, offset by the payments to the year that profit is generated). benefit of the share buyback programme in place at the start Trade receivables returned to usual levels, following the of the year which reduced the weighted average number of reduction at half year due to the impact of revenue discounts, ordinary shares in issue to 871.2m (2019: 884.4m). and there has been no noticeable change in the level of bad debt. Debtor days are slightly higher, which reflects the continuing support given to some customers to extend payment terms while their pipeline of sales awaits completion. Trade and other payables reduced due to timing of accruals. Trade payments are being made in the same timely manner as 2019.
20 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 21 REPORT | ANNUAL RIGHTMOVE PLC generated from operating activities operating of from £141.5m (2019: generated £221.7m) w Homes ARPA is calculated as revenue from New Homes developers in a given in Homes developers New from as revenue w Homes ARPA is calculated A as a during the month, measured number of advertisers divided by the total over the year average monthly Ne as a during the month, measured number of developers month divided by the total over the year average monthly Cash compared to operating profit as reported inreported the as of statement profit income £135.1moperating to compared (2019: £213.7m). Shareholder Shareholder returns our the dividend to of importance the recognises Board The 2020, during by the Board taken decisions The shareholders. per 4.4p of payment dividend final proposed the cancel to 2019 December 31 ended year the for total) in (£38.5m share at the 2020 half year dividend an interim declare to and not were extended, being were customers to discounts when liquidity. the Group’s protect to made in order protect hold a higher level of cash to to will continue Whilst we capital our longer-term volatility, further market against any remains and the Board unchanged, allocation policy remains to flows cash free all substantially returning to committed dividend of a progressive a combination through shareholders the Therefore, programme. buyback policy and a share per 4.5p of dividend final a recommending are Directors will approval, shareholder which, subject to share ordinary register the on shareholders all to 2021 May 28 on paid be programme buyback at 30 April 2021. In addition, the share 2021. in March will resume Alison Dolan Officer Financial Chief 26 February 2021 (1) inagivenmonth advertisers Agency from asrevenue gency ARPAiscalculated (2) (3)
declined 36% (3) to £141.5m (2019: £221.7m), again reflecting customer customer reflecting again £221.7m), (2019: £141.5m to in remained cash conversion and operating discounts, to addition in regulations, Tax Corporation revised with excess of 100%. of excess shares ordinary 5.0m cancelled bought back and Group The of £30.3m at a cost during the year, (2019: 3.6m shares) buyback share ongoing its of part as £88.6m) (2019: to intention our announced we March, 14 On programme. dividend and cancel programme buyback pause the share cash and strengthen conserve (2019: £60.2m) to payments sheet. our balance £37.3m), (2019: £45.0m at higher were payments Tax line in liability, tax 2020 full the of payment the reflecting liability. tax 2019 the of quarters two remaining the £0.8m), (2019: £3.5m was year the in expenditure Capital purchases. and software hardware computer comprising on the received were of £0.7m (2019: £0.9m) Proceeds £2.1m) (2019: £0.8m and incentives share-based of exercise employee fund Rightmove to shares purchase applied to was plans. share Cash flowand liquidity and cash during 2020 debt-free remained Rightmove cash to of free the return albeit strong, remained generation and dividends was backs buy share through shareholders our strengthen and to liquidity preserve to paused in order cash pandemic. Predictable Covid-19 sheet during the balance coupled business, the of nature subscription the reflect flows capital requirements. working with low at deposit balance market cash and money closing Group The cash (2019: £36.3m). Surplus £96.7m was the end of the year money accessible easily in short-term, primarily invested was uncertainty economic general the reflecting deposits, market cash. available retained increasing for rationale and the Group’s activities operating from Cash generated Strategic report | Risk management
Approach to risk management and risk appetite Board and senior management. The Board reviewed and The Board has overall responsibility for determining the nature approved the Risk Register at both the February 2020 and and extent of the risk it is willing to take and for ensuring that July 2020 Board meetings, with a particular focus on the risks are effectively managed across the Group. The Group principal risks identified and any new or emerging risks; which operates a cautious attitude to risk and its risk appetite is low. included Covid-19 risks and the on-going strengthening of Risks are assessed based on their potential impact(s) and are Van Mildert’s internal controls and compliance. classified as either critical, severe, moderate or minor. Risk management is reinforced by the Group’s continuous Critical impacts must not happen, regardless of the effort process to design and embed strong internal controls across and investment required or the impact on company culture. the business as it grows, particularly in relation to other The other risk categories require varying levels of investment business areas. The Group’s internal control framework is to manage. Where risks have a relatively minor impact, minimal aligned to a ’three lines of defence’ model. Operational investment is required. The open culture which is embedded management is the organisation’s first line of defence, given throughout Rightmove is such that objective views are made its primary responsibility for the direct management of risk and when assessing risks and internal controls, dialogue is ensuring that appropriate mitigating controls are in place and encouraged, and decisions are not made until risks have that they are operating effectively. The second line is formed been appropriately considered. by the Group’s internal oversight and compliance functions In determining its appetite for specific risks, the Board is guided such as finance, treasury, legal and compliance. The third line by three key principles: incorporates both internal and external audit reporting to the 1. Any risks should be aligned to the Group’s core purpose and Audit Committee. values, strategy and financial objectives; The Audit Committee receives and analyses regular reports 2. Risks should only be accepted where appropriate business from management and the outsourced internal audit function reward is achievable on the basis of objective evidence; on matters relating to risk and control and reviews the 3. Risks can be actively controlled and monitored through the timeliness and effectiveness of corrective action taken by appropriate allocation of management and other resources. management. The Audit Committee on behalf of the Board Risks are all captured and documented in a Risk Register, which also considers the findings and recommendations of the includes an action against each risk and identifies a specific external auditor throughout the year in relation to the design owner for each risk. During 2020, the CFO was ultimately and implementation of effective financial controls. Further responsible for maintaining this register, with input from detail of these activities is included within the Audit senior management. The register then formed the basis for Committee report. monitoring risks and ongoing risk discussions between the
Rightmove’s three lines of defence model
Senior Management Team Board & Audit Committee
First Line of Defence Second Line of Defence Third Line of Defence • Management & Process Controls • C orporate Risk Management • Internal and External Audit providing • Owned and managed by business Framework; Risk Register & Risk independent assurance of previous operational managers responsible Appetite; Monitoring and Redesign two for each area of Controls Effectiveness • Compliance monitoring of controls • Advisory & Monitoring to First Line of Defence • Financial Controls
22 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 23 REPORT | ANNUAL RIGHTMOVE PLC osts through the Board and Group’s Senior Senior and Group’s the Board osts through liquidity by confirming the company was eligible eligible was company the confirming by liquidity eserving cash flow through the cancellation of the of cancellation the through flow cash eserving previously proposed 2019 final dividend (£38.5m), dividend final 2019 proposed previously from programme buyback suspension of the share payments (VAT) taxation of indirect and deferral 14 March, the once 2020, October in repaid was VAT The £12.1m. of reopened. market property Saving salary c Saving salary in salary 20% reduction taking a voluntary team Leadership of customer- as one-third as well July, 31 1 April to from at 90% of their usual taking furlough employees facing the repaid Group the that albeit July; to April from salary the increase 2020 following in September furlough grant reopened. market the property after in activity Pr Ensuring Financing Corporate the Government’s Covid access to £10.0m Group’s the extending and (CCFF) Facility 12 months to for loan facility revolving committed nor loan facility 7 February 2022. Neither the CCFF utilised. were • • and has taken, that the Government measures The the pandemic could contain to in order take, to continues the business (Risk 1). risk to the macroeconomic increase the risk increases of Covid-19 incidence continued The the right talent in the business secure of being unable to absence risk of employee the increased (Risk 5) due to illness. due to risks wider than is exposed to that the Group recognise We those that we have disclosed we however those listed, Group’s impact on the have the greatest to likely believe are objectives and those that have deliver its strategic to ability and Audit Board been the subject of discussion at recent meetings. Committee •
ontinuity procedures which enabled the which enabled procedures ontinuity oviding financial support to our customers in response to response in customers our to support financial oviding ontinuing to innovate whilst activity in the property the property in activity whilst innovate ontinuing to C that we ensure To restricted. severely was market as agents and help them work maximised our value to the on features new delivered we possible, as effectively such as highlighting properties Rightmove platforms available, giving agents the were online viewings where a to in response video content auto-deliver to ability agencies estate for Rightmove lead, running webinars help agents make local data to bespoke and providing decisions during lockdown. Invoking business c entire organisation to work remotely, for the safety of our the safety for remotely, work to organisation entire with Government guidelines. and in accordance employees significant no had has working remote to transition The as for and can continue impact on business performance long as is required. New Homes customers and selected support across other support across and selected Homes customers New with a 60% then extended support was business units. The Agency for in August and 40% in September discount Scotland and Wales in arrangements different with customers, than in England. opened later market the property where Pr market. property the in activity in reduction significant the We provided a subscription-discount of 75% of the invoice invoice of 75% of the a subscription-discount provided We and our Agency for July to April 4 months from value for • Principal risks and uncertainties risks Principal | report Strategic by the faced and uncertainties of the principal risks A description impact and monitoring with the potential in 2020, together Group the table overleaf. activities is set out in and mitigating Covid-19 it contain to taken pandemic and measures Covid-19 The economy. impact on the UK have had an unprecedented 2020 to action in March immediate Management took its impact of the pandemic on the Group, the mitigate These stakeholders. and other customers employees, included: measures • • Change from Key risk and description Impact Changes in the year Monitoring and mitigation prior year Macroeconomic Monitoring of housing 1 Substantially fewer housing Housing transactions in 2020 environment transactions than the were down 10.9% year on year market including leading The Group derives almost norm may lead to a versus 2019 ending the year indicators and membership all its revenues from the reduction or consolidation at 1.0m(1). trends. UK and is therefore in the number of Agency Overall membership numbers Continuing to provide dependent on the branches or a reduction in were down 3% since the most significant and macroeconomic the number of New Home December 2019, reflecting a effective exposure for conditions surrounding the developments advertised, 3% reduction in Agency customers’ brands UK housing market and both of which are a major branches and a 5% reduction and properties. consumer confidence determinant of the Group’s in New Homes developments. Remain the largest source which impacts on property revenue. ARPA was down £310 year on of high-quality leads, offer transaction levels. A more uncertain macro year to £778(2), reflecting the and political environment discounts given to customers value-adding products and may also lead to a during Q2 and Q3. packages and help drive operational efficiencies for lengthening of the typical The Covid-19 pandemic property transaction cycle, has created considerable our customers; thereby resulting in cash flow uncertainty in the UK embedding the value of issues for smaller agents economy, during the year our membership. with lower stock levels. and for 2021, albeit that the Maintaining a flexible cost In addition, a contraction in property market has base that can respond to the volume of transactions benefitted from the stamp changing conditions. in the UK housing market duty holiday which is in place could lead to a reduction in until March 2021. advertisers’ marketing budgets which could reduce the demand for the Group’s property advertising products.
Competitive environment Communication of 2 Increased competition may Market share of the top four The Group operates in a impact Rightmove’s ability property portals has seen a Rightmove’s value to competitive marketplace to grow revenue due to the 1.3% increase to 87.8%(3) with advertisers. with attractive margins potential loss of: Rightmove retaining the Continued investment in and low barriers to entry. • audience; largest and most engaged our account management This may result in • advertisers; and audience of any UK property teams to help customers increased competition portal. • demand for additional run their businesses more from existing competitors advertising products. efficiently. or new entrants targeting Sustained marketing the Group’s primary investment in the revenue markets. Rightmove brand. Sustained investment and innovation in serving all of our audiences.
Small increase in risk Risk unchanged
(1) Source: HMRC transactions for the UK as published in January 2021. (2) R evenue from Agency and New Home advertisers in a given month divided by the total number of advertisers during the month, measured as a monthly average over the year. (3) Source: comScore December 2020
24 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
from Change prior year Continual improvements to to improvements Continual our platforms. our product Developing continue to proposition meeting our customers’ needs and evolving business models. in-house technology Large of with culture team innovation. of Ongoing monitoring behaviour and consumer which annual ‘Hackathons’ spend to employees allow to hours time during work online develop their own ideas. related property with the contact Regular and prop-tech start-up stay to communities of market abreast innovations. Disaster Recovery and Recovery Disaster Plans Business Continuity testing regular subject to and review. to data centres Use of three and ensure load- balance and optimal performance business continuity capability. of the testing Regular of the IT systems security including and platforms testing. penetration Ongoing investment in systems. security of Ongoing monitoring threats. external information internal Regular and training security ‘spearphishing’ tests. Monitoring and mitigation and Monitoring ANNUAL REPORT 2020 | 25 REPORT | ANNUAL RIGHTMOVE PLC Following the changes in the Following team Development Product have we during 2019/20 time (time our cycle improved develop and release to it takes by production) a change to increasing on year, 20% year innovate to our capacity have we market In the lettings the enhance to continued Manager and Viewings development of our tenant offering. services Changes in the year Changes in the having all to transitioned We without remotely staffworking our security compromising or productivity. posture a major network Commenced segment our to project refresh environment; corporate to resilient making it more in heavily and invested attack our incident response capabilities. develop to continued have We our capabilities in responding incidents. security to or additional demand f advertising products. Failing to innovate may may innovate Failing to ability impact Rightmove’s the due to revenue grow to loss of: potential • engagement; audience • and advertisers; • Any loss of website loss of website Any or theft or availability, misuse of data held within databases and the Group’s in result could IT systems, the damage to reputational of loss of as a result Group and customer consumer in theconfidence Rightmove andbrand; financial loss arising from penalties and potential fines. Impact
w or disruptive w or disruptive Ne and technologies changing consumer behaviours in a Rightmove operates online fast-moving to Failure marketplace. or adopt new innovate to or failure technologies changing adapt to business customer models and evolving behaviour may consumer ability impact the Group’s theoffer to best products its to and services and the best advertisers experience. consumer Cyber security and IT security Cyber systems has a high Group The dependency on and internal technology IT systems. digital world In today’s risks increased are there with external associated which could cyber-attacks to in the inability result our platforms. operate such as breach A security or loss of key corruption disrupt the data may efficiency and functioning day to day of the Group’s operations. Key risk and description Key 3 4
Strategic report | Principal risks and uncertainties continued
Change from Key risk and description Impact Changes in the year Monitoring and mitigation prior year Securing and retaining The inability to recruit and 5 The Nomination Committee Ongoing succession the right talent retain talented people continued its focus on Board planning and development Our continued success is could impact our ability to succession, with the of future leaders. dependent on our ability maintain our financial appointment of a new CFO. Payment of competitive to attract, recruit, retain performance and deliver Non-Executive Directors reward, including a blend of and motivate our highly growth. continued their employee short and long-term skilled workforce. When key staff leave or engagement activities. incentives for senior retire, there is a risk that Following a restructure, management knowledge or competitive recruitment has been The ability for all employees advantage is lost. continuing in the to participate in the success Technology Team. of the Group through the There has been significant SIP and SAYE schemes. investment in ensuring Regular staff employees remain safe, well communication and connected and productive engagement. during the pandemic and Maintaining the culture of that the Rightmove culture the Group, which generates is retained. significant staff loyalty. Employee sentiment increased with our ‘great place to work’ score increasing to 93%.
26 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 27 REPORT | ANNUAL RIGHTMOVE PLC -domiciled business with very little business with very little -domiciled e sheet philosophy of maintaining a simple debt- of maintaining e sheet philosophy of our employees will lose the right to stay in the UK; the in stay to right the lose will employees our of Rightmove is a UK Rightmove None and nationals; EU 18 employ currently we Our balanc we suppliers; or customers non-UK with interaction based EU from supplies in £1.2m than less purchased costs licence in £0.9m than less and 2020 in suppliers USD; in or debt-refinancing no have we that means position free risks. Brexit interest-related and, the Group has high margins, significant free cash flow cash free significant margins, high has Group the and, dividend adjust the discretionary to and an ability generation which liquidity, enhance to programme buyback and share during 2020. evidenced was • • certain plan makes up model. The basis using a bottom Homes customer and New assumptions about Agency and streams revenue and other ARPA growth numbers, flows cash profitability, base, cost Group’s the considers period. over the three–year and dividend cover downside robust plan has been subject to strategic The main the of number a flexing involved which testing stress assess the impact of the plan to assumptions underlying to performed was Analysis scenarios. but plausible severe the of period the over impact financial potential the evaluate including the impact occurring, risks actually principal Group’s during 2021. lockdowns of possible further UK Covid-19 downside include modelled been have that scenarios Specific being of revenue drivers the key to in relation scenarios short term ARPA and extraordinary numbers, customer with the impact of plausible together discounts, Covid-19 In all plausible scenarios of these scenarios. combinations cash positive over the remained the Group tested, period. three-year the around with comfort the Directors that provide Other facts or economic of adverse in the face viability long term Group’s overly is not include that the Group conditions competitive base, with no single customer on a concentrated reliant revenue; Group of 2.5% than more constituting customer • with combined above factors, believe that the Directors The its with position, relationships market strong the Group’s and the value embedded in its membership customers the withdrawal for terms mean that the agreed proposition, the on both have a minimal impact to likely the EU are from operations. base and its day-to-day cost Group’s
eduction in housing market activity increases the increases activity eduction in housing market ound two-thirds of our Agency customers also provide also provide customers of our Agency ound two-thirds he Rightmove business is largely subscription-based and is subscription-based is largely he Rightmove business Ar A r spend their marketing evaluate to advertisers for propensity in confident remain we and portals other on and offline both proposition; value Rightmove the of strength the T shocks or variations short-term to less susceptible therefore economy; wider or market property the in the impact on their mitigate which may services, lettings market; property the in downturn a of businesses Withdrawal from the EU the from Withdrawal | report Strategic Going concern and viability statement and viability | Going concern report Strategic 1 assessment discussed in note Based on the going concern reasonable a have Directors the statements, financial the of to resources has adequate expectation that the Group the the 12 months from for existence in operational continue reason, this For statements. financial the of approval of date in preparing basis adopt the going concern to continue they statements. financial the the UK Corporate 31 of with provision In accordance the assessed have Directors the 2018, Code Governance the account taking into of the Group, viability long-term of the impact position and the potential current Group’s 26. set out on pages 23 to principal risks and uncertainties assessment of the principal risks facing Based upon the robust its business threaten those that would including the Group, the Directors solvency or liquidity, performance, model, future and the expectation that the Group have a reasonable and meet in operation continue will be able to Company period to due over the three-year fall its liabilities as they period over an appropriate 2023 constitutes 31 December operates as the Group statement, its viability provide which to looking and projections within an online digital marketplace, less significantly become years three than further out of the nature of the fast-moving meaningful in the context under the is also the period considered years Three market. plan is reviewed This business plan. strategic current Group’s and is developed on a segment-by-segment by the Board • • 2023. 31 December period to that a three-year have determined Directors The Following the UK’s departure from the European Union on Union the European from departure the UK’s Following 31 January 2020, the UK and EU agreed the terms of future of future the terms agreed 2020, the UK and EU 31 January 2020. 24 December on agreements trading on Rightmove of theassessed the impact has Board The housing broader the to the EU in relation from withdrawal base. In particular, and our customer levels transaction market, the following: considered the Directors • Strategic report | Working with our stakeholders
Here we explain how Rightmove’s Directors have fulfilled their duty It is essential to Rightmove’s success that we do not take the to promote the success of the Company and considered the network effect for granted and remain committed to innovating interests of Rightmove’s key stakeholders when making decisions. our platforms to provide the best consumer property-search Rightmove has a clear purpose, which is to make home moving experience and the best tools and service to our customers. easier in the UK by bringing together the UK’s largest audience of We have the opportunity to further reduce the carbon footprint of home hunters and the largest selection of available properties. our customers and home hunters, and improve our own operating Our ambition is to be the place that consumers and customers efficiency. In 2020, the Board approved new targets under our turn to as their property portal of choice, and to deliver that Environmental, Social and Governance (ESG) strategy to deliver objective, Rightmove needs to be a business in which people want greater benefits to our stakeholders and wider society, focusing to work, invest and with which people want to partner. on the long term sustainability of Rightmove’s business. The Board and Senior Leadership Team, supported by all The events of 2020 required our Board to make some difficult Rightmove employees, operates first on a values-based, decisions and to react quickly to market conditions, balance sustainable approach to strategic, financial and operational the interests of our stakeholders and remain focused on our decision-making. Doing the right thing for our stakeholders and long-term objectives. The Board met more frequently and balancing all their interests is central to everything we do, and engaged with stakeholders to react, recover and reinvent the aligned to the requirements and expectations of stakeholder way we do business. engagement under Section 172 of the Companies Act (the Act). Rightmove’s key stakeholder groups are our shareholders, Our long-term business success relies on delivering an effective, customers, consumers, employees and regulators. Here we innovative and sustainable service to our customers and explain how the Board engages with and manages our consumers through our talented and committed employees and relationship with our key stakeholders by describing some close working relationships with suppliers, providing long-term of the Board and Committee decisions made in 2020. benefits to the wider UK property market and to our shareholders.
Shareholders
We have long-standing relationships with our largest shareholders; many Board decisions have owned Rightmove shares since the Company’s flotation in 2006. Currently our Top 10 shareholders own over 53% of shares in issue, with a The Board considers the interests of all shareholders when making geographic split of 51% held in the UK, 37% held in North America and decisions which may affect them and acts fairly as between members 12% in the Rest of the World. Rightmove’s shareholders own the of the Company. Company and expect to earn a return on their investment. • The Board responded to the coronavirus pandemic and closure of the UK property market in March by focusing on liquidity and Strategy Engagement supporting Rightmove’s customers, taking the difficult decision to cancel the 2019 final dividend. Our strategy is one of We are committed to maintaining • It remains the Company’s capital management policy to return all sustainable, long-term growth constructive dialogue with excess free cash to shareholders and we are pleased to confirm the and shareholder returns through shareholders and have actively resumption of our share buyback programme in March and declare the successful delivery of our engaged with them through online payment of a final dividend for 2020 of 4.5p per share in May 2021. business strategy. results presentations, question • The Board took the precautionary measures of applying for access Our policy is to return all excess and answer sessions, investor calls to the Government’s Covid Corporate Financing Facility (CCFF) and free cash to our shareholders. and online meetings. The range of extending the Group’s committed revolving loan facility with Barclays topics covered have included Bank plc for 12 months. No CCFF commercial paper was issued and business performance, ESG policy no amounts drawn under the loan facility. and corporate governance. • The Remuneration Committee Chair contacted shareholders to Our Chair and Executive Directors explain the application of our Remuneration Policy in 2020 and maintain an “open door” policy for proposals for the 2021 bonus and performance share plan targets current and potential investors to (see the Directors’ Remuneration Report). meet online, or in person if • The Nomination Committee reviewed the Board and business possible, beyond the regular succession plan, recommended the appointment of our new CFO, results calendar. Our Investor and the Board Chair invited our major shareholders to introductory Relations team has provided meetings to discuss a range of topics. information to investors and • The Board discussed and approved an ESG strategy, including an arranged calls and meetings with environmental reporting and governance framework aligned to management all year. TCFD, and has subscribed to the Science Based Targets initiative and the UK’s net zero emissions objective. These decisions have been influenced by shareholder feedback on investors’ ESG policies and their desire to invest in sustainable businesses (see the Environmental, Social and Governance Report). 28 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
echnology for our customer our customer for echnology ANNUAL REPORT 2020 | 29 REPORT | ANNUAL RIGHTMOVE PLC omer tools and products to optimise agents’ to and products omer tools orms to provide consumer updates and advice on and advice updates consumer provide orms to y, fraud prevention and data protection to help keep to and data protection prevention fraud y, oved an extension of the discount strategy after four months, months, four after strategy of the discount oved an extension to service, viewings out of our online oved the launch and roll e investment in customer support, training and compliance with compliance and training support, e investment in customer eed to support our customers with heavily discounted fees over a fees discounted with heavily support our customers eed to omating our data quality processes, ensuring the accuracy of ensuring the accuracy processes, omating our data quality oviding Rightmove’s property data to inform Government inform data to oviding Rightmove’s property oduct development to improve property search and information search property improve oduct development to onsumer tools and services, including Viewings Manager, enhanced Manager, including Viewings and services, onsumer tools statistics and publishing factual data to counter negative counter data to and publishing factual statistics and support home movers market on the property commentary recovered. market as the property and sellers affordability alerts, property new functionality, search price sold in our IOS and improvements information environmental tools, Apps and android online safe our users advertised on Rightmove data property pr to experience and enable the consumer available on our platforms requirements individual to and tailored intuitive be more using our platf affecting restrictions and lockdown of periods during moving home and Wales in England, Scotland markets the property pr c cyber securit aut further investment in people and t further investment in people teams support and management development of cust mor available via of webinars frequency and increased team, a dedicated the Hub. agr appr and economics on customer feedback monitoring constantly sentiment appr effectively leads manage and properties promote to customers help periods. busy and during restricted out roll the including efficiency, and reach market developers’ and lettings for Manager, Viewings of the appointment booking system, agents six month period, with the highest discount of 75% for four months, months, four of 75% for highest discount six month period, with the closure market property and lockdown first the with coinciding
The Board approved the business and strategic plans, which provide which provide plans, business and strategic the approved Board The investment in: continued for • • • • on cyber updates regular received and Audit Committee Board The investment in extra and approved and data protection security continue data privacy and security consumer ensure to resources changes. environment be prioritised as the external to • decisions Board pandemic: the Coronavirus to response our approved Board The • • Board decisions Board pandemic, the Board: the coronavirus to In response • • approved was development roadmap and product plan strategic The for: and provides in the year by the Board • • • We engaged with consumers engaged with consumers We our consumer through directly Our and webinars. newsletter support and marketing consumer consumer to responded teams and acting on feedback enquiries, property about concerns data protection advertisements, online. Our safe and staying team Development Product feedback consumer to responded and design about the functionality which informed of our platforms, our mobile and to enhancements and functionality search desktop details pages. property We actively seek to understand understand seek to actively We our customers’ to and respond by business requirements with them engaging regularly our account through management and customer and webinars teams, experience training. Engagement Engagement Consumers Customers Our consumers are home hunters, home sellers and researchers who and researchers home sellers home hunters, are Our consumers in 2020. platforms on Rightmove spent 15.9 billion minutes Strategy the provide is to Our strategy online and best quality largest buyers, property for marketplace and landlords home sellers intelligence with market together to and advice tools and research home moving easier.help make
Our customers are principally estate agents and new home developers home developers agents and new estate principally are Our customers Rightmove platforms. on rent sale or to for properties who advertise Strategy our provide is to Our strategy with the best customers their promote to platforms and support them with services market innovative products, to and training tools intelligence achieve their business objectives.
Strategic report | Working with our stakeholders continued
Employees
Rightmove directly employs around 560 people across the UK, based Board decisions out of offices in London, Milton Keynes and Newcastle. Rightmove’s long-term success depends on the shared commitment, talent, skills In response to the Coronavirus pandemic: and values of its employees. • around one third of Group employees were placed on furlough for up to four months at 90% of uncapped salary – the Board subsequently Strategy Engagement approved repayment of the Coronavirus Job Retention Scheme grant which had covered 80% of their full salary Our strategy is to make Directors received feedback from • the entire Board and the Group’s Senior Leadership Team took a Rightmove a great place to work our teams via online events and voluntary 20% reduction in salary in recognition of the impact of through an open, collaborative communications, including Covid-19 on our stakeholders culture, based on the belief that regular Town Hall webinars, • a full employee-support package was agreed, including online crisis we are all in it together. Rightmove question and answer sessions, management training and support for team leaders, tailored webinars aims to be a supportive and Board presentations and on topics such as home schooling and mental well-being and additional inclusive employer with a diverse employee surveys (see the practical support, such as an extra ten days’ paid leave for those with workforce. Environmental, Social and caring responsibilities. Governance Report). The Board also agreed: • the extension of employee share plans: SIP free shares and Sharesave grant of options, and pension benefits to Van Mildert employees • an enhanced ESG strategy, which took employee preferences into account in the selection of charities and community support focusing on local issues, diversity and inclusion • the Nomination Committee’s recommendation of action plans to improve diversity in the succession pipeline and continue to address Rightmove’s gender pay gap.
Suppliers
Rightmove works closely with our larger suppliers. Principally in relation to Board decisions the provision of technology, marketing, recruitment and professional services. Rightmove aims to build strong relationships with suppliers so it • The Audit Committee has approved a new risk and compliance can successfully deliver projects whilst maximising cost efficiencies and framework, which will oversee the supplier risk management enhancing outcomes. framework agreed in 2019 to ensure a consistent and compliant procurement policy in relation to key areas of spend or risk. Strategy Engagement The Board endorsed the Payment Practices Report and the prompt Our strategy is to select suppliers We engage with suppliers before payment of suppliers, with no payment delays arising directly from the Coronavirus pandemic. who meet our ethical standards, entering into agreements, regularly can deliver excellent service, pay throughout the contract period and them promptly and work closely to on renewal. ensure close alignment of interests.
Regulators and industry bodies
Rightmove is regulated by the Information Commissioner’s Office for data Board decisions protection and the FCA for some credit referencing and rent guarantee insurance services. We work with professional property organisations • The Board approved the 2020 Business Plan, with continued including The Property Ombudsman and Propertymark to support our significant investment in people and systems focused on cyber customers in meeting all relevant regulations and codes of best practice. security, fraud prevention and data protection. • The Audit Committee approved a new risk management framework, Strategy Engagement including the appointment of a Legal and Compliance Director, and formation of a new Risk Committee with responsibility for Our strategy is to work with our We engage with regulators and monitoring operational risks and reviewing the effectiveness of regulators and professional bodies professional bodies through controls (see the Risk Management section of the Strategic Report). to meet the Group’s regulatory regulatory reporting and direct • T he Board reviewed the Group’s cyber security and incident responsibilities and help our consultation on emerging trends, response plans, including enhanced controls introduced to secure customers comply with their new legislation and best practice our platforms, internal business systems and protect personal data. responsibilities to ensure our solutions for our customers and platforms offer a safe and consumers. transparent market for consumers.
30 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 31 REPORT | ANNUAL RIGHTMOVE PLC Created by the global index provider FTSE FTSE by the global index provider Created is Index Series Russell, the FTSE4Good of the performance measure designed to ESG strong demonstrating companies used are indices FTSE4Good The practices. participants to of market by a wide variety investment and assess responsible create products. funds and other pleased that,confirm are to having We under the assessed been independently Rightmove criteria, FTSE4Good has satisfied and is a of a constituent the requirements Index Series. member of the FTSE4Good We will maintain and extend our will maintain and extend We Wider society support to and charitable sponsorship corporate UK. the and communities local our benefit We will work both to reduce reduce to both will work We environment The carbonall offset to and footprint carbon Rightmove’s as a maintain our status 1, 2 and 3), to emissions (Scope organisation. carbon neutral to with our employees will work We Our employees and inclusive workplace, an open provide to continue have a great we ensure to on well-being with a focus work. to place and consumers) (customers Our marketplace and our customers provide to innovate to will continue We efficiency platforms, accessible secure, with consumers resources. fewer that uses and a digital service tools Making a difference beyond our operation Making direct beyond a difference compatible is already approach As much of our environmental place also choosing to are we aims, with these environmental good’ agenda and on being more as much emphasis on the ‘do do on already business as we ‘system-positive’ an overall and risk management. In this social compliance ensuring ESG Goals which on the UN’s Sustainability will focus we context, Action. & Climate and Housing & Opportunity Equality cover Rightmove’s improve can we where areas identified have We including energy impact and set targets, environmental which consumption, disposal and water waste consumption, alignment with the ensure during 2021 to will be reassessed for have also been agreed objectives and targets Key SBTi. agenda, including Rightmove’s social and governance and and inclusion, anti-corruption, diversity welfare, employee and Social Environmental, Specific measures. transparency tax section relevant under the can be found targets Governance will be against each target our progress and of this report, Annual Reports. detailed in future Index FTSE4Good
e will commence reporting under the Taskforce for for under the Taskforce reporting e will commence with BEIS and the UK Government’s also working e are e are using a number of frameworks to build a strong build a strong to of frameworks using a number e are he Sustainability Accounting Standards Board principles of Board Standards Accounting he Sustainability o continue to make our business better and more and more our business better make to o continue o make a difference beyond the direct operation of our of operation direct the beyond difference a make o Climate-Related Financial Disclosure (TCFD) at the end of at (TCFD) Financial Disclosure Climate-Related in line with its develop our disclosures 2021 and will aim to recommendations. W W T a are framework FTSE4Good risk management and the ESG such as companies out an agenda for of laying helpful way Media & Services as Internet categorised which are ours, have used the and we be acting responsibly, to businesses, which focuses businesses, such out for set they framework with impact of data centres on the environmental primarily and on the consumption water and power to respect staff. sales mobile by generated emissions T minimising our our platforms, sustainable, by securing diversity impact and ensuring meaningful environmental governance and strong in the workforce agenda and to support their Net Zero Champion to Net Zero of emissions a culture promote can help to we how explore in the UK using our unrivalled and reduction awareness to target a longer-term to have also committed We platform. than 2050 ourselves. emissions by no later net-zero reach W T the business. for social programme and environmental is already of our business footprint Although the environmental – initiative (SBTi) Based Targets light, the Science relatively business, through the reach of our platforms and contribution of our platforms the reach through business, to wider society. to behind our guide the science joined during 2020 – will which we Rightmove committed have we targets; emissions-reduction with the working agenda and are a 1.5C emissions-reduction to targets set emissions-reduction to scientists behind the SBTi global with keeping consistent 1 and 2 that are scopes across levels. 1.5C above pre-industrial to warming • • been to protect our people, support our customers and stakeholders and continue to protect the environment around us. around the environment protect to continue and and stakeholders support our customers people, our protect been to success. term Rightmove’s long supports that this approach believe We Rightmove’s and approved reviewed Board In 2020, the primary aims: embodies two which strategy, ESG new • the and incorporate our operation improve to Continue do everything we agenda into ESG • • These aims are reflected in each of the following key areas areas key following the of each in reflected are aims These • Environmental, social and governance report governance social and Environmental, | report Strategic has during the pandemic our priority and member of society corporate being a responsible to is committed Rightmove for our business: for Strategic report | Environmental, social and governance report continued
UN Sustainable Development Goals ENVIRONMENTAL The UN Sustainable Development Goals (SDGs) aim to end poverty, protect the planet and ensure prosperity for all. We Making a difference have identified the goals which have most relevance to our to our environment business and will ensure that we make a positive contribution to these areas in the UK, which is the home of our business. Rightmove’s purpose is to make home moving in the UK easier and in doing so, we will innovate to help our consumers and customers use technology to save time and resources, reducing their own environmental impact and carbon footprint. Our ability to reach the largest UK property market audience and professionals, gives Rightmove an opportunity to contribute to the reduction of the UK’s carbon footprint, as well as to focus on our own operation and our own emissions.
Sustainable Development Goal Playing our part 4 Quality Education We believe it is important to offer opportunity and education for people Rightmove’s Environmental Goals are as follows: who do not have those opportunities Environmental Goals 5 Gender Equality through no fault of their own. We believe in a fair and inclusive working Target Action environment and that gender and Be carbon neutral Achieved in 2019. 8 Decent Work and ethnic equality are important in all Economic Growth areas of our business. Reduce the carbon Between 2016-2019 we reduced CO2 footprint of the data by 40% in absolute terms and CO2/ 11 Sustainable Cities Our purpose is to make home moving centres by 10% employee by 47% and are working and Communities easier in the UK. We believe that we within the next with our data centre providers to can help drive the UK’s ‘net zero’ 3 years identify a greener energy strategy. We 12 Responsible agenda by continuing to digitise are significantly investing in a hyper- Consumption and home moving in the UK and helping converged infrastructure to halve our Production consumers understand their options rack space and consume less energy. around making homes in the UK 13 Climate Action 25% of company Through a new matched contribution more energy efficient. cars to be ultra-low scheme where Rightmove pays to offer emission by 2022, more ULEV options to staff, we are on 75% by 2025, 100% target to achieve less than 25% ULEV Further details of our initiatives and actions to achieve these by 2028 by 2022. We are also currently exploring goals can be found on the following pages. the installation of dedicated charging points at our Milton Keynes office.
Reduce office carbon 2016-2019 we have reduced CO2 by emissions by 10% in 54% in absolute terms and CO2/ 3 years employee by 60%. Our Milton Keynes office uses 100% renewable energy. Our London landlord will be moving to a green energy supplier during 2021. Reduce water We are working with our data centre consumption by 10% providers and office water providers in the next 3 years to reduce water consumption. Increase waste Our current recycling rate is 44%, and recycling to 50% by we are working with our recycling 2022 partner to increase that to 50%. Reduce unnecessary All staff (office based and mobile) now travel work from home at least 40% of the week.
32 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS kWh 2,123,010 1,406,226 e 2 2.50 0.90 0.59 1.62 333.17 514.65 181.48 214.45 118.72 Tonnes CO Tonnes (4) (4) (5) e 2 e 2 (3) (3) CO ANNUAL REPORT 2020 | 33 REPORT | ANNUAL RIGHTMOVE PLC (5) Activity data centres Outsourced Company car travel Company e per £million turnover e per employee e per £million turnover e per employee 2 2 2 2 CO CO CO CO (2) (1) on 558 employees taken as the average number of employees in the Group Group the in employees of number average the as taken employees 558 on 2020. for £205.7m of turnover on cope 3 emissions include Transmission and Distribution. 3 emissions include Transmission cope otal Energy Consumption includes UK Electricity and Company Owned Vehicles as and Company includes UK Electricity Consumption Energy otal SECR. for required S Based the year. throughout Based T Tonnes of Tonnes (1) Van Mildert has no Scope 1 emissions. (1) Van Mildert has no Scope (2) (3) (4) (5) efficiency Energy and refit complete a had has office London our years recent In a also started LED lighting. In 2020 we to has been ungraded to office Keynes Milton our in lighting the upgrade to project 2021. in completed be will which lighting, LED efficient energy the use of public promote to continue we As mentioned below, meetings virtual of use the and offices our between transport emission usage and have included ultra-low energy reduce to car. a company those individuals entitled to as an option for cars maintain an to all of our employees encourage to continue We home when and offices the in both usage energy of awareness and monitors laptops, down example powering for working, in use. not are when they printers efficiency energy possible all review to continue will We in future on our progress and report measures improvement Annual Reports. metric Emissions intensity metric’, using an ‘intensity Emissions have also been calculated are we well how monitor to which will enable the Group independent of emissions on an annual basis, controlling 1 Scope of respect In activity. their of levels the in fluctuations is driven by our people and therefore and 2 our use of energy based on the most suitable metric is ‘Emissions per Employee’, during the year. number of employees the average Scope 1, 2 & 3 Total Energy Energy 1, 2 & 3 Total Scope Consumption (kWh) Tonnes of Tonnes Scope 1 Scope of Tonnes Consumption (kWh) Energy Total The table below summarises the Group’s GHG emissions for emissions for GHG the Group’s summarises table below The 2020. year: reporting financial latest the Tonnes of Tonnes Scope 1, 2 & 3 Total tonnes of CO tonnes 1, 2 & 3 Total Scope Scope 1 & 2 Total tonnes of tonnes 1 & 2 Total Scope Scope 2Scope 3 Scope generation Electricity
e greenhouse gasses). The Board has agreed to to has agreed Board The gasses). e greenhouse 2 e greenhouse gasses was £4,892 (2019: £7,743 to offset to £7,743 (2019: £4,892 was gasses greenhouse e 2 815 tCO 815 Rightmove has appointed Carbon Footprint, a leading carbon Carbon Footprint, Rightmove has appointed assess independently to company, management and energy with the Gas (GHG) emissions in accordance its Greenhouse Guidelines: Reporting UK Government’s ‘Environmental Guidance’. and Carbon Reporting Energy Including Streamlined the ISO GHG emissions have been assessed following The emission 2020 the used has and standard 14064-1:2018 for published by the Department factors conversion the and (Defra) Affairs Rural and Food Environment, & Industrial Strategy Energy Business, for Department (BEIS). The assessment follows the location-based assessment follows (BEIS). The electricity 2 emissions from assessing Scope for approach used. been has approach control financial The usage. Our sustainability and carbon management consultant, Carbon consultant, and carbon management Our sustainability off-setting carbon suitable of number a identified Footprint, a UK have funded support and we Rightmove to initiatives for which is Farm in Surrey planting scheme at Pierrepont tree and a tree Trust Restoration managed by the Countryside deforestation. help combat to in the Amazon planting project 515 of 2020 for footprint carbon our offsetting for cost The tCO Rightmove is Carbon Neutral Rightmove its Rightmove has maintained that report pleased to are We 2020. business for a carbon neutral position as offset an additional 10% of greenhouse gases for 2020 to 2020 for gases greenhouse of 10% additional an offset and business of homeworking cost the estimated acknowledge since Company has been a carbon neutral Rightmove travel. and reduction the continued to committed are 2019, and we emissions gas greenhouse Group’s the all of off-setting annual in future. Gas Report and Greenhouse Energy Strategic report | Environmental, social and governance report continued
E E I I (Tonnes (Tonnes of CO of2e COper2 employeee per employee) ) T T E E C C (Scope (Scope 2 & 3) 2 MwH & 3) MwH
Emissions per employee have also decreased by 40%, mainly The total electricity consumption for 2020, for Scope 2 due to lower electricity use in our offices and to travel Electricity and Scope 3 Outsourced data centres, was restrictions, which significantly reduced the number of face- 1,226 MwH. to-face meetings with our customers and suppliers. Renewable energy We have been committed to reducing our carbon emissions In 2020 we reviewed the energy supply agreements for which for many years and the table above shows our progress. we are directly responsible and are pleased to report that the Between 2016 and 2020 our emissions intensity ratio, energy supplied to our Milton Keynes office is now from calculated as Scope 1, 2 & 3 emissions normalised per renewable resources. In addition, two of our data centres also
employee (tCO2e) has decreased from 2.4 to 0.9. use renewable energy and the landlord of our London office will be sourcing a renewable energy contract during 2021, when Our overall emissions are down 37% year on year, which is the current supply contract is renewed. We will continue to largely attributable to the impact of Covid-19, resulting in work with the landlord of our Newcastle office and our third reduced travel, office closures during lockdown and data centre provider to encourage the use of green energy significantly reduced attendance at our offices during the year. on renewal of contracts. In addition, we have been more efficient in the use of energy in our offices and outsourced data centres. Whilst we expect 68% of electricity consumed by the Group in 2020 was from energy use to increase again in 2021 as travel and working renewable sources. arrangements return to normal levels, our targets are to Business travel reduce these emissions below 2019 levels. We encourage our employees to use public transport rather Energy consumption than driving between our office locations in London, Milton Our electricity consumption has been gradually reducing over Keynes and Newcastle. We have invested in significant recent years, as illustrated in the following bar chart. From 2016 improvements in our online meeting technology since 2019, to 2020, our electricity consumption has decreased by 19%. which has reduced the impact of working across three office The decrease in energy consumed in 2020 was largely due to locations and has enabled us to continue meeting and the impact of Covid-19, described above. As an operator of an operating seamlessly during the recent Covid-19 restrictions. online property portal, we are aware that a key environmental We continue to encourage participation in our Cycle to Work impact of our business is from the power used by our data scheme for local commuting, provide bike storage and shower centres. To manage and reduce this impact, our policy is to facilities at our offices and have many keen cyclists. purchase hardware with the best computational performance Company cars which uses the least electrical power required to provide our Employees entitled to a company car can select plug-in hybrid digital platforms for customers and consumers. electric cars as an alternative to petrol or diesel engines and we have seen a small rise in employees selecting this option. To incentivise take up, Rightmove is allowing company car drivers to order the more expensive plug-in hybrid cars, up to £150 above the existing monthly rental threshold and sharing 50% of the increased cost. For the majority of drivers this represents a financial saving due to the lower personal Benefit In Kind tax liability for most plug-in hybrid vehicles. We aim to
34 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ANNUAL REPORT 2020 | 35 REPORT | ANNUAL RIGHTMOVE PLC We are conscious of playing our part in tackling climate change our part in tackling climate of playing conscious are We their minimise to our employees encourage to and continue recycle to paper and plastic and including use of resources, possible. wherever materials management Water we that offices three the from derived is usage water Our of these Each and Newcastle. London Keynes, in Milton occupy for consumption water the and site a managed of part is offices bestare waste, with as offices, Newcastle and London our both of the site. occupation on our proportionate based estimates 1,523 cubic 2020 was during consumption water Our total meters. emissions-reduction further support the UK’s overall To contribution: significant a make to continue we agenda, efficiency Energy – digitising home moving to continues contribution environmental significant most Our for search home movers the way have changed we be the way available to information optimise the Our platforms property. advertise to the ability giving our customers home-hunters, particulars property and plans floor photographs, quality high unnecessary reducing available instantly, are which on screen offices. agents’ estate and properties unsuitable visit to travel our through the SDGs can be shown Our alignment to tools support and development of innovative new continued during the function to market which have helped the property the social distancing while adhering to this year, lockdown and contact. travel guidelines and minimising unnecessary video viewing in and developed a new invested During 2020, we deliver securely to which enabled our customers platform in line with government home hunters, videos to online viewing agents and we by many adopted was service This advice. the reducing in the future, grow to it will continue anticipate emissions. In total and travel viewings number of in-person via email which our over 50,000 videos have been delivered home hunters, invaluable to believe has been customers movement and during periods of restricted particularly to functionality and reporting offers also tool This contact. enquiries home hunter to of responding the process make customers. agency our for efficient more and faster and improved Other developments have included new such as and services criteria, details pages and search property help to and insurance referencing online tenant straightforward through efficient more be to tenants and customers our both a new introduced have recently We the home moving process. using properties view book appointments to to tenants for way to agents and tenants both allows which Manager, Viewings will suits them. This on a time that mutually agree digitally wasted in reduction a and time in savings significant provide agents. and letting tenants for journeys
68 13 19
46% 41%
recycled
Percentage Percentage
Percentage of Fleet Percentage 5.7 5.8 tonnes Waste in Waste emissions from our fleet of fleet our from emissions 2 Milton Keynes Milton company cars and turn them into new UK woodlands. UK new them into and turn cars company and carbon management in 2019 by our sustainability A review unreported, previously identified Footprint, Carbon consultant, transport, including public carbon emissions, non-mandatory in 2020, restrictions the travel Due to used by our employees. be included in 2021. these will now management Waste in a near paperless environment work we As a digital business, and business partners all our customers, and encourage printing, especially and reduce use online records to suppliers paper-based have replaced possible, we emails. Wherever with online alternatives, and communications services and consumers shareholders, for including e-communications and reports marketing management information, customers, all available online. which are documentation, product the supplies that are through waste produce however, do, We that consumables the and offices, our at used and to delivered location. office each to bring employees our our across of waste 11.5 tonnes generated During 2020, we recycled. was 44% which of sites, office largest two it has been confirmed that, by volume, around half the waste waste the half around volume, by that, confirmed been has it is recycled. collected as normal than lower are 2020 for figures waste overall The occupancy reduced had or closed been have offices our during the pandemic. Our Milton Keynes and Newcastle offices are located in located are offices Newcastle and Keynes Milton Our waste The collections. waste communal with offices managed the on based estimate, best our are Keynes Milton for figures data by Rightmove. The occupied of the site proportion at our generated of waste the weight estimate to required however, landlord, our from available not is office Newcastle Location London Our fuel card provider, Allstar, has continued to partner with to has continued Allstar, provider, Our fuel card the CO capture Carbon to Forest 31 December 2020. 31 December Type Diesel Petrol emission) (ultra-low Hybrid achieve a car fleet composed of 25% ultra-low emission ultra-low 25% of composed fleet car a achieve 2028. by 100% and 2025 by 75% 2022; by vehicles as at by type cars our company shows table below The Strategic report | Environmental, social and governance report continued
According to the UK Committee for Climate Change, UK • Employee Survey: ensure that 90% or more of employees homes have a critical role to play in meeting the twin climate agree that Rightmove is a great place to work (this target is change goals of reducing emissions and adapting to current also directly linked to our Executive Directors’ remuneration) and future climates. Rightmove plans to continue our drive for • Remain a Living Wage Employer innovation and information provision to make the process of • Support and encourage STEM initiatives home moving both easier and more efficient, to work with • Support communities and individuals through increased government to help to inform users of our sites about green charitable giving and matched funding options in relation to their homes and in doing so to conserve Rightmove’s culture and values resources and have a positive impact on climate change. At the heart of everything we do is Rightmove’s open, Energy Performance Certificates innovative and supportive culture, which reflects the values of Energy Performance Certificates (EPCs) provide home our Board and Senior Leadership Team. Our culture has been movers with information about a property’s energy use, shaped by our values, the Rightmove ‘hows’, which support typical energy costs and recommendations about how to our fast-paced, customer-oriented business and benefit reduce energy use and save money. An EPC gives a property Rightmove and the wider communities in which we operate. an energy efficiency rating from A (most efficient) to G (least In 2020, we continued to integrate Van Mildert into the efficient) and is valid for ten years. Rightmove Group and to equalise employee benefits for all Rightmove will help consumers to better understand energy- Group employees. Whilst we have made good progress, some efficient ratings and how to increase the energy efficiency of benefits alignment will be implemented in 2021 and therefore their homes by enhancing the content of our platforms to: references in this report to Rightmove include Van Mildert, • highlight EPC ratings to consumers and support consumers unless otherwise stated; references to the Board are to the with search criteria based on environmental factors; board of Directors of Rightmove plc. • provide consumer content on options for improving EPC ratings and obtaining government grants; and • continue to work with lenders to highlight the increased value of energy-efficient homes. The Hows All our innovations help to reduce the carbon footprint generated by prospective home buyers and estate agents, by reducing the reliance on travel and printed marketing materials Do the right thing for consumers and customers and property details. Build great teams because Rightmove is people SOCIAL Be curious and go out of your way to understand Our social activities will have a positive impact on many of Share honestly, early and often our stakeholders. Here we explain our work with our Take responsibility and make things that matter happen employees, our customers and consumers and the wider community. We have set ambitious goals, but are already Make complex things as simple as possible well on our way to achieving many within the next 3 years. Drive improvement, we can always be better
Dare to do, be bold. Don’t be afraid of mistakes you can learn from
Be approachable and appreciate what others do
Our Social Goals: Enjoy the journey, be part of it We are committed to driving diversity, inclusion and equality and ensuring that Rightmove’s platforms are safe and accessible • Pr ogress towards an employee ethnic mix in proportion to UK ethnicity • Reduce the gender pay gap year-on-year until parity is reached • All employees to receive mental health support and training by 2021
36 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Living Wage Living Wage as a accredited was Group Rightmove 2020. January from employer Living Wage have historically employees All Rightmove Living of the Real excess been paid in in review a thorough and, following Wage that all of ensure action to took 2019 we from work who regularly our contractors are paidour theoffices living wage. ANNUAL REPORT 2020 | 37 REPORT | ANNUAL RIGHTMOVE PLC Diversity, inclusion and equal opportunities inclusion and equal opportunities Diversity, on people having a wide relies success Rightmove’s continued perspectives different bring to skills and experience of range challenge. innovation and constructive and promote of home-hunters audience consumer Rightmove’s large from service expect excellent of customers and wide variety variety wide equally an need we platforms; our and Rightmove that demand and meet to perspectives of skills and personal our stakeholders. value for create and is employer Rightmove is an equal opportunities all employees to treatment and equal giving fair to committed conditions, pay of recruitment, and job applicants in terms Fair and matters. and all employment training promotions, individual’s race, of an will be given regardless equal treatment gender or beliefs, religion ethnic background, age, gender, orientation, marital or civil partnership sexual reassignment, and selection processes or disabilities. Our recruitment status, will also We each role. for on selecting the best candidate focus part of a trade against individuals who are discriminate not an inclusive creating to union. Rightmove is committed and can be matters everyone where environment working each individual can thrive and bring their unique where heard, the business. to contribution planning and on succession focus to continues Board The Leadership within the Senior and potential developing diversity individuals on merit, and promote recruit Our policy is to Team. with each role, for required based on the skills and experience as possible on an objective of achieving as near gender-parity the wider workforce. and in the Board with disabilities Employees its policy of giving full and fair to Rightmove is committed all vacancies. with disabilities for people to consideration who become employees support and retain to continue We with us. disabled during their employment Diversity Ethnic 100 all FTSE for recommendation Review In line with the Parker diverse an ethnically from have at least one director to Boards that confirm to pleased are we 2021, by background out of eight with three Rightmove is ahead of this target as at backgrounds diverse ethnically from (37%) Directors our employee will be analysing 2020. In 2021, we 31 December ethnically- a more in creating our progress measure data to in the business. senior roles and pipeline for workforce diverse
A great place to work work to place A great To ensure that our managers were confident and fully prepared prepared fully and confident were managers our that ensure To of 2020, each of our the pressures through help their teams to hour development programme a six undertook managers a crisis’. lead through to entitled ‘How a total in March, market of the property the closure to In response April and July furloughed between were of 150 of our employees 90% of uncapped up to topped were 2020. Furlough payments Team, Leadership salary and during this period the Senior a took executive and non-executive directors, including both Scheme Job Retention Coronavirus The reduction. 20% pay employees, furloughed of salary the of 80% covered which grant, report. in this as detailed later repaid, subsequently was maintain connections during 2020 has been to focus A key Rightmove’s to so important which are teams, between business updates, regular achieved this through We culture. on a initially Hall’ webinars, ‘Town including Company-wide be well to continue which basis and then fortnightly, weekly the across place also took meetings team Daily attended. objectives and the well- activities, on work focus business to home. from being of individuals working home from work able to were all employees During lockdown, and keyboards chairs, office delivered we and seamlessly individuals who needed that equipment for those to monitors first the Following environment. working home effective an environment, the work to return a safe ensure to lockdown, Keynes, our Milton for completed were risk assessments Covid the to return a phased before offices London and Newcastle of review and assessment A risk implemented. was office visiting managers account field-based our for guidelines assessments The completed. also was offices agents’ with practitioner, Safety by a Chartered undertaken were Our people bring talent, energy and experience to the business to and experience bring talent, energy Our people a Making Rightmove success. Rightmove’s vital to and are and recognises a management objective is work to place great most valuable asset. our are that our employees response Covid-19 parts of large home for from full time working to transfer The challenges, health and well-being with it new 2020 brought by the additional of our employees many for augmented have We relatives. home schooling or caring for of pressure and patterns working flexible through people our supported including those support. For all employees, additional practical webinars tailored a series of Covid-19 provided on furlough, we anmental well-being, such as home schooling and on topics caring those with 2020 for for paid leave days’ ten extra into holiday more over carry to flexibility and responsibilities get away. been able to who have not employees 2021 for to. and adhered put in place all recommendations Strategic report | Environmental, Social and Governance Report continued
Gender Diversity seen an improvement but not as significant as those reported. As at 31 December 2020, female employees made up 40% Including all employees, our mean pay gap has decreased by (2019: 39%) of the Rightmove leadership team(1). The Board is 5.2% and our median by 4.7%. We have continued to take actions keen to strengthen and maintain female representation in towards closing our pay gap as part of our longer-term action senior roles and Rightmove has been a contributor to the plan, which is having a positive impact. Our full report can be Hampton-Alexander Review, an initiative which aims to found on the Company’s website at plc.rightmove.co.uk and we increase female leadership within the FTSE 350. will continue to report on an annual basis. Our commitment to gender equality starts from our leadership Rightmove employees are paid equally for working in the same team and we are proud that, as a listed company, 50% of the jobs and we are pleased to report that men and women are Board consists of female Directors, with equal representation almost equally represented in our wider workforce. The main at an Executive Director level, making our Board amongst the contributor to Rightmove’s gender pay gap is the mix in the best-balanced in the FTSE 100. This, combined with our strong highest and lowest quartile salaries. Women are still less well female leadership team representation, resulted in Rightmove represented in the higher paid senior management and being placed sixth in the 2020 Hampton-Alexander FTSE 100 technology teams and men are under-represented in the Women Leaders table. customer experience teams. A breakdown by gender of the number of Directors and Below is our gender pay gap as at April 2020 and some of the employees as at 31 December 2020 by various classifications actions on which we continue to focus our efforts to improve as required by the Companies Act is set out below: our gender balance going forward. Difference between male and female pay A 2020 2019 Mean Median Mean Median Difference in hourly rate of pay(1) 20.4% 29.6% 27.6% 37.7%
19 (2) 4 4 Difference in bonus pay 36.0% 59.1% 76.9% 54.5% 28 (1) Calculat ed using Rightmove Group Limited pay data from April 2020. (2) Calculat ed using 12 months of Rightmove Group Limited bonus pay data to 5 April 2020. Both our mean and median bonus pay gap continues to be influenced by gender, with more men participating in bonus schemes than women. F M F M We work hard to create an environment where men and women have the opportunity to build careers throughout the S T A R E business and believe that our open, collaborative culture is key to that objective. We are committed to a number of actions to balance our teams in a fair and transparent way, including:
18 • Continuous review of all job specifications to ensure our hiring 283 2 5 27 and interview processes have universal appeal and allow for fair progression for all, to ensure we attract and nurture talent • Maintain bias free selection and promotion processes • To continue in our commitment to close the mean and F M F M median pay gap
(1) The Hampton-Alexander cohort comprises members of the Executive • To challenge our understanding of what drives the gender Committee and their direct reports. pay gap across team functions (2) T he Senior Leadership Team comprises the Hampton-Alexander cohort, • Remain focused on addressing the under representation of excluding the Executive Directors. women in technology and senior positions by continuing to Gender pay promote and support technology careers for women and Rightmove has published its gender pay gap report for other less represented groups Rightmove employees, based on data as at April 2020, and • Offer a range of family-friendly and agile working policies we have seen an improvement in both our mean and median to both men and women and adjust these as we need to gender pay gap. Our mean pay gap has decreased by 7.2% support a change in transforming habitual working habits and our median pay gap by 8.1% year-on-year. A third of our • To continue as participants in the 30% Club cross company employees were excluded from the 2020 pay gap calculations as mentoring programme. This supports our aim to bring more they were either on furlough or had waived an element of pay. talent diversity into senior manager roles. The underlying mean and median gender pay gap numbers have 38 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 8
Value £284 2,472 2,180 100%
ANNUAL REPORT 2020 | 39 REPORT | ANNUAL RIGHTMOVE PLC Percentage of employees who received training who received of employees Percentage cross in the 30% Club, a participated have we year For a third mentoring provide to programme mentoring company senior into progression for identified women to opportunities positions. leadership Summary of training provided in 2020 provided of training Summary per employee of training hours Average employees to provided hours number of training Total hours training Number of mandatory 4,652 Number of technical development training hours hours training development Number of technical per employee cost training Average and compliance and technical teams. and technical and compliance covered topics including resilience, wellbeing, creativity and creativity wellbeing, including resilience, topics covered this theme with online continued In 2020 we innovation. on a range advice with specialist employees providing webinars or being working, the challenges of to relating of subjects pandemic. during the Coronavirus furloughed, and annual training complete to is required Every employee the corporate anti-bribery, prevention, about fraud awareness and protection data evasion, tax facilitating of offence criminal that ensure is designed to training This security. information practices unethical and alert to up-to-date remain employees or customers. our consumers risks to and potential FCA on-going also undertake Our Van Mildert teams their to related training specific business and regulatory provider. a Financial Services as work hours Training with an average each employee In 2020, Rightmove provided training mandatory of hours 2,472 total In training. of hours 8 of information data protection, covering primarily delivered, were of hours 2,180 least at and compliance, FCA and security and experience including customer developmental training, in provided hours training development The sales training. the impact of due to years than in previous lower 2020 were support online employee alternative the pandemic, however including the their place, have taken and engagement webinars included not are Halls (which Town fortnightly and now weekly provided was of the training majority The in the table below). in of training annual cost The trainers. in-house by expert-led platform and trainer external all including £158,000 was 2020 costs. employment trainers’ but excluding our own costs provide we training and mandatory technical In addition to to access and qualifications professional for sponsorship legal finance, our for development professional continuing
oss company oss company Participation in the Mission Include which is a cr in the Mission Include Participation mentoring programme. This supports our aim to support aim to supports our This programme. mentoring all roles. of talent across diversity more to build our business and embrace the ‘hows’ is essential to the ‘hows’ and embrace build our business to individuals with technology for market The Rightmove’s business. strongly are We competitive. skills is highly and customer-centric environment supportive working on maintaining a happy, focused and attract to benefits of range comprehensive a providing and the considerable the best people. In 2020, despite retain 93% of that delighted were we by our teams, challenges faced survey Say’ the annual ‘Have Your to responding employees • and retention Recruitment experience and capability the right skills, people with Recruiting think that Rightmove is a great place to work. to place a great think that Rightmove is and training People development training that development and ensure have set out to We and therefore all of our employees to should be accessible we invest in extensive training and leadership programmes, programmes, and leadership training invest in extensive we skills to with all the necessary equip employees designed to and consumers. our customers to service exceptional provide the business to introduced are Rightmove employees All new fits Rightmove ‘How two attending by customers our and London and Keynes based at our Milton courses together’ reinforce to course induction residential off-site, an and offices induction and values. Our residential Rightmove’s culture in restrictions Covid be suspended in line with had to course do so. to as soon as it is safe 2020 and will resume styles learning different have employees our that recognise We individual requirements to opportunities tailor training and we skills. Our training and non-technical technical in both on-the-job training, include workshops, programmes online and mentoring, coaching at conferences, attendance ensure to aim We qualifications. professional and learning 20% more were training of mandatory hours In 2020, total that employees are provided with access to at least as much to with access provided are that employees training. with mandatory are as they developmental training than those of developmental training. pandemic, the Coronavirus to and in response During the year attended every individual with line management responsibility course a crisis’. This lead through to on ‘How a workshop online sessions with a three-hour of two consisted valuable and provided guide managers, to trainer professional and personally pressures with new cope to how insights into be who may members team identify and support any or working struggling with the challenges of remote workloads. increased and thoughtful culture, a diverse to As part of our commitment Rightmove for Circles’ a series of ‘Mentoring hosted we who speakers keynote in 2019 with external employees came insightful discussion. Speakers stimulus for provided and of sports and business backgrounds, a variety from Strategic report | Environmental, Social and Governance Report continued
Employee survey SIP and can sell their shares, subject to tax, after three years or We conduct a ‘Have your Say’ people survey twice a year to tax free after five years. gauge how our employees feel about working for Rightmove. Flexible working The survey results are followed up by every manager, supported The Group supports flexible working arrangements, part-time by our HR team. We place great importance on the feedback of working and reduced hours to allow our employees to balance our employees, and we are proud of the fact that our ‘Great their home and work commitments. Under the flexible holiday Place to Work’ score has risen to 93% from 81% in 2019. scheme, Rightmove employees can buy or sell up to five days We place particular importance on the factors which create (or the part-time equivalent) of holiday each year to suit their positive employee sentiment, and are pleased that they remain personal circumstances. In addition, in 2020 we provided extra strong: flexibility for employees to roll over a higher number of holiday • 92% of respondents enjoy working in their teams; days into 2021, where they have been unable to take annual • 91% are proud to tell people that they work at Rightmove; leave and we provided up to an additional 10 days paid leave to • 88% have a great deal of faith in the people leading Rightmove; support those with caring responsibilities brought about by • 85% would recommend working at Rightmove to other people; Covid-19 lockdown. • 82% feel motivated to deliver in their roles; and Well-being and mental health • 80% are happy with Rightmove’s values and principles. We are committed to supporting our employees in all aspects An employee satisfaction target will again help to determine of their health and well-being and we offer private healthcare executive management’s bonus in 2021, demonstrating the and a complementary cash plan scheme for all Rightmove importance of our people and employee engagement to the employees’ medical needs, which has been extended to continuing success of Rightmove. Van Mildert employees in 2020. Employee benefits As noted above, all line managers participated in ‘How to lead Whilst we believe that being a great place to work helps us to through a crisis’ training, enabling them to support all of our retain the best talent, we also offer a comprehensive range of employees during 2020. We are also a subscriber to Spill, an competitive benefits to our employees; our Van Mildert team app that provides access to trained and accredited therapists will be fully aligned with Rightmove benefits in 2021. or counsellors via video or telephone therapy sessions for any employee who would like emotional support. During the Pensions pandemic we have also provided well-being and parenting Rightmove provides a group stakeholder pension plan, under webinars as additional support mechanisms for our people which Rightmove employees can contribute 3% or more of and we conducted a lockdown survey to ensure all employees their salary and Rightmove contributes 6%. This benefit will be felt supported. extended to Van Mildert employees in 2021. The opt-out rates for the Rightmove pension are low, with 94% of employees This has been an exceptionally tough year for many people and currently members of the pension plan. Van Mildert employees for some of our employees, and small gestures of kindness and have been able to opt into a NEST pension scheme with a 76% engagement have been well received. For World Mental Health take up rate. Day, we distributed to each of our employees a small tea and biscuit package to acknowledge that many of our people have Employee share schemes found themselves under pressure or felt stressed due to We want our employees to benefit directly from their uncertainty and for some, that can have an impact on mental contribution to Rightmove’s success. We offer two all- health. We encouraged all our employees to take some time to employee share plans, enabling employees to share in the make a hot drink, take a moment for themselves and to reach growth of the Group and help align the interests of employees out to someone to talk to, if helpful. with those of our shareholders. Exercise is well known to have a positive influence on mental Sharesave: Every Group employee can join the Rightmove Save health and well-being and employees at our Milton Keynes As You Earn Scheme (Sharesave), which allows employees to location are able to use the on-site gym which is provided by save money from their salary with the option to purchase shares the business park on which our office is located. In response to at a discount after three years. Over 57% of Group employees the pandemic, our private healthcare provider Vitality has currently participate in Sharesave and many have benefitted provided access for all our employees to online events from the strong share price growth over recent years. including Mindful Mondays, Mental Health Awareness for SIP: Every eligible Group employee received a Free Share Employees, How to Lose Weight workshops, and virtual HIIT Award of 350 shares under the Share Incentive Plan (SIP) in sessions during the year. December 2020. Over 98% of employees participate in the
40 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 41 REPORT | ANNUAL RIGHTMOVE PLC A trusted marketplace A trusted marketplace As described in our Business Model, Rightmove is the UK’sAs described in our Business the UK’s bringing together marketplace, property largest with the largest audience and most engaged property largest of properties. inventory a provide strives to Rightmove As a leading digital platform, and customers our for marketplace fair and efficient reliable, objective and key is embodied in our primary This consumers. and consumers. customers right thing for do the value: to or service new every platforms, our to modification Every valuable a it delivers ensure to tested innovation is rigorously data consumer whilst protecting our customers for service most engaging user experience. the and providing our customers Supporting UK of the the shutdown pandemic caused Coronavirus The extreme putting during the initial lockdown, market property extensive agents. Following lettings and on estate pressure Rightmove chose to of our customers, dialogue with many New Agency, our all support to assistance substantial offer of a 75% in the form customers and Commercial Homes, in August discounts and reduced July April to from discount and Overseas Commercial Agency, for and September in also was response this that belief firm the in customers, of the business and our shareholders. interests the long-term a received market half of 2020, the property During the second of a stamp duty announcement the Government’s boost from seen a marked have subsequently and our customers holiday remaining with the market transactions, in property upturn 2021. into buoyant market, period in the property During this unprecedented and customers both protect to Rightmove has continued the make and innovating to advice providing consumers, effective the support and easier moving home of process about information More market. functioning of the property in the Chief Executive’s Review our innovations can be found our to difference a ‘Making the and Model Business and section above. Environment’ advice and webinars and consumer Customer including Covid-related 100 online events, close to hosted We by over attended which were our agents in 2020, for webinars and over 5,700 branches from professionals 29,000 property at our online by a further 17,000 individuals. Attendance viewed in 2020. events trebled technology and people to advance our internal systems and systems internal our advance people to and technology will NED engagement programme The platforms. external activities of engagement include a variety in 2021, to resume and employees. NEDs our Chair, for Health & Safety to and visitors all of employees of health and well-being The we and during the year the business, for is a priority our sites a safe provide to continue that our premises have ensured a Chartered before, As mentioned environment. working assessments for risk Covid completed Practitioner Safety a during employees all to presented and offices our of each keeping risk and safe explaining the Covid Hall webinar, Town in our implemented given was All guidance take. to measures office the at attendance any and return office secure Covid authorised has been return and the interim during lockdown by our HR team. and co-ordinated Policy and Health and Safety compliant Rightmove has a fully to Our approach all its employees. for insurance appropriate as it treat to is safety and health of management effective the policy Group’s The part of business management. an integral of the control adequate provide is to on health and safety is activities. This work risks arising from health and safety of employees, with, and training consultation through delivered training. safety place work and aid first safety, fire including of plant and the maintenance Rightmove also ensures and the handling and use of all substances equipment, safe of ill-health. and causes of accidents prevention or have had no fatalities that we report pleased to are We during the year. serious injuries reported engagement Wider workforce Corporate 2018 the of requirements the to response In that an alternative, agreed the Board (Code), Code Governance be engagement would employee to approach tailored Rightmove and our Non-Executive Directors for appropriate sessions(NEDs) should be involved in a series of engagement employees. from feedback direct gain to with Rightmove teams of our the furloughing of a third led to In 2020, Covid-19 we and the business, across working and remote employees meetings face to face implement scheduled unable to were turned attention meeting. Directors’ the February Board after the impact of the pandemic on our customers to responding to Employee remotely. and supporting our employees with weekly the year throughout engagement has continued all employees, for Hall webinars Town fortnightly and now of the Senior by the Chief Executive and members hosted the CEO from feedback receives Board The Team. Leadership at meeting on the questions and issues raised at each Board our HR team. from updates in addition to these meetings, the Chief Executive’s messages and insights from key The our NED's have supplemented during the year updates facing of the challenges and opportunities understanding decision- some of the Board’s Rightmove and informed and support our customer to in relation making, particularly new in investment and working flexible strategy, discount Strategic report | Environmental, Social and Governance Report continued
Consumer webinars have also taken place and an Sponsorship accompanying consumer advice hub was launched in 2020, We continue to support our local community in Milton Keynes giving practical tips on home hunting within Government through our support for the local volleyball and both the female guidelines. Our weekly consumer email update was read on and male ice hockey teams, MK Falcons and MK Thunder, as well average by over 750,000 home hunters every week. as the MK College football team for the fifth consecutive year. Unfortunately, the MK Marathon had to take place virtually this Making a difference to year which saw a reduction in participants, despite this the total our communities raised by our On the Move team was £14,145. Rightmove will continue to support this event in 2021, which will be our fourth We are committed to supporting the communities in which we and final year of sponsorship. operate. Both local and national charities are considered Matched giving important stakeholders for our business and we continue to We also believe in supporting our people when they take action debate and develop how we direct our support to make the to raise funds and volunteer for causes that are important to biggest difference. We engage with our local communities on them. We do this through uncapped, matched funding and will an ongoing basis through local connections, charitable support continue with our programme of matched funding in 2021. and sponsorship. Rightmove employees are also able to donate directly from Charitable support in 2020 their monthly salary to any charity, through the Charities Trust, In 2020 we are pleased to report that charitable donations, which provides a tax efficient means of giving. including matched funding, totalled £133,000. STEM (Science, Technology, We are proud to have supported the following organisations Engineering and Mathematics) during 2020. A number of our employees working in IT systems and Campaign Against Living Miserably product development are STEM ambassadors, giving their (CALM) is leading a movement time to mentor and support individuals who want to pursue against suicide through vital, STEM careers. lifesaving support, impactful Future plans campaigns and collective action. Rightmove is a rich and varied community already, our people Women’s Aid, a charity supporting are united in their commitment to do the right thing for women and children affected by customers, consumers and each other. We have already made domestic abuse. significant commitments to foster gender and ethnic diversity NSPCC, a national charity for the in our own business and we now want to increase opportunities protection of children aiming to for people disadvantaged by colour or background. transform society for every Therefore, in line with our SDG aims, we will be supporting the childhood. Rightmove’s donation following charity in 2021 with both financial support and time: was used to fund Childline for two days at the end of December, Generating Genius a charity which has ensuring that children across the UK been working for 15 years to ensure had a place to turn to for support. that talented and able students from BAME backgrounds are positioned to Harry’s Rainbow, a local Milton excel in STEM careers and whose Keynes charity dedicated to mission is ‘To change the world by supporting bereaved children. A task supercharging young minds to realise that has been made even harder due their potential’. to Covid restrictions. We look forward to reporting on our involvement with this Our Van Mildert employees organise charity and others in next year’s report. a food bank collection for The Trussel Trust and especially the Newcastle East End Foodbank. Given the restrictions due to the pandemic in 2020, both monetary and food donations were made to the food bank prior to Christmas 2020.
42 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 43 REPORT | ANNUAL RIGHTMOVE PLC incorrect images and property descriptions. Our dedicated Our dedicated descriptions. property images and incorrect teams prevention and fraud data protection data quality, and activity anomalous any investigate to have continued or discovered that are adverts or inaccurate misleading our on activity fraudulent prevent to helping reported, and advisory services threat to subscribe We platforms. are we ensure to data sources external multiple monitor in dealing with cyber threats. proactive data and consumer customer Protecting data is of paramount and consumer customer Protecting heavily invest to have continued We Rightmove. to importance data prevention, and our fraud and protection, in data security to vigilantly work teams security and information protection process use, that the data we to safe are our platforms ensure legislation. with data protection comply and that we is secure audits of our internal and undertaken have reassessed We and provisions data protection and consumer cyber security and processes our policies and strengthen review to continue and challenges threats meet new in line with legislation and to in have a number of controls all online businesses. We facing well and data are our services ensure to our estate across place specialists to with external extensively and work protected posture. security maintain a strong in significantly invest to 2020 during continued We risk appetite. our aligned to and data security cybersecurity exercises team’ and ‘red tests annual penetration perform We risks. Rightmove’s incident response our biggest understand to high risk potential run through to meets frequently team testing including major cyber incidents and data loss, scenarios, requiring areas any and identifying response our co-ordinated investment or improvement. on reliant even more has become market As the property in the have increased and transactions digital platforms, our dedicated update to continued half of 2020, we second tools hub. These pages and our customer and Security Safety online and avoid safe stay help consumers designed to are provide their next home, and to for when searching fraud customers. our to advice and data protection online security supply a secure of maintaining the importance Recognising our cyber risk assessment activities in have extended chain we and now of suppliers due diligence formal include more 2020 to that work. manage and track to in place have a framework information for framework governance have an internal We which includes various policies data protection, and security and updated reviewed Our policies are and procedures. read have they that certified have employees all and annually Data Protection, policies (covering the core and understood Use of IT, Appropriate Security, Information Reporting, Breach specialised policies and Additional Own Device). and Bring Your
ero tolerance of bribery and corruption, modern slavery or modern slavery of bribery and corruption, tolerance ero Z human rights breaches Tax transparency transparency Tax taxpayer being a responsible to Rightmove is committed manner at all times. acting in a transparent measure precautionary the took we During the initial lockdown (CRJS). Scheme Job Retention the Coronavirus of accessing to and returned be resilient to as the business proved However, the repaid subsequently we 2020, of half second the in profit CRJS the repaying that believe We £750,000. of grant CRJS the to is central which do, the right thing to was grant and supports our values and brand Rightmove culture the wider community. to responsibilities . £96.2m was 2020 in contribution tax total Rightmove’s in the can be found Further details on our tax strategy Financial Review. security Our platform portal in the UK, advertising property Rightmove is the largest on behalf of estate rent or to sale for 1,100,000 properties advertise their to who pay homes developers, agents and new checks carry out vetting We our platforms. across properties can meet all they ensure to on all Rightmove customers we before standards and best practice regulations relevant advertise on Rightmove. them to allow that and customers audience our consumer It is important to and accurate on Rightmove are adverts displayed property automatic our comprehensive, have upgraded genuine. We anomalous images or text identify any to system detection has advert. This property Rightmove in any uploaded to to customers our with effectively more work to us allowed misleading or potentially listings and remove property rectify GOVERNANCE strategy our ESG for responsibility overall has Board The and isAlison the Dolan, our Chief Financial Officer, with programme, ESG leading Rightmove’s director Board The Team. Leadership our Senior support from the consider and will regularly leadership clear provides against our new progress and monitor strategy Group’s will be reviewed which and targets, objectives ESG our governance Further details of the year. throughout in the Corporate be found and policies can framework Governance Report. Our Governance Goals: and ethical in a responsible operating to committed are We and integrity manner with honesty • Be tax transparent incidents data protection reportable • Zero • Strategic report | Environmental, Social and Governance Report continued standards are required for employees in technical roles. We Modern Slavery also have a Chief Information Security Officer and a security Rightmove is committed to preventing slavery and human committee, with representatives from across the organisation, trafficking in its business and supply chains. We require who meet regularly to ensure our security posture remains the highest standards of honesty and integrity in all our strong and to oversee security initiatives. business dealings and relationships. We will not tolerate the mistreatment of people in our employment and, Rightmove has two Data Protection Officers (DPOs) and a wherever possible, employed in our supply chain. Our Deputy Data Protection Officer, who are responsible for Modern Slavery Act Statement can be found on our website data privacy, data breach prevention and reporting, policy plc.rightmove.co.uk. During 2020, no incidents of Modern compliance, record keeping and data subject rights. Slavery or human rights abuse have been identified. Supporting our DPOs is a dedicated team handling data protection enquiries from consumers and customers via Whistleblowing [email protected]. At Rightmove, we follow clear and transparent business practices and strive to apply high ethical standards in all our Further details on our approach to the risk management business dealings. We believe this contributes to a fair and of our Cyber Security and IT systems can be found in the honest marketplace where customers and consumers know Principal Risks and Uncertainties section of this Report. that we can be trusted. Rightmove operates an anonymous, Anti-bribery and corruption independent whistleblowing facility available to all Group We will not tolerate any form of bribery and corruption within employees, supplemented by an internal reporting facility for our business and/or in any dealings with our customers, employees if they suspect anything inappropriate or experience suppliers and other third parties who we deal with in the course any serious misconduct or wrongdoing in our business. of our business. We will not conduct business with any service Climate risk management and opportunities provider, customer or supplier which does not meet the The Board has overall responsibility for risk management principles of our Anti-Bribery Policy, which can be found on and reviews all financial and operational risks regularly. our website plc.rightmove.co.uk. During 2020 no employees The Senior Leadership Team reviews new and emerging were disciplined or dismissed due to non-compliance with risks and opportunities including environmental risks and the Policy and no fines were levied on the Company. opportunities; going forward this work will be undertaken Human rights by the Group Risk Committee. We are committed to supporting human rights through our As Rightmove is a digital media company, our carbon footprint compliance with national laws and through our internal policies and environmental impact is low, and our Business Model is which adhere to internationally recognised human rights sustainable in a low-carbon environment. Our environmental principles. Our Code of Conduct and associated policies risks are not currently considered sufficiently material to be require respect and equal and fair treatment of all persons we listed in our principal risks and uncertainties. However, in 2021, come into contact with, in line with our Group values the ‘hows’. we will be modelling environmental risks and opportunities We safeguard our employees through a framework of policies under the TCFD reporting framework and our findings will be and statements including: Modern Slavery; Gender Pay; Equal reported in the 2021 Annual Report. We are not complacent Opportunities and inclusion policies. about our environmental impact and will continue to monitor and improve our performance; mitigate any risks and review all opportunities as they arise.
44 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ANNUAL REPORT 2020 | 45 REPORT | ANNUAL RIGHTMOVE PLC Strategic Report: Chief Executive's review Chief Executive's Report: Strategic Report ESG Report Governance Corporate Report ESG Relevant Information Relevant the our business impact on on Information Report, in this ESG can be found environment gas emissions greenhouse including statutory data Report ESG
– Whistleblowing Policy – Whistleblowing Modern Slavery Statement Policy Data Retention Privacy Policy does not Company The have a specific on information policy however how our on social matters Report in the ESG can be found local and wider community business supports the Handbook, which includes: Employee – Code of Conduct – Code Policy – Anti-Bribery and Corruption Policies has a Company The policy and specific targets issues on environmental includes: Handbook, which Employee of Conduct – Code Business model report: Strategic Principal risks and uncertainties Report: Strategic indicators performance key Operational Report: Strategic Human rights matters Social Anti-bribery and corruption Environmental matters Environmental Employees Business model Principal Risks key Non-financial indicators performance Reporting Requirement Reporting Non-Financial Information Statement Information Non-Financial relevant sets out where below table The requirements. Directive Reporting with the Non-Financial comply aims to Rightmove Annual Report. in this can be found information Governance | Corporate governance report
I am pleased to introduce our Corporate Governance Report, which explains how the Company has applied the provisions of the UK Corporate Governance Code (the Code) during the year.
Andrew Fisher Chair Board changes Following my own appointment on 1 January 2020, Our Corporate Governance Report includes Robyn Perriss, our Finance Director, stepped down from • A statement of compliance with the Code the Board on 30 June 2020 and Alison Dolan was appointed • Rightmove’s corporate governance structure as our new Chief Financial Officer, joining the Board on • Our Directors’ biographies 7 September 2020. • Key Board and committee activities Full details of the Board changes and the work of the
Nomination Committee can be found on pages 64 to 66. and reports from the • Audit Committee Culture • Nomination Committee We are fortunate to have an open and supportive culture at • Remuneration Committee; and Rightmove, and the Board recognises the value of this • Directors strong company culture to the success of the business and is satisfied that our culture is aligned with the Company’s Company Purpose purpose, values and strategy. Examples of how Rightmove’s Rightmove’s purpose is to make home moving easier in the culture benefits all our stakeholders can be found in the UK. This is achieved through the delivery of our strategy, Environmental, Social and Governance Report. supported by an effective system of governance throughout the Group. Statement of compliance The Code sets out the principles and provisions relating to Board priorities good governance of UK listed companies and can be found 2020 has been a challenging year and a key priority for the on the FRC’s website at frc.org.uk. Board has been to ensure that our customers, employees and other stakeholders were well supported, reducing the The Board recognises the importance of good governance impact of Covid-19 as far as possible. As a Board, we have and we are pleased to confirm that for the year under review, carefully considered all of our stakeholders in the decisions the Company has complied with the principles and that we have taken, including enhanced furlough payments provisions of the Code. for Group employees and discounts to support our Directors’ duties customers, and we will continue to do so to ensure that An explanation of how Directors have engaged with and Rightmove’s strategy can generate value for our shareholders have taken into consideration the requirements of and customers and contribute to wider society. Rightmove’s key stakeholders, in accordance with S172 of Other priorities in the year have included the appointment the Act, can be found in the Working with our Stakeholders of our new Chief Financial Officer and the review of our section of the Strategic Report. Environmental, Social and Governance strategy. More details on this can be found in the Environmental, Social and Governance Report. In addition, the Board has updated the matters reserved for its decision. Andrew Fisher Chair
46 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ching the skills, knowledge and experience of and experience knowledge ching the skills, y to the Chair; y to onsider succession planning and the planning and onsider succession eeping the structure, size and composition of the and composition size eeping the structure, ANNUAL REPORT 2020 | 47 REPORT | ANNUAL RIGHTMOVE PLC Directors to Rightmove’s business strategy and Rightmove’s to business strategy Directors and requirements; under review; and its Committees Board senior roles. pipeline for development of a diverse mat c k • Nomination Committee Nomination Committee independent) be must majority NEDs, (Quorum: 2 for: Responsible • •
ermediary for other Directors when necessary; Directors other ermediary for o shareholders if they have concerns which they have not which they have concerns if they o shareholders or the Chair if required; oring the delivery of the strategy within the risk and control within the risk and control oring the delivery of the strategy ontact is inappropriate; and ontact is inappropriate; of the Chair. of the performance onduct an annual review onstructively challenging the Executive Directors; and Directors; challenging the Executive onstructively c framework set by the Board. framework the normal channels of the Chair and through resolve been able to for Chief whichExecutive or suchOfficer other Executive Directors c c monit acting in an advisory capacit deputising f serving as an int be available t • Responsible for: Responsible • • One is of as appointed the the non-executive Senior Independentdirectors for: who is responsible Director, • • • • Non-Executive Directors (5) Non-Executive Directors • Environmental, • Social and Environmental, policies Governance communications and shareholder results • the annual and half-year • major acquisitions and disposals • appointment ofand Company of the removal officers
for: ecommendations to the Board for the for the Board to ecommendations and the Senior Team. Leadership the for policy and framework overall Executive Directors of the Chair, remuneration making r • Remuneration Committee Committee Remuneration (Quorum: 2 independent NEDs) Responsible oup strategy. | Board governance structure and members of the SLT, to continually assess existing and changing risks, monitor the effectiveness of corresponding controls controls corresponding of effectiveness the monitor risks, changing and existing assess continually to SLT, the of members and internal audit internal function; and y. y-to-day management of the Group, and its operations and results; and results; and its operations of the Group, management y-to-day oversight of accounting, reporting financial of oversight accounting, with relationship auditor. the external Group’s the Rightmove’s the the da implementation of the Gr and internal control processes; control and internal and • at plc.rightmove.co.uk website available each are for on of corporate the the Committees Company’s Board of reference Terms and Management Committees Team Leadership Senior meets and strategy, business Rightmove’s of delivery and development the in Officer Executive Chief the supports (SLT) Team Leadership Senior The the of understanding deeper a provide to SLT the from presentations receives also Board The performance. financial and operational discuss to regularly the has been established in 2021, comprising A Risk Committee Rightmove operates. in which and the market and products, our customers business, Officer Financial Chief each of their remits. Only Committee members are entitled to attend Committee meetings. Other Board members may attend Committee meetings by Committee attend may members meetings. Other Board Committee attend entitled to are members Committee Only each of their remits. invitation onl Audit Committee (Quorum: 2 independent NEDs) for: Responsible • • Details of Board activities during the year can be found later in this report. later can be found activities during the year of Board Details (NEDs) only) Non-Executive Directors of (composed Committees The Board within on the matters the Board back to and report review Committees The Committees. its three of business to matters certain delegates Board The The Company Secretary The Company corporate all in Chair the assisting and Board the advising for responsible is who Secretary, Company the by supported are Committees its and Board The matters. governance and updated in 2020) (reviewed the Board to reserved Matters and • annual Rightmove’s business business plan strategy • capital management and dividend policies and risk management control of internal • the system Executive Directors (2) Executive Directors for: Responsible • • Led by the Chief Executive andOfficer by supported the Chief Financial Team. andOfficer their Senior Leadership of roles The Chair withand clearareChief separate Executive Officer guidelines on the division of responsibilities. written The Board of Rightmove plc (8 Directors) of Rightmove Board The of the the for the andGroup success benefitpromoting long-term for alsoresponsible of is the shareholders Company’s theBoard The collectively wider and 2006 (the Act) Act duties set out in the Companies and and has the powers of the Group and control direction it serves. It sets the overall community and of the delegates operation day the to day the committees to Board Articles the of Company’s matters certain Association. delegates Board The Directors. the Executive business to Chair Chair The and is leadership of for relevant,governance responsible the sufficient, planning Board, the agenda receive Board’s and ensuring that Directors and timely clear and information that all subjects sufficientdiscussion allocated torequiring time are effective support decision making. He also ensures relationships theconstructive between and ongoing Executive ensures and andthat byeffective Non-Executivethe remains encouraging Directors Board communication the and between Board effective its stakeholders. key Board Leadership Board of Rightmove plc Shareholders the through (primarily Chief Board The Executive andOfficer the Chief Financial Officer and supported by the Chair and Senior Director) the Independent the engaged actively Details throughout of year. with the institutional during engagement the investors Board’s the with Company’s can year shareholders be on found the pages Report. following and section in of with the the our Working Strategic Stakeholders and report to the Audit Committee. the Audit Committee. to and report Governance | Directors and officers
Andrew Fisher Peter Brooks-Johnson Alison Dolan Chair Chief Executive Officer Chief Financial Officer Nationality Nationality Nationality British British Irish Appointment to the Board Appointment to the Board Appointment to the Board 1 January 2020 10 January 2011 7 September 2020 Committee membership Current external commitments Current external commitments Nomination (Chair) Non-Executive Director of Adevinta ASA None Current external commitments Previous roles and relevant skills and Previous roles and relevant skills and Non-Executive Director (and Remuneration experience experience Committee Chair) of Marks and Spencer plc Peter joined Rightmove in 2006 and became Alison was the Chief Strategy Officer at News Previous roles and relevant skills and Chief Operating Officer in April 2013 having UK from 2016 until May 2020, where she experience been Managing Director of rightmove.co.uk was at the forefront of the business’s digital Andrew has a background in building digital, since 2011 and Head of the Agency transformation. Before News UK, Alison held media and entrepreneurial businesses and business since 2008. He was promoted to a number of senior positions at Sky plc, executing a high growth strategy. He also Chief Executive Officer in May 2017. Prior to including Group Treasurer, Director of Finance has experience of serving on the Boards joining Rightmove, Peter was a management and Deputy Managing Director Sky Business. of a number of listed companies as a consultant with Accenture and the Alison is an Irish national, but has lived in non-executive director. Berkeley Partnership. London since 1994. She has a Masters Andrew was previously CEO and Executive Peter has substantial experience and in Business Studies from University Chairman of Shazam, where he was understanding of the online media and College Dublin. instrumental in developing and executing a property markets, developing Rightmove’s growth strategy to establish one of the business plan and strategy over many years, world’s leading mobile consumer brands. with strong leadership and stakeholder He was also European Managing Director of management skills. Infospace Inc and the founder and Managing Director of TDLI.com. Andrew was a non- executive director of Moneysupermarket. com Group plc until May 2020 and Merlin Entertainments plc until November 2019.
48 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ector of Euromoney of Euromoney ector director of M&C Saatchi PLC to of M&C PLC Saatchi director ANNUAL REPORT 2020 | 49 REPORT | ANNUAL RIGHTMOVE PLC 1 February 2018 membership Committee (Chair), Nomination Remuneration commitments external Current UK Growth of Jupiter Non-Executive Director plc Investment Trust plc VCT of Proven Non-Executive Director of Finsbury Growth Non-Executive Director PLC Trust & Income Non-Executive Dir PLC Investor Institutional skills and and relevant roles Previous experience a media as experience has extensive Lorna the media and investment adviser to analyst with financialsector and strong analysis skills. leadership She was Executive Director and Head of the Media in Sector Corporate PLC at Numis Corporation & Advisory Broking until 2017. September She was a offounder Numis when it launched in 2001 having of as SGa at worked director Sheppards, of WestLB and executive director Warburg Panel sits on the Advisory Lorna Panmure. programme Fifty Future of TechNation’s and has served as a Cabinet Ambassador Media of & Culture, Sport. She was a non- executive 2019. December Lorna Tilbian Non-Executive Director Nationality British the Board Appointment to the Department for Britain) Creative (for
ector of UK Media at Amazon to June to Media at Amazon of UK ector Be Heard Group plc until August 2018 and plc until August Group Be Heard 2019, and a May plc to Properties of Intu Dir Rakhi has extensive knowledge of the knowledge has extensive Rakhi and experience and consumer customer of digital a wide range innovation across and mobile platforms, desktop products, by a varied non-executive augmented customer-centric in other portfolio businesses and sectors. of a non-executive director was Rakhi 2014. She held various other senior positions at Amazon tenure during her 12-year General including Media, Entertainment, as and Book divisions as well Merchandise held Rakhi Amazon, Prior to advising Zappos. and Oliver Wyman. at TomTom roles strategy Rakhi Goss-Custard Non-Executive Director Nationality American/British the Board Appointment to 2014 28 July membership Committee Nomination, Remuneration commitments external Current of KingfisherNon-Executive plc Director plc of Schroders Non-Executive Director skills and and relevant roles Previous experience
orkplace with a particular orkplace focus on getting women and girls into digital and girls into women on getting focus subjects.and STEM studying careers lend her to delighted Jacqueline is especially the improve to Group Youth The support to the Girlguiding and to people, young odds for transformation. technology Association for a She CBE to was services for awarded industry in the technology trade international in 2018. Previous roles and relevant skills and and relevant roles Previous experience leader technology Jacqueline is a recognised in experience the with software, years’ many in working and digital sectors, technology businesses. and sales-focused enterprise She has knowledge and extensive skills in solutions and technology-based promoting advocate and is a passionate cyber security and inclusion. diversity for throughout Jacqueline has been employed by global blue-chip software her career and has held senior positions at companies and Ascential McAfee Technologies, Citrix, CA She was a non-executive Software. director 2016, 2012 to from Group of Home Retail 2019. 2017 to plc from World and of AO of at the Institute Jacqueline is the co-chair Digital the and is also an advisor to Coding, of and the board Group Technology Leaders the under- which addresses Accelerate-her, in technology. of women representation She andis a diversity for advocate passionate inclusion in the w Committee membership membership Committee Audit, Nomination, Remuneration commitments external Current of techUK President plc Group of Costain Non-Executive Director of FDM Group Non-Executive Director (Holdings) plc Nationality British the Board Appointment to 2016 30 December Jacqueline de Rojas CBE Jacqueline de Rojas Senior Independent Non-Executive Director Governance | Directors and officers continued
Andrew Findlay Amit Tiwari Sandra Odell Non-Executive Director Non-Executive Director Company Secretary Nationality Nationality Appointment as officer to the Board British American 1 November 2016 Appointment to the Board Appointment to the Board Current external commitments 1 June 2017 1 June 2019 None Committee membership Committee membership Previous roles and relevant experience Audit (Chair), Nomination Audit, Nomination Sandra is a Fellow of the Chartered Current external commitments Current external commitments Governance Institute. Prior to joining None Managing Director of Vitruvian Partners LLP Rightmove, Sandra was Company Secretary Previous roles and relevant skills and Previous roles and relevant skills and of Quintain, the London property developer, experience experience and before that held various senior company Andrew is a chartered accountant with a wealth Amit has a strong understanding of the online secretarial positions in listed financial of financial expertise, proven commercial classified sector and innovation across a services companies. experience and strong consumer-centric range of online marketplace businesses, background. He has a deep knowledge of with extensive knowledge of finance and financial reporting and risk management, capital markets. He was Head of International technological solutions and consumer platforms. Developed Equities at Harvard Management Andrew was the Chief Financial Officer of Company and prior to that Head of Equities easyJet plc from 2015 until 3 February 2021. at the Lakshmi Mittal Family Office. Before joining easyJet, Andrew was Chief He previously held senior investment Financial Officer of Halfords plc and prior to that management roles at Morgan Stanley & Co Director of Finance, Tax and Treasury at Marks International plc, Ziff Brothers Investments and Spencer Group plc. He formerly held senior and KKR & Co. Amit has an MBA with finance roles at the London Stock Exchange Distinction from Harvard Business School and at Cable and Wireless, in the UK and US. and a Bachelor’s degree in Economics with Andrew qualified as a chartered accountant Honours from Harvard College. with Coopers & Lybrand.
Board Composition and Diversity
1 2 2 1 5 1 5 A 2 5 N
F M E C N E E N E F T We recognise the benefits of diversity on our Board to ensure effective engagement with Rightmove’s key stakeholders and a variety of C thinking in relation to our business strategy. The age, gender, tenure and skills of board members as at 1 January 2021 are set out above.
50 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS Policy review and Policy review renewal and controls Internal update risk governance Audit Committee from and security Cyber incident response update and Committee Board evaluation feedback and actions agreed Governance Corporate update Insurance review and review Insurance renewal ESG Strategy Review Strategy ESG Risk Register Review Review Risk Register for including update Covid-19 Confirmation of 2020 of Confirmation Policy Remuneration approval Risk register review review Risk register Report Gender Pay Review Review Strategy Tax Act Slavery Modern update Statement Practices Payment Report Governance and updates regulatory ANNUAL REPORT 2020 | 51 REPORT | ANNUAL RIGHTMOVE PLC (1) Investor Relations Relations Investor update AGM – analysis of – analysis AGM and voting shareholder feedback Cancellation of final of Cancellation dividend Shareholders and register Share Governance market reports
Update on the Group on the Group Update and plan succession in addressing progress gap the gender pay the Nomination from Committee Annual approval of SIP of approval Annual awards Sharesave and Employee Voice: Voice: Employee on lockdown feedback experience Employee support and Employee working remote arrangements Group employee employee Group scores satisfaction ’Have Say’ your results survey People update Employee and feedback Regular reports and activities reports Regular continued
Core Business Product Product Business Core update Half-year results Half-year Marketing Presentation Marketing Customer update Customer Development Product Roadmap Cash flow and funding Agency andAgency Homes New presentation results Full-year Performance management Monthly report
Update from the from Update Remuneration on 2021 Committee targets performance 2021 budget and three- business plan year approved Strategy day: Strategy and threats Potential the to opportunities business model arising factors external from Customer discount discount Customer review Planning Scenario of Future Areas Opportunity Covid-19 recovery recovery Covid-19 strategy Impact of Covid-19 Impact of Covid-19 support Customer Presentation on Estate on Estate Presentation and products Agency pricing Strategy and Analysis implementation of initiatives strategic Fr
December November September August June July May March February (1) indicated. unlessotherwise meetings, withBoard equency coincides Corporate governance report report governance | Corporate Governance Board activities Board CEO the from updates meetings, at previous raised and actions the minutes considers meeting the Board each scheduled At Chairs. respective the from activities Committee’s each on reports and CFO, and set out below: are year during the Board carried out by the and actions responsibilities key The Governance | Corporate governance report continued
There are usually seven scheduled Board meetings Annual General Meeting each year including one meeting or away day devoted to The AGM usually provides an opportunity for shareholders consideration of the Group’s strategy. In 2020, the Board to vote on aspects of the Company’s business, meet the scheduled additional meetings to discuss and agree Directors and ask them questions. In 2020, in response the business response to the coronavirus pandemic. to the coronavirus restrictions, the AGM was held with a In addition to scheduled Board meetings, there was quorum of directors and shareholder questions were frequent online and informal communication between received in advance. The next AGM will be held on the Directors and management. 7 May 2021 at Rightmove’s London office 6th Floor, 33 Soho Square, London, W1D 3QU. Each Committee Directors receive Board papers in the week before meetings Chair will be available at the AGM to answer any shareholder to allow sufficient time for review. At each Board meeting, questions on their respective Committee’s activities. the Chair holds a brief informal meeting with the non- executive directors to consider key questions and The Company will arrange for the Annual Report and related comments for management. The Company Secretary papers to be available on the Company’s corporate website records Directors’ questions and challenges and agreed at plc.rightmove.co.uk or, if requested, posted to actions in the Board minutes. In addition to formal Board shareholders at least 20 working days before the AGM. papers, Directors receive monthly management reports on The Company proactively encourages shareholders to the operational and financial performance of the business, vote at general meetings by providing electronic voting for setting out actual and forecast financial performance shareholders who wish to vote online and personalised proxy against approved budgets and other key performance cards to shareholders electing to receive them, ensuring indicators. The Board has access to broker reports, research that all votes are clearly identifiable. The Company takes analyst reports and market reviews relating to Rightmove. votes at general meetings on a poll, the results of which Shareholder engagement are reported after each resolution and published on the The Board welcomes opportunities to engage with current Company’s website. All resolutions at the Company’s 2020 and potential shareholders and answer any questions about AGM were passed comfortably, and no resolutions received the performance and activities of the Group. more than 20% of votes against the Board’s recommendations. Within the regulatory framework, the Chair and Executive Directors have conducted regular and open dialogue with Stakeholder engagement shareholders through ongoing meetings with institutional Maintaining regular contact with our key stakeholders investors and analysts to discuss strategy and operational and remains an important part of the Board’s activities and is financial performance, environmental, social and governance fundamental to good governance. Under the Code, the matters. Whilst contact is principally with the Chief Executive Board is required to report on how it has considered the Officer and the Chief Financial Officer, during the year the interests of its wider stakeholders in accordance with Board Chair offered shareholders an introductory meeting section 172 of the Companies Act 2006. This report can and opportunity to discuss a range of subjects from corporate be found in the Working with our Stakeholders section of governance to business strategy. The Committee chairs and the Strategic Report. Senior Independent Director were also available to answer Employee engagement shareholder questions, typically received via our Company In response to the Code requirement, in 2019 the Board Secretary or investor relations team. elected for a bespoke approach to employee engagement, The Board is kept informed of the views and opinions of with all Non-Executive Directors engaging directly and shareholders and analysts. Directors receive an update at regularly with the Company’s workforce in 2019. During 2020, each Board meeting from the Chief Executive Officer and the remote working meant that directors did not meet face to Chief Financial Officer, as well as share register analyses and face with employees but heard from employees at Board market reports from the Company’s brokers, UBS and Numis. meetings and received additional feedback and information from the HR team, as detailed in the Environmental, Social Shareholders are also kept up to date with the Group’s and Governance Report. Directors will resume regular face activities through the Annual Report, full and half year to face employee engagement activities in 2021. results presentations. The investor relations section of the Company’s website, at plc.rightmove.co.uk provides Rightmove’s culture and values details of all the Directors, the financial calendar, latest news The Board fully supports and reflects Rightmove’s open, including financial results, investor presentations, corporate supportive and innovative culture, described in more detail governance, and Stock Exchange announcements. in the Environmental, Social and Governance Report. Executive Directors lead by example in maintaining
52 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS – – – 2 2 2 2 2 2 2
–––– –– 4 4 –––– 77 4 – 7 – 7 4 Remuneration Remuneration Audit Nomination 7 3 (1) 10 10 10 10 10 10 10 10 ANNUAL REPORT 2020 | 53 REPORT | ANNUAL RIGHTMOVE PLC Board (2) (3) olan has attended all Board meetings since her appointment on meetings since all Board olan has attended Dolan
obyn Perriss attended all Board meetings until she stepped down from the from down meetings until she stepped all Board obyn Perriss attended T which is included in these day, strategy Board The Covid-19. to in response September. in person in meet could Board the until postponed was numbers, R on 30 June 2020. Board Alison D 2020. September 7 Alison Jacqueline de Rojas Goss- Rakhi Custard Findlay Andrew Tilbian Lorna Amit Tiwari (1) meetingsin2020, unscheduledBoard eightscheduledandtwo were here (2) (3) Total meetings Total Fisher Andrew Brooks- Peter Johnson Perriss Robyn to debate during meetings to determine whether they whether they determine during meetings to debate to there whether and judgment independent demonstrate affect, to likely are which circumstances or relationships are judgment. Director’s a affect, to appear could or balance is an appropriate that there considers Board The and Non-Executive Directors. Executive between appointments external Directors’ external additional Directors’ the of any Code, the with line In Andrew Our Chair, by the Board. approved appointments are publicly one other of is also a Non-Executive Director Fisher, non- Executive holds one other Chief The company. listed as permitted company, of a listed executive directorship that non-executive recognises as the Board under the Code, of and experience the knowledge can broaden directorships Company. the benefit may which Directors Executive the and attendance membership and Committee Board and of the Board of the Committees membership The the meetings for and Committee at Board attendance set out in the table below: are under review year Board independence independence Board Director’s Non-Executive each reviews Board The that basis and considers on an annual independence independent of fully are Directors all Non-Executive review The judgment. and character in and management, contribution Directors’ as such factors account into takes
separate with clear written guidelines on the division of with clear written separate of responsibilities A summary of the key responsibilities. structure is included in the governance members the Board table at the beginning of this Report. Rightmove’s open, collaborative culture with a fully open plan plan open fully a with culture collaborative open, Rightmove’s access had employees 2020 during and environment office question and answer with webinars fortnightly regular, to employees, Group to access have full Directors sessions. All detailed in the Environmental, of channels, a variety through and assesses Board The Report. Governance and Social of the bi-annual the results through culture monitors the of percentage a with survey, employee Say’ Your ‘Have on dependent directly bonus variable Directors’ Executive on this can be found information – more results the survey Report. Remuneration Directors’ the in (Whistleblowing) concerns Employee its and approved reviewed the Company During the year, are that there ensures Board policy. The Whistleblowing concerns. raise individuals to for in place arrangements by is provided service An independent whistleblowing been Expolink) and this has Navex Global (previously During 2020 no concerns all employees. to communicated issues were and no other using this facility raised were Further as whistleblowing. been treated that have raised in the Audit Committee on this can be found information Reports. Governance and Social Environmental, and Conflicts of interest have a 2006, the Directors Act Under the Companies have, or in which they avoid situations to duty statutory the with interest of conflict indirect or direct a have, may and the nature also declare must Directors The Company. conflicting potential or existing any in interest any of extent have does Association of Articles Company’s The interest. conflicts potential authorising and managing for provisions Rightmove’s observes and approved Board The interests. of of Register the reviews and Policy Interest of Conflicts annually. least at Interests Directors’ entitled to is not a Director their independence, safeguard To a have or conflicted be may they which in matter any on vote to required are Directors If necessary, interest. personal while such a meeting of the Board absent themselves from doubt, the is any being discussed and if there are matters whether determining for is responsible Chair of the Board exists. interest of conflict a Division of responsibilities are Officer Executive Chief and Chair of roles The Governance | Corporate governance report continued
In addition to the above meetings, the Chair conducts meetings Board diversity and experience with the Non-Executive Directors without the Executive Rightmove is committed to a diverse Board comprised Directors being present. Jacqueline de Rojas, the Senior of directors from different backgrounds with relevant Independent Director, chaired a meeting of the Non-Executive experience, perspectives, skills and knowledge. We believe Directors in December 2020, at which the performance of the that diversity, including gender and ethnic diversity, amongst Chair was also reviewed without him present. directors and employees contributes towards a high performing and effective Board and business and promotes Board composition and succession the Company’s ongoing success. We strive to maintain the At the date of this report, the Board comprises two optimal balance, using a meritocratic appointment process. Executive Directors and six Non-Executive Directors, including the Chair. The Executive Directors are Peter At 31 December 2020, 50% of both executive and non- Brooks-Johnson (Chief Executive Officer) and Alison Dolan executive Board members were female, along with the (Chief Financial Officer) and the Non-Executive Directors strong female representation amongst the Senior are Andrew Fisher (Chair), Jacqueline de Rojas (Senior Leadership Team. We remain committed to our policy of Independent Director), Andrew Findlay, Rakhi Goss-Custard, recruiting the best people and appropriate talent for the Lorna Tilbian and Amit Tiwari. business whilst seeking to maintain as near 50:50 gender balance on the Board as possible. All continuing Directors will retire and offer themselves for election or re-election at the next AGM. The Board is We are pleased to report that as at 31 December 2020, satisfied that the Directors retiring and standing for 37% of Board members are from ethnically diverse re-election are well qualified for re-appointment by virtue backgrounds, which exceeds the Parker Review target of their skills, experience and contribution to the Board, for FTSE100 boards. We remain committed to meeting described in their biographies at the beginning of this report. or exceeding this target in future. The Executive Directors have service contracts with the The range of skills and experience the Board considers Company which can be terminated on 12 months’ notice. necessary to deliver Rightmove’s business strategy, as The appointments of the Non-Executive Directors can be identified in the Board Strategy Review, includes: terminated on three months’ notice. • finance and governance The interests of the Directors in the share capital of the • technology and innovation Company as at the date of this report, the Directors’ total • voice of the customer and property market remuneration for the year and details of their service • voice of the consumer and retail contracts and Letters of Appointment are set out in the • digital marketing and online media Directors’ Remuneration Report. At the date of this report, • corporate transactions the Executive Directors were deemed to have a non- Further information can be found at the beginning of beneficial interest in 1,395,476 ordinary shares held by this report and in the Environmental, Social and The Rightmove Employees’ Share Trust (EBT). Governance Report. Biographical details of all Directors at the date of this report Board evaluation and details of Committee membership appear earlier in The Board last completed an externally facilitated this report. performance evaluation in 2018. Therefore, the evaluation The Board’s size and composition is kept under regular conducted in 2020 was internally facilitated and details can be review by the Nomination Committee. found in the Nomination Committee report. The 2021 Board and Committee evaluations will be externally facilitated. Board changes Andrew Fisher was appointed as the Chair of the Board Re-election to the Board with effect from 1 January 2020 and was independent on Directors are appointed and may be removed in accordance his appointment to the Board. with the Articles of Association of the Company and the provisions of the Act. All Directors are subject to election at Robyn Perriss stepped down from the Board on the first AGM following their appointment and in accordance 30 June 2020, and Alison Dolan joined the Board as with the Code, all Directors will seek re-election at the Chief Financial Officer on 7 September 2020. 2021 AGM. More information on the selection and appointment process for new Directors, and on the work of the Nomination Committee can be found on pages 64 to 66.
54 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ANNUAL REPORT 2020 | 55 REPORT | ANNUAL RIGHTMOVE PLC Indemnification of Directors a for allow of the Company Articles of Association The the purposes for provision indemnity qualifying third-party and past its and Company the between Act the of S234 of the at force in remains which officers, and Directors present directors’ arranged also has Group The report. this of date action legal of respect in cover insurance officers’ and nor the Neither our indemnity against the Directors. is a Director in the event that cover provides insurance or fraudulently. dishonestly have acted to proven out the process setting Code has a Dealing Company The with the compliant which is dealing in shares, and timing for all applies to Code Dealing The Abuse Regulation. Market managerial discharging persons are who Directors, insiders. and other responsibility, Control Audit, Risk and Internal the nature determining for responsibility accepts Board The in take to willing is it risks significant the of extent and reviews and monitors and objectives strategic its achieving and management risk Company’s the of effectiveness the in the Further details can be found systems. control internal and in the Risk Management Report Audit Committee Report. Strategic the of section Remuneration describes the which Report Our Annual Remuneration that the Company ensure to in place policies and practices sustainable deliver long term to is motivated leadership is Committee of the Remuneration and the work growth section. in this Governance set out later Governance | Audit Committee report
Dear shareholder Audit Committee Report Summary As Chair of the Audit Committee (the Committee) I am pleased to present the report of the Committee for the year ended 31 December 2020. In this report we aim to provide an overview of the principal activities of the Committee and insight into key topics discussed and the way in which the Committee discharged its responsibilities during the year. The key responsibilities are set out in the Corporate Governance Report. The impact of Covid-19 on the Group, outlined in the Chief Executive's Review, required certain decisions and Andrew Findlay their outcomes to be reflected in the financial statements. Chair of the Audit Committee The Committee supported the Board in considering the Committee’s remit appropriate level of disclosure to reflect the FRC guidance The Committee is an essential part of Rightmove’s on Covid-19 reporting and in ensuring that the Annual governance framework to which the Board has delegated Report, taken as a whole, is fair, balanced, understandable oversight of the accounting, financial reporting and and provides the information necessary for shareholders to internal control processes, the outsourced internal audit assess the Group’s position and performance, business function and the relationship with the external auditors. model and strategy. Furthermore, Covid-19 meant that the Finance team and auditors had to quickly adapt to remote Committee members and auditors working, and the related challenges, and I am pleased to The Committee members are independent Non-Executive Directors and comprise: report that the financial control environment was maintained • Andrew Findlay (Chair) during the year. • Jacqueline de Rojas The Committee has overseen a detailed programme of work • Amit Tiwari in 2020 in relation to its remit, including agreeing the scope The Group’s external auditors are KPMG LLP. PwC LLP provide of work delivered by the PwC outsourced internal audit internal audit services. function, Rightmove Assurance. The Committee reviewed 2020 Activities the results of PwC’s data protection review, which looked at The Committee met four times during 2020 and its key activities were to: consent management and privacy-by-design, and the Van • assess the integrity of the Group’s half-year report and annual Mildert compliance review which focused on the company’s financial statements, considering the application of financial GDPR and FCA compliance. These reviews were reporting and governance standards, including the FRC guidance supplemented by further discussion at Board level to on reflecting the impact of Covid-19 • review management’s approach to any key judgmental areas of consider the progress against agreed actions to strengthen reporting and the related comments of the external auditor the controls framework, which included the establishment of • confirm that the Annual Report is fair, balanced and understandable a new risk and compliance team. Other PwC activities in the • review the effectiveness of Rightmove’s internal control processes year included a review of pricing and the pricing-to-billing • r eview the changes to the cash management and treasury policy process, as well as the HR joiners and leavers procedures. • c onsider the plans to further strengthen risk and compliance within the business The Committee as part of its annual governance cycle, also • assess the conclusions and recommendations of the internal audit reviewed the Group’s treasury, bribery and whistleblowing reports on Data Protection, Van Mildert compliance with GDPR and policies, the gifts and hospitality register and the non-audit FCA requirements, pricing, the pricing to billing system and HR services policy. starters and leavers procedures • evaluate the effectiveness of the external auditor and the internal Looking forward to the next 12 months, the Committee will audit function, and continue to focus on risk areas such as GDPR and Van Mildert • develop the internal audit plan for 2021 compliance, as well as cyber and data security. Other areas 2021 Priorities of focus will include third-party supplier management, the • focus on key risk areas such as compliance, cyber and data security purchasing-to-payables process and customer on-boarding. • review of customer onboarding, the supplier management In addition to its annual performance evaluation, the framework and purchasing-to-payables financial controls Committee carried out a review of its terms of reference in relation to the 2018 UK Corporate Governance Code. These are published on the investor relations section of
56 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 57 REPORT | ANNUAL RIGHTMOVE PLC of the investment by the parent Company in its subsidiary Company of the investment by the parent in the context given its materiality Limited, Rightmove Group Company. of the parent assets of the total the key significant accounting matter is the recoverability recoverability the is matter accounting significant key the Audit Committee Audit effectiveness Committee was Committee the of operation the of effectiveness The Board the internal 2020 as part of in December reviewed on the feedback The process. evaluation and Committee Committee the that confirmed and positive was Committee challenge. appropriate provides and effective is Financial reporting the reviewing for is responsible Committee The annual and report half-year Group’s the of appropriateness considered, has Committee The statements. financial policies and practices the accounting things, among other application of reporting the correct Group; by the adopted governance with broader and compliance standards the on reporting guidance including the FRC requirements, by management to taken the approach impact of Covid-19; the of comments the reporting; of areas judgmental key the and approach; chosen management’s on auditor external assumptions and stress-test underlying the information, status in support of the Going Concern presented analysis Statement Viability and Significant matters accounting the of context the in matter accounting significant key The recognition. revenue is Statements Financial Group 2020 given significant be to area this considers Committee The is the that revenue and the fact the volume of transactions this which statement, income the in figure material most support to offered discounts significant the included year discussed Committee The during the pandemic. customers in detail, including the underlying recognition revenue that the ensure to and controls, processes policies, was and disclosure accounting to taken approach appropriate. Statements, Financial Company parent the to relation In
a chartered accountant with the Institute of Chartered of Chartered with the Institute accountant a chartered In line with the Code, in England and Wales. Accountants relevant as a whole possesses experience the Committee experience the digital and consumer the business through to of Jacqueline background the technology Findlay, of Andrew of perspective markets capital and financial the and Rojas de Amit Tiwari. out in set are of the Committee members of the Biographies Report. Governance the Corporate of times in 2020 and attendance met four Committee The Report. Governance in the Corporate is shown the members all between communication effective maintain to order In the Chief Financial invited the Committee parties, relevant the of members appropriate with together Officer, to auditors, and internal and the external management team, set time periodically Committee The meetings as necessary. without the auditor, of the external seek the views aside to had direct auditor external of management. The presence outside formal concerns any raise to the Chair to access also met separately Committee meetings. The Committee and inbetween during the year auditor with the internal with the Chief meetings the Chair maintained contact members other and partner audit external Officer, Financial of the management team. on the Board to each meeting, the Chair reported After and minutes the main issues discussed by the Committee the Board to circulated meetings were of the Committee approved. once Audit Committee membership and meetings membership Audit Committee Independent are of the Audit Committee All the members 24 with provision in accordance Non-Executive Directors (the Code). Code Governance of the UK Corporate the as Findlay, that Andrew has determined Board The financial relevant and recent the has Chair, Committee executive given his former by the Code, required experience also is Andrew plc. easyJet of Officer Financial Chief as role Andrew Findlay Andrew Chair of the Audit Committee the Group’s website at plc.rightmove.co.uk and are available are and plc.rightmove.co.uk at website Group’s the Secretary. Company the from form copy hard in questions about any answer to at the AGM I will be available of the Committee. the work Governance | Audit Committee report continued
Key accounting matters Committee review Revenue recognition Revenue is a prime area of audit focus, in particular the timing of recognition As more fully described in Note 1 to the accounts in relation to the billing of subscription fees, additional products and the the majority of the Group’s revenue is derived accounting for any membership offers to customers with discounts. from membership subscriptions for core listing During the year, management performed data analytics procedures on the fees and advertising products on Rightmove’s amounts billed to the two largest customer groups (Agency and New Homes). platforms. Customers are able to tailor their This included investigating anomalies such as billing gaps and single bills raised packages. The Group recognises this revenue and reporting to the Committee in this regard. over the period of the contract or the point at The Committee discussed any anomalies with management in relation to which advertising products are used. In 2020, the the data analytics work performed. The Committee was satisfied with the Group offered significant discounts to customers explanations provided and conclusions reached. to support them during the reduction in activity in As part of the financial statement audit KPMG perform data analytics work the property market between April and August. by using computer-assisted audit techniques to identify any unexpected or unusual revenue postings, considering in particular whether the opposite side of the journal entry was as expected, based on the characteristics of the journal. The results of this work were reported to the Committee. The data analytics work above was supplemented by a detailed analytical review of margin and ARPA together with a comprehensive analysis on the treatment of discounts and free member offers. Investment by the Company Rightmove plc in The Committee reviewed the assumptions made by management, including Rightmove Group Limited (RMGL) the strong track record of profitable growth and cash generation by RMGL. The investment by the Company in RMGL is Furthermore, the Rightmove plc share price has increased significantly in the carried at cost, adjusted for subsequent additions 12 years since 2008, resulting in a current market value in excess of £5.5billion, to the investment. Cost was initially assessed as significantly higher than the investment carrying value of £0.6 billion. As RMGL at 28 January 2008 when Rightmove plc became is the main trading entity of Rightmove plc, we therefore see no evidence of the parent company of RMGL. Share-based impairment. The Committee was satisfied with the assumptions made. payment awards to RMGL employees are accounted for as a deemed capital contribution by Rightmove plc to RMGL, with the value of the share-based payment charge for those awards increasing the value of the investment. Further details are provided in Note 15 to the financial statements. The investment is not considered at risk of material misstatement or subject to significant judgement, however it is considered a significant risk due to its size in relation to the Company balance sheet.
The Committee also reviewed and considered the following areas in relation to the 2020 financial statements. Accounting matter Committee review Going concern and viability statements In assessing the validity of the viability and going concern statements detailed on page 27, the Committee reviewed the work undertaken by management to assess the Group’s resilience to the Principal Risks set out on pages 23 to 26 under various stress test scenarios. The Committee concluded that the viability time period of three years remained appropriate. The Committee were satisfied that sufficient rigour was built into the process to assess going concern and viability over the designated periods.
58 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 59 REPORT | ANNUAL RIGHTMOVE PLC To help the Committee in forming its opinion, management its opinion, in forming help the Committee To the paper to and understandable balanced a fair, presented key the identified which Committee, Audit 2021 February whether each of and assessed Annual Report themes in the met. were requirements the governance the on reflected Committee the opinion, its forming When the and its discussions throughout it had received information 2020 and whether messages for the key It considered year. the disclosed through and consistently appropriately these are half reporting of front with equal prominence Annual Report, with and omissions; or bias no with statements, financial and the In addition, framework. structured clear language within a of the FRC the requirements also considered Committee of on the impact disclosure 2020 regarding for annual letter matters key the EU. The and the UK's exit from Covid-19 were: and its conclusion by the Committee considered eport written in easy to understand language and are the key the key language and are understand to in easy eport written clutter? of unnecessary eport free ory presented and has any sensitive material been omitted that been omitted sensitive material and has any ory presented eporting on the business areas in the narrative reporting consistent consistent reporting narrative in the eporting on the business areas e a clear and cohesive framework for the Annual Report? for framework e a clear and cohesive w do with these the judgements risks compare that KPMG planning are to e key e messages key in the aligned narrative with the KPIs and reflected they are year? to year from e the consistently KPI’s being reported highlighted? e identifiedthreats and appropriately with appropriate explained clearly measures performance e the alternative in to and the reporting significante narrative issuesthe judgements key referred the throughout appropriately e the important messages highlighted o you get the same messages when reading the front end and back end of the end and back the front get the same messages when reading o you messages clearly drawn out, including the impact of Covid-19? out, including drawn messages clearly with the reportingfinancial in the financial statements? independently? Annual Report Is ther Ar Is the Annual R Is the Annual R should have been included? Ar Ar Is the r D Ar Ar prominence? Ar estimation of key with disclosures consistent Report in this Committee reported and uncertainties critical judgements set out in the financial statements? Ho include in Report? their Auditors’ Annual Report? Is the whole st in the reporting? financial
• • is of the opinion that the 2020 Annual Report, the Committee its review, Following the information and provides and understandable balanced as a whole, is fair, taken assess to businessthe position, Group’s performance, shareholders for necessary model and strategy. • • • • • • • • • • • Is the report balanced? Is the report Conclusion Is the report understandable? Is the report Is the report fair? Is the report Fair balanced and understandable Fair balanced the Annual is for requirements governance key One of the be to whole, a as taken Statements, Financial the and Report the information and provide and understandable balanced fair, position Group’s the assess to shareholders for necessary strategy. business model and and performance, of the draft with an early provided was Committee The and direction strategic the assess to order in Annual Report provided Feedback was communicated. messages being key of the February 2021 Board in advance by the Committee the Committee where areas any meeting, highlighting was report draft The required. was believed further clarity being to prior feedback this incorporate to then amended approval. and comment final for meeting Board the at tabled Governance | Audit Committee report continued
External audit The Committee approves the terms of engagement and The Committee has primary responsibility for overseeing fees of the external auditor, ensuring they have appropriate the relationship with, and performance of, the external audit plans in place and that an appropriate relationship is auditor, KPMG LLP (KPMG), who is engaged to conduct a maintained between the Group and the external auditor. statutory audit and express an opinion on the financial The Committee approved the audit fees of £240,100 for statements. The Committee reviews the scope of KPMG’s the year as set out in Note 6 of the financial statements. audit, which includes the review and testing of the systems Independence and non-audit services of internal financial control and data which are used to The Board has policies and procedures in place in relation to produce the information contained in the financial the provision of non-audit services by the external auditor statements. and the non-audit fee policy was reviewed by the Committee The Committee is responsible for making recommendations during the year. The non-audit fee policy ensures that the to the Board in relation to the appointment of the external Group benefits in a cost-effective manner from the auditor. KPMG was reappointed as auditor of the Group at cumulative knowledge and experience of its auditor whilst the 2020 AGM. The current external audit engagement also ensuring that the auditor maintains the necessary partner is Anna Jones, who has held this role since the degree of independence and objectivity. beginning of 2018. The Board expect to start the selection process for new auditors during 2021 and appoint the new auditor for the year ended 2022. A timeline setting out the tenure of KPMG as auditor is set out below. External Audit tendering timeline
2000 2006 2013 2018 2021 2022
KPMG appointed Rightmove KPMG reappointed Mandatory Competitive New auditor in as auditor becomes a as auditors, appointment of tender during place for 2022 publicly listed following a new audit lead 2021* year-end entity competitive partner after audit tender five years process
*KPMG will not be invited to re-tender as they would exceed maximum period in office
Non-audit services Policy Assurance-related services directly related to the audit -for The half-year Review, an assurance-related non-audit service, example, the review of the half year Financial Statements. is approved as part of the Audit Committee approval of the external audit plan, which takes place in May of each year. Permitted non-audit services Management is authorised to incur additional fees for permitted Including but not limited to accounting advice, work related to non-audit services of up to £15,000 in any financial year, without mergers, acquisitions, disposals, joint ventures or circulars, any prior approval from the Committee. employee benefit plan audits, sustainability audits and Thereafter, all additional fees are to be referred to the Audit reports required by regulators. Committee in advance, subject to the cap of 70% of the fees paid for the audit in the last three consecutive financial years. Prohibited services Prohibited, in accordance with the EU Audit Reform and will be In line with the EU Audit Reform, these are services where the assessed going forward in line with the new FRC Ethical and auditor’s objectivity and independence may be compromised. Auditing Standards. Prohibited services are detailed in the FRC Revised Ethical Standard 2019 and include tax services, accounting services, internal audit services and valuation services.
60 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 61 REPORT | ANNUAL RIGHTMOVE PLC ompliance with GDPR and FRC requirements; with GDPR and FRC ompliance o billing-system; and o billing-system; ers and leavers processes. and leavers ers and privacy- management – consent otection Data pr Van Mildert c Pricing; Pricing-t HR start by-design; of their reviews and agreed management actions. The management actions. The and agreed of their reviews previous open actions from also reviewed Committee by the progress with monitoring together reviews, these actions. management in completing • by provided the reports reviewed Committee The findings principal the out set that Assurance Rightmove • • • External auditor independence and objectivity independence auditor External to in place the safeguards considered Committee The KPMG independence. auditor’s external the protect its that it had considered the Committee to reported to confirmed and audit the to relation in independence and UK regulatory with it complies that the Committee not is objectivity its that and requirements professional account into this took Committee The compromised. independence auditor’s external the considering when and independent that KPMG remained and concluded audit. the to relation in objective Risk Management and extent the nature has considered Audit Committee The reviewed and framework management risk Group’s the of to and the Board by management undertaken the work which uncertainties, and risks principal Group’s the assess of each risk and the related included an assessment actions. Further made against any and progress response, set is management risk to approach Group’s the on details Report. Strategic the of section management Risk the in out audit Internal Audit function, Rightmove has an Internal Group The aim of PwC. The to outsourced which is fully Assurance, and independent provide is to Rightmove Assurance effectiveness and adequacy the on assurance objective risk management and governance control, of internal financial underlying that assurance includes This processes. as well as effectively, working are processes and controls on that focus reviews and compliance specialist operational of the business. and evolving areas in new risks emerging in approved 2020 was plan for Rightmove Assurance The range a broad and covered by the Audit Committee advance controls, and processes operational and financial core of were reviews Specialist areas. risk specific on focusing areas: in the following undertaken •
that there had been appropriate focus and challenge on focus had been appropriate that there that the of audit risk and concluded the primary areas effective and efficient remained KPMG of performance The level of non-audit fees as a proportion of the audit of the proportion as a fees level of non-audit The year, Rightmove. During the at low been has typically fee non-audit services, £20,800 for the Group KPMG charged £19,100 Of this, the 2020 audit fee. 8% of representing agreed-upon £1,700 for and review, the half-year to related Further the 2020 bonus outturn. to relation in procedures the 6 to in Note can be found details of these services statements. financial with the Competition of Compliance and Statement (CMA) Order Authority Markets Statutory The with complied has it that confirms Group The Investigation Market Companies Large for Services Audit and Audit Processes of Competitive Use (Mandatory 2014 (Article 7.1), Order Responsibilities) Committee responsibilities Committee’s the to respect with including and authorising and fees the audit scope agreeing for non-audit services. effectiveness auditor External on ensuring importance great places Committee The The effective. and quality high of is audit external the that the of effectiveness and quality the considered Committee for Aid Practice FRC’s the with line in process audit external of effectiveness The 2019). (updated Committees Audit the external audit process is dependent on several factors, factors, is dependent on several audit process the external of and training experience continuity, including the quality, of the business model, understanding audit personnel; of rigour and degree knowledge and risks; technical strategy undertaken; of the work processes applied in the review judgements; audit and accounting key of communication the at identification risk audit appropriate with together start of the audit cycle. also met with KPMG at various stages Committee The management present, at times without during the year, their issues arising from and any discuss their remit to as the auditor. work audit the of effectiveness the evaluated Committee The with input from together using a questionnaire process included the in the review considered management. Areas with of audit planning and execution, engagement quality audit of key quality and management, the Committee of the audit team. and experience and the capability reports satisfied was Committee the year, financial 2020 the For in their role. Governance | Audit Committee report continued
Approach to developing the 2021 internal audit plan Anti – bribery and whistleblowing The approach to the 2021 internal audit plan is in line with The Code includes a provision requiring the Committee prior years, in that it includes a combination of traditional to review arrangements by which employees of the Group internal audit and compliance reviews, primarily with a may, in complete confidence, raise concerns about possible financial control, cyber or GDPR focus, as well as reviews improprieties in relation to financial reporting or other with more of an advisory focus. In addition, as the business matters. The Committee’s objective is to ensure that continues to evolve, with new sources of growth and with arrangements are in place for the proportionate and the increasing complexity of the environment within which independent investigation of such matters and for the Rightmove now operates, the Board wants to ensure an appropriate follow up action. appropriate level of continuity in the monitoring of risks Rightmove is committed to the highest standards of quality, and controls throughout the year by senior management. honesty, openness and accountability. The Group has a Consequently, the 2021 internal audit plan will include some whistleblowing process, which enables employees of the elements of in-house assurance activities to supplement Group to raise genuine concerns on an entirely confidential the work of PwC, strengthening the second line of defence basis, that includes a third party ‘speak up’ facility provided in the assurance model on page 22 and enhancing the by Navex Global (previously Expolink). The Committee on-going ownership of risk management by the business. receives reports on the communication of the PwC will continue to work closely with management and whistleblowing policy to the business and on the use have completed their annual detailed review of the audit of the service which contains information on any universe which highlights the various functional areas within whistleblowing incidents and their outcomes. Rightmove, the associated key process areas, related The Board believes that it is important for the Group and its principal or emerging risks and where internal audit work has employees to follow clear and transparent business previously taken place. This review was then used as the practices and consistently apply high ethical standards in basis for developing of the Rightmove Assurance plan for all business dealings, thereby supporting the objectives of 2021, to ensure an appropriate focus on the key risks facing the Bribery Act 2010. A Bribery Policy and procedures exist the business and any in-house assurance activities. to set out what is expected from employees and other Effectiveness of the internal audit process stakeholders acting on the Group’s behalf to ensure that The work of Rightmove Assurance provides a key source of they protect both themselves and the Group’s reputation additional assurance and support to management and the and assets. Employees are required to sign up to Audit Committee regarding the effectiveness of internal Rightmove’s Bribery Policy on appointment, and any controls, as well as providing guidance and recommendations updates are communicated to all employees. Rightmove to further enhance the internal control environment and has a zero-tolerance approach to bribery and any breach of provide specialist insight into areas of change in the business. the Bribery Act is regarded as serious misconduct, justifying immediate dismissal. At the end of the year, the Audit Committee undertook a review of the effectiveness of the Rightmove Assurance All corporate gifts and hospitality offered or received valued function during 2020. The evaluation was led by the at more than £50 are recorded in the Group’s gifts and Committee Chair and involved issuing tailored evaluation hospitality register. Prior approval is required for any gifts or questionnaires which were completed by Rightmove hospitality greater than £100, and the register is examined management, KPMG, and the Committee. The evaluation by the Committee at least annually. concluded that the function had a sound appreciation of the Internal controls key issues facing the business, was realistic and robust with The Board has overall responsibility for the Group’s system audit suggestions and added value to the business. of internal controls and has established a framework of financial and other controls which is periodically reviewed in accordance with the FRC Guidance on Risk Management, Internal Control and Related Financial and Business Reporting (which integrates and replaced the earlier FRC guidance and the Turnbull Guidance) for its effectiveness.
62 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ommittee focused on additional risks focused ommittee ANNUAL REPORT 2020 | 63 REPORT | ANNUAL RIGHTMOVE PLC y for employees to work remotely in the remotely work to employees y for wing and bribery policies of which all employees wing and bribery policies of which all employees y of the business to maintain business critical business critical maintain to y of the business oup Data Protection Framework which provides which provides Framework oup Data Protection amework which provides guidelines in meeting the guidelines provides which amework o-hosting of the Rightmove.co.uk website across three three across website of the Rightmove.co.uk o-hosting egular testing of the security of the IT systems and of the IT systems of the security egular testing Cyber Security Plan which identifies and categorises categorises and identifies which Plan Security Cyber platforms, regular backups of key data and ongoing threat data and ongoing threat of key backups regular platforms, of cyber-attack; against the risk protect to monitoring c and reviewed; tested which is regularly locations, separate the abilit the event of an incident; activities in the capabilit which is regularly of our premises event of a loss of one closures; office planned through tested r – – – – are made aware, to enable concerns to be raised either with be raised to enable concerns to made aware, are outside confidentially appropriate, if or, management line the line management. A Gr of the data the requirements guidelines in meeting principles set out in the Data Protection protection 2018; Act A regularly which are and controls, threats cyber security and Audit Committee; by the Board reviewed A management sub-c and restrictions; operating and related posed by Covid-19 Whistleblo A c based on: plan continuity A fr for requirements regulatory Authority Financial Conduct entities; our regulated Through the procedures outlined above, the Board, with outlined above, the Board, the procedures Through all has considered the Audit Committee, from advice up and year the for control internal of aspects significant or failings significant No Report. Annual this of date the to However, review. this during identified were weaknesses • • • • the Board or weaknesses, such failings any been had there to taken been have would actions necessary that confirms them. remedy • and business plan recovery disaster omprehensive • commercial, strategic, competitive, financial and financial competitive, strategic, commercial, y-defined policies for capital expenditure and expenditure capital for policies y-defined organisational structure with clearly defined lines of lines defined clearly with structure organisational omprehensive system of planning, budgeting and system omprehensive Treasury function which manages cash flow forecasts forecasts flow cash manages which function Treasury investment exist, including appropriate authorisation levels, levels, authorisation investment exist, including appropriate disposals and acquisitions projects, capital larger with approval; Board requiring monitoring for and cash on deposit and is responsible and counterparty with banking agreements compliance limits; exposure A regulatory risks are formally identified, quantified and quantified identified, formally are risks regulatory are which they assessed, by senior management, after by the Board; considered An and an of authority, and delegation responsibility business decisions of openness where embedded culture and discussed are benefits and risks associated their and challenged; Clearl A c monthly includes This results. Group monitoring of performance and monitoring management reporting for with explanations budgets and forecasts against both variances; significant all Major • • • • The Board has taken, and will continue to take, appropriate appropriate take, to will continue and taken, has Board The financial of chances the that ensure to measures as is reasonably as far reduced are occurring irregularities at all levels in of information quality the improving possible by ensuring that and environment an open fostering the Group, internal of system Any applied. rigorously is analysis financial the risk than eliminate manage rather designed to is control provide only can and objectives business achieve to failure of material against assurance absolute and not reasonable or loss. misstatement procedures the established has management Group’s The for is an ongoing process that there ensure to necessary the and managing the principal risks to identifying, evaluating the whole of for have been in place procedures These Group. the to up and 2020 December 31 ended year financial the statements. financial these of approval the of date Rightmove function, Audit Internal Rightmove’s date, To PwC which provides to outsourced has been fully Assurance, on the additional independent assurance with the Group controls. internal of effectiveness are: control of internal elements of the system key The • Governance | Nomination Committee report
Andrew Fisher Chair of the Nomination Committee
Dear shareholder The Committee continued its focus on Board and I am pleased to present the Nomination Committee report organisational succession, comparing Rightmove’s strategic for 2020. objectives with the profiles of Directors and the Senior Leadership Team, to shape recruitment plans. The role of the Nomination Committee (the Committee) is to keep the structure, size and composition of the Board Robyn Perriss stepped down from the Board as Finance and Committees under review. Our primary objective is Director on 30 June 2020 after over 12 years at Rightmove. matching the skills, knowledge and experience of Directors Robyn’s contribution to Rightmove’s success was invaluable, to Rightmove’s business strategy and optimise Board and particularly significant in the areas of investor relations performance, manage risk effectively and foster innovation and financial management and control. We were delighted to in the business. welcome Alison Dolan to the Board as Chief Financial Officer on 7 September 2020. The terms of reference of the Committee were reviewed and updated during the year and can be found on the The Board currently consists of eight Directors including six Company’s website. Non-Executive Directors, all of which are considered to be independent, from diverse backgrounds and with gender The Committee fulfilled its terms of reference during the balance in both executive and non-executive roles. year by: • r eviewing the Group organisation and succession plans; I will be available at the AGM to answer any questions • nominating a new Chief Financial Officer; and about the work of the Committee. • appr oving the format of internal Board and Committee evaluations, further details of which can be found later in this report. Andrew Fisher Chair
64 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 65 REPORT | ANNUAL RIGHTMOVE PLC Board induction and training Board tailored a undertake Board the joining Directors New members key including meetings with induction programme have Directors Non-Executive team. management the of Leadership Senior and Directors Executive our to access full and can attend meetings Board outside scheduled Team briefings. and events employee and Company comprehensive, was induction Officer’s Financial Chief The Senior the of member each with meetings online including advisors, Directors, Non-Executive Team, Leadership analysts and investors. In addition, our CFO had access had access In addition, our CFO and investors. analysts Board from papers portal containing Board the secure to analysts’ policies, Group meetings, and Audit Committee company relevant and other and management reports documentation. and can training to access have members Individual Board at the advisers, independent professional from seek advice is training or expertise specific where expense, Group’s effectively. duties their perform to them enable to required business key on briefings technical receives Board The risks including and technology; products new activities, and other data protection risks, security cyber emerging complete to required are Directors All regulations. relevant training, and data protection security information mandatory all Rightmove employees. for which is a requirement and experience diversity Board skills diverse with Board a maintaining to committed are We proposals has reviewed Committee The and backgrounds. of talent pipeline in terms further develop a diverse to Rightmove. at senior roles for gender and ethnicity and skills the and policy diversity Board our of Details Corporate the in out set are Directors our of experience Report. Governance oved the plans for the organisation and succession and succession the organisation oved the plans for eed the process for an internal Board evaluation Board an internal for eed the process onsidered the Board succession plan and succession the Board onsidered of reference. of its terms the annual review onducted eviewed the composition and diversity of the Board; and diversity the composition eviewed committees; of Board the membership eviewed c r appr management; senior and Directors Executive the of c agr r and actions arising; and considered recommendation of the preferred candidate for for candidate of the preferred recommendation Officer; Financial Chief • • • • • Composition and attendance at meetings Composition and attendance the of members are Directors Non-Executive and Chair The Financial Chief Officer, Executive Chief The Committee. attend Development & People of Director the and Officer the CEO of the Chair, the request invitation. At meetings by discuss the the meeting to attend to invited is normally plans. and succession organisation at and attendance during the year twice met Committee The report. Governance in the Corporate the meetings is shown Membership Directors, Non-Executive of comprised is Committee The Corporate in the details can be found whose biographical report. Governance were Directors Non-Executive our all year, the Throughout be independent. to by the Board considered years, three of up to a period for Appointments are three-year additional two than more no by extendable to continue members so long as Committee periods, be independent. Principal activities has: Committee the year the During • Governance | Nomination Committee report continued
Board succession and independence Board effectiveness and evaluation The Nomination Committee takes a long-term view of Board In 2020, Directors completed an internally facilitated review succession, which has been informed by the externally of the Board and each of its Committees. The review facilitated Board Strategy Review in 2018 and refreshed concluded that Directors would benefit from more time in Board skills accordingly. In 2020, the Committee considered meetings and the Non-Executive Directors would welcome current Board skills and the talent pipeline in light of the Board the opportunity to meet more often than scheduled approved Group strategic plan. All key roles currently have meetings. The 2021 Board programme has been extended recognised successors; additionally a number of individuals to include more employee engagement activities and Board have been identified with strong potential to join the Senior agendas have been lengthened to allow more time for Leadership Team and possibly the Board in the future. business presentations and briefings for Non-Executive Directors with the Chair. The increased time commitment Following the announcement that Robyn Perriss would required in 2020 is not expected to reduce in future, owing step down from the Board as Finance Director at the end to the Board’s increased focus on environmental, social and of June 2020, the Committee appointed Russell Reynolds governance issues, including stakeholder engagement. Associates, to conduct an external search for a suitable candidate for the position of Chief Financial Officer. In An externally facilitated Board and Committee evaluation August, following an extensive search and interview process, will be conducted in 2021. the Board considered the Chief Executive’s proposal to appoint Alison Dolan, former Chief Strategy Officer at News UK, as CFO and approved her appointment with effect from 7 September 2020. Each Non-Executive Director met Alison online in advance of her start date. Russell Reynolds Associates has no other connection with the Company or any individual directors. The Board has determined that all Non-Executive Directors are independent in character and judgment and have enough capacity to meet their commitments to Rightmove, including during periods when greater involvement may be required of them. Directors were all able to meet the extra demands on the Board’s time in 2020, in response to the coronavirus pandemic.
66 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 67 REPORT | ANNUAL RIGHTMOVE PLC increased to 93% (2019: 81%), (2019: 93% to increased (2) below the threshold target. Likewise, the threshold the threshold Likewise, target. the threshold below (1) was not met for Other revenue growth nor for Tenant Tenant nor for growth Other revenue met for not was achieved: were targets two remaining The Services. compared in time spent on our platforms, growth audience achieved time spent on Rightmove’s closest competitors, to work’ to place ‘great employee the and target; maximum the score satisfaction exceeding the threshold of 90%. of threshold the exceeding considered the Committee In making its recommendation, bonus and resulting measures whether the performance 2020, for outcome and reasonable a fair calculation were Directors. Executive to payable be should bonus any and if performance business as that agreed and discussed It was half of 2020, with the successful in the second strong was and levels traffic record discounts, customer of unwinding the of 18.5% of bonus a engagement, employee strong of context the in outcome appropriate an was maximum and experience shareholder the performance, business was discretion no Therefore, experience. our employees’ this bonus outcome. applied to coronavirus the from arising challenges the Despite the market pandemic in 2020, Rightmove has outperformed January 1 from period performance three-year the over over growth TSR Rightmove’s 2020. December 31 to 2018 50%, over by Index 350 FTSE the exceeded period that Despite a year of uncertainty, we have maintained all maintained have we uncertainty, of year a Despite under shares free of award an including benefits, employee grant Sharesave annual the and Plan Incentive Share the all to paid was bonus cash small a addition, In of options. and senior managers than directors (other employees of recognition in December, in scheme) bonus a in already the have made to our teams the outstanding contribution challenges personal extraordinary the of face the in business environment. and broader in the working and reward 2020 performance Directors’ that ensure to is role key Committee’s The of performance overall the reflects fairly remuneration the achievement of pre-set through the Group, targets. performance against the business performance reviewed Committee The an annual 2020 and recommended bonus plan objectives for bonus The Directors. Executive for 18.5% of payment bonus Group in reduction the reflects primarily achieved level operating adjusted reduced which 2019, to relative revenue profit
Governance Directors' | remuneration report Annual Statement by the Chair of the Remuneration Committee www.plc.rightmove/investors/corporate-governance/ remuneration-policy.co.uk. priorities in 2020 Remuneration design and implement objective is to key Committee’s The incentivise and retain reward, attract, to policy a remuneration deliver to and wider workforce our management team Committee’s The business strategy. Rightmove’s long-term and management support the Board to in 2020 was focus that the interests ensure to uncertainty, of great in a year team taken were and shareholders customers of our employees, way. and balanced in a fair consideration into senior management team and the directors Company’s The July, and April between cut pay 20% a accept to offered of Rightmove employees one third during which time around liquidity Group’s the protect to furloughed. In order were grant a take to elected Board the lockdown, first the during in Scheme Retention Job Coronavirus the from £750,000 of Group’s the when September, in full in repaid was which April, Directors’ Executive certain. more became position trading award, maximum the of 18.5% just be will 2020 for bonuses of results Group’s the on impact significant the reflecting customers. our to discounts offering Lorna Tilbian Committee Chair of the Remuneration Shareholder Dear Remuneration Directors’ our present to pleased am I its with together Company) (the Rightmove Report for ended the year for (the Group) subsidiary companies 2020. 31 December how and Committee the of work the explains report Our approved was which Policy, Remuneration the it applied Policy Remuneration The year. the during by shareholders a at ‘Remuneration in summarised is application its and Full details of the 2020 Remuneration below. glance’ at website Company’s the on found be Policy can Governance | Directors' remuneration report continued resulting in 25% of the Performance Share Plan (PSP) awards period. These targets are considered to be demanding in granted in 2018 vesting in March 2021 (the maximum award light of the current trading environment, the Group’s relating to TSR performance). However, Rightmove’s starting position, internal financial planning and external adjusted basic EPS(3) fell by 37% over the performance market expectations for future growth. In view of the period, reflecting the revenue loss from customer discounts, continued uncertainty facing Rightmove and our customers, which meant that the threshold target of 20% growth was the targets are considered to be as stretching as previous not achieved, the result of which is that 75% of the awards years and provide a realistic incentive at the lower end of the will not vest. The Committee reviewed and received performance range, but require exceptional performance to verification of both performance conditions, set at the achieve full vesting. On this basis, the Committee is satisfied beginning of the performance period, and believes the that the range of targets remains appropriately demanding, overall outturn against the performance conditions is fair and no less challenging than the range of targets set for and accurate. prior year awards. 2021 Remuneration The Committee intends to review the weighting of the The Committee has approved a 1% increase in Executive performance measures and target ranges for future grants Directors’ salaries from 1 January 2021, in line with the to ensure they continue to be appropriately stretching, all‑employee pay rise in accordance with the Policy and taking into account internal and external forecasts and no change to the range of benefits, described in the overall market stability. 2020 Remuneration Policy. Employee remuneration and engagement The 2021 Bonus plan targets have been adjusted and The Committee has received feedback on employee weighted to align with key performance targets in the sentiment during the year, including two ‘Have your Say’ business strategy. 80% of the bonus will be determined surveys, an additional survey and feedback on employees’ by financial targets, compared to 70% in 2020. The Rental experience of lockdown and frequent online all-employee Services target is now a financial measure and as such we webinars. We have considered the need to balance rewards have increased its weighting by 5%, with a corresponding for effort, which has been very high, with financial reduction of 5% in the profit target. Both represent performance, which has been hampered by the effects of challenging revenue generation targets to achieve in the the pandemic. We have recommended management’s current trading environment: proposal to continue and extend the Free Share award under • 60% (reduced from 65%) for a challenging operating profit the Share Incentive Plan and offer Sharesave options for all target above 2020; Group employees in 2020. The annual pay award for 2021 • 15% for absolute growth in traffic, compared to our nearest will be 1% for all employees and directors. competitors; Shareholder engagement • 10% for a stretching Other revenue(4) target above 2020; I have written to investors holding in total over 50% of Rightmove • 10% (increased from 5%) for achieving a revenue target shares to inform them of these changes and to seek feedback. for Rental Services; and Our major shareholders have supported these changes. I will also • 5% for employee engagement, based on our ‘Have Your be available at the AGM to answer any questions you may have Say’ survey. on the application of the Remuneration Policy in 2020 and its The Remuneration Committee has reviewed the weighting proposed application in 2021. of the EPS and TSR performance measures and the EPS targets, which applied to the PSP awards granted in 2020, to take account of the current economic uncertainty, and to reflect current external consensus for the financial measures. The Committee decided to increase the percentage of the 2021 PSP awards that vest based on Lorna Tilbian relative TSR performance from 25% to 50% and reduce Chair of the Remuneration Committee the weighting of the EPS vesting condition from 75% to 26 February 2021 50% of the awards.
With a view to ensuring that appropriately stretching but (1) Operating profit before share-based payments and NI on share-based incentives. achievable targets are set in light of market expectations (2) Based on the number of employee respondents selecting ‘Yes’ as a response for the Group, the EPS growth ranges from threshold to to this question in the annual employee survey. (3) Calculated using operating profit before share-based payments and NI on share- maximum have been set as 98% to 107% growth (i.e. based incentives with no related adjustment for tax. Prior year EPS has been broadly doubling EPS) over the three-year performance adjusted for the 10:1 share subdivision effective on 31 August 2018. (4) Revenue excluding Agency and New Homes. 68 | RIGHTMOVE PLC | ANNUAL REPORT 2020 S T R T S Dec 2020 R FTSE FTSE
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS T R FTSE FTSE I
T
S T R T S 2500 R S
12.9 2020
Dec 2020 Total Shareholder Return Shareholder Total 25% out of a maximum of 25% for this element of the 2018 PSP three- will vest as relative awards exceeded performance TSR year the 350 FTSE index by over 50%. LTIP £30.1m Bonus Returns to shareholders to Returns £220.5 ANNUAL REPORT 2020 | 69 REPORT | ANNUAL RIGHTMOVE PLC (3) (3) 500 1000 1500 2000 £220.5 £40.8 £124.1 R FTSE FTSE Salary £124.1 £124.1 (4 months’ remuneration) 0 PSP EPS T R FTSE FTSE I
Actual P
000 EPS Long-term incentive plan performance – 25% – performance plan incentive Long-term basic EPS Adjusted Adjusted basic EPS EPS fell by 37% over three years, EPS by fell 37% over years, three missing the of threshold 20% growth; this element of the 2018 PSP awards will not vest in 2021.
T Total Shareholder Return Shareholder Total inimum
aximum Chief Financial Officer – Alison Dolan – Alison Officer Financial Chief S R S (1) 0% 0% 2500 15.0% Bonus % achieved
12.9 2020 -37% 93% 3.5% Actual £135.1m 0% £893.6 Operating profit Operating referencing an 8% in fall compared to to compared on Rightmove, reduction in the in the reduction There was a net was There using Van Mildert increased by 12% increased lower year on year year lower Other revenue was was Other revenue competitors’ traffic number of branches number of branches Growth in time spent Growth Proportion of variable awards of variable awards Proportion in shares received pay 80% of performance-related in for 2020 Rightmove was awarded shares 360 90% LTIP Same £2.0m minutes absolute absolute £213.3m growth in growth £893.6 Threshold Bonus £165.3 (1)
500 1000 1500 2000 (2) £477.7 £363.2 £510.6 £510.6 Salary -29% (12 months’ remuneration) ed using operating profit before share-based payments and payments share-based NI ed on before using share-based profit operating PSP EPS business revenue business is revenue all excluding revenue Agency and New Homes.
0
P P Calculat adjustment with incentives tax. for no related T competitors. nearest Other
EPS
Actual 000 – number Services Tenant independent agency of new Van Mildert using branches in 2020 referencing survey Employee think who respondents ‘Rightmove is a place great to work’ Governance Remuneration | at a glance Shareholding guidelines Shareholding 200% of salary all for Executive Directors (1) our to relative ime in spent minutes by on measured comScore, Rightmove platforms, (2) (3) Shareholder alignment Shareholder Operating profit profit Operating Annual bonus achievement – 18.5% Target Performance with a performance with period a performance ending on 2020. 31 charts The December exclude data pensionsbenefits, for and former the Finance details of which remuneration, can be Director’s in table. found figure the single remuneration time on in absolute Growth to relative in minutes site competitors our nearest Chief Executive Officer – Peter Brooks-Johnson Peter – Officer Executive Chief Pay and performance for 2020 from charts The the her for below show the Chief for actual Executive 2020remuneration Officer andthe Chief Financial Officer, in 2018, granted shares) (performance appointment in 2020. bonus charts September The and include the data LTIP salary, for 2020 Financial performance Financial 2020 Revenue Innovation – growth in Innovation – growth Other revenue inimum aximum Governance | Directors’ remuneration report continued
2020 Remuneration Policy
Policy Application Base salaries Executive Directors will normally receive Executive Directors will receive a 1% pay rise in line inflationary adjustments to salaries in line with with the wider workforce from 1 January 2021 wider workforce increases Pension Rightmove contributes 6% of base salary, subject The CEO and former Finance Director elected not to an employee contributing a minimum of 3% of to participate in the Group pension plan during the base salary year. The current CFO joined the Group pension scheme, on the same terms as all employees, in December 2020 Annual bonus and Deferred Share Bonus Plan Maximum 175% of salary, with 40% cash and 60% Directors’ 2019 bonus awarded in March 2020 (DSP) deferred into Company shares for two years based on a maximum of 125% of salary. The CEO and CFO will be awarded cash and deferred bonuses for 2020 in March 2021 based on a maximum of 175% of salary with 60% deferred into shares Performance Share Plan (PSP) Awards granted at 175% of salary. Introduction of The CEO and CFO were granted awards in two-year post-vesting holding period September 2020, based on the three-year performance period from 1 January 2020 to 31 December 2022 at 175% of salary, exercisable from September 2025 Malus and Clawback Enhanced malus and clawback apply to DSP and Applied to the 2020 PSP award and will be applied PSP awards to the 2021 PSP and DSP awards Shareholding Guidelines 200% of basic salary –
Post cessation shareholding requirements A two-year post-employment holding period will – apply to share awards granted from May 2020, with 100% of the shareholding requirement (or actual holding, if lower) retained for the first year, and 50% for the second year Non-executive director fees (including the The fees for Non-Executive Directors are reviewed A fee review and benchmarking of all roles was Company Chair and additional fees for chairing periodically (normally every three years). Fee levels completed in early 2021. The Senior Independent Board Committees) reflect the responsibility, skills and knowledge Director’s fee was increased to £10,000, in line required to perform each role and the expected with the additional commitments of that role. It time commitment was also agreed that an all employee increase of 1% would be added to all non-executive director fees in 2021
70 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 71 REPORT | ANNUAL RIGHTMOVE PLC monitoring of remuneration for the Senior Senior the for remuneration of monitoring review and approval of Executive Directors’ base Directors’ Executive of approval and review oval of share awards granted in March under the March in granted awards oval of share eview and approval of appropriate benchmarks and of appropriate and approval eview the new for package the remuneration ecommend eview of 2020 business performance against relevant against relevant of 2020 business performance eview performance measures for the annual performance- for measures performance measures ensure to awards PSP 2021 and bonus related achievable are targets and that strategy aligned with are stretching; and appropriately and Dolan; Alison Officer, Chief Financial annual benefits; and salaries r annual bonus payments determine to targets performance incentives; and vesting of long-term r appr PSP; the 2020 under September in and DSP r ongoing Team. Leadership • • • • • External advisors External remuneration Committee’s the is (Deloitte) LLP Deloitte Remuneration the of member a is Deloitte advisor. of Conduct. its Code to and has signed up Group Consultants Deloitte to £17,500 of fees paid Company the 2020, In Committee The the Committee. to of services in respect regular a on advisors external with relationship its reviews interest. of conflicts no are there that satisfied is and basis support provided remuneration-related other Aside from be of to considered not was that as advisors in their role (e.g. provision the Committee to assistance material awards), Rightmove share values for fair of accounting the to services other any provide not did Deloitte during the year. Company done during the year? What has the Committee appropriate, and, where considered Committee The including: items remuneration key approved plan reviews and incentive Pay •
de Rojas Rojas de akhi Goss-Custard akhi Goss-Custard orna Tilbian (Chair of the Committee) orna Tilbian Jacqueline L R
met seven times during 2020 and Committee The in the Corporate at meetings is shown attendance will meet as necessary, Committee The Report. Governance for quorum The year. a times five least at normally but Company The members. is two meetings of the Committee Committee. the to Secretary as acts Secretary attend have the right to of the Committee members Only Chair has invited Committee meetings. The Committee during except meetings attend to Board the of the Chair CEO The remuneration. his own to discussions relating is meetings when the Committee to is also invited on the remuneration recommendations his considering Leadership Senior the and Officer Financial Chief the of their deciding in involved is Director No Executive Team. own remuneration. reward of directors and employees. and employees. of directors reward also the Committee with the Code, In accordance the level of and monitors the structure, recommends level. The Board below management, for remuneration benefit employee the on, advises and of, aware is Committee that it is kept and ensures the Group throughout structures those arising from business risks potential of any aware and terms remuneration The arrangements. remuneration are Directors Non-Executive the of appointment of as a whole. by the Board determined which are of reference terms has formal Committee The are These as required. and updated annually reviewed at plc.rightmove.co.uk. website available on the Company’s Membership were Directors Non-Executive independent following The during 2020: of the Committee members Annual Report on Remuneration Annual Report membership purpose and Committee Remuneration of reference Terms making for responsible is primarily Committee The on the Company’s the Board to recommendations the setting and framework, policy remuneration overall the and Directors Executive Chair, the of remuneration primary Committee’s The Team. Leadership Senior the Remuneration and applying objective in formulating fair and retention recruitment, effective the is Policy Governance | Directors’ remuneration report continued
Governance and strategy • Risk – the 2020 Policy is in line with Rightmove’s risk • review of the 2020 AGM voting and feedback from appetite. The Committee has the discretion to reduce institutional investors; variable pay outcomes where these are not considered to • engagement with shareholders on the application of the represent overall Group performance or the shareholder 2020 Remuneration Policy in 2021; experience. Over half (60%) of bonus awards are deferred • review and approval of the Directors’ Remuneration Report; into shares, and vested shares under the LTIP must be • evaluation of the Committee’s performance during the retained for a further two years, ensuring that Executive year; and Directors are motivated to deliver longer-term sustainable • review of the Committee’s terms of reference. performance. • Predictability – the Committee considers the impact of Remuneration Policy various performance outcomes on incentive levels when In formulating the Remuneration Policy approved by determining overall executive pay levels. shareholders in 2020 (‘the 2020 Policy’), the Committee • Proportionality – a substantial portion of the package considered the following principles recommended in comprises performance-based reward, linked to the the Code: delivery of strong Group performance and the • Clarity – the 2020 Policy is designed to allow our achievement of key strategic objectives. The Committee remuneration arrangements to be structured in a way that will use its discretion where required to ensure that clearly supports the financial objectives and the strategic performance outcomes are appropriate. priorities of the Group. The Committee remains committed • Alignment to culture – in determining executive to reporting on Rightmove’s remuneration practices in a remuneration policies and practices, the Committee transparent, balanced and straightforward way. considers the overall remuneration framework for our • Simplicity – the 2020 Policy consists of three main wider workforce as part of its review, including employee elements: fixed pay (salary, benefits and pension), an annual engagement and satisfaction levels, succession plans bonus award and a long-term incentive award. The annual including diversity, to ensure executive remuneration is bonus award is based on a combination of our financial and aligned to Rightmove’s culture. operational KPIs. The vesting of LTIP awards is based on EPS growth and relative TSR performance.
72 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
£ Total Total
in 2020 56,136 51,458 65,492 65,492 51,458 187,121 388,829 166,834 1,008,448 remuneration remuneration £ subtotal 40,793 Variable pay Variable pay
£ – (5) Performance-related pay Performance-related Long-term Long-term incentives £ ––– ––– ––– ––– ––– ––– (4) ANNUAL REPORT 2020 | 73 REPORT | ANNUAL RIGHTMOVE PLC Annual bonus £ subtotal 56,136 51,458 65,492 65,492 51,458 Fixed pay 187,121 479,960 165,312 363,176 528,488 167,112 23,747 197,970 221,717 £ – – (3) 1,950 126,041 40,793 Pension £ –– – –– –– –– –– –– (2) Fixed Pay 2,224 Benefits £ (1) 56,136 51,458 65,492 65,492 51,458 187,121 477,736 124,091 165,868 1,244 Salary/ fee (8) (7) (6) in kind for the Executive Directors relate to private medical insurance and the medical private to medical insurance cash in plan. relate kind the for Executive Directors participated in participated the Rightmove pension scheme on the same as terms all employees. and tobenefits 30 shown to are June 30 2020, June being 2020. the period pro-rated Robyn’s ofwere her as service bonus a shares and Director; performance and fourforbenefits months 7 2020. September from capital gain of £8,791 on option Sharesave the which on CEO’s vested 1 November the between 2020, of optionfor price is £3.29 grant the (adjusted difference cost PSPs vesting cost where is by calculated taking the number of nil options vest cost to expected in 2021 March (including dividend which subject roll-up), the are to nil the the subdivision) share and £6.51, being the market value of at shares 2020. 31 December three-year performance period, ending performance on 2020, 31 multiplied December three-year by the end year of closing price £6.51, share and he basic fee for all Non-Executive Directors he (excluding basic an the all for fee additional Chair) Non-Executive in received Directors (excluding Chairs 2020 Nomination was £55,000; Committee) Committee he annual the in to bonus payment of accrued respect amount the the for relates ended full results year 2020 31 year including December element the deferred he value of the incentives long-term includes: The increase in increase The the value of vesting the in PSP was £136,951 2020, awards appreciation, and the for price due £76,505 share CEO to the for Director. Finance former • • (60% of the annual vesting bonus in with period). is shares a deferred two-year Salary T of fee £15,000, an and additional the of fee received Senior £5,000. Independent Director Chair’s The is fee £200,000. subject All a to were fees voluntary 20% April 2020. July from to months, four for reduction T Salary All Benefits Alison T (5) (6) (8) (4) (7) (1) (2) a 20% in reduction volunteered their salaries and months four for fees directors (April 2020); July to of a reduction £83,228. total (3) Andrew Fisher Andrew Executive Directors Brooks-Johnson Peter Directors’ remuneration remuneration Directors’ interests share Directors’ in changes with along 2020, in was applied Policy 2020 the how out sets report the of section This indicated. is clearly that is audited Information during 2020. (audited) Tables Remuneration Single Figure Directors’ follows: as is Director a as served time for 2020 during Company the of Directors the of remuneration The Jacqueline de Rojas Alison Dolan Non-Executive Directors Robyn Perriss Robyn Rakhi Goss-Custard Rakhi Andrew Findlay Findlay Andrew Lorna Tilbian Tilbian Lorna Amit Tiwari Amit Tiwari Governance | Directors’ remuneration report continued
The remuneration of the Directors of the Company during 2019 (audited) was:
Fixed Pay Performance-related pay Total Fixed pay Annual Long-term Variable pay remuneration Salary/ fee Benefits(1) subtotal bonus(2) incentives(3) subtotal in 2019 £ £ £ £ £ £ £
Executive Directors
Peter Brooks-Johnson 500,605 2,407 503,012 406,742 1,246,005 1,652,747 2,155,759
Robyn Perriss 359,552 1,420 360,972 292,136 897,471 1,189,607 1,550,579
Non-Executive Directors(4)
Jacqueline de Rojas(5) 58,207 – 58,207 ––– 58,207
Rakhi Goss-Custard 55,000 – 55,000 ––– 55,000
Andrew Findlay(6) 70,000 – 70,000 ––– 70,000
Lorna Tilbian(7) 64,620 – 64,620 ––– 64,620
Amit Tiwari(8) 32,083 – 32,083 ––– 32,083
Scott Forbes 185,000 – 185,000 ––– 185,000
Peter Williams(9) 27,174 – 27,174 ––– 27,174
(1) Benefits in kind for the Executive Directors relate to private medical insurance and the medical cash plan. (2) T he annual bonus amount relates to the accrued payment in respect of the full year results for the year ended 31 December 2019 including the deferred element (60% of the annual bonus is deferred in shares with a two-year vesting period). (3) The value of the long-term incentives includes: • nil cost PSPs where vesting is calculated by taking the number of nil cost options expected to vest in March 2020 (including dividend roll-up), which are dependent on the three-year performance period ended 31 December 2019 and multiplying by the year end closing share price of £6.34; and • the capital gain of £6,375 on the Sharesave option exercised by the CEO in March 2019, which reflects the difference between the option grant price of £2.96 (adjusted for the share subdivision in August 2018) and £5.06, being the market value of shares on exercise. The increase in the value of PSP awards vesting in 2019 due to share price appreciation was £452,401 for the CEO and £331,877 for the Finance Director. (4) The basic fee for all Non-Executive Directors (excluding the Chair) rose from £50,000 in 2018 to £55,000 from 1 January 2019. Committee Chairs (excluding Nomination Committee) received an additional fee of £15,000, and the Senior Independent Director received an additional fee of £5,000. The Chair’s fee rose from £170,000 in 2018 to £185,000 in 2019. (5) Fee as a Non-Executive Director to 10 May 2019, and as Senior Independent Director thereafter. (6) Fee as a Non-Executive Director and Audit Committee Chair in 2019. (7) Fee as a Non-Executive Director to 10 May 2019, and as Remuneration Committee Chair thereafter. (8) Fee for seven months from appointment on 1 June 2019. (9) Fee for the period to retirement on 10 May 2019.
Defined contribution pension The Group operates a stakeholder pension plan for employees under which Rightmove contributes 6% of base salary, subject to the employee contributing a minimum of 3% of base salary. Alison Dolan elected to join the Group pension plan in December 2020, on the same basis as all employees. The Company does not contribute to any personal pension arrangements. External appointments With the approval of the Board in each case, Executive Directors may accept one external appointment as a non-executive director of another listed or similar company and retain any fees received. Peter Brooks-Johnson is a Non-Executive Director of Adevinta ASA, the international online classifieds operation, which is listed on the Oslo Børs. Peter received a director’s fee of €72,000 from Adevinta for the year to 31 December 2020 (2019: 597,000 Norwegian Krone).
74 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 0% 0% 0% 3.5% bonus bonus 15.0% 18.5% Resulting Resulting % achieved
ANNUAL REPORT 2020 | 75 REPORT | ANNUAL RIGHTMOVE PLC on year on year spent on in time in minutes Growth on year year Rightmove platforms time in fall a to compared 12%, was competitors’ spent on our nearest platforms Actual performance achieved performance Actual 93% of respondents say say respondents of 93% work’ to place great a is ‘Rightmove Revenue was lower year on year year lower was Revenue in the a net reduction was There using Van number of branches Mildert referencing
5% 5% 15% 65%year lower was profit Operating 10% 100% As a % of opportunity maximum bonus absolute growth: 25% payout 25% growth: absolute higher absolute growth: growth: absolute higher Same 50% 100% payout • • £10m: 25% payout 25% £10m: • payout 100% £21.4m: • spent on in time in minutes Growth as measured Rightmove platforms Rightmove’s to relative comScore by competitors: nearest • Percentage of respondents to to of respondents Percentage say who survey the employee work’: to place great a is ‘Rightmove payout 25% 90%: • payout 100% 95%: • • Growth of £5.0m: 25% £5.0m: of Growth • 100% £6.5m: of Growth • independent number of new The using Van Mildert agency branches in 2020: referencing payout 25% branches: 360 • payout 100% branches: 480 • Target Target (3) (2) engagement
(1) on the of engagement results the survey. annual employee eferencing services provided by Van Mildert Landlord and Tenant Protection Limited. Protection and Tenant by Van Mildert Landlord provided services eferencing R R Based
(1) (2) evenue excluding Agency and New Homes. (3) Strategic targets Strategic share market Traffic Other business revenue Measure Financial targets profit Operating profit: operating in Growth How was pay linked to performance in performance How was to 2020? linked pay plan Annual bonus and salary of 70% to up of bonus cash a of form the in was 2020 December 31 ended year financial the for incentive The DSP and cash both bonus, The Policy). 2020 the under awarded total in 175% (i.e. salary of 105% to up of bonus a DSP (35%) indicators performance key and (65%) performance profit operating of mixture a by determined was elements, growth. revenue long-term of drivers underlying relating to maximum the of 18.5% that determined Committee the set, targets bonus 2020 the against performance comparing When 13% of bonus cash a Accordingly, 2021. March in Directors Executive the to paid be should bonus DSP and cash achievable 105%) of maximum a of (out salary base of 19% and executives the to paid be will 70%) of maximum a of (out salary of base 2023. March until deferred be will which DSP, the under Directors Executive the to granted be will table: following the in provided are targets bonus of achievement the of Details Tenant Services Tenant Employee Total Governance | Directors’ remuneration report continued
Long-term incentives vesting during the year Share awards granted during the year (audited) The PSP awards granted to Peter Brooks-Johnson and On 17 September 2020 Peter Brooks-Johnson and Alison Robyn Perriss in March 2018 were subject to adjusted EPS Dolan were awarded shares under the PSP, which vest in (75% of the awards) and relative TSR (25% of the awards) September 2023, and are subject to a mixture of EPS performance conditions that related to the three-year (75% of the awards) and TSR relative to the FTSE 350 Index period ended 31 December 2020. The vesting schedule (25% of the awards) performance with the greater weighting for the relative TSR element of the 2018 PSP awards is set on EPS to reflect its particular relevance to the performance out below: of the business.
% of award vesting Basis of Number Face value Relative TSR condition (maximum 25%) Executive Director grant of shares of award(1) Less than the Index 0% Peter Brooks-Johnson 175% of 143,034 £893,580 base salary Equal to the Index 6.25% Alison Dolan 175% of 84,970(2) £530,833 25% higher than the Index 25% base salary Intermediate performance Straight-line vesting (1) Based on the average mid-market share price for the three consecutive days At the end of the performance period, Rightmove’s TSR prior to grant, taken from the Daily Official List, of £6.25. (2) Alison Dolan’s PSP award was prorated by 28/36 for time employed during the was 48% compared to -3% for the FTSE 350 Index. This performance period (7 September 2020 to 31 December 2022). performance is over 50% above the Index and therefore this part of the award will vest at the maximum level of 25% on The vesting schedule for the relative TSR element of 28 February 2021. Executive Directors’ 2020 PSP awards is set out below. Rightmove’s adjusted basic EPS growth is measured over a It is consistent with the TSR condition used for previous period of three financial years (2018 to 2020); the vesting grants under the share option plan and will be assessed schedule is set out below: against the FTSE 350 Index. Performance will be measured over three financial years. Basic adjusted EPS growth from % of award vesting 2018 to 2020 (maximum 75%) % of award vesting Relative TSR condition (maximum 25%) Less than 20% 0% Less than the Index 0% 20% 18.75% Equal to the Index 6.25% 50% 75% 25% higher than the Index 25% Between 20% and 50% Straight-line vesting Intermediate performance Straight-line vesting At the end of the performance period, adjusted basic EPS was 12.9p which is 37% lower than basic adjusted EPS of Rightmove’s EPS growth will be measured over a period of 16.3p for the base year 2017. Therefore, there will be nil three financial years (2020-2022). The EPS figure used will vesting for this part of the award (maximum of 75%). be equivalent to the Group’s basic EPS (based on the Group’s operating profit).
The following vesting schedule will apply for Executive Directors’ awards granted in 2020:
Basic EPS growth from % of award vesting 2020 to 2022 (maximum 75%) Less than 14% 0% 14% 18.75% 44% 75% Between 14% and 44% Straight-line vesting
The benchmark basic EPS for the financial year 2019 from which these targets will be measured is 19.6p.
76 | RIGHTMOVE PLC | ANNUAL REPORT 2020
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Expiry date Expiry Vesting date Vesting
28/02/2020 27/02/2021 01/03/2019 28/02/2021 01/11/2023 30/04/2024 17/09/2023 17/09/2027 04/03/2022 03/03/2023 09/05/2020 08/05/2022 01/03/2020 28/02/2022 28/02/2021 27/02/2023 01/11/2020 30/04/2021 01/11/2021 30/04/2022 06/03/2021 05/03/2022 06/03/2022 05/03/2024
31 December 2020 31 December
– –
incentives held at at held incentives Share–based Share–based 1,754 2,730 2,313 39,282 30,549 56,498 143,034 165,170 212,310 204,746
ANNUAL REPORT 2020 | 77 REPORT | ANNUAL RIGHTMOVE PLC Lapsed (5,186)
(28,037) (33,223) 858,386 at date of exercise of date at
–– –– –
Average share price price share Average Exercised (4) (2) ––– ––– ––– ––– ––– ––– ––– –––– –––
(42,490)
(171,022) (128,532)
cise price cise Exer (1) –
£5.13 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £3.29 £3.89 £0.00 £0.00 £0.00
roll–up (7) (6) (5) (3) (3)
– – – – – – –
Granted/dividend 1,754
39,282
143,034
1 January 2020 January 1
(1)
– – –
held incentives Share–based Share–based 2,730 2,313 34,570 1,165 42,490 56,498
128,532 212,310 186,910 6,297 204,746 871,099 191,532 Date granted Date Executive Directors Brooks–Johnson Peter 01/03/2016 (PSP) Share–based Share–based incentives held by the and Executive not Directors exercised as at 31 2020 December (audited) 28/02/2018 (PSP) 01/03/2017 (PSP) Total 30/09/2020 (Sharesave) 17/09/2020 (PSP) 01/10/2017 (Sharesave) 09/05/2017 (PSP) 01/10/2018 (Sharesave) 28/02/2018 (DSP) 06/03/2019 (DSP) 06/03/2019 (PSP) 04/03/2020 (DSP) Governance | Directors’ remuneration report continued
cise price anted/dividend anted/dividend Date granted Date Share–based held incentives 1 January 2020 Gr roll–up Exer Exercised price share Average at of date exercise Lapsed Share–based held at incentives 2020 31 December Vesting date Expiry date Alison Dolan 17/09/2020 – 84,970(6) £0.00 ––– 84,970 17/09/2023 17/09/2027 (PSP) 30/09/2020 – 3,508(7) £5.13 ––– 3,508 01/11/2023 30/04/2024 (Sharesave)
Total – 88,478 –––– 88,478
(1) The Company’s ordinary shares of 1 pence each were divided into 10 new ordinary shares of 0.1 pence each on 31 August 2018. The exercise prices and the number of shares under options granted before 31 August 2018 have been restated for the share subdivision. (2) The nil cost performance shares awarded to Executive Directors under the PSP on 1 March 2016 vested in 2019 subject to EPS and relative TSR performance measures, which were met in full. Peter Brooks-Johnson exercised the nil cost option over 128,532 shares (which included a dividend roll-up of 4,773 shares) on 14 September 2020 and sold all the shares at an average market price of £6.15 per share. (3) The nil cost performance shares awarded to Peter Brooks-Johnson under the PSP on 1 March and 9 May 2017 vested in 2020 subject to EPS and relative TSR performance measures. 85% of the awards vested, resulting in options over 33,210 shares lapsing (28,037 in March and 5,186 in May 2020). (4) The nil cost deferred shares granted under the DSP on 28 February 2018 vested in February 2020. Peter Brooks-Johnson exercised a nil cost option over 42,490 shares on 14 September 2020 and sold all the shares at an average market price of £6.15 per share. (5) On 4 March 2020, the Executive Directors were awarded nil cost deferred shares under the DSP, which vest in March 2022. The average mid-market share price for the three consecutive preceding days, used to calculate the number of shares awarded, was £6.21. (6) On 17 September 2020 the Executive Directors were awarded nil cost performance shares under the PSP, which vest in 2023 and are exercisable in September 2025. The average mid-market share price for the three consecutive preceding days, used to calculate the number of shares awarded, was £6.25. (7) On 30 September 2020, Peter Brooks-Johnson and Alison Dolan were granted Sharesave options over 1,754 and 3,508 shares respectively at an exercise price of £5.13. The options will be exercisable from November 2023.
Dilution (audited) All existing executive share-based incentives can be satisfied from shares held in the Rightmove Employees’ Share Trust (EBT) and shares held in treasury. It is intended that the 2021 share-based incentive awards will also be settled from shares currently held in the EBT or from shares held in treasury without any requirement to issue further shares. During 2020, treasury shares were used to satisfy vested DSP and PSP awards over 74,820 shares, representing 0.01% of the issued share capital (less treasury shares) as at 31 December 2020.
78 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
– – – – – – – (2) Yes No 4,067 3,508 Options (unvested) Guideline met (200% of salary)
– – – – – – – – 0% Value of PSP & DSP shares as shares a % of base salary awards (vested (vested awards but unexercised)
(1) – – – – – – £0 awards awards Value of Interests in share–based incentives in share–based Interests 84,970 shares atshares ANNUAL REPORT 2020 | 79 REPORT | ANNUAL RIGHTMOVE PLC (unvested) PSP & DSP 31 December 2020 31 December
– – – – – (1) 0 At 1,880 5,440 vested, vested, 267,991 368,338 Number of unexercised unexercised 2,014,553 655,870 195,692 share awards share 1 January 2020
– – – – 0 At 1,880 5,440 20,000 267,991 Number of shares heldshares 2,014,553 198,422 £14,406,467 2,793% 2,014,553 2,309,864 2,289,864 1,109,178 195,692 7,575 beneficially atbeneficially Interests in ordinary shares of 0.1p of shares in ordinary Interests 31 December 31 2020 December 31 December 2020
Base salary £515,724 £393,900 1 January 2021 Directors are required to retain at retain least to vesting half toselling or (after of meetsufficientexercised awards any required pay toshare and any are the shares price exercise Directors Based Executive under awards no on longer under a subject awards performance net to of tax basis. tax liabilities due) until have they met the guideline. shareholding Or he Directors’ beneficial holdings represented 0.23% of the Company’s shares in issue as at 31 December 2020 December 31 at as issue in shares Company’s the of 0.23% represented holdings beneficial Directors’ he he closing share price of the Company was £6.51 as at 31 December 2020. The lowest and highest share prices during prices share highest and lowest The 2020. December 31 at as £6.51 was Company the of price share closing he of shares ordinary 1,395,476 in Act, the of purposes the for interested, being as regarded are Directors Executive he here have been no changes to the share interests of continuing Directors between the year-end and the date of this report. of date the and year-end the between Directors continuing of interests share the to changes no been have here
T treasury. in held shares excluding (2019: 0.50%), T each). 0.1p of shares ordinary (2019: 891,416,008 each 0.1p of shares ordinary 886,387,616 T respectively. £7.01 and £4.00 were the year T are, they as 2020 December 31 at EBT the by held Company the in each) 0.1p of shares ordinary 2,208,362 (2019: 0.1p each EBT. the of beneficiaries potential employees, other with together T (1) (2) on the on closing price 2020: 31 share £6.51 December per multiplied share; by the andnumber shares awards of owned plus beneficially share shares vested Executive Directors Brooks–Johnson Peter • guidelines (audited) ownership Share The website. Company’s the on Policy Remuneration the in out set are guidelines ownership share Director Executive of a percentage as Company the of capital share the in 2020 December 31 at office in Directors Executive the of interests as follows: base salary were • comprised 2020 December 31 at as treasury) in held shares 13,285,490 (including issue in shares Company’s he • • • (1) of date appointment later. where Executive Directors Brooks–Johnson Peter Directors’ interests in shares (audited) in shares interests Directors’ Company the of capital share the in 2020 during Director a as served who person each of interests family and beneficial The as follows: were Alison Dolan Alison Dolan Robyn Perriss Robyn Non–Executive Directors Fisher Andrew Jacqueline de Rojas Rakhi Goss–Custard Rakhi Andrew Findlay Andrew Lorna Tilbian Lorna Amit Tiwari Total Governance | Directors’ remuneration report continued
Payments to past Directors and payments for loss of office There were no payments to past Directors for loss of office during 2020. Robyn Perriss, Finance Director, stepped down from the Board on 30 June 2020 and her notice period ended on 8 November 2020. Robyn was entitled to receive her base salary and other contractual benefits, including health and medical insurance during her notice period. Share–based incentives Robyn’s outstanding share awards have been treated in accordance with Rightmove’s 2020 Remuneration Policy. Rightmove Performance Share Plan (PSP) Unvested PSP awards were pro-rated for time elapsed from the date of grant to 30 June 2020 and vest on the original vesting dates. These awards will be exercisable for 12 months from the original vesting dates. Details of the PSP award exercised in 2020 and unexercised awards are set out in the table below. The 2018 PSP award was also pro-rated to 25% for achievement of TSR and EPS performance criteria; the 2019 award is shown as the maximum potential vesting, without any reduction for EPS and TSR performance conditions:
Performance Normal Award Pro–rated award Award Date Period Vesting Date (number of shares) (number of shares) 1 March 2017 1 January 2017 to 1 March 2020 160,290 141,646(1) 31 December 2019 28 February 2018 1 January 2018 to 28 February 2021 152,490 30,420(2) 31 December 2020 6 March 2019 1 January 2019 to 6 March 2022 147,056 65,358(3) 31 December 2021
All awards are subject to EPS and TSR performance conditions on vesting, before dividend roll-up is applied. (1) The 2017 PSP award was pro-rated for 85% EPS and TSR performance and Robyn Perriss exercised a nil cost option over 141,646 shares (including the dividend roll up of 5,400 shares) on 7 August 2020 at a market value of £6.33 per share. (2) Pro-rated by 28/36 for time elapsed from grant and by 25% for performance. (3) Pro-rated by 16/36 for time elapsed from grant.
No performance shares were awarded in 2020. Rightmove Deferred Share Bonus Plan (DSP) DSP awards granted in respect of prior years’ performance will vest in full on the original vesting dates and be exercisable for 12 months.
Award Date Performance Period Normal Vesting Date Award (number of shares) 28 February 2018 1 January 2017 to 31 December 2017 28 February 2020 32,360 6 March 2019 1 January 2018 to 31 December 2018 6 March 2021 40,579 4 March 2020 1 January 2019 to 31 December 2019 4 March 2022 28,213
No DSP shares were awarded in respect of 2020. Details of Robyn’s salary, benefits and cash bonus for 2020 are shown in the Directors’ Single Figure Remuneration Table above.
80 | RIGHTMOVE PLC | ANNUAL REPORT 2020
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Dec 20 Dec Dec 20 Dec Dec 20 Dec Dec 20 Dec -3% -5% -3% -5% 48% 48% 60% 60% 70% 70% 836% 836%
Dec 19 Dec Dec 19 Dec
Source: Thomson Reuters Source: Thomson Reuters Source: Thomson Reuters Source: Thomson Reuters
Dec 18 Dec Dec 18 Dec
Dec 17 Dec Dec 17 Dec
ANNUAL REPORT 2020 | 81 REPORT | ANNUAL RIGHTMOVE PLC Dec 19 Dec Dec 19 Dec
Dec 16 Dec Dec 16 Dec
Dec 15 Dec Dec 15 Dec
Dec 14 Dec Dec 14 Dec
Dec 18 Dec Dec 18 Dec
Dec 13 Dec Dec 13 Dec
Dec 12 Dec
Dec 12 Dec TSE 350 TSE 350
Dec 11 Dec Dec 11 Dec
Rightmove 100 TSE TSE 350 Rightmove 100 TSE
Rightmove TSE 100 Rightmove TSE 100 TSE 350
Dec 10 Dec Dec 10 Dec Dec 17 Dec Dec 17 Dec This graph shows the value, by 31 December 2020, of 100 invested in Rightmove on 31 December 2010, compared with the value of 100 invested in the TSE 100 and the TSE 350 Indices on a daily basis. This graph shows the value, by 31 December 2020, of 100 invested in Rightmove on 31 December 2010, compared with the value of 100 invested in the TSE 100 and the TSE 350 Indices on a daily basis. This graph shows the value, by 31 December 2020, of 100 invested in Rightmove on 31 December 2017, This graph shows the value, by 31 December 2020, of 100 invested the TSE 350 Indices on a daily basis. compared with the value of 100 invested in the TSE 100 and This graph shows the value, by 31 December 2020, of 100 invested in Rightmove on 31 December 2017, 31 December 2020, of 100 invested in Rightmove on 31 December This graph shows the value, by basis. invested in the TSE 100 and the TSE 350 Indices on a daily compared with the value of 100 0 0 90 80 70 60 90 80 70 60 160 150 140 130 120 110 100 160 150 140 130 120 110 100 800 600 400 200 800 600 400 200 TSR TSR Graph – years ten TSR TSR Graph – three years Review of past performance of past Review price performance Share down was which Index 100 FTSE the to compared year, on year 2.7% up £6.51, at year the ended price share Company’s The FTSE the and 44.6% by increased has price share the basis three-year a On 13%. down was Index 350 FTSE the and 14.3% relative performance Return Shareholder Total Rightmove’s respectively. 13.5% and 16.0% by fell Indices 350 FTSE and 100 below. in the graphs is shown years ten and over three those indices to (TSR) return shareholder Total for Index 350 FTSE the and Index 100 FTSE the against shares Rightmove’s of TSR the compares below graph first The plus price share the in movements of product the is TSR 2020. December 31 to 2018 January 1 from period the three-year Company’s the illustrate to benchmark used widely useful, a provides TSR date. ex-dividend the on reinvested dividends in and shares Rightmove’s in invested £100 of value the illustrates it Specifically, years. three last the over performance period. that over Index 350 FTSE the and Index 100 the FTSE index; share broad-based recognised a against shown is performance TSR Company’s the Act, the by required As the FTSE 100 and the FTSE 350 indices are both considered appropriate comparators. comparators. appropriate considered both are indices 350 FTSE the and 100 FTSE the and Index 100 FTSE the against shares Rightmove’s of TSR the purposes, statutory for illustrate, below graphs The 2020. December 31 to years ten and three the for Index FTSE 350 the 1200 1000 1200 1000 Governance | Directors’ remuneration report continued
Total remuneration for the Chief Executive Officer The table below shows the total remuneration figure for the Chief Executive Officer over a ten-year performance period. The total remuneration figure includes the annual bonus and long-term incentive awards that vested based on performance in those years.
Long–term Total single Annual bonus outturn incentive outturn Year Executive figure £ (% of maximum) (% of maximum) 2020 Peter Brooks–Johnson 1,008,440 18.5% 25% 2019 Peter Brooks–Johnson 2,155,759 65% 85% 2018 Peter Brooks–Johnson 1,490,178 78% 67% 2017 Peter Brooks–Johnson(1) 504,557 60% 100% Nick McKittrick(1) 1,223,443 n/a 100% 2016 Nick McKittrick 2,126,923 92% 100% 2015 Nick McKittrick 2,300,349 100% 100% 2014 Nick McKittrick 1,599,610 70% 92% 2013 Nick McKittrick 531,371 85% 100% Ed Williams(2) 1,531,515 n/a 100% 2012 Ed Williams 2,219,882 90% 100% 2011 Ed Williams 4,934,942 100% 100%
(1) Nick McKittrick was Chief Executive Officer and a Director until 9 May 2017 and retired from Rightmove on 30 June 2017. Peter Brooks-Johnson was appointed Chief Executive Officer on 9 May 2017. (2) Ed Williams was Chief Executive Officer until his retirement on 30 April 2013. Nick McKittrick was appointed Chief Executive Officer at this time. Percentage change in the remuneration of Directors compared with employees The table below sets out the percentage change in the remuneration of all the Directors of the Company compared with the average of all employees between 2019 and 2020, based on the figures shown in the single figure tables above.
% increase/(decrease) in remuneration of the Directors compared with the avereage of all employees between 2019 and 2020 Salary or fees Benefits Bonus Peter Brooks–Johnson (4.6)% (7.6)% (83.7)% Alison Dolan(2) – – – Robyn Perriss(3) (17.8)% (12.4)% (91.9)% Andrew Fisher(4) 1.1% – – Jacqueline de Rojas (3.6)% – – Andrew Findlay (6.4)% – – Rakhi Goss–Custard (6.4)% – – Lorna Tilbian(5) 1.3% – – Amit Tiwari(6) 60.4% – – Employees (0.8)% (4.1)%(7) 33.3%
(1) All directors volunteered a 20% reduction in their salaries and fees for four months from April to July 2020. (2) Alison Dolan, CFO, was appointed to the Board on 7 September 2020 and has no prior year earnings from Rightmove. (3) Robyn Perriss, Finance Director, stepped down from the Board on 30 June 2020 and received her salary and benefits to the end of her notice period on 8 November 2020. (4) Andrew Fisher joined the Board as Chair on 1 January 2020 the uplift in his fee for 2020 is in comparison to the outgoing Chairman’s fee of £185,000 for 2019. (5) Lorna Tilbian was appointed Chair of the Remuneration Committee in May 2019, the uplift in her fee reflects the full year’s fee earned in 2020. (6) Amit Tiwari joined the Board on 1 June 2019, the uplift in his fee reflects the full year’s fee earned in 2020. (7) Employee benefits are shown on the same basis as 2019, excluding pension benefits. If pension benefits were included (Alison Dolan participates in the pension scheme), the increase in the average value of employee benefits would be 220.2%.
82 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
33 14 2% 4%
pay ratio pay 75th percentile 75th percentile
20 538 Median pay ratio pay Year ended Year £40,473,000 (37)% £88,583,000 (66)% £34,146,000 £60,173,000 (100)%
£213,730,000 (37)% £289,320,000 (29)% 31 December 201931 December % change 71 45 34 pay ratio pay ANNUAL REPORT 2020 | 83 REPORT | ANNUAL RIGHTMOVE PLC 25th percentile 25th percentile £0 558 Year ended Year All employees £25,040,000 £30,125,000 £34,832,000 £135,142,000 £205,717,000 31 December 2020 31 December 75th percentile Pension and other benefits all pension plan for a stakeholder operates Group The same the under Directors Executive (including employees base of 6% contributes Rightmove which under terms) a minimum of contributing the employee subject to salary, in the participate to elected CFO new Our salary. base of 3% did not Company The pension plan during the year. pension arrangements. personal any to contribute terms same the on enrolled are Directors Executive The insurance medical private Group’s the in employees as all assurance life scheme, the medical cash plan and receive times base salary. four equal to cover Median Change
Salary 30,204 48,433 66,054 £510,617£390,000 1% 1% (1) 25th percentile 31 December 2020 31 December
(2) (1) Salary £515,724 £393,900 CEO’s total CEO’s 1,008,448 29,854 51,155 73,266 2,155,759 remuneration 1 January 2021 of the CEO’s remuneration was attributable to share price growth in respect of the PSP award granted in was in £3.99 2017. of price respect at share The granted the growth price the PSP share was attributable to grant award of remuneration the CEO’s Option A Option A Aver T £452,401 date of date the £6.34 and 2017 to as increased PSP at award, 2019. 31 December
Operating profit profit Operating Revenue (1) and employees. age Group includes number Executive of Directors employees The 1% increase in base salaries for Executive Directors Directors Executive for salaries base in increase 1% The Group other to applied increase living of cost same is the market the below remain Salaries 2021. for employees All companies. comparable in executives for median and market annual review subject to salaries are employee also approves the Committee adjustments as appropriate; roles. key other and Team Leadership Senior the for salaries Average number of employees (refer Note 7) Note (refer number of employees Average Income tax (refer Note 10) Note tax Income (refer Dividends paid to shareholders (refer Note 12) Note (refer Dividends paid shareholders to 23) Note of (refer Purchase own shares Executive Directors Brooks–Johnson Peter Application of Policy for the year ending ending the year Application of Policy for 2021 31 December Salaries year financial 2021 the for salaries Directors’ Executive The table below: set out in the are Alison Dolan Employee costs (refer Note 7) Note (refer costs Employee 2020 (1) (2) bonusbenefits, and the including value PSP ofsalary, awards. incentives, comprises long-term remuneration total he CEO’s of the spend on pay importance Relative indicators. financial key other to compared employees Rightmove’s all for pay total the shows below table The context. for provided been has profit operating and revenue total employees, of number the on Additional information Pay ratio Pay information in relation the to of remuneration total the Chief Executive Officer for remuneration equivalent the to compared Officer Executive Chief our of remuneration total the shows below table The in the UK. all based who are our employees, Option preferred Government's the using employees Group all for remuneration equivalent time full the calculated have We figure percentile each compared then We percentile. 75th and 50th 25th, the at figure remuneration total the identified and A below. out set ratios pay the determine to remuneration total for figure single CEO’s our against Year Method 2019 Governance | Directors’ remuneration report continued
Annual bonus In relation to the financial target a challenging sliding scale The annual bonus for the 2021 financial year will be consistent will operate with 10% of the maximum bonus opportunity with the 2020 Remuneration Policy, in terms of maximum payable at the threshold operating profit target relative to bonus opportunity (175% of base salary), deferral (40% cash the 2021 business plan through to 100% payable for and 60% shares) and malus and clawback provisions. The significant outperformance relative to the plan. mechanism through which the clawback can be implemented The relative weighting of performance measures has (enabling both the recovery and withholding of incentive pay) changed from 2020, reflecting the strategic focus on Rental enables the Committee to: Services and making lettings easier and more efficient for (i) reduce the cash bonus earned in a subsequent year both our consumers and our customers. Financial targets and/or reduce outstanding DSP/PSP share awards (operating profit, other revenue and rental services revenue) (i.e. withholding provisions may be used to effect a comprise 80% of the performance measures, with 20% recovery); or key operational performance indicators (traffic and (ii) for the Committee to require that a net of tax balancing employee engagement). cash payment be made to the Company. The specific financial targets for the 2021 financial year The performance measures have been selected to reflect are considered to be commercially sensitive. However, a range of financial and strategic targets that continue to retrospective disclosure of the actual targets and support Rightmove’s key objectives. The Committee has performance against them will be provided as usual in decided to revert to adjusted operating profit as an the 2021 Remuneration Report, to the extent that they appropriate performance measure for 2021 bonus awards, do not remain commercially sensitive at that time. because adjusted operating profit excludes share-based Long–term incentives incentive costs and the related national insurance payments. Awards to the continuing Executive Directors under the PSP The performance measures and weightings for the 2021 in 2021 will be consistent with the 2020 Remuneration Policy, financial year are as follows: with a maximum bonus opportunity of 175% of base salary. Measure As a % of maximum bonus opportunity The awards will again be subject to a mixture of EPS and relative TSR performance conditions and subject to a two Financial targets year post-vesting holding period. The Committee has (1) Adjusted operating profit 60% decided to: Strategic targets • change the weighting of EPS and TSR vesting conditions Traffic market share(2) 15% to 50% each, compared to 75% and 25% respectively for Other business revenue(3) 10% prior years; and Rental services revenue(4) 10% • revert to adjusted EPS as an appropriate performance Employee engagement(5) 5% measure for 2021 PSP awards, as this is based upon operating profit before share-based incentives and related (1) Before share-based payments and NI on share-based incentives. NI charges. (2) Measured on a time on site basis (minutes spent relative to Rightmove’s nearest competitors) by reference to comScore. The Committee has consulted Rightmove’s investors (3) Revenue excluding Agency and New Homes. about the change in the weighting of EPS and TSR targets (4) Based on revenue generated from combined Rental Services. and will continue to invite feedback and keep these (5) Based on the results of the annual employee engagement survey. weightings under review, within our Remuneration Policy parameters. Whilst determining the increase in the TSR weighting, the Committee was cognisant of the share price performance during 2020; Rightmove shares recovered from a 12 month low of £4.00 in 2020 to end the year at £6.51. This represents a strong starting point for the three year comparative TSR target.
84 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
£
2021 Fees
£ 5,000 10,000 15,000 15,150 200,000 202,000 2020 Fees ANNUAL REPORT 2020 | 85 REPORT | ANNUAL RIGHTMOVE PLC executive director fees, prepared by Deloitte, which Deloitte, by prepared fees, director executive ‑ Senior Senior Independent Director Committee Chair (excluding theCommittee Nomination Committee) Non–Executive Director (basic fee)Non–Executive Director 55,000 55,550 to £10,000, inclusive of the 1% all-employee rise, for 2021. for rise, all-employee 1% the of inclusive £10,000, to shareholder subject to are increases fee proposed The of Articles the in cap fee Directors’ higher a of approval approval, such to Subject AGM. year’s this at Association Directors Non-Executive and Chair the for fees the annual detailed below: as will increase Role Chair earlier found be can 2020 in Directors to paid fees of Details in this report. Chair and Non–Executive Directors’ fees Directors’ Chair and Non–Executive have fees Directors’ Non-Executive and Chair’s The light in and context market a in reviewed been historically last The years. three every commitments time of Directors’ effective were increases fee and 2018 during was review and reviewed was fee Chair’s The 2019. January 1 from and commitment time the reflect to £200,000 to increased from effect with Chair new our of role the of responsibilities 2020. 1 January that has agreed Committee and Remuneration Board The the and Directors Non-Executive all for fees 2021, from in line with an annual increase to Chair should be subject year a three than rather award, pay the annual employee of a review considered Board The cumulative increase. non Director Independent Senior our for fees the that indicated the time commitment for the market to relative low were Board comparable other to and when compared required agreed therefore It was positions in Rightmove’s sector. increase would fee Director's Independent Senior the that
0% 0% 50% 50% 12.5% 12.5%
(maximum 50%) (maximum 50%) % of award vesting % of award % of award vesting % of award Straight–line vesting Straight–line Straight–line vesting Straight–line (1)
(1) If then the Company’s TSR then would have TSR the be to Company’s at least 75% all for 50% of the PSP vest. to shares targets will targets be is measured 12.9p.
of targets remain appropriately demanding, and no less appropriately remain of targets awards. prior year set for of targets challenging than the range condition performance TSR Relative of element TSR relative the for schedule vesting The below. out set is awards PSP 2021 Directors’ Executive Index, 350 FTSE the against assessed be will TSR Relative market of terms in size Company’s the reflecting over will be measured capitalisation. Performance years. three financial 25% higher than the Index (1) the 350 period, FTSE Index’s was 50% performance TSR over the three-year TSR performance of the Company of the Company performance TSR 350 Index FTSE the to relative Less than the Index On this basis, the Committee is satisfied that the range the that satisfied is Committee the basis, this On Equal the to Index performance Intermediate The targets that are intended to operate for the 2021 PSP 2021 the for operate to intended are that targets The of the current be demanding in light to considered are awards internal starting position, the Group’s environment, trading future for expectations market external and planning financial Rightmove facing uncertainty of the continued In view growth. be no less to considered are the targets and our customers, a realistic and provide years than in previous stretching but range performance end of the at the lower incentive vesting. full achieve to performance exceptional require Less than 98% (1) benchmark The basic adjusted EPS the for yearfinancial 2020 which from these Adjusted Basic EPS growth Basic EPS growth Adjusted 2023 2021 to from 98% The 2021 targets are as follows: as are targets 2021 The condition EPS performance period the over measured be will growth EPS Group’s The used figure EPS The 2023). to (2021 years financial of three to view a With EPS. basic Group’s the to equivalent be will targets but achievable stretching ensuring appropriately the Group, the for expectations market of light in are set awards: 2021 the to apply will targets of range following 107% Between 98% Between and 107% Governance | Directors’ remuneration report continued
Shareholder voting on the Remuneration Policy and Annual Report At the AGM on 4 May 2020, shareholders again voted overwhelmingly in favour of the 2020 Remuneration Policy and the Directors’ Remuneration Report, demonstrating a strong level of shareholder support for Rightmove’s management and their remuneration. The table below shows full details of the voting outcomes for the Remuneration Policy and the Directors’ Remuneration Report at the 2020 AGM:
Votes for % Votes for Votes against % Votes against Votes withheld(1) Remuneration Policy 684,058,225 96.08 27,900,733 3.92 793,538 Directors’ Remuneration Report 670,870,672 94.18 41,468,750 5.82 413,075
(1) A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes cast ‘For’ and ‘Against’ a resolution. In line with the Company’s commitment to ongoing dialogue with its shareholders, the Committee has corresponded with major shareholders to invite their feedback on the 2021 remuneration proposals.
86 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
; 13,285,490 shares of 0.1p of shares 13,285,490 ; (1) ANNUAL REPORT 2020 | 87 REPORT | ANNUAL RIGHTMOVE PLC per 0.1p share (2019: nil) amounting to £39.2m (2019: Nil). (2019: £39.2m to amounting nil) (2019: share 0.1p per dividend final the which in year unprecedented an was 2020 2020 for dividend interim an and cancelled was 2019 for of impact the to due declared, not was pence) 2.8 (2019: therefore is year the for dividend total The Covid-19. pence). 2.8 (2019: share 0.1p per pence 4.5 General Annual the at approval shareholder to Subject paid be will dividend final the 2021, May 7 on (AGM) Meeting members of register the on shareholders to 2021 May 28 on 2021. April 30 on business of close the at Share buyback suspended was programme buyback share Company’s The announcement of the UK Government’s lockdown in view on place taking purchase last the with March, 23 on by granted authority 10% the Of 2020. March 13 shares 5,028,392 of total a AGM, 2019 the at shareholders in purchased were shares) 0.1p 16,268,322 (2019: 0.1p of of 1.8%) (2019: 0.6% being 2020, December 31 to year the the at treasury) in held shares (excluding issue in shares the paid per price average The granted. was time the authority a with share) 0.1p per £5.45 (2019: £5.99 was share 0.1p £30,124,778 of costs) all (excluding paid consideration total £88,583,260). (2019: 432,666,464 of equivalent the 2008, January Since 39,964,605 which of total, in purchased been have shares shares 1p as purchased were of £886,388 (2019: £891,416). £891,416). (2019: £886,388 of ordinary 0.1p each to attached obligations and rights The Articles of as set out in the Company’s are share in the share of each ordinary holders Association. The from as declared dividends receive to entitled are Company at general per share one vote to entitled and are time time to regulations Other than the usual meetings of the Company. no restrictions are there companies, UK listed applicable for shares. of the Company’s on the transfer dividends and Results the for tax before profit operating reported Group The are Directors The £213.7m). (2019: £135.1m of year pence 4.5 of year the for dividend final a recommending Share capital and Shareholder Voting Rights Voting capital Shareholder and Share 0.1p of shares 13,285,490 including issue, in shares The the at shares) 0.1p 13,360,310 (2019: treasury in held 0.1p of shares 886,387,616 to amounted year-end value nominal a with shares), 0.1p 891,416,008 (2019: were held in treasury as at 31 December 2020, with the with 2020, December 31 at as treasury in held were seeking to A resolution having been cancelled. remainder at the shareholders will be put to this authority renew 2021. May 7 on AGM
On of shares of 1 ordinary shares each 0.1 pence ordinary ten (1p pence into shares) each (0.1p in shares) the capital of Following the the subdivision, Company. each held 0.1p shareholder each for ten shares prior 1p held theto share immediately subdivision. Each new 0.1p carries share the same rights and entitlements as the 1p shares, as set 1p out shares, in Articles the of Company’s Association. Directors’ report | Directors’ Governance (1) 31 subdivide a to approved August the resolution 2018 Company’s shareholders The Directors submit their report together with the audited audited the with together report their submit Directors The 06426485) (Number: Company the for statements financial ended the year for (the Group) companies and its subsidiary 2020. December 31 sections the pages, these comprises Report Directors’ The under the Corporate to referred of the Annual Report which below information and other statement Governance reference. by Report Directors’ the into incorporated are Strategic the in disclosures certain included has Board The the of 414C(11) section with accordance in Report 2006 (the Act). Act Companies statement governance Corporate (DTR) Rules Guidance and Transparency Disclosure, The be included in a corporate to information certain require Information Report. Directors’ the in statement governance Corporate the in found be can requirements these fulfils that Directors’ the into incorporated is and Report Governance by reference. Report Report Strategic 45. to 1 pages on found be can Report Strategic The a fair, present to Report this Annual requires Act The of Rightmove’s business view and understandable balanced the of and 2020 December 31 ended year the during period, financial the of end the at Group the of position with a description of the principal risks and together the business. facing uncertainties required the 4.1 DTR with compliance of purposes the For in the can be found of the management report content the including Report, Directors’ this and Report Strategic by reference. incorporated sections of the Annual Report Duties Directors’ the to regard had have Directors the how of statement A with business relationships the Company’s foster need to that of effect the and others, and customers suppliers, by the including on principal decisions taken regard, our with Working the in found be can Company, Report. Strategic the in section Stakeholders Directors report this of date the at as Company the of Directors The Dolan, Alison Brooks-Johnson, Peter Fisher, Andrew are Goss-Custard, Rakhi Findlay, Andrew Rojas, de Jacqueline the Finance Perriss was Robyn and Amit Tiwari. Tilbian Lorna the from down stepped she until Company the of Director can Directors current of Biographies 2020. June 30 on Board Report. Governance the Corporate in be found Governance | Directors’ report continued
Shares held in trust Annual General Meeting As at 31 December 2020, 1,395,476 shares of 0.1p The AGM of the Company will be held at Rightmove’s (2019: 2,208,362 0.1p shares) were held by The Rightmove London office 6th Floor, 33 Soho Square, London W1D 3QU Employees’ Share Trust (EBT) for the benefit of Group on 7 May 2021 at 10am. The Notice of Annual General employees. These shares had a nominal value at Meeting will be published in March 2021. 31 December 2020 of £1,395 (2019: £2,208) and a market The resolutions being proposed at the 2020 AGM include value of £9,084,549 (2019: £14,001,000). The shares held by the renewal for a further year of the limited authority of the the EBT may be used to satisfy share-based incentives for Directors to allot unissued share capital of the Company and the Group’s employee share plans. During 2020, 817,714 to issue shares for cash other than to existing shareholders shares of 0.1p (2019: 294,160 0.1p shares) were transferred (in line with the Pre-Emption Group’s Statement of to Group employees following the exercise of share options Principles). A resolution will also be proposed to renew the under the Sharesave plan, the Deferred Share Bonus Plan Directors’ authority to purchase a proportion of the and the Performance Share Plan. Company’s own shares. The Company will again seek Additionally, 113,465 shares of 0.1p (2019: 131,110 0.1p shareholder approval to hold general meetings (other than shares) were purchased by the EBT for transfer to the AGMs) at 14 days’ notice. Resolutions will be proposed to Rightmove Share Incentive Plan Trust (SIP) and 4,828 renew these authorities, which would otherwise expire at the shares were purchased in relation to Restricted Share Plan 2021 AGM. In addition to the other Ordinary Business of the awards to certain members of the Senior Leadership Team. AGM, the Directors propose a resolution to update the The terms of the EBT provide that dividends payable on the Articles of Association. shares held by the EBT are waived. Auditor As at 31 December 2020, 757,575 shares of 0.1p KPMG LLP has indicated its willingness to continue in office (2019: 785,130 0.1p shares) were held by the SIP for the as auditor of the Group. In accordance with section 489 of benefit of Group employees. These shares had a nominal the Act, separate resolutions for the re-appointment of value at 31 December 2020 of £758 (2019: £785) and a KPMG LLP as auditor of the Group and for the Audit market value of £4,931,813 (2019: £4,978,000). The shares Committee to determine the auditor’s remuneration held by the SIP are awarded as free shares to eligible will be proposed at the 2021 AGM. employees each year and are held in trust for a period of Audit information three years before an employee is entitled to take ownership So far as the Directors in office at the date of this report are of the shares. During the year, 141,020 shares of 0.1p aware, there is no relevant audit information of which the (2019: 156,075 0.1p shares) were transferred to Group auditor is unaware and each Director has taken all reasonable employees under the SIP rules. steps to make themselves aware of any relevant audit Research and development information and to establish that the auditor is aware of The Group undertakes research and development activity in that information. order to develop new products and to continually improve Substantial shareholdings the existing property platforms. Further details are disclosed As at the date of this report, the following beneficial interests in Note 2 to the financial statements. in 3% or more of the Company’s issued ordinary share Political and charitable donations capital (excluding shares held in treasury) held on behalf During the year the Group did not make donations to any of the organisations shown in the table below, had been political party or other political organisation and did not incur notified to the Company pursuant to DTR 5.1. The any political expenditure within the meanings of sections information provided below was correct as at the date of 362 to 379 of the Act (2019: £nil). Details of the Group’s notification, where indicated this was not in the 2020 charitable donations are set out in the Environmental, financial year. It should be noted that these holdings are likely Social and Governance Report. to have changed since they were notified to the Company. However, notification of any change is not required until the next applicable threshold is crossed.
88 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
(1)
and (1) (1) (1) (1) Location in Annual Report Location in Annual Directors’ Remuneration Remuneration Directors’ Report Report: Strategic Social Environmental, Report and Governance Corporate Governance Governance Corporate Report Note 23, Financial Statements Financial 23, Note Remuneration Directors’ Report Report: Strategic and Social Environmental, Report Governance report Audit Committee statement Directors’ and of responsibilities Notes 3 and 26, Financial 26, and 3 Notes Statements Report Governance Corporate Report Strategic Report: Strategic and Social Environmental, Report Governance Report: Strategic and Social Environmental, Report Governance ANNUAL REPORT 2020 | 89 REPORT | ANNUAL RIGHTMOVE PLC he Board he has Board taken advantage of section 414C(11) of the Act include to T on Report the above. indicated items in disclosures the Strategic Health and safety and Health and safety policies employee-related and disability including diversity Brooks-Johnson Peter Officer Executive Chief 2021 February 26 Movements in share capital Movements in share incentives Share-based plans incentive Long-term Statements Financial 25, Note and Greenhouse Energy Gas Report and balanced Fair, understandable indemnities Directors’ (1) on Board the by approved was Report Directors’ The 2021. February 26 Board: the of behalf on Signed Information and Financial instruments management risk financial and removal Appointment, Directors of powers developments of the Future business Group’s engagement Employee schemes share Employee Other Information
(1) % voting rights 5.75% 0.63% 1.87% 8.20% 5.09% 0.04% 3.87
% of total
rights 376,620 5,473,130 Total voting Total 71,571,964 33,746,254 59,307,550 6.79% 58,736,140 6.73% 45,307,190 5.19% 45,181,68044,413,780 5.17% 50,160,300 16,304,460 Direct Depository American Receipts Indirect for Contracts difference Lending Stock Indirect Indirect Indirect Indirect Indirect for Contracts difference Nature of holding Nature (2) (2) (2) (2) (2) (2) e theof 2020 year. notification financial preceded T Dat (being the in shares issue less held shares in of treasury) 873,102,126 as at 26 February 2021. Marathon AssetMarathon Management LLP Articles of association be made in accordance the Articles may amendment to Any concerning of applicable English law with the provisions to time from amended (as Act the specifically companies, meeting of at a general of special resolution time), by way the shareholders. Compensation for loss of office the Company between no additional agreements are There compensation for providing employees or Directors its and a of because occurs that employment or office of loss for share Company’s the of provisions that except bid, takeover and Directors to granted awards and options allow may plans vest on a takeover. to employees Parties with Related Transactions its nor Company the neither review under year the During with any transactions material any into subsidiaries entered the to 28 Note in disclosed those than other parties related statements. financial sheet events Post-balance the end of sheet events since have been no balance There year. financial 2020 the Branches nor its subsidiaries have branches Neither the Company outside the UK. (1) based are he upon above the percentages voting rights capital share BlackRock Inc BlackRock (2) Shareholder Anderson Kayne Rudnick Investment LLC Management, Baillie Gifford & Co & Gifford Baillie Life Standard Aberdeen Generation Investment Management LLP InvestmentAxa SA Managers Governance | Directors’ responsibilities statement
Statement of Directors’ responsibilities in respect of statements comply with the Companies Act 2006. They are the annual report and the financial statements responsible for such internal control as they determine is The directors are responsible for preparing the Annual Report necessary to enable the preparation of financial statements and the Group and parent Company financial statements in that are free from material misstatement, whether due to accordance with applicable law and regulations. fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the Company law requires the directors to prepare Group and assets of the Group and to prevent and detect fraud and parent Company financial statements for each financial year. other irregularities. Under that law they are required to prepare the Group financial statements in accordance with international Under applicable law and regulations, the directors are also accounting standards in conformity with the requirements responsible for preparing a Strategic Report, Directors’ of the Companies Act 2006 and applicable law and Report, Directors’ Remuneration Report and Corporate have elected to prepare the parent Company financial Governance Statement that complies with that law and statements on the same basis. In addition the Group those regulations. financial statements are required under the UK Disclosure The directors are responsible for the maintenance and and Transparency Rules to be prepared in accordance with integrity of the corporate and financial information included International Financial Reporting Standards adopted on the company’s website. Legislation in the UK governing pursuant to Regulation (EC) No 1606/2002 as it applies in the preparation and dissemination of financial statements the European Union (“IFRSs as adopted by the EU”). may differ from legislation in other jurisdictions. Under company law the directors must not approve the Responsibility statement of the directors in respect financial statements unless they are satisfied that they give of the annual financial report a true and fair view of the state of affairs of the Group and We confirm that to the best of our knowledge: parent Company and of the Group’s profit or loss for that • the financial statements, prepared in accordance with the period. In preparing each of the Group and parent Company applicable set of accounting standards, give a true and fair financial statements, the directors are required to: view of the assets, liabilities, financial position and profit or • select suitable accounting policies and then apply them loss of the company and the undertakings included in the consistently; consolidation taken as a whole; and • mak e judgements and estimates that are reasonable, • the strategic report includes a fair review of the relevant and reliable; development and performance of the business and the • stat e whether they have been prepared in accordance with position of the issuer and the undertakings included in the international accounting standards in conformity with the consolidation taken as a whole, together with a description requirements of the Companies Act 2006 and, as regards of the principal risks and uncertainties that they face. the group financial statements, International Financial Reporting Standards adopted pursuant to Regulation (EC) We consider the annual report and accounts, taken as a No 1606/2002 as it applies in the European Union (“IFRSs whole, is fair, balanced and understandable and provides the as adopted by the EU”). information necessary for shareholders to assess the group’s • assess the Group and parent Company’s ability to continue position and performance, business model and strategy. as a going concern, disclosing, as applicable, matters Signed on behalf of the Board: related to going concern; and • use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. The directors are responsible for keeping adequate Peter Brooks-Johnson Alison Dolan accounting records that are sufficient to show and explain Chief Executive Officer Chief Financial Officer the parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the 26 February 2021 parent Company and enable them to ensure that its financial
90 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
vs 2019
4.3% (2019: 4.4%) (2019: 4.3% of profit before tax before profit of £5.8m (2019: £9.3m) (2019: £5.8m group profit before tax before profit group 99.8% (2019: 99.4%) of 99.4%) (2019: 99.8% Recoverability of Recoverability Company’s parent investment in subsidiaries Agency and New and New Agency Homes revenue recognition ANNUAL REPORT 2020 | 91 REPORT | ANNUAL RIGHTMOVE PLC
ey audit matters: our audit assessment ey of matters: risks of K misstatement material Overview Materiality: financial Group as a whole statements Coverage audit matters Key risks Recurring 2. that, in our professional those matters are audit matters Key the of audit the in significance most of were judgement, significant most the include and statements financial (whether or not misstatement assessed risks of material the had which those including us, by identified fraud) to due allocation the strategy; audit overall the on: effect greatest the of efforts the directing and audit; the in resources of audit key the below summarise We team. engagement audit of order decreasing in 2019), from (unchanged matters together above, opinion audit our at arriving in significance, and, those matters address to audit procedures with our key those from our results entities, public interest for as required and our results addressed, were matters These procedures. of, context the in undertaken, procedures on based are financial the of audit our of, purpose the for solely and thereon, our opinion as a whole, and in forming statements do that opinion, and we incidental to are and consequently opinion on these matters. a separate provide not fulfilled our ethical responsibilities under, and we remain we and under, responsibilities ethical our fulfilled UK ethical with, accordance in of the Group independent applied as Standard Ethical FRC the including requirements entities. No non-audit services public interest listed to provided. were by that standard prohibited
financial statements have been prepared in accordance accordance in prepared been have statements financial parent Company financial statements have been have statements financial Company parent financial statements give a true and fair view of the the of view fair and true a give statements financial properly been have statements financial Group the 2006 and, as Act of the Companies with the requirements IAS the of 4 Article statements, financial Group the regards applicable. extent the to Regulation the with international in accordance prepared properly with the requirements in conformity standards accounting of the with the provisions and as applied in accordance of, 2006; and Act Companies state of the Group’s and of the parent Company’s affairs as affairs Company’s parent the of and Group’s the of state year the for profit Group’s the of and 2020 December 31 at then ended; the accounting with international in accordance prepared of the with the requirements in conformity standards Financial Reporting 2006 and International Act Companies No (EC) Regulation to pursuant adopted Standards Union; European the in applies it as 1606/2002 the Independent auditor’s report to the members of Rightmove plc Rightmove of members the to report Governance auditor’s Independent | Basis for opinion Basis for International with accordance in audit our conducted We law. applicable and (UK)”) (“ISAs (UK) Auditing on Standards that believe We below. described are responsibilities Our • • • and sufficient a is obtained have we evidence audit the our opinion. Our audit opinion is basis for appropriate the audit committee. to with our report consistent the to directors the by auditor as appointed first were We it becoming to prior holding company, previous Group’s ended period financial the for entity, interest public a uninterrupted total of period The 2000. 31 December ended years financial 15 the for is engagement years 21 and entity public-interest a as 2020 31 December directors the by auditor as appointed first were We total. in later and 2000, December 31 ended period financial the for audit tender a competitive following as auditors reappointed have We 2013. December 31 ended period the for process 1. Our opinion is unmodified plc Rightmove of statements financial the audited have We 2020 December 31 ended year the for Company”) (“the of statement the Consolidated which comprise of statement Consolidated income, comprehensive position, financial of statement Company position, financial statement Company flows, cash of statement Consolidated in changes of statement Consolidated flows, cash of of changes in statement Company equity, shareholders’ including the notes, and the related equity, shareholders’ 1. note in policies accounting In our opinion: • Governance | Auditor's report continued
The risk Our response Agency and New Homes revenue recognition Processing error: Our procedures included: (£205.7m; The key revenue streams, being Agency We performed the detailed tests below rather than seeking to rely 2019: £264.8m) and New Homes, consist of subscription on any of the group’s controls because our knowledge of related IT Refer to page 56 fees and customer spend on additional controls indicated that we would not be able to obtain the required (Audit Committee advertising products in respect of evidence to support reliance on controls. Report), page 106 properties listed on Rightmove platforms. Tests of details: Using statistical sampling we selected revenue (accounting policy) There are a variety of packages and transactions recorded throughout the year. We have agreed the and page 116 membership offers available and sample through to source documentation in order to assess whether (financial customers are able to tailor both the revenue is recognised in line with the products and rates agreed by disclosures). specific add-on products (purchased in the customer. We also agreed discounts applied due to Covid-19; addition to the subscribed membership Tests of details: For a sample of the highest revenue generating package) and the volume of these that customers we inspected contracts signed in the year, to assess they receive. whether revenue had been recognised in accordance with the In response to Covid-19 and during the specific contract terms and conditions; we also reviewed the period of the housing market closure, standard packages against the revenue recognition policy; Rightmove introduced discounts applied Tests of details: We Inspected a sample of credit notes raised during across Agency and New Homes the year and post year end to determine whether they related to customers between April and September revenue recognised in the year; and 2020. These discounts were applied at a flat rate for each month across the Tests of details: We obtained all journals posted in respect of revenue transactions starting at 75% from April. and, using computer assisted audit techniques, analysed these to The discounts were phased out through identify any entries which were unexpected based upon the specific to the end of September when normal characteristic of the journal, considering in particular whether the pricing resumed. The effect of these opposite side of the journal entry was as expected, based on our discounts resulted in a year on year business understanding. We tested a sample of expected and all decrease of 29% in revenue. significant unexpected entries back to supporting evidence to assess whether revenue was recognised appropriately. The resulting large volume of non-routine transactions, accompanied with the Our results business as usual variability of product and We found no exceptions performing the procedures described pricing combinations available to above (2019: We found no exceptions performing the procedures customers, creates a risk of pricing described.) processing error, in particular revenue being recognised at the incorrect amount. In addition revenue is the most material figure in the financial statements and is considered to be a main driver of results, and as such has the greatest effect on our allocation of resources in planning the audit. Recoverability of Low risk, high value: Our procedures included: parent Company’s The carrying amount of the parent Comparing valuations: comparing the carrying amount of the investment in Company’s investments in the investment to the market capitalisation of the Group, as Rightmove subsidiaries subsidiary company Rightmove Group Group Limited contains all of the Group’s trading operations to (£557.6m; Limited represents 100% (2019: 99%) ascertain whether there are any indicators of impairment. 2019: £554.6m) of the Company’s total assets. Its recoverability is not at a high risk of Our results Refer to page 56 significant misstatement or subject to We found no indicators of impairment (2019: We found no (Audit Committee significant judgement. However, due indicators of impairment). Report), page 108 to its materiality in the context of the (accounting policy) parent Company financial statements, and page 123 this is considered to be the area that had (financial the greatest effect on our overall parent disclosures). Company audit.
92 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
0.2 0.6 99.4 99.8 99.8% (2019: 99.4%) Full sc purposes 2020 Full sc purposes 2019 Residual components Residual audit Group ope for audit Group ope for £0.29m the to reported Misstatements (2019: £0.47m) audit committee Group profit tax before Group materiality Group £5.8m (2019: £9.3m) £5.8m Whole financial statements (2019: £9.3m) materiality £4.4m Whole financial statements materiality performance (2019: £7m) £4.4m £4.4m materiality Component (2019: £6.8m) ANNUAL REPORT 2020 | 93 REPORT | ANNUAL RIGHTMOVE PLC 1.3 1.1 0.3 1.5 99.7 98.5 98.9 98.7
98.5% 98.7% (2019: 99.7%) (2019: 98.9%) Group materiality Group Profit before tax before Profit Group revenue Group assets total Group Group Group profit tax before £134.8m (2019: £213.6m)
Our scope of our audit scope £0.29m (2019: £0.47m), in addition to other identified other to addition in £0.47m), (2019: £0.29m on qualitative reporting that warranted misstatements grounds. components, reporting four) (2019: four Group’s the Of 3. was whole a as statements financial Group the for Materiality application and of an materiality overview of the a to reference with determined £9.3m), (2019: £5.8m at set represents it which of tax, before profit Group of benchmark 4.4%). (2019: 4.3% on our procedures In line with our audit methodology, performed were and disclosures balances individual account reduce to so as materiality, performance threshold, a lower to immaterial level the risk that individually an acceptable to a add up to balances in individual account misstatements whole. a as statements financial the across amount material company and parent the group for materiality Performance financial the for materiality of 75%) (2019: 75% at set was £7m) (2019: £4.4m to equates which whole, a as statements parent the for £5.1m) (2019: £3.2m and group the for determination our in percentage this applied We company. of performance materiality because we did not identify any identify any did not because we materiality of performance level of risk. indicating an elevated factors as statements financial Company parent the for Materiality with determined £6.8m), (2019: £4.4m at set was whole a of which net assets, a benchmark of Company to reference 1.3%). (2019: 1.1% represents it corrected any Committee Audit the to report to agreed We exceeding misstatements identified uncorrected or Group for audits scope full to two) (2018: two subjected we audit by the Group audited are purposes. All components the to material are that risks, specific no are There team. The scope. in Group not in the components Group, accounted of our work within the scope components opposite. illustrated the percentages for Governance | Auditor’s report continued
4. Going concern However, as we cannot predict all future events or conditions The Directors have prepared the financial statements on the and as subsequent events may result in outcomes that are going concern basis as they do not intend to liquidate the inconsistent with judgements that were reasonable at the Group or the Company or to cease their operations, and as time they were made, the above conclusions are not a they have concluded that the Group’s and the Company’s guarantee that the Group or the Company will continue financial position means that this is realistic. They have also in operation. concluded that there are no material uncertainties that could 5. Fraud and breaches of laws and regulations – have cast significant doubt over their ability to continue as a ability to detect going concern for at least a year from the date of approval of the financial statements (“the going concern period”). Identifying and responding to risks of material misstatement due to fraud We used our knowledge of the Group, its industry, and the To identify risks of material misstatement due to fraud general economic environment to identify the inherent risks (“fraud risks”) we assessed events or conditions that could to its business model and analysed how those risks might indicate an incentive or pressure to commit fraud or provide affect the Group’s financial resources or ability to continue an opportunity to commit fraud. Our risk assessment operations over the going concern period. The risk that we procedures included: considered most likely to adversely affect the Group’s • Using our own forensic specialists to assist us in identifying available financial resources over this period was lower any associated fraud risks. than expected revenues as a result of the Covid discounts • Enquiring of directors, the audit committee and inspection provided to customers. of policy documentation as to the Group’s high-level We considered whether these risks could plausibly affect the policies and procedures to prevent and detect fraud, liquidity in the going concern period by assessing the degree including the internal audit function, and the Group’s of downside assumption that, individually and collectively, channel for “whistleblowing”, as well as whether they have could result in a liquidity issue, taking into account the knowledge of any actual, suspected or alleged fraud. Group’s current and projected cash and facilities (a reverse • Reading Board, audit committee and remuneration stress test). We also assessed the completeness of the committee minutes. going concern disclosure. • Considering remuneration incentive schemes and performance targets for management including the Our conclusions based on this work: EPS target for management remuneration. • we consider that the directors’ use of the going concern • Using analytical procedures to identify any usual or basis of accounting in the preparation of the financial unexpected relationships. statements is appropriate; • we have not identified, and concur with the directors’ We communicated identified fraud risks throughout the assessment that there is not, a material uncertainty related audit team and remained alert to any indications of fraud to events or conditions that, individually or collectively, may throughout the audit. cast significant doubt on the Group’s or Company’s ability As required by auditing standards, we perform procedures to continue as a going concern for the going concern period; to address the risk of management override of controls , • w e have nothing material to add or draw attention to in in particular the risk that Group management may be in a relation to the directors’ statement in note 1 to the financial position to make inappropriate accounting entries. On this statements on the use of the going concern basis of audit we do not believe there is a fraud risk related to revenue accounting with no material uncertainties that may cast recognition because revenue consists of a high volume significant doubt over the Group and Company’s use of of low value transactions with no individually significant that basis for the going concern period, and we found the transactions such that there is a remote chance that going concern disclosure in note 1 to be acceptable; and fraudulent revenue recognition could have a material • the related statement under the Listing Rules set out on impact on the financial statements. Further, the revenue page 27 is materially consistent with the financial transactions are simple and are largely automated based on statements and our audit knowledge. contractual prices established in the billing system which provides little opportunity to fraudulently record revenue. We did not identify any additional fraud risks.
94 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS eports have been prepared in eports have been prepared ormation given in those reports for the for ormation given in those reports ANNUAL REPORT 2020 | 95 REPORT | ANNUAL RIGHTMOVE PLC e have nothing report to on the other information in e have not identified material misstatements in the in misstatements material identified not have e W the Annual Report the Annual Report in our opinion those r w report; directors’ and the report strategic in our opinion the inf statements; financial the with consistent is year financial and 2006. Act Companies with the accordance • • report remuneration Directors’ Remuneration Directors’ the of part the opinion our In in prepared has been properly be audited to Report 2006. Act Companies with the accordance The directors are responsible for the other information information the other for responsible are directors The financial the with together Report Annual the in presented does statements financial the on opinion Our statements. do not we and, accordingly, information the other cover not below, stated explicitly as except or, opinion audit an express thereon. conclusion of assurance form any and, in information the other read is to Our responsibility financial our on based whether, consider so, doing is materially therein the information audit work, statements or statements financial the with inconsistent or misstated have not we work on that Based solely our audit knowledge. information. other the in misstatements material identified report and directors’ report Strategic information: on the other on our work Based solely • Context of the ability of the audit to detect fraud or fraud detect audit to the of the ability of Context or regulation law of breaches is an there limitations of an audit, the inherent Owing to some have detected not may risk that we unavoidable even statements, financial the in misstatements material audit in our planned and performed have properly though we the example, For standards. auditing with accordance and regulations with laws non-compliance further removed financial the in reflected transactions and events the from is procedures limited the inherently the less likely statements, identify it. would auditing standards by required a higher risk remained audit, there In addition, as with any involve collusion, these may as of fraud, of non-detection or the misrepresentations, omissions, intentional forgery, are Our audit procedures controls. override of internal not are We misstatement. material detect to designed and or fraud non-compliance preventing for responsible laws all with non-compliance detect to expected be cannot and regulations. 6. Identifying and responding to risks of material misstatement misstatement material of risks to and responding Identifying and regulations with laws non-compliance due to could that regulations and laws of areas identified We the on effect material a have to expected be reasonably and commercial general our from statements financial directors the with discussion through and experience sector by auditing standards), management (as required and other and legal regulatory inspection of the Group’s and from and other with the directors and discussed correspondence regarding and procedures management the policies and regulations. with laws compliance risks involved our assessment of is regulated, As the Group environment of the control gaining an understanding with complying for procedures including the entity’s requirements. regulatory regulations and laws identified communicated We indications any alert to and remained team our throughout the audit. throughout of non-compliance the on regulations and laws these of effect potential The considerably. varies statements financial that and regulations laws is subject to the Group Firstly, financial including statements financial the affect directly companies (including related legislation reporting taxation and legislation profits distributable legislation), with compliance of extent the assessed we and legislation on the as part of our procedures and regulations these laws items. statement financial related and laws other many to subject is Group the Secondly, of non-compliance the consequences where regulations the in disclosures or amounts on effect material a have could of imposition the through instance for statements, financial those as areas following the identified We litigation. or fines protection data general effect: an such have to likely most law, employment anti-bribery, and safety, health regulation, and capital and liquidity regulatory agency regulations, the legislation recognising aspects of company certain Group’s the of some the of nature regulated and financial audit limit the required activities. Auditing standards with these laws identify non-compliance to procedures and other enquiry of the directors to and regulations and legal management and inspection of regulatory of operational if a breach Therefore if any. correspondence, relevant us or evident from disclosed to is not regulations that breach. detect an audit will not correspondence, Governance | Auditor’s report continued
Disclosures of emerging and principal risks and Based on those procedures, we have concluded that each longer-term viability of the following is materially consistent with the financial We are required to perform procedures to identify whether statements and our audit knowledge: there is a material inconsistency between the directors’ • the directors’ statement that they consider that the annual disclosures in respect of emerging and principal risks and report and financial statements taken as a whole is fair, the viability statement, and the financial statements and balanced and understandable, and provides the information our audit knowledge. necessary for shareholders to assess the Group’s position and performance, business model and strategy; Based on those procedures, we have nothing material to • the section of the annual report describing the work of the add or draw attention to in relation to: Audit Committee, including the significant issues that the • the directors’ confirmation within the viability statement audit committee considered in relation to the financial page 27 that they have carried out a robust assessment of statements, and how these issues were addressed; and the emerging and principal risks facing the Group, including • the section of the annual report that describes the review those that would threaten its business model, future of the effectiveness of the Group’s risk management and performance, solvency and liquidity; internal control systems. • the Principal risks and uncertainties disclosures describing these risks and how emerging risks are identified, and We are required to review the part of the Corporate explaining how they are being managed and mitigated; and Governance Statement relating to the Group’s compliance • the directors’ explanation in the viability statement of how with the provisions of the UK Corporate Governance Code they have assessed the prospects of the Group, over what specified by the Listing Rules for our review. We have period they have done so and why they considered that nothing to report in this respect. period to be appropriate, and their statement as to whether 7. We have nothing to report on the other matters on they have a reasonable expectation that the Group will be which we are required to report by exception able to continue in operation and meet its liabilities as they Under the Companies Act 2006, we are required to report to fall due over the period of their assessment, including any you if, in our opinion: related disclosures drawing attention to any necessary • adequate accounting records have not been kept by the qualifications or assumptions. parent Company, or returns adequate for our audit have We are also required to review the Going Concern and not been received from branches not visited by us; or Viability Statement, set out on page 27 under the Listing • the parent Company financial statements and the part of Rules. Based on the above procedures, we have concluded the Directors’ Remuneration Report to be audited are not in that the above disclosures are materially consistent with the agreement with the accounting records and returns; or financial statements and our audit knowledge. • certain disclosures of directors’ remuneration specified by law are not made; or Our work is limited to assessing these matters in the context • we have not received all the information and explanations of only the knowledge acquired during our financial we require for our audit. statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes We have nothing to report in these respects. that are inconsistent with judgements that were reasonable 8. Respective responsibilities at the time they were made, the absence of anything to Directors’ responsibilities report on these statements is not a guarantee as to the As explained more fully in their statement set out on page Group’s and Company’s longer-term viability. 90, the directors are responsible for: the preparation of the Corporate governance disclosures financial statements including being satisfied that they give a We are required to perform procedures to identify whether true and fair view; such internal control as they determine is there is a material inconsistency between the directors’ the necessary to enable the preparation of financial statements corporate governance disclosures and the financial that are free from material misstatement, whether due to statements and our audit knowledge. fraud or error; assessing the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
96 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ANNUAL REPORT 2020 | 97 REPORT | ANNUAL RIGHTMOVE PLC
Auditor) Statutory (Senior purpose of our audit work and whom to we owe The our responsibilities Anna Jones Auditor Statutory LLP, KPMG of behalf on and for Accountants Chartered Keynes Milton 2021 February 26 This report is made solely to the Company’s members, as a members, the Company’s to is made solely report This the of 16 Part of 3 Chapter with accordance in body, of our engagement by 2006 and the terms Act Companies so that has been undertaken Our audit work the Company. those matters members the Company’s to might state we we are required to state to them in an auditor’s report and report them in an auditor’s to state to required are we them in to state to required are we the further matters and for with the Company, agreed with the terms accordance we law, by permitted extent fullest the To purpose. other no than other anyone to or assume responsibility accept do not our for as a body, members, and the Company’s the Company have formed. the opinions we or for this report, for audit work, Auditor’s responsibilities responsibilities Auditor’s about assurance obtain reasonable to are Our objectives from free are whole a as statements financial the whether and to or error, fraud whether due to misstatement, material Reasonable report. in an auditor’s issue our opinion but does not of assurance, is a high level assurance ISAs with accordance in conducted audit an that guarantee when it misstatement a material detect (UK) will always are and error or fraud from arise can Misstatements exists. could they or in aggregate, individually if, material considered decisions economic the influence to expected be reasonably statements. financial the of basis the on taken users of on the is provided our responsibilities A fuller description of at www.frc.org.uk/auditorsresponsibilities. website FRC’s 9. Consolidated statement of comprehensive income for the year ended 31 December 2020
2020 2019 Note £000 £000 Revenue 4,5 205,717 289,320
Administrative expenses (70,575) (75,590)
Operating profit 6 135,142 213,730 Financial income 8 151 318 Financial expenses 9 (478) (486) Net financial expense (327) (168) Profit before tax 134,815 213,562 Income tax expense 10 (25,040) (40,473)
Profit for the year being total comprehensive income 109,775 173,089 Attributable to: Equity holders of the Parent 109,775 173,089
Earnings per share (pence) Basic 11 12.60 19.57 Diluted 11 12.57 19.49
Dividends per share (pence) 12 – 6.80 Dividends paid 12 – 60,173
98 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
– 429 892 540 2019 £000 (256) (871) 2,718 4,141 (1,709) (2,111) (2,914) 12,802 21,954 37,474 23,985 32,117 60,672 98,146 41,340 39,908 41,340 (19,516) (18,930) (42,522) (10,499) (14,284) (56,806)
– – 334 887 545 2020 £000 (666) (859) 2,843 1,163 (2,023) (1,570) (2,969) 13,852 22,112 38,807 23,450 96,690 (18,925) (23,184) (10,287) (14,115) (37,299) 121,637 160,444 123,145 121,713 123,145 ANNUAL REPORT 2020 | 99 REPORT | ANNUAL RIGHTMOVE PLC 5 5 13 14 16 17 18 18 19 21 22 21 22 16 23 Note as at 31 Decemberas at 31 2020 Dolan Alison Director
Consolidated statement of financial position position financial of statement Consolidated Non-current assets Non-current plant and equipment Property, Peter Brooks-Johnson Peter Director Intangible assets Deferred tax asset Deferred Total non-current assets non-current Total Current Current assets receivables and other Trade Contract assets Contract Income tax receivable Income Money market deposits market Money Cash and cash equivalents Total current assets Total Total assets Total Current Current liabilities payables and other Trade Lease liabilities Contract liabilities Contract Income tax payable Income Provisions Total current liabilities Total Non-current liabilities Non-current Lease liabilities Provisions Deferred tax liability Deferred Total non-current liabilities non-current Total Total liabilities Total Net assets Equity capital Share Other reserves Retained earnings (net of own shares held) shares own earnings (net of Retained Total equity attributable the to of equity holders the Parent Total The financial statements were approved by the Board of directors on 26 by approved February thewere offinancialThe 2021 Board directors signed statements andwere on its behalf by: Company statement of financial position as at 31 December 2020
2020 2019 Note £000 £000 Non-current assets Investments 15 557,622 554,554 Deferred tax asset 16 549 1,010
Total non-current assets 558,171 555,564
Total assets 558,171 555,564
Current liabilities Trade and other payables 19 (47,464) (15,240)
Total current liabilities (47,464) (15,240)
Net assets 510,707 540,324
Equity Share capital 23 887 892 Other reserves 124,539 121,466 Retained earnings (net of own shares held) 385,281 417,966
Total equity attributable to the equity holders of the Parent 510,707 540,324
The financial statements were approved by the Board of directors on 26 February 2021 and were signed on its behalf by:
Peter Brooks-Johnson Alison Dolan Director Director
100 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
– 35 28 (44) 480 486 283 259 898 2019 £000 (318) (481) (371) (198) (543) (236) (619) 3,114 4,911 (2,112) (1,535) 40,473 16,270 15,847 32,117 (37,263) (15,627) (16,147) (59,856) (88,583) 173,089 222,518 221,685 184,224 (151,807)
– 2 95 (20) 478 507 465 160 824 716 2020 £000 (151) (572) (541) (198) (765) (211) 3,259 1,011 2,102 4,141 (2,308) (1,169) (2,159) 25,040 96,291 64,573 32,117 96,690 (44,959) (30,125) (32,542) 109,775 141,494 141,448 ANNUAL REPORT 2020 | 101 REPORT | ANNUAL RIGHTMOVE PLC 8 9 13 14 13 25 10 18 13 14 27 12 23 24 23 21 18 Note for the year ended December 31 2020 Consolidated statement of cash flows Cash from flows operating activities foryear the Profit Adjustments Adjustments for: charges Depreciation Amortisation charges Amortisation charges Financial income Financial income Financial expenses Re-measurement of leased assets Re-measurement Share-based payments Share-based Income tax expense Income Operating Operating cash changesflow before inworking capital Decrease/(increase) in trade and other receivables and other in trade Decrease/(increase) (Decrease)/increase in trade and other payables and other in trade (Decrease)/increase Increase/(decrease) in provisions Increase/(decrease) Decrease in contract assets in contract Decrease Decrease in contract liabilities in contract Decrease Cash generated Cash from operating generated activities Financial expenses paid Income taxes paid Income Net cash from operating activities Cash usedflows in investing activities on cash and cash equivalents received Interest Reduction in money market deposits market in money Reduction Acquisition of property, plant and equipment of property, Acquisition Acquisition of intangible assetsAcquisition Acquisition of subsidiary, net of cash acquired of subsidiary, Acquisition Net cash used in investing activities Cash usedflows in financing activities Net dividends Purchase of own shares for cancellation for shares of own Purchase Purchase of own shares for share incentive plans incentive share for shares of own Purchase Share-related expenses Share-related Payment of lease liabilities Payment Proceeds on exercise of share-based incentives of share-based on exercise Proceeds Net cash used in financing activities Net increase in cash and cash equivalents Net increase Cash and cash equivalents at 1 January Cash and cash equivalents at 31 December Company statement of cash flows for the year ended 31 December 2020
2020 2019 Note £000 £000 Cash flows from operating activities (Loss)/profit for the year (707) 174,618
Adjustments for: Dividend income 28 (734) (179,398) Financial expenses 28 279 542 Share-based payments 25 (966) 1,835 Income tax credit (441) (927)
Operating cash flow before changes in working capital (2,569) (3,330)
Increase in trade and other payables 2,569 3,330
Cash generated from operating activities – –
Net decrease in cash and cash equivalents – – Cash and cash equivalents at 1 January – –
Cash and cash equivalents at 31 December 18 – –
102 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
£000 Total (765) equity equity (2,112)
311 311 £000 (211) (211) (619) (619) (241) 716 (608) 898 1,028 1,028 4,911 4,911 2,102 2,102 earnings Retained (88,583) (88,583) (59,856) (59,856) (30,125) (30,125) 173,089 173,089 109,775 109,775 – £000 reserve Reverse Reverse acquisition –– –– ––– –– 16 £000 Other reserves ANNUAL REPORT 2020 | 103 REPORT | ANNUAL RIGHTMOVE PLC
– 5 – – 957 Own £000 (765) 1,506 (2,112) shares shares held
–––– – – – – – – 2 2 –––– –––– –––– –––– – – –––– –––– –––– –––– (5) for the year ended December 31 2020 887 (11,552) 407 138 133,265 123,145 892 (11,744) 402 138 51,652 41,340 892 (11,744) 402 138 51,652 41,340 908 (11,138) 386 138 22,290 12,584 £000 Share capital 23 23 24 24 12 10 25 23 23 (16) 24 24 12 10 25 Note
recognised directly in equity directly recognised recognised directly in equity directly recognised At 31 2020 December Share-related expenses Share-related Cancellation of own shares of own Cancellation Purchase of shares for share incentive plans incentive share for of shares Purchase Exercise of share-based incentives of share-based Exercise Net dividends Tax credit in respect of share-based incentives incentives of share-based in respect credit Tax Transactions with owners recorded directly in directly equity recorded with owners Transactions payments Share-based Total comprehensive income comprehensive Total foryear the Profit At 1 January 2020 At 31 December 2019 31 December At Share-related expenses Share-related Cancellation of own shares of own Cancellation Purchase of shares for share incentive plans incentive share for of shares Purchase Exercise of share-based incentives of share-based Exercise Net dividends Tax credit in respect of share-based incentives incentives of share-based in respect credit Tax Transactions with owners recorded directly in directly equity recorded with owners Transactions payments Share-based Total comprehensive income comprehensive Total foryear the Profit Consolidated statement of changes in shareholders’ equity shareholders’ in changes of statement Consolidated At 1 January 2019 At Company statement of changes in shareholders’ equity for the year ended 31 December 2020
Reverse Share Own Other acquisition Retained Total capital shares held reserves reserve earnings equity Note £000 £000 £000 £000 £000 £000 At 1 January 2019 908 (10,025) 14,854 103,520 401,047 510,304
Total comprehensive income Profit for the year –––– 174,618 174,618
Transactions with owners recorded directly in equity Share-based payments 25 –––– 1,835 1,835 Tax credit in respect of share-based incentives recognised directly in equity 10 –––– 375 375 Capital contribution 24 –– 3,076 –– 3,076 Dividends to shareholders 12 –––– (59,856) (59,856) Transfer of shares to SIP – (826) ––– (826) Exercise of share-based incentives – 1,299 –– (1,299) – Cancellation of own shares 23 (16) – 16 – (88,583) (88,583) Share-related expenses 23 –––– (619) (619)
At 31 December 2019 892 (9,552) 17,946 103,520 427,518 540,324
At 1 January 2020 892 (9,552) 17,946 103,520 427,518 540,324
Total comprehensive income Loss for the year –––– (707) (707)
Transactions with owners recorded directly in equity Share-based payments 25 –––– (966) (966) Tax credit in respect of share-based incentives recognised directly in equity 10 –––– 56 56 Capital contribution 24 –– 3,068 –– 3,068 Dividends to shareholders 12 – – – – 2 2 Transfer of shares to SIP – (734) –– (734) Exercise of share-based incentives – 560 –– (560) –
Cancellation of own shares 23 (5) – 5 – (30,125) (30,125) Share-related expenses 23 –––– (211) (211)
At 31 December 2020 887 (9,726) 21,019 103,520 395,007 510,707
104 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 105 REPORT | ANNUAL RIGHTMOVE PLC Notes Notes forming part of the financial statements 1 General information 1 General in the United 6426485) domiciled no. in England (Company registered company limited is a public plc (the Company) Rightmove financialKingdom of statements (UK). asCompany theconsolidated The at for andyear the endedcomprise 2020 31December of the the operation Its principal business is as the Group). to referred (together in its subsidiaries its interest and the Company by time on site). (as measured portal UK property of any audience which have the largest platforms, Rightmove financial of statements the consolidated asThe Group atfor andyear the ended 2020 31 availableDecember request are upon to the Company Secretary from the Company’s registered office at 2 Caldecotte Lake Business Park, Caldecotte Lake Drive, Lake Business at Park,office Caldecotte 2 Caldecotte registered the from Company’s Secretary the to Company at plc.rightmove.co.uk. website corporate available on the MK7 8LE or are Keynes, Milton Caldecotte, of compliance Statement with in financialand and accordance have byGroup The statements Company approved been the of prepared Board directors NoRegulationto 1606/2002 (EC) as pursuant reporting adopted financial it standards international applies in Union. theEuropean for authorisedwere onfinancial issue 26 statements byconsolidated February theThe of 2021. Board directors Basis of preparation of with the requirements in conformity standards accounting with international in accordance have been prepared accounts The the Act Companies 2006. On together publishing with financialthe the here financial statements Company Group statements, its individual statement present to 2006 not Act in s408 of the Companies is taking advantage of the exemption the Company that notes a form and part income related of of Thethese financialcomprehensive for loss approved year statements. the of the was £707,000 (2019: Company £174,618,000). profit financialThe oncost have statements an basis. been historical prepared Basis of consolidation direct to has existing rights that give it the ability the Group exists when Control by the Group. entities controlled are Subsidiaries the activities relevant of an and entity has as resultreturnsreceive the the a theaffect will ofto ability Group its involvement with The account. into taken are or convertible exercisable currently rights that are voting potential In assessing control, the entity. financial of commences statements subsidiaries includedfrom are in the financial control consolidated that the date statements ceases. that control until the date Protection and Tenant capital of Van Mildert Landlord share of the ordinary 100% acquired 2019 the Group On 30 September (Van Limited Mildert). of results The this have in entity been these financialconsolidated FurtherGroup statements. details of the investment and acquisition set are out in 15 Note and 27. Note Going concern of scenarios range in a liquidity the Group’s and tested review going concern a detailed and extended Management has performed pandemic. the Covid-19 arising from the uncertainties account taking into as set out below, 2020 at 31 December and has cash of £96.7m be cash generative to has continued debt free, was the Group the year, Throughout 2019: (31 cash December and market money deposits of balance £36.3m). has Group The Bankthe revolving plcbenefit withfacility loanwhich was of on Barclays agreed a 7committed £10m February 2020 2020 a In April on that date. terminated Bank plc which was with Barclays loan facility committed £10m the previous and replaced in a covenant and introduced 7 February 2022 to the original year beyond the term extend to the facility to agreed variation was date. to under the facility No amount has been drawn EBITDA. of net debt to the ratio to relation suspend the share included the decision to This Covid-19. to in response liquidity preserve to steps immediate took Group The 2019 dividend. On 27 April 2020 announced of the previously 2020 and the cancellation 14 March from programme buyback that Financingconfirmation the itwas (CCFF). Facility UKRightmove to eligible Corporate Covid Government’sreceived access the in activity properties, view physically to inability the particularly 2020, March late in introduced measures the lockdown Following inreduced housing the market UKwas significantly untilto 2020. May/June during support In this customers order unprecedented which discounts had aoffered negative impactshut were ondown revenueof 2020 ofthe market, customers £88.9m: UK property 60% in August and 40% April and July, months between four value for on their invoice a 75% discount received customers Agency the delay due to 75% in August and 60% in September to extended was and Wales in Scotland discount the Agency in September; ain 75%the of onoffered discount restart in activity their fourfor value were those invoice New months Homes areas; customers be in place. to business units continues other support across limited Selected, April and July. between Notes continued
Going concern continued During the second half of the year, in addition to ending the discounts offered to customers, the Group repaid the Furlough grant in September and a deferred VAT amount in October. The Covid Corporate Financing Facility (CCFF) was not needed and access to the scheme lapsed at the end of December. In stress testing the future cash flows of the Group, management modelled a range of scenarios which considered the impact of a reduction in housing transaction numbers of varying severity for at least the next 12 months from the approval of these financial statements ("the going concern period"). These included severe, but plausible downside scenarios. Under these various scenarios management have modelled likely timing of cash flows from our customers over the going concern period. The models considered the impact of changes in key drivers of the Group’s revenue, including customer numbers and average revenue per advertiser (ARPA). In all the scenarios tested, the Group remained cash positive, debt-free and did not require utilisation of the loan facility. The Board of directors is confident that with the existing cash resources and banking facility in place the Group and the Company will remain cash positive and will have adequate resources to continue in operational existence for at least a period of 12 months from the date of approval of these financial statements, and therefore, have prepared these financial statements on the going concern basis. Judgements and estimates The preparation of the consolidated and Company financial statements in conformity with EU Adopted IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods, if applicable. Management has determined that there are no significant areas of estimation uncertainty or critical judgements in applying accounting policies that have a significant effect on the amounts recognised in the consolidated and Company financial statements.
2 Significant accounting policies The following accounting policies applied by the Group in these consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2019. There are no standards that are issued but not yet effective that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. (a) Revenue Revenue principally represents the amounts receivable from customers in respect of property products, primarily membership of the Rightmove platforms, together with the provision of tenant referencing and rent guarantee insurance. Rightmove also provides non-property services, which includes Data Services and Third-Party advertising. Revenue is recognised based upon the transaction price specified in a contract with a customer. It is recognised at the point when the performance obligations are satisfied, through providing a customer with access to the Rightmove platforms and or products or other services.
106 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 107 REPORT | ANNUAL RIGHTMOVE PLC continued during which the customer chose to apply and use the product. and use the product. apply chose to during which the customer asto part are customers of and or taken into be membership may Discounts package offers offered each product. for price in the transaction consideration agency lettings to primarily services, referencing of tenant the supply to relates revenue Referencing obligations satisfied, at revenueare recognised and thePerformance is end customers. of the month and is the reportservice completed tofinalduring passed the which customer. the referencing tenant insurance guarantee on the sale of rent is generated commission broking insurance to related Revenue of the insurance at the start date is recognised Revenue customers. agency and landlord lettings to and less any payable, costs net of insurance is stated revenue commission Insurance policy purchased. cancellations. adjustment for expected a for dataof variety and different valuationgenerated fees to products relates revenue Data Services is revenue tools, use Rightmove’s property to access gives a customer the contract Where and tools. access gains the point the customer from of the product, over the life basis, on a monthly recognised the is with provide customer to the the specificto Where revenuecontract tools. recognised data, is the customer. to at the point that the data is transferred for inconsideration the price transaction and taken into to are customers be may Discounts offered obligation. each performance advertise non-property to amounts paid by customers represents advertising revenue party Third is actively a customer met once are obligations Performance on the Rightmove platforms. products of the basis over the life on a monthly is recognised Revenue advertising on the Rightmove Platform. mean that Rightmove is acting customers party with third A small number of arrangements contract. is acting as an agent, the Group case where In any as an agent, in a principal-agency relationship. at a is revenue net recognised amount the earned. reflecting margin For membership listing services customers pay monthly subscriptions to list their properties on the list their properties subscriptions to monthly pay customers listing services For membership for equivalent location or branch branch per are these services for Contracts Rightmove platforms. Homes customers. New for and per development customers and Overseas Commercial Agency, vary forin They periodslength typically one but of from years month to are sixfiveto 12 months. the from pointobligations recognised, satisfied,revenue thatare and has Performance customer over the is spread revenue Subscription list their properties. them to allow to the platform to access in advance, billed monthly typically are services and Commercial Overseas Agency, of the contract. life billed are Homes developers and New the platform, to gains access the customer the point from in arrears. monthly on Rightmove through listings and presence their property enhance the option to have Customers property brand enhanced that provide For products advertising products. additional purchasing the point the from of the product the life over is recognised a period of time, revenue across exposure listing basis in line with the core sent on a monthly are Invoices the product. to gains access customer For which services. revenueone-offrecognised products are is use, at a point chosen by the customer, For products and use the product. apply chose to at the end of the month during which the customer is period of time, revenue a across exposure or property exposure brand enhanced that provide the product. to gains access point the customer the from of the product over the life recognised which are For products listing services. basis in line with the core sent on a monthly are Invoices atrevenueone-offrecognised the is use, end at of a the point month chosen by the customer, Property products – products Property of tenant provision and rent referencing insurance guarantee products Non-property at the invoiced yet but not that have been provided services for consideration rights to the Group’s to assets relate Contract unconditional. and the rights have become when invoiced receivables to transferred assets are Contract date. reporting customers, and Commercial Overseas Agency, Estate from received consideration the advance to relate liabilities Contract provided. are or when the services as date, at a later is recognised which revenue for Type of product/serviceType obligations of performance timing of satisfaction and Nature – products Property of membership Rightmove platforms 2 Significant policies accounting along to with customers and table The thetypes timing below summarises nature of and offered the products services different of satisfaction of performance of obligations: of satisfaction performance Notes continued
2 Significant accounting policies continued (b) Investments Investments in subsidiaries are held at cost less any provision for impairment in the parent Company financial statements. (c) Intangible assets (i) Goodwill Goodwill arising on a business combination represents the difference between the fair value of the consideration paid and the fair value of the net identifiable assets acquired and is included in intangible assets. In respect of acquisitions prior to 1 January 2004, goodwill is included on the basis of its deemed cost, which represents the amount previously recorded under UK GAAP. The classification and accounting treatment of business that occurred prior to 1 January 2004 was not reconsidered in preparing the Group’s opening IFRS statement of financial position at 1 January 2004. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is tested annually for impairment. This applies to all goodwill arising both before and after 1 January 2004. (ii) Research and development The Group undertakes research and development expenditure in view of developing new products and improving the existing property platforms. Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge and understanding, is recognised in profit or loss as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of a new product or substantially enhanced website, is capitalised if the new product or the enhanced website is technically and commercially feasible, the Group has sufficient resources to complete development, future economic benefits are probable and the Group can measure reliably the expenditure attributable to the intangible asset during its development. Capitalised costs are held as an asset in progress until such point that the asset is brought into use, at which point it is transferred to the appropriate intangible asset category and amortisation is charged. The expenditure capitalised includes subcontractors and direct labour. Capitalised development expenditure is stated at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed when incurred. (iii) Computer software and licences Computer software and externally acquired software licences are capitalised and stated at cost less accumulated amortisation and impairment losses. Amortisation is charged from the date the asset is available for use. Amortisation is provided to write off the cost less the estimated residual value of the computer software or licence by equal annual instalments over its estimated useful economic life as follows: Computer software 20.0% – 33.3% per annum Software licences 20.0% – 33.3% per annum (iv) Market appraisal algorithm The market appraisal algorithm identified on the acquisition of the Outside View Analytics Ltd is valued using the reproduction cost method based on market rate salaries. Amortisation is expensed in the profit or loss on a straight-line basis over the estimated useful economic life as follows: Market appraisal algorithm 33.3% per annum (v) Credit referencing software The credit referencing software identified on the acquisition of Van Mildert is valued using the reproduction cost method based on market rate salaries. Amortisation is expensed in the profit or loss on a straight-line basis over the estimated useful economic life as follows: Credit referencing software 20.0% per annum (vi) Customer relationships The customer relationships identified on the acquisition of Van Mildert are valued using the income approach, calculating the multi-period excess earnings. Amortisation is expensed in the profit or loss on a straight-line basis over the estimated useful economic life as follows: Customer relationships 10.0% per annum
108 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 109 REPORT | ANNUAL RIGHTMOVE PLC per annum emaining life of the lease emaining life 20.0% 20.0% – 33.3% per annum r continued
ovements Leasehold impr (e) Impairment is any whether there determine to date at each reporting equipment is reviewed plant and carrying value of property, The An impairment loss is is estimated. amount asset’s recoverable the exists, such indication If any indication of impairment. of amount recoverable amount. The its recoverable asset’s carrying amount exceeds the amount by which the for recognised non-financial assets of isfairtheir the valueto greater costs less sell and value in use. In assessing value in use, the estimated toreflects market assessments their that value current rate of present using discounted acash discount are pre-tax flows future the time value of and money the risks tospecific the asset. For an independentasset cash that largely flows, does not generate which the asset belongs. unit to the cash generating for amount is determined the recoverable Goodwill and intangible assets that have an usefulfor notindefinite to are subject life impairment tested amortisation but are the amount by for loss is recognised An impairment might be impaired. is an indication that they and whenever there annually amount. its recoverable which the carrying value of the asset exceeds carrying The amounts atof reportingreviewed eachthe date non-financialother tax Group’s assets, are than assets, deferred whether is to determine there indication any of impairment. If such any amount indication then is exists, the asset’s recoverable For estimated. goodwill, and intangible assets that have usefulindefinite lives oryet thatfor not available are use, recoverable the at the same time. each year amount is estimated sell. to value less costs of its value in use and its fair unit is the greater amount of an asset or cash-generating recoverable The In assessing to value their value rate in present using use, discounted acash discount the are pre-tax flows future estimated market assessmentsthat reflects current of the time value of and money the risks to specific the asset. For the purpose of of assets that the smallest group into together grouped are individually be tested assets that cannot impairment testing, continuing independent use ofcash that from largely theinflows are cashgenerates of inflows other assetsgroups or of assets is allocated the purpose of impairment testing, for in a business combination, acquired goodwill unit”). The (the “cash-generating that are of CGUs groups to is allocated in a business combination acquired Goodwill or (“CGU”). units, cash-generating to ofbenefitcombination. theto synergies expected the from amount. recoverable its estimated exceeds carrying amount of an asset or its CGU if the An impairment loss is recognised in or reduce Impairment profit to loss.respectlosses inrecognised Impairment ofrecognised first are CGUs allocated losses are assets in the unit the carrying amounts of the other reduce and then to the units, to allocated goodwill the carrying amount of any basis. rata of units) on a pro (group (f) Cash and cash equivalents months or less. of three with original maturities and call deposits cash balances Cash and cash equivalents comprise (g) Provisions obligation that can legal or constructive has a present of a past event, the Group as a result if, is recognised A provision and it be reliably is estimated that probable an tooutflow of benefits settle the economic will required obligation. be reflects market thatcash by current rate determined the at flows discounting are future expected aProvisions pre-tax assessment of the time value of and money the risks tospecificThe the unwinding liability. ofrecognised the is discount cost. as a finance 2 Significant policies accounting plant and equipment (d) Property, are costs losses. Capitalised and impairment depreciation less accumulated at cost stated are plant and equipment Property, the appropriate to point it is transferred use, at which into that the asset is brought until such point in progress held as an asset plant and off equipment write is cost to and theis category provided lessDepreciation depreciation charged. the property, useful economic their estimated instalments over equipment by equal annual plant and value of property, residual estimated lives as follows: and fittings equipment,Office fixtures Computer equipment Computer Notes continued
2 Significant accounting policies continued (h) Leases When a contractual arrangement contains a lease the Group recognises a lease liability and a corresponding right of use asset at the commencement of the lease. At the commencement date the lease liability is measured at the present value of the future lease payments, discounted using the Group’s incremental borrowing rate where the interest rate in the lease is not readily determined. Subsequently, the lease liability is adjusted by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications. The lease term is determined from the commencement date of the lease and covers for the non-cancellable term. If the Group has an extension option, which it considers it reasonably certain to exercise, then the lease term will be considered to extend beyond that non-cancellable period. If the Group has a termination option, which it considers it reasonably certain to exercise, then the lease term will be considered to be until the point the termination option will take effect. At the commencement date the right of use asset is measured at an amount equal to the lease liability plus any lease payments made before the commencement date and any initial direct costs, less any lease incentive payments. An estimate of costs to be incurred in restoring an asset, in accordance with the terms of the lease, is also included in the right of use asset at initial recognition. Subsequently, the right of use asset is measured in accordance with the accounting policy for property, plant and equipment. An adjustment is also made to the right of use to reflect any remeasurement of the corresponding lease liability. The right of use assets are also subject to impairment testing under IAS 36. Short-term leases and low value leases are not recognised as lease liabilities and right of use assets but are recognised as an expense straight line over the lease term. (i) Employee benefits (i) Pensions The Group provides access to stakeholder pension schemes (defined contribution pension plans). Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss when they are incurred. (ii) Employee share schemes The Group provides share-based incentive plans allowing executive directors and other employees to acquire shares in the Company. An expense is recognised in profit or loss, with a corresponding increase in equity, over the period during which the employees become unconditionally entitled to acquire equity settled share-based incentives. Fair value at the grant date is measured using either the Monte Carlo or Black Scholes pricing model as is most appropriate for each scheme. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option behaviour), expected dividends, and risk-free interest rates (based on government bonds). Service and non-market performance conditions attached to the awards are not taken into account in determining the fair value. For share-based incentive awards with non-vesting conditions, the grant date fair value of the share-based incentives is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. When either the employee or the Company chooses not to meet the non-vesting condition, the failure to meet the non‑vesting condition is treated as a cancellation and the cost that would have been recognised over the remainder of the vesting period is recognised immediately in profit or loss. (iii) Own shares held by The Rightmove Employees’ Share Trust (EBT) The EBT is treated as an agent of Rightmove Group Limited, and as such EBT transactions are treated as being those of Rightmove Group Limited and are therefore reflected in the Group’s consolidated financial statements. In particular, at a consolidated level, the EBT’s purchases of shares in the Company are charged directly to equity.
110 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ANNUAL REPORT 2020 | 111 REPORT | ANNUAL RIGHTMOVE PLC continued (iv) Own shares held by The Rightmove Share Incentive Plan Trust (SIP) Plan Trust Incentive Rightmove Share by The held (iv) Own shares plc being those of Rightmove as treated are SIP transactions plc, and as such as an agent of Rightmove SIP is treated The at level, consolidated thea SIP’s financialconsolidated in In statements. the particular, Group’s reflected and therefore are equity. to directly charged are in the Company of shares purchases incentives (NI) on share-based (v) National Insurance when rate be the prevailing which management expects to of 13.8%, at a rate applicable, where NI is accrued, Employer’s In exercised. the are incentives case at share-based the price it between of options, share is share on provided the difference and deferred shares performance options. In the case of nil cost share of price exercise average and the date the reporting date. at the reporting price based on the share it is provided shares, (j) Treasury shares and shares purchased for cancellation (j) Treasury costs, attributable paid, including directly the amount of the consideration is repurchased, as equity capital recognised When share or cancelled. treasury either held in are shares Repurchased equity. a deduction from as is recognised (k) Segmental reporting and incur earn revenues which it may activities from that engages in business of the Group segment is a component An operating operating An components. other of the Group’s with any transactions to and expenses that relate including revenues expenses, toby be the Chief toregularly Group’s Executive make decisions resources Officer about reviewed are segment’s results operating the to allocated segment and assess financial and its is information which for performance available. discrete (l) Financial income and expenses Interest income. deposits and dividend market and money on cash balances receivable interest comprises Financial income method.as using on recognised Dividendit the theis isincome that income interest accrues, effective date recognised the is established. payment receive right to Company’s and on provisions of the discount and the unwinding and bank charges fees banking facility Financial expenses comprise lease liabilities. (m) Taxation tax Income tax. in on tax or to and Income profit the current is lossthe the for deferred comprises results recognised except year in equity. in which case it is recognised in equity, directly recognised items to it relates that extent equity, to directly posted or credit charge the period net of any for on the taxable income tax payable tax is the expected Current of previous in respect tax payable adjustment to and any date at the reporting enacted or substantially enacted using tax rates periods. the between carrying amounts oftax differences assetsis in of andprovided Deferred respect temporary for liabilities financial for: the not purposes are provided reporting and the amounts differences used taxation for temporary purposes. following The of goodwill; initial of the recognition assets initial or recognition liabilities northat taxable other neitheraffect profit accounting than torelatingin investments a in tobusiness subsidiariesand thecombination, thatthe extent will they differences probably amount The tax is of in provided future. based deferred the not reverse on foreseeable the manner expected of or realisation date. by the reporting enacted or substantially enacted using tax rates and liabilities, of the carrying amount of assets settlement tax the to A only that asset extent deferred it is is recognised taxable that willprobable profits future be available against which the asset can be utilised. include is to incentives on share-based tax of deferred the recognition to policy in relation 12, the Group with IAS In accordance the tax income ofeffect the tax deduction in or to profit loss the value of the tax on income charge the cumulative IFRS 2 charge. of remainder The the tax income ofeffect the tax in deductionrecognised equity. is (n) Dividends that the extent to at that date equity) (and deduction to as a liability recognised only are date Dividends unpaid at the reporting meet these Unpaid dividends that do not Company. of the no longer at the discretion authorised and are appropriately are they disclosed are in criteria the the to financialnotes statements. 2 Significant policies accounting Notes continued
2 Significant accounting policies continued (o) Earnings per share (EPS) The Group presents basic and diluted EPS data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive shares. The Group’s potential dilutive instruments are in respect of share-based incentives granted to employees, which will be settled by ordinary shares held by the EBT, the SIP and shares held in treasury.
3 Risk and capital management Overview The Group has exposure to the following risks from its use of financial instruments: • credit risk • liquidity risk • market risk This note presents information about the Group and Company’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk and the Group’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements. The Board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The primary method by which risks are monitored and managed by the Group is through the monthly Executive Management Committee, where any significant new risks or change in status to existing risks will be discussed and actions taken as appropriate. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit Committee oversees how management monitors compliance with the Group’s internal controls and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. Credit risk Credit risk is the risk of financial loss to the Group if a customer or banking institution fails to meet its contractual obligations. The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group provides credit to customers in the normal course of business. The Group provides its services to a wide range of customers in the UK and overseas and therefore believes it has no material concentration of credit risk. More than 84.0% (2019: 87.0%) of Rightmove Group Limited’s Agency and New Homes customers pay via monthly direct debit, minimising the risk of non-payment. The Group establishes an expected credit loss that represents its estimate of losses in respect of trade and other receivables. Further details of these are given in Note 26. The Group’s treasury policy is to monitor cash and deposit balances on a daily basis and to manage counterparty risk by ensuring that no more than £40,000,000 is held with any single institution. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated with its financial liabilities that are settled by delivering cash. The Group and Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group’s revenue model is largely subscription-based, which results in a regular level of cash conversion allowing it to service working capital requirements. The Group and Company ensure that they have sufficient cash on demand to meet expected operational expenses excluding the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Throughout the year, the Group typically had sufficient cash on demand to meet operational expenses, before financing activities, for a period of 552 days (2019: 232 days).
112 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 113 REPORT | ANNUAL RIGHTMOVE PLC continued (i) Currency risk (i) Currency All of the sales Group’s and than more 97.8% accordingly denominated, (2019: 97.0%) of Sterling are the purchases Group’s it has no significant risk. currency risk rate (ii) Interest bearing lease has on although Group The liabilities, interest these the is interest Theinsignificant. isto Group exposed interest risk on financialcash rate liabilities. and has market money deposit no Company The balances. interest-bearing (i) Dividend policy in relation shareholders ordinary of dividends to the level monitors dividend policy and has a progressive of directors Board The growth with the underlying returns align shareholder to this policy in order has adopted Board in basic EPS. The the growth to achieved in of the theprofitability Group. earnings level of available retained by the determined is primarily dividend payments make to of the Group capacity The deduction after of held, of own shares earnings and the retained The of the Group. the in the Company, cash resources deduction after of held, £385,282,000 own shares are (2019: £417,966,000) as set Company, out in statement the Company 2020 of £96,690,000 31 December deposits at market has cash and money Group The equity. of changes in shareholders’ (2019: £36,258,000), the of majority which held are by the principal subsidiary operating Group The Rightmove Limited. Group business and in 2020 cash of the nature cash generative strong dividends given the fund its future positioned to is well activities operating was £141,452,000 from an (2019: cash operating £221,685,000) conversion generated representing in excess of 100%. buybacks (ii) Share its in purchases own shares the Company The market; the timing of these depends purchases on available cash free flow and In market conditions. 2020, 5,028,392 bought (2019: at back 16,268,322) were cancelled of an and shares price average were £5.99 (2019: £5.45). 3 Risk and capital management 7 February 2020. on terminated was loan facility revolving committed a £10,000,000 Bank plc for with Barclays agreement The with Bank that loan a plc revolving expires facility with a new for This was replaced agreement Barclays £10,000,000 committed on 7 February 2022 and introduced a covenant in relation to the ratio of net debt to EBITDA. of net debt to the ratio to in relation a covenant 2022 and introduced on 7 February risk Market Market risk is the risk that will changes theaffect in income. such Group’s rates exchange market prices as and foreign interest while The objective of market risk management parameters, is market risk manage within to exposures and acceptable control on risk. optimising the return Capital management policy is and maintain creditor to of an Board The directors’ efficient of statement financial position so to maintainas investor, working thattoconsiders and the development sustain future of future market confidence theThe business. of Board directors are on capital measures return and accordingly be low to will continue of the Group requirements capital and capital expenditure as basic EPS. as well shareholders of the Company’s the spread monitors of directors Board The targets. performance key not buybacks. share of dividends and a combination through shareholders surplus capital to return policy is to Board’s The of its nor any Neither the Company capital management during the year. to approach no changes in the Group’s were There imposed capital requirements. externally subject to subsidiaries are Operational risk processes, with the Group’s of causes associated a wide variety loss arising from or indirect risk is the risk of direct Operational risks such as those and liquidity market than credit, other factors external and from and infrastructure, technology personnel, risks arise behaviour. Operational of corporate standards accepted and generally requirements legal and regulatory arising from operations. all of the Group’s from objective Group’s The is manage risk to operational so as the of balance to avoidance financial losses andto damage the Group’s restrict that initiative and creativity. procedures to andcontrol effectiveness with avoidcost reputation overall Notes continued
3 Risk and capital management continued The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management within each business unit. This responsibility is supported by the development of overall Group standards for the management of operational risk in the following areas: • requirements for appropriate segregation of duties, including the independent authorisation of transactions; • requirements for the reconciliation and monitoring of transactions; • compliance with regulatory and other legal requirements, including Financial Conduct Authority requirements for regulated entities; • documentation of controls and procedures; • requirements for the periodic assessment of operational risks faced and the adequacy of controls and procedures to address the risks identified; • requirements for reporting of operational losses and proposed remedial action; • development and regular testing of business continuity and disaster recovery plans; • regular testing of the security of the IT systems and platforms, regular backups of key data and ongoing threat monitoring to protect against the risk of cyber attack; • training and professional development and ongoing succession planning; and • risk mitigation, including insurance where this is effective.
4 Operating segments The Group determines and presents operating segments based on internal information that is provided to the Chief Executive Officer, who is the Group’s Chief Operating Decision Maker. The Group’s reportable segments are as follows: • The Agency segment which includes resale and lettings property advertising services provided on Rightmove’s platforms and tenant referencing and insurance products sold by Van Mildert; and • The New Homes segment which provides property advertising services to new home developers and housing associations on Rightmove’s platforms. The Other segment which represents activities under the reportable segments threshold, comprises Overseas and Commercial property advertising services and non-property advertising services which include our Third-Party advertising and Data Services. Management monitors the business segments at a revenue and trade receivables level separately for the purpose of making decisions about resources to be allocated and of assessing performance. All revenue in both years is derived from third parties and there is no inter-segment revenue. Operating costs, financial income, financial expenses and income taxes in relation to the Agency, New Homes and the Other segment are managed on a centralised basis at a Rightmove Group Limited level and as there are no internal measures of individual segment profitability, relevant disclosures have been shown under the heading of Central in the table below.
114 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
151 318 570 £000 £000 Total (486) (779) (478)
(3,594) (4,270) (3,476) 19,552 77,723 17,397 (55,935) (35,277) 289,320 213,730 205,717 135,142 141,025 (4) (2) (2) (4) (4) (4)
(4) (4) – – – – – – – – – – Trade receivables receivables Trade 57 55 127 198 £000
2019 (5,980) £000 7,327 Adjustments Revenue Revenue 281,993 18,982 289,320 19,552
(2) – – – – 151 318 £000 (486) (779) (478)
(3,594) Central (4,270) (3,476) 77,668 (55,682) (253) (35,093) (184) 137,521 (2,379) 140,968 219,710 145 £000
ANNUAL REPORT 2020 | 115 REPORT | ANNUAL RIGHTMOVE PLC £000 Other Trade receivables Trade
2020
£000 3,249 Revenue £000 202,468 17,252 205,717 17,397 Subtotal Subtotal
New £000 Homes
–––– – – – – –––––––––––– –––––––––––––––––––– –––– –––– –––––––– £000 5,324 11,086 16,410 2,944 4,776 9,683 14,459 2,811 Agency 209,268 55,482 264,750 24,570 141,636 40,656 182,292 23,425 continued (3) (3) (1) (1) al operating doesal profit not ofoperating include charge payments £2,102,000 share-based (2019: £4,911,000) and NI of charge on £277,000 incentives share-based he only segment assets that are separately monitored by the Chief Operating Decision Maker relate to trade receivables net of any associated provision for for provision associated net of any receivables trade to relate Maker Decision by the Chief Operating monitored separately segment assets that are he only and made for consolidation receivables payables tradehe debit on reclassificationtrade credit in the in adjustments balances ofreflects balances column T basis. on a centralised reported segment assets are impairment. All other T purposes. statutory accounts Centr (2019: £1,069,000). Operating profit Operating Year ended 31 2020 December Year Revenue 4 Operating segments segments. no reportable has Company The UK (4) Geographic information location of customers. based on the geographical and assets are revenue on the basis of geography, information In presenting (1) Operating profit is stated after the charge for and is the(1) depreciation after profit amortisation. stated charge Operating (2) (3) Group Financial income 2019 ended 31 December Year Revenue profit Operating and amortisation Depreciation Financial income Depreciation and amortisation Depreciation Financial expenses receivables Trade Liabilities Capital expenditure Financial expenses Other assets receivables Trade Other segment assets Segment liabilities Segment Capital expenditure Rest of the world Rest Notes continued
5 Revenue The Group’s operations and main revenue streams are those described in these annual financial statements. The Group’s revenue is derived from contracts with customers. Disaggregation of revenue In the following table, revenue is disaggregated by property and non-property advertising revenue. The table also includes a reconciliation of the disaggregated revenue with the Group’s reportable segments (see Note 4).
Agency New Homes Other Total Year ended 31 December 2020 £000 £000 £000 £000 Revenue stream Property products 141,636 40,656 9,832 192,124 Non-property products – – 13,593 13,593
141,636 40,656 23,425 205,717
Agency New Homes Other Total Year ended 31 December 2019 £000 £000 £000 £000 Revenue stream Property products 209,268 55,482 13,961 278,711 Non-property products – – 10,609 10,609
209,268 55,482 24,570 289,320
Contract balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
2020 2019 Note £000 £000 Receivables, which are included in trade and other receivables 17 18,277 20,285 Contract assets 334 429 Contract liabilities (1,570) (2,111)
The contract assets primarily relate to the Group’s rights to consideration for services provided but not invoiced at the reporting date. The contract assets are transferred to receivables when invoiced and the rights have become unconditional. The contract liabilities primarily relate to the advance consideration received from Agency, Overseas and Commercial customers, for which revenue is recognised as or when the services are provided.
6 Operating profit 2020 2019 £000 £000 Operating profit is stated after charging: Employee benefit expense 34,832 34,146 Depreciation of property, plant and equipment 3,259 3,114 Amortisation of intangibles 1,011 480 Bad debt impairment charge 701 740
116 | RIGHTMOVE PLC | ANNUAL REPORT 2020 6 Operating profit continued Auditor’s remuneration 2020 2019 £000 £000 Fees payable to the Company’s auditor in respect of the audit Audit of the Company’s financial statements 32 19 Audit of the Company’s subsidiaries pursuant to legislation 208 197
Total audit remuneration 240 216 STRATEGIC REPORT Fees payable to the Company’s auditor in respect of non-audit related services Half year review of the condensed financial statements 19 19 All other services 2 2
Total non-audit remuneration 21 21
There were no other fees payable to KPMG LLP (2019: £nil). GOVERNANCE 7 Employee numbers and costs The average number of persons employed (including executive directors) during the year, analysed by category, was as follows:
2020 2019 Number of Number of employees employees FINANCIAL STATEMENTS Administration 514 502 Management 44 36
558 538
The aggregate payroll costs of these persons were as follows:
2020 2019 £000 £000 Wages and salaries 29,698 29,125 Social security costs 3,700 3,664 Pension costs 1,434 1,357
34,832 34,146
In 2019, employee numbers and costs include the average number of Van Mildert employees for the 3-month period since acquisition with an aggregate Van Mildert payroll cost of £534,000. The 2020 aggregate payroll costs include the full year Van Mildert employee costs of £2,176,000. Wages and salaries include £8,099,000 (2019: £8,890,000) relating to the product development and technology teams; these teams spend a significant proportion of their time on research and development activities, including innovation of our product proposition and enhancements to the Rightmove platforms. Social security costs do not include a charge of £277,000 (2019: £1,069,000) relating to NI on share-based incentives (note 25).
RIGHTMOVE PLC | ANNUAL REPORT 2020 | 117 Notes continued
8 Financial income 2020 2019 £000 £000 Interest income on cash and cash equivalents 134 267 Interest income on money market deposits 17 51
151 318
9 Financial expenses 2020 2019 £000 £000 Other interest payable 199 198 Interest unwind on lease liabilities 279 288
478 486
10 Income tax expense 2020 2019 £000 £000 Current tax expense Current year 25,272 40,689 Adjustment to current tax charge in respect of prior years 60 (385)
25,332 40,304
Deferred tax Origination and reversal of temporary differences 219 14 Adjustment to deferred tax in respect of prior years (351) – (Increase)/decrease in tax rate at which deferred tax is being recognised (160) 155 (292) 169
Total income tax expense 25,040 40,473
Income tax credit recognised directly in equity 2020 2019 £000 £000 Current tax Share-based incentives (465) (904)
Deferred tax (Note 16) Share-based incentives 250 (124) Increase in tax rate at which deferred tax is being recognised (96) – 154 (124)
Total income tax credit recognised directly in equity (311) (1,028)
Total income tax recognised directly in equity in respect of the Company was a credit of £56,000 (2019: £375,000 credit).
118 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
– – (5) 2019 £000 155 129 2019 (385) Diluted 40,579 40,473 863,996 213,562 (216,744) (6,097,026) (14,813,304) 904,626,215 884,363,137 Number of shares
Pence Pence per share 77 50 60 2020 £000 Basic (160) (351) (250) 2020 25,614 25,040 (6,669) 134,815 409,021 (4,280,999) (13,360,310) 888,422,516 871,183,559 Number of shares £000 173,089 19.57 19.49 109,775 12.60 12.57 ANNUAL REPORT 2020 | 119 REPORT | ANNUAL RIGHTMOVE PLC
continued held by the EBT and SIP Trust held by the EBT and SIP Trust Less own shares held in treasury at the beginning of the year held in treasury shares Less own for cancellation ofown purchased shares Effect exercised of incentives share-based Effect by of purchased the shares EBT Effect shares less ordinary at 31 December shares Issued ordinary average number of Weighted ordinary shares (diluted) dilutive of all potentially assume conversion to is adjusted in issue shares number of ordinary average the weighted EPS, For diluted which will be employees, to granted incentives of share-based in respect dilutive instruments are potential Group’s The shares. held in treasury. the SIP and shares held by the EBT, shares by ordinary settled Issued ordinary shares at 1 January less ordinary shares shares at 1 January less ordinary shares Issued ordinary 11 Earnings per share (EPS) ended 31 2020 December Year Earnings Profit before tax before Profit 10 Income tax expense of Reconciliation effective taxrate foryear the endedrate tax 2020effective 31December is consolidated 18.5%Group’s The (2019: 19.0%) which is than lower (2019: in tax line in of and with) the corporation and development the UK rate expenditure research standard for due credit to other shown of below. A items the full of components reconciliation the tax is charge set out below: Year ended 31 December 2019 ended 31 December Year Earnings Current tax Current at 19.0% (2019: 19.0%) Weighted average number of Weighted ordinary shares (basic) Reduction in tax rate at which deferred tax is being provided at which deferred in tax rate Reduction Non-deductible expenses Share-based incentives Share-based Adjustment to deferred tax charge in respect of prior years in respect tax charge deferred to Adjustment Adjustment to current tax charge in respect of prior years in respect tax charge current to Adjustment Research and development credit Research Notes continued
11 Earnings per share (EPS) continued 2020 2019 Number of shares Number of shares Weighted average number of ordinary shares (basic) 871,183,559 884,363,137 Dilutive impact of share-based incentives outstanding 2,491,363 3,670,032
873,674,922 888,033,169
The average market value of the Group’s shares for the purposes of calculating the dilutive effect of share-based incentives was based on quoted market prices for the period during which the share-based incentives were outstanding. Adjusted EPS Adjusted EPS is calculated as it is used in the remuneration arrangements noted in the Directors Remuneration Report. It is calculated by taking basic profit for the year and adding back the charge for share-based payments and the related NI, but without any adjustment to the tax charge in respect of these items. A reconciliation of the basic earnings for the year to the adjusted earnings is presented below: 2020 2019 £000 £000 Basic profit for the year 109,775 173,089 Share-based incentives charge 2,102 4,911 NI on share-based incentives 277 1,069
Adjusted profit for the year 112,154 179,069
Price per share Price per share 2020 2019 Basic adjusted EPS 12.87 20.25 Diluted adjusted EPS 12.84 20.16
12 Dividends Dividends declared and paid by the Company were as follows: 2020 2019 Pence per share £000 Pence per share £000 2018 final dividend paid – – 4.00 35,510 2019 interim dividend paid – – 2.80 24,663 2019 final dividend paid – – – – 2020 interim dividend paid – – – –
– – 6.80 60,173
Unclaimed dividends returned – (2) – (317)
Net dividends included in the statement of cash flows – (2) – 59,856
After the reporting date a final dividend of 4.5p (2019: 4.4p cancelled) per qualifying ordinary share being £39,228,000 (2019: 38,484,000 cancelled) was proposed by the Board of directors. The final dividend will be paid, subject to shareholder approval, on 28 May 2021. There was no 2020 interim dividend paid (2019: £24,663,000). There was no 2020 interim dividend paid (2019: £24,663,000). On 28 February 2020, the final dividend for 2019 was proposed for 4.4p with an estimated payment of £38,484,000. However, due to the Covid-19 pandemic, the Board of directors decided on 27 March 2020 to cancel the proposed payment of the final 2019 dividend and not to declare any further discretionary dividend payments during 2020. The Board of directors believes that the additional liquidity generated by this decision was prudent given the uncertainties arising from the Covid-19 pandemic. The terms of the EBT provide that dividends payable on the ordinary shares held by the EBT are waived. No provision was made for the final dividend in either year and there are no income tax consequences.
120 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
543 278 £000 £000 Total Total (130) (273) 1,429 2,308
* – 190 305 £000 £000 573 573 Motor Motor vehicles vehicles
–– – –– – –– –– –– 10 £000 £000 Leasehold Leasehold improvements improvements
ANNUAL REPORT 2020 | 121 REPORT | ANNUAL RIGHTMOVE PLC £000 £000 Computer Computer equipment equipment
–– –– –– 23 520 52 2,256 £000 £000 Office Office fittings fittings fixtures fixtures & fixtures fixtures & equipment, equipment,
* ––– – – (29) (24) (77) 115 121 48 109 £000 £000 (283) 1,429 Land & Land & (2,961) (656) (8,437) (466) (788) (13,308) (1,456) (141) (993) (132) (392) (3,114) (4,531) (802) (9,566) (588) (1,080) (16,567) (1,476) (491) (7,367) (334) (396) (10,064) (1,570) (146) (1,129) (122) (292) (3,259) (2,961) (656) (8,437) (466) (788) (13,308) 11,776 461 1,640 771 544 15,192 10,244 366 1,200 649 343 12,801 13,205 1,022 9,637 1,115 1,130 26,109 14,634 1,074 11,893 1,115 1,703 30,419 13,205 1,022 9,637 1,115 1,130 26,109 13,252 951 9,008 1,105 940 25,256 10,244 366 1,200 649 343 12,801 10,103 272 2,327 527 623 13,852 buildings buildings The re-measurement of leased assets relates to a cash refund in relation to a rent-free period on of a an to leased lease. cash a office in assets to re-measurement The refund rent-free relation relates plant or equipment in either year. had no property, Company The At 31 December 2018 31 December At Net book value At 31 2019 December At 31 December 2019 31 December At At 31 December 2019 31 December At Charge for year for Charge Net book value At 31 2020 December Acquired through a business combination a business combination through Acquired At 31 December 2020 31 December At Depreciation 2019 1 January At Charge for year for Charge At 31 December 2019 31 December At Depreciation 1 January 2020 At Re-measurement of leased assets Re-measurement At 31 December 2020 31 December At Leased asset additions Modificationof leased assets Leased asset additions Additions Additions Acquired through a business combination through Acquired Cost 1 January 2020 At Group 13 Property, plant and equipment 13 Property, Group Cost 2019 1 January At * Land & Buildings and Motor Vehicles are Right of Use assets held under leasing arrangements accounted for in accordance with IFSR16. Further disclosure is in Note 21. is in Note with IFSR16. Further disclosure in accordance for accounted Right of Use assets held under leasing arrangements Vehicles are * Land & Buildings and Motor Notes continued
14 Intangible assets Computer Customer Goodwill software relationships Total Group £000 £000 £000 £000 Cost At 1 January 2020 16,516 6,197 4,521 27,234 Additions – 1,169 – 1,169
At 31 December 2020 16,516 7,366 4,521 28,403 Amortisation At 1 January 2020 – (5,167) (113) (5,280) Charge for year – (559) (452) (1,011)
At 31 December 2020 – (5,726) (565) (6,291) Net book value At 31 December 2020 16,516 1,640 3,956 22,112
At 31 December 2019 16,516 1,030 4,408 21,954
Computer Customer Goodwill software relationships Total Group £000 £000 £000 £000 Cost At 1 January 2019 2,465 5,208 – 7,673 Additions – 236 – 236 Arising on a business combination 14,051 753 4,521 19,325
At 31 December 2019 16,516 6,197 4,521 27,234 Amortisation At 1 January 2019 – (4,800) – (4,800) Charge for year – (367) (113) (480)
At 31 December 2019 – (5,167) (113) (5,280) Net book value At 31 December 2019 16,516 1,030 4,408 21,954
At 31 December 2018 2,465 408 – 2,873
The Company had no intangible assets in either year. Impairment testing for cash generating units containing goodwill For the purpose of impairment testing, goodwill is allocated to the Group’s Agency segment which represents the lowest level within the Group at which goodwill is monitored for internal management purposes, which is not higher than the Group’s operating segments as reported in Note 4. The goodwill comprises £14,051,000 recognised on the acquisition of Van Mildert in 2019; £1,733,000 arising on the acquisition of The Outside View Analytics Ltd in May 2016 and £732,000 of purchased goodwill arising pre-transition to IFRS. The Van Mildert goodwill was allocated to the Agency segment as the revenue and future synergy benefits primarily relate to Agency customers. The goodwill in relation to the Outside View was also allocated at the time of the initial acquisition to the Agency segment as the revenue from their market appraisal product, known as Rightmove Discover, is derived from Rightmove’s Agency customer base.
122 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
2019 £000 3,076 551,478 554,554
2020 £000 100% Ordinary 100%100% Ordinary Ordinary 100% Ordinary 3,068 554,554 557,622
Country of ANNUAL REPORT 2020 | 123 REPORT | ANNUAL RIGHTMOVE PLC incorporation Holding Class of shares England and Wales Nature of Nature business Online rental servicesOnline rental servicesOnline rental England and Wales England and Wales Credit referencing and rent and rent referencing Credit Online property advertisingOnline property England and Wales guarantee insurance services insurance guarantee continued for-share exchange. Following the Scheme of Arrangement, the Company underwent a court-approved capital reduction. capital reduction. a court-approved underwent the Company of Arrangement, the Scheme exchange. Following for-share ‑ Protection Limited Protection Investment in subsidiary undertakings 1 January At the impairment testing is not sensitive to changes in the inputs. sensitive to is not the impairment testing Limited Services Rightmove Rent Company Company Limited Rightmove Group 15 Investments subsidiaries The of the as Group at as 2020 31 follows: were December 14 Intangible assets 19 pandemic. the Covid- arising from the uncertainties which included considering test, the annual impairment performed Management calculations The used in the basedcash are onflowprojections the business latest plan thatreflect hasto the recent been most updated developments as at the date. impairment The reporting looked rate at test cash growth overflows The the long-term next years. five used is in line of usedwasrate resultwith inflation The10%. ofthe ofrate The prevailing discount for c1% pre-tax years. the nexttwo Rightmove Property Services Limited Services Rightmove Property and Tenant Van Mildert Landlord All the above subsidiaries are included in the Group consolidated financial statements. The registered office for allAll office subsidiariesthe of above registered subsidiaries The included financialare in statements. the consolidated Group MK7 8LE. Keynes, Milton Drive, Caldecotte, Lake Business Park, Caldecotte Lake is 2 Caldecotte the Group in February 2019. appointed were liquidators after in January 2021, liquidated was Ltd Analytics Outside View The charge payments – subsidiary share-based Additions At 31 December In 2008, the Company became the holding company of Rightmove Group Limited (formerly Rightmove plc, Company no. plc, Company Rightmove (formerly Limited of Rightmove Group became the holding company In 2008, the Company of a 1985 by way Act under s425 of the Companies of Arrangement a Scheme to 03997679) and its subsidiaries pursuant share the same as the consolidated substantially were the Scheme after immediately of the Group assets and liabilities consolidated The the Scheme. prior to immediately assets and liabilities of the Group holding the new to transferred were incentives share-based in 2008 all employees’ the capital reconstruction Following Rightmove Limited from Group transferred of were employment contracts plc. In addition, directors’ certain company, Rightmove the share-based Accordingly, Limited. by Rightmove Group employed remained employees plc, whilst all other Rightmove to has charge payments been split and the between with Rightmove Company Limited £3,068,000 Group (2019: £3,076,000) as a in capital its accounts the to being recognised contribution subsidiary. Company impairment. has been assessed for Limited, investment in its subsidiary undertaking, Rightmove Group Company’s The as Rightmove Group capitalisation of the Group, the market the carrying amount of the investment to Management compared 2020, the market at 31 December no impairment as, was There operations. trading all of the Group’s contains Limited Limited. investment in Rightmove Group than the Company’s than nine times greater more was capitalisation of the Group Notes continued
16 Deferred tax asset and deferred tax liability The deferred tax asset and deferred tax liability are attributable to the following: Deferred tax asset Group Company Property Share-based plant and Share-based incentives equipment Provisions Total incentives £000 £000 £000 £000 £000 At 1 January 2020 2,318 308 92 2,718 1,010 Prior year adjustment – 130 221 351 – Recognised in profit and loss (98) (57) 83 (72) (335) Recognised directly in equity (154) –– (154) (126)
At 31 December 2020 2,066 381 396 2,843 549
At 1 January 2019 2,261 368 169 2,798 966 Arising on business combination – (9) – (9) – Recognised in profit and loss (67) (51) (77) (195) (84) Recognised directly in equity 124 –– 124 128
At 31 December 2019 2,318 308 92 2,718 1,010
The decrease in the deferred tax asset relating to share-based incentives at 31 December 2020 is primarily due to the reduction in expected performance of the PPS awards. Deferred tax liability Intangibles 2020 Intangibles 2019 Group £000 £000 At 1 January (871) – Arising on business combination – (897) Recognised in profit and loss 12 26
At 31 December (859) (871)
A reduction in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) was substantively enacted on 26 October 2015, and an additional reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. On 17 March 2020 a measure was substantively enacted to maintain the corporation tax rate of 19% for the 2020 and 2021 financial years, rather than reducing it to 17%. This will increase the Group’s future tax charge accordingly. The deferred tax asset and liability as at 31 December 2020 have been calculated at the rate of 19% (2019:17%) which represents the average rate at which they are expected to reverse in the future, based on currently enacted UK tax rates.
17 Trade and other receivables 2020 2019 Group £000 £000 Trade receivables 18,277 20,285 Less provision for impairment of trade receivables (880) (733) Net trade receivables 17,397 19,552 Prepayments 5,951 3,922 Interest receivable 4 32 Other debtors 98 479
23,450 23,985
Exposure to credit and currency risks and expected credit losses relating to trade and other receivables are disclosed in Note 26. The Company had no trade and other receivables in either year.
124 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
– – – 2019 £000 2019 £000 2019 £000 2,216 4,141 1,202 32,117 10,586 12,802 36,258 14,038 15,240 Company
– – – – 666 2020 £000 2020 £000 2020 £000 3,126 96,690 13,852 10,726 96,690 46,798 47,464
– 481 2019 £000 1,384 6,705 10,946 19,516 ANNUAL REPORT 2020 | 125 REPORT | ANNUAL RIGHTMOVE PLC Group
– 414 2020 £000 2,742 5,879 9,890 18,925 Analysis of property, plant and equipment owned between and of leased Analysis property, assets plant and equipment owned Net book value of property, 21 Leases and equipment plant held within property, vehicles that are leases assets including land and buildings and motor Group The (Note 13). about Information leases which for the is Group a below. lessee is presented 20 Loans and borrowings on 20 April 2020 to updated was loan facility revolving a £10,000,000 committed Bank plc for with Barclays agreement The of net debt to the ratio to in relation a covenant introduce and to 7 February 2022 to the term extend to a variation incorporate in either year. had no bank loans and borrowing company The under this facility. No amount has been drawn EBITDA. Trade payables Trade 19 Trade and other payables 19 Trade Cash and cash equivalents Cash and cash 18 Cash and deposits Group Net book value of right of use assets Money market deposits market Money Trade accruals Trade Cash balances with an original maturity of less than three months were held in current accounts during the year and attracted attracted and during the year accounts held in current months were of less than three original maturity with an Cash balances of 0.2% at (2019: rate average a 0.5%). cash weighted interest The and cash equivalents includes balance £454,000 with the (2019: £507,000)deeds of use to which the in is EBT. accordance restricted at a interest attracted months and less than a year, than three of more deposits with an original maturity market Money of 1.3% (2019: rate 1.3%). weighted average year. had no cash and cash equivalents in either Company The Other creditors Other taxation and social security Inter-group payables Inter-group Notes continued
21 Leases continued Property Vehicles Total Net book value of right of use assets £000 £000 £000 At 1 January 2020 10,244 342 10,586 Additions – 573 573 Lease modification 1,429 – 1,429 Depreciation charge (1,570) (292) (1,862)
At 31 December 2020 10,103 623 10,726
At 1 January 2019 11,776 544 12,320 Additions 115 190 305 Acquired through business combination 92 – 92 IFRS 16 re-measurement (283) – (283) Depreciation charge (1,456) (392) (1,848)
At 31 December 2019 10,244 342 10,586
Lease liabilities 2020 2019 Maturity analysis – contractual undiscounted cash flows £000 £000 Less than one year 2,281 1,983 One to five years 8,346 7,391 More than five years 2,544 3,921
13,171 13,295
2020 2019 Lease liabilities included in the statement of financial position £000 £000 Current 2,023 1,709 Non-current 10,287 10,499
12,310 12,208
2020 2019 Amounts recognised in profit or loss £000 £000 Interest on lease liabilities 279 287 Expenses relating to short-term leases 233 87 Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets 16 31
528 405
2020 2019 Amount recognised in the statement of cash flows £000 £000
Total cash outflow for leases 2,159 1,535
126 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
46 256 Total Total £000 (417) 1,095 Number of shares
– – – 2019 £000
2,407 2,446 2,407 2,914 (16) (16,268,322) 908 907,684,330 892 891,416,008 £000 Contingent Contingent consideration consideration Amount
2019 –– – 2 256 £000 (417) Employee provisions provisions
– – 37 46 Number 424 671 507 256 2,407 3,170 507 507 256 2,407 3,170 £000 of shares ANNUAL REPORT 2020 | 127 REPORT | ANNUAL RIGHTMOVE PLC provision provision Dilapidations 2020
(5) (5,028,392) 721 666 £000 Total Total (256) 892 891,416,008 887 886,387,616 £000 Amount
– – – £000 2,407 2,969 Contingent consideration
2020 – 666 £000 (256) Employee provisions – –––– – 55 666 507 256 2,407 3,170 562 666 2,407 3,635 562 562 666 2,407 3,635 £000 provision Dilapidations 22 Provisions In issue ordinary shares In issue ordinary 1 January At At 1 January 23 Share capital Purchase and cancellation of shares and cancellation Purchase Utilised during the year At 31 December Arising on business combination All issued shares are fully paid. The holders of ordinary shares are entitled to receive dividends as declared from time to time time to from dividends as declared receive entitled to are shares of ordinary holders paid. The fully are All issued shares and are entitled one at per meetings to share vote general ordinary of the Company. number total The shares. ordinary its own purchase to programme buyback a share commenced In June 2007, the Company of shares bought back in 2020 was 5,028,392 1.8% (2019: (2019: 16,268,322) 1.8%) representing shares of the shares ordinary in issue (excluding held shares in acquired All treasury). of were shares The the bought cancelled. shares back were in both years on the open (excluding of market at costs) £30,125,000 a consideration (2019: total £88,583,000). maximum The and minimum £6.50 paid (2019: prices were expenses £6.40) stamp in and to relation £5.05 (2019: Share-related £4.28) per respectively. share £211,000 expenses and (2019: were charges duty broker £619,000). Included within in shares issue at 2020 757,575 31 1,395,476 are December (2019: 2,208,362) held shares by the EBT, (2019: 785,130) held shares by the SIP and 13,285,490 (2019: 13,360,310) held shares in treasury. Charged in the year in the Charged At 31 December Current Non-current The dilapidations provision is in respect of any of the Group’s leased properties where the Group has obligations to make good good make has obligations to the Group where leased properties of the Group’s of any is in respect dilapidations provision The nine years. one to over periods from be payable to estimated liabilities are non-current dilapidations. The is based on the provision The pay. holiday related employee to amounts in relation accrued has the Group During the year the and to cost Group has as not payroll been the future discounted time estimated value of is money not significant. and Tenant on acquisition of Van Mildert Landlord arising consideration and deferred value of the contingent present The one and a over the remaining 2020 and is discounted at 31 December reassessed was is £2,407,000. This Limited Protection classifiedhalf period asyear and a liability. is non-current therefore in either year. had no provisions Company The Notes continued
24 Reconciliation of movement in capital and reserves Group Own shares held – £000 EBT shares SIP shares Treasury reserve reserve shares Total £000 £000 £000 £000 Own shares held as at 1 January 2019 (1,113) (2,985) (7,040) (11,138) Shares purchased for share incentive plans (2,112) – – (2,112) Shares transferred to SIP 826 (826) – – Share-based incentives exercised in the year 208 424 723 1,355 Reduction in shares released due to net settlement – – (31) (31) SIP releases in the year – 182 – 182
Own shares held as at 31 December 2019 (2,191) (3,205) (6,348) (11,744)
Own shares held as at 1 January 2020 (2,191) (3,205) (6,348) (11,744) Shares purchased for share incentive plans (765) – – (765) Shares transferred to SIP 734 (734) – – Share-based incentives exercised in the year 397 524 36 957 Reduction in shares released due to net settlement – – – – SIP releases in the year – – – –
Own shares held as at 31 December 2020 (1,825) (3,415) (6,312) (11,552)
Own shares held – number of shares Number of shares EBT shares SIP shares Treasury reserve reserve shares Total Own shares held as at 1 January 2019 2,248,020 810,095 14,813,304 17,871,419 Shares purchased for share incentive plans 385,612 – – 385,612 Shares transferred to SIP (131,110) 131,110 – – Share-based incentives exercised in the year (294,160) (111,800) (1,518,184) (1,924,144) Reduction in shares released due to net settlement – – 65,190 65,190 SIP releases in the year – (44,275) – (44,275)
Own shares held as at 31 December 2019 2,208,362 785,130 13,360,310 16,353,802
Own shares held as at 1 January 2020 2,208,362 785,130 13,360,310 16,353,802 Shares purchased for share incentive plans 118,293 – – 118,293 Shares transferred to SIP (113,465) 113,465 – – Share-based incentives exercised in the year (817,714) (141,020) (74,820) (1,033,554) Reduction in shares released due to net settlement – – – – SIP releases in the year – – – –
Own shares held as at 31 December 2020 1,395,476 757,575 13,285,490 15,438,541
(a) EBT shares reserve This reserve represents the cost of own shares acquired by the EBT less any exercises of share-based incentives. At 31 December 2020, the EBT held 1,395,476 (2019: 2,208,362) ordinary shares in the Company, representing 0.2% (2019: 0.3%) of the ordinary shares in issue (excluding shares held in treasury). The market value of the shares held in the EBT at 31 December 2020 was £9,085,000 (2019: £14,001,000).
128 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS ANNUAL REPORT 2020 | 129 REPORT | ANNUAL RIGHTMOVE PLC continued 25 Share-based payments and employees. directors executive schemes for incentive a number of share-based operate and Company Group The value of the in the fair account into taken not are conditions Such condition. a service subject to are incentives All share-based value the fair to by reference is measured incentives share-based for in return received value of services fair The received. service using either the is measured incentives value of the share-based of the fair estimate The granted. incentives of share-based each scheme. for pricing model as is most appropriate Carlo or Black Scholes Monte when the awards rate the prevailing be of 13.8%, which management expects to applicable, at a rate where NI is being accrued, based was £277,000 on are exercised, all at to NI the the for price awards relating total The the charge share date. year reporting (2019: at £1,069,000). price 2020 31 share The was December £6.51 (2019: £6.34). 24 Reconciliation 24 of Reconciliation movement in capital and reserves (b) SIP shares reserve (Group and Company) cost the represents reserve This (SIP). Plan Trust Incentive Share the Rightmove established 2014, the Company In November of of acquiring and Rightmove Limited less Rightmove Group or Employees of shares exercises any plc releases SIP were awards. from with 2020 21 350shares December effect (2019: free offered 450), year to period. subject service 141,020a three shares and exercised nil by released (2019: were the 44,275) SIP were shares during the good in to and year leavers relation retirees. the to the SIP from EBT. reserve 113,465 transferred (2019: 131,110) were shares 0.09% At 2020 31 (2019: the December 0.09%) representing SIP held 757,575 (2019: in 785,130) shares the ordinary Company, of the in shares issue ordinary (excluding held shares in market The value treasury). of the held shares in the SIP at 31 December 2020 was £4,932,000 (2019: £4,978,000). shares (Group and Company) (c) Treasury were shares These incentives. of share-based exercises less any in treasury held of acquiring shares the cost represents This An additional awards. incentive share-based satisfy certain be used to and may of 47.60 pence price bought in 2008 at an average nil issued (2019: as 23,085) were a market shares The of up shares. result rolled dividend performance in payments to relation value of the held shares in at treasury 2020 31 was December £86,489,000 (2019: £84,704,000). Other reserves movement of £5,000 The bought back and cancelled. shares of own in respect Reserve the Capital Redemption represents This (2019: £16,000) is the nominal value during cancelled of the shares ordinary year. Retained earnings loss The on the of of incentives exercise £241,000 share-based (2019: £608,000 the between loss) valueis thatthe the difference incentives at which share-based price at and the exercise acquired originally were shares SIP and treasury held by the EBT, shares 23. included in Note are of shares and cancellation buybacks of share Details during the year. or released exercised were Company acquisition Reverse reserve the between from acquisition of the resulted by Rightmove Limited reserve difference This and the Group represents Company issued. at 28 January 2008 and the nominal value of the shares acquired the value of the shares Other reserves as a deemed capital have been treated employees Limited Rightmove Group made to incentives share-based to relating Awards principal The contribution. movement in £3,068,000 the other for comprises reserves (2019: year £3,076,000) in of respect the Limited. Group of Rightmove employees for charge incentives share-based In addition, other include reserves £407,000 (2019: £402,000) of Capital A Reserve. Redemption movement of £5,000 (2019: £16,000)the in to nominal relation has value during cancelled been of the shares recorded ordinary year. Notes continued
25 Share-based payments continued The Group recognised a total share-based payments charge for the year of £2,102,000 (2019: £4,911,000) with a Company credit for the year of £966,000 (2019: charge £1,835,000), as set out below:
Group Company 2020 2019 2020 2019 £000 £000 £000 £000 Sharesave Plan 324 267 1 (1) Performance Share Plan (PSP) (1,112) 1,302 (1,019) 1,206 Deferred Share Bonus Plan (DSP) 1,489 2,364 52 630 Share Incentive Plan (SIP) 838 676 – – Restricted Share Plan (RSP) 563 302 – –
Total share-based payments charge 2,102 4,911 (966) 1,835
NI on applicable share-based incentives at 13.8% 277 1,069 (53) 597
A 2% reduction or increase in the employee leaver assumption (excluding executive directors) for the DSP and the PSP would have increased or decreased the share-based payments charge in the year by £41,000 (2019: £58,000). Approved and Unapproved Plans There has been no award of share options for Approved and Unapproved Plans since 5 March 2010. 2020 2019 Weighted average Weighted average exercise price exercise price Group Number (pence) Number (pence) Outstanding at 1 January – – 525,530 66.6 Exercised – – (525,530) 66.6
Outstanding at 31 December – – – –
Exercisable at 31 December – – – –
The weighted average market value per ordinary share for options exercised in 2020 was nil (2019: 541.60 pence). There are no options outstanding at 31 December 2020 (2019: nil). Sharesave Plan The Group operates an HMRC Approved Sharesave Plan under which employees of Rightmove plc and Rightmove Group Limited are granted an option to purchase ordinary shares in the Company at up to 20% less than the market price at invitation, in three years’ time, dependent on their entering into a contract to make monthly contributions into a savings account over the relevant period. These funds are used to fund the option exercise. No performance criteria are applied to the exercise of Sharesave options. The assumptions used in the measurement of the fair value at grant date of the Sharesave Plan are as follows:
Employee turnover before Share vesting/ price at Exercise Expected Risk free Dividend non-vesting Fair value grant date price volatility Option life rate yield condition per option Grant date (pence) (pence) (%) (years) (%) (%) (%) (pence) 1 October 2019 558.6 430.0 22.4 3.0 0.8 1.2 25.0 146.9 30 September 2020 627.0 513.0 27.5 3.0 0.0 0.5 10.0 167.1
130 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
e) e) value (penc (penc cise price cise price Fair per option
exer
eighted average average eighted (%) W ore yee
bef 2019 urnover ondition vesting/ t c Emplo non-vesting
Number 22,220 331.5
954,274 349.2 316,047 388.0 804,221 387.3 (187,093) 359.0 (279,007) 324.8 (%) yield Dividend
e)
(%) ate free r (penc cise price Risk ANNUAL REPORT 2020 | 131 REPORT | ANNUAL RIGHTMOVE PLC exer
eighted averageeighted W
life ears)
2020 (y Option Number 42,096 329.00
(85,974) 401.5
804,221 387.3 247,942 513.0 752,023 442.9
(214,166) 329.7 y ed (%)
volatilit Expect
e) e cise pric (penc Exer
e) e e at Shar 495.1495.1630.0 0.0630.0 0.0 0.0 22.4 0.0 n/a 27.5 3.0 n/a 3.0 3.0 0.8 3.0 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 270.0 0.0 495.1 0.0 346.0 533.0 (penc pric ant date ant date gr
(1) (1) continued (1) (1) Outstanding at 1 January 25 Share-based payments date. at the grant volatility price share average historic by considering is estimated volatility Expected condition. Plan is a non-vesting the Sharesave under shares purchase to in order must save an employee that requirement The the Black from the valuation obtained to a discount by applying date grant value at the fair into incorporated has been feature This saving based will stop employee that the by estimating the probability has been determined discount pricing model. The Scholes behaviour. and past employee price the share in trends future on expected Grant date Grant (1) For details of TSR and EPS performance conditions refer to the Directors’ Remuneration Report. Remuneration the Directors’ to refer conditions and EPS performance (1) For details of TSR date. at the grant volatility price share average historic by considering is estimated volatility Expected 6 March 2019 (TSR dependent) 2019 (TSR 6 March Group Granted 6 March 2019 (EPS dependent) 6 March dependent) 2020 (TSR 17 September 2020 (EPS dependent) 17 September Forfeited Exercised Outstanding at 31 December Exercisable Exercisable at 31 December The weighted average market value per ordinary share for Sharesave options exercised in 2020 was 624.01 pence 624.01 pence in 2020 was options exercised Sharesave for share value per ordinary market average weighted The (2019: options 585.88 Sharesave The outstanding pence). at 2020 31 have December in an price the exercise of range of life 389.00 513.00 2.2 to (2019: pence pence years 296.00 430.00 to and contractual pence pence) average a weighted (2019: 2.4 years). Share Plan Performance (PSP) of a vest in the event of prior satisfaction which will only shares options or contingent nil cost of PSP permits awards The condition. performance (EPS) and Total Per Share Earnings subject to Date) 2020 (the Grant made on 17 September were 228,004 PSP awards will (1 be years over JanuaryPerformance financialmeasured three 2020 performance. –(TSR) Return 31December Shareholders performance TSR on a relative will be dependent of 50% of the 2019 PSP award 2022 (Vesting Date) vesting in March 2023). The dependent will be of the 50% of the 2019 PSP award period and the vesting performance year over a three measured condition on the period. of satisfaction over measured performance an a target year EPS three growth the EPS model for element and the Black Scholes the TSR Carlo model for have been valued using the Monte PSP awards The Date Grant between period over the three-year evenly is being spread charge payments share-based element and the resulting and and the Vesting Date Date the Grant between dividends accruing receive entitled to are holders PSP award and Vesting Date. awards of the PSP date value at grant of the fair used in the measurement assumptions The in shares. this value will be delivered as are follows: Notes continued
25 Share-based payments continued 2020 2019 Group Number Number Outstanding at 1 January 1,131,918 1,719,070 Granted 228,004 351,802 Lapsed(1) (82,637) (326,905) Exercised (260,006) (612,049)
Outstanding at 31 December 1,017,279 1,131,918
Exercisable at 31 December 188,258 123,758
(1) Following the achievement of 67% of the 2016 PSP performance targets 236,692 nil cost PSP options were lapsed in 2019. Following the achievement of 85% of the 2017 PSP performance target 57,266 nil cost PSP options were lapsed in the year. The weighted average market value per ordinary share for options exercised in 2020 was 624.25 pence (2019: 529.79 pence). The weighted average exercise price was nil in both years. The PSP awards outstanding at 31 December 2020 have a weighted average contractual life of 3.3 years (2019: 2.9 years). Deferred Share Bonus Plan (DSP) In March 2009 a DSP was established which allows executive directors and other selected senior management the opportunity to earn a bonus determined as a percentage of base salary settled in nil cost deferred shares. The award of shares under the plan is contingent on the satisfaction of pre-set internal targets relating to underlying drivers of long-term revenue growth (the Performance Period). The right to the shares is deferred for two years from the date of the award (the Vesting Period) and potentially forfeitable during that period should the employee leave employment. The deferred share awards have been valued using the Black Scholes model and the resulting share-based payments charge is being spread evenly over the combined Performance Period and Vesting Period of the shares, being three years. The assumptions used in the measurement of the fair value of the deferred share awards are calculated at the date on which the potential DSP bonus is communicated to directors and senior management (the grant date) as follows: Employee turnover before Share vesting/ price at Exercise Expected Risk free Dividend non-vesting Fair value grant date price term rate yield condition per option Grant date Award date (pence) (pence) (years) (%) (%) (%) (pence) 6 March 2019 6 March 2019(1) 495.1 0.0 3.0 0.8 1.3 12.0 476.0 4 March 2020 4 March 2020(2) 614.0 0.0 3.0 0.8 0.5 12.0 605.3
(1) Following the achievement of 65% of the 2019 internal performance targets, 357,152 nil cost shares were awarded to executives and senior management on 4 March 2020 (the award date) with the right to release the shares deferred until March 2022. (2) Based on the 2020 internal performance targets, the Remuneration Committee determined that 56% of the maximum award in respect of the year will be made in March 2021. The number of shares to be awarded will be determined based on the share price at the Award Date in March 2021. 2020 2019 Group Number Number Outstanding at 1 January 939,982 789,640 Awarded 357,152 572,387 Forfeited (10,257) (64,525) Exercised (405,300) (357,520)
Outstanding at 31 December 881,577 939,982
Exercisable at 31 December – –
The weighted average market value per ordinary share for deferred shares exercised in 2020 was 616.37 pence (2019: 523.19 pence). The weighted average exercise price was nil in both years. The DSP awards outstanding at 31 December 2020 have a weighted average contractual life of 2.2 years (2019: 1.7 years).
132 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
e) 2019 value (penc Number 79,770 (96,200) (44,275) Fair 790,470 223,650 761,845 per option (111,800)
(%)
ore yee – bef 2020 urnover ondition vesting/ t c Emplo Number (60,025) non-vesting
761,845 187,250 748,050 106,000 (141,020)
(%) yield Dividend
(%) ate free r ANNUAL REPORT 2020 | 133 REPORT | ANNUAL RIGHTMOVE PLC Risk
life ears) (y Option
y ed (%) volatilit Expect
e) e cise pric (penc Exer
e) e e at Shar 420.9 0.0 25.4 3.0 0.8 0.0 33.0 420.9 642.4 0.0 22.4 3.0 0.8 0.0 33.0 642.4 651.6 0.0 27.5 3.0 0.0 0.0 33.0 651.6 (penc pric ant date ant date gr continued Group Outstanding at 1 January Granted Forfeited 630.37 pence in 2020 was and exercised released SIP awards for share value per ordinary market average weighted The was nil. in price both exercise years (2019: 496.24average weighted The pence). of the SIP. with the terms the SIP, in accordance from and retirements good leavers to relate released SIP shares The SIP The options outstanding (2019: of life at 1.4 1.2 2020 31 years). years have December contractual average a weighted Share Plan Restricted (RSP) conditions. service to subject only senior management, selected to shares established that awards was 2019 an RSP In March years will vest three these awards 2019. All senior management on 6 March to awarded were shares deferred 254,502 nil cost 2020 with a on 17 September awarded period. A further 33,614 were service a three-year subject to of grant, the date from vesting period of one year. model have been valued using the Black Scholes awards RSP dividends on these awards. receive entitled to not Participants are years. being three over the Vesting Period of the shares, evenly is being spread charge payments share-based and the resulting Grant date Grant 25 Share-based payments Share Incentive Plan plc and Rightmove in Rightmove (SIP). Employees Plan Trust Incentive the Rightmove Share established Group In 2014, the 350 on shares 2020 21offered December (2019: 450were onshares Group Limited 2019) 20 year December to subject a three share-based model and the resulting Scholes valued using the Black have been SIP awards The (the Vesting Period). period service paid in cash dividends to entitled are SIP shareholders The years. Period of three over the Vesting evenly spread charge payments assumptions used in the of SIP options. The the exercise applied to are criteria No performance over the Vesting Period. of measurement the value fair of at as date are the grant follows: SIP awards Released Exercised Outstanding at 31 December Exercisable at 31 December 21 December 2018 21 December 20 December 2019 20 December 20 December 2020 20 December Expected volatility is estimated by considering historic average share price volatility at the grant date. at the grant volatility price share average historic by considering is estimated volatility Expected Notes continued
25 Share-based payments continued Employee turnover before Share vesting/ price at Exercise Expected Risk free Dividend non-vesting Fair value grant date price volatility Option life rate yield condition per option Grant date (pence) (pence) (%) (years) (%) (%) (%) (pence) 6 March 2019 495.1 0.0 22.4 3.0 0.8 0.0 25.0 476.0 17 September 2020 630.0 0.0 27.5 1.0 0.0 0.0 0.0 627.2
2020 2019 Group Number Number Outstanding at 1 January 211,323 – Awarded 33,614 254,502 Forfeited – (28,786) Exercised – (14,393)
Outstanding at 31 December 244,937 211,323
Exercisable at 31 December – –
The weighted average market value per ordinary share for RSP awards exercised in 2019 in relation to a good leaver was 525.10 pence. The weighted average exercise price was nil. The RSP options outstanding at 31 December 2020 have a weighted average contractual life of 1.1 years (2019: 2.2 years).
26 Financial instruments Credit risk The carrying amount of financial assets, represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: 2020 2019 Group Note £000 £000 Net trade receivables 17 17,397 19,552 Accrued interest receivable 17 4 32 Contract assets 5 334 429 Other debtors 17 98 479 Cash and cash equivalents 18 96,690 32,117 Money market deposits 18 – 4,141
114,523 56,750
The Company had no exposure to credit risk in either year. The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was: 2020 2019 Group Note £000 £000 UK 17,252 18,982 Rest of the world 145 570
17 17,397 19,552
134 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
No No No No No No No No No No 2019 £000 2,167 17,355 19,522 Credit-impaired
(8) (50) (25) £000 Credit-impaired 2020 £000 £000 (149) (197) (381) (220) (171) (145) (267) (733) (880) 2,436 14,961 17,397 Loss allowance allowance Loss Loss allowance
867 402 423 £000 £000 17 amount amount Note 20,285 18,277 ANNUAL REPORT 2020 | 135 REPORT | ANNUAL RIGHTMOVE PLC Gross carrying Gross Gross Gross carrying 1.1% 13,099 1.6% 11,969 7.8% 4,904 6.5% 3,391 5.8% 2.1% 5.9% 13.3% 1,281 14.3% 1,013 21.9% 1,213 loss rate loss rate Weighted-average Weighted-average Weighted-average Weighted-average continued Current Current 2019 2020 Current Group products Property 26 Financial instruments at by the date of type risk reporting receivables was: credit maximum The customer trade for to exposure Past due 1 – 30 days Past due 1 – 30 days Other Past due 31 – 60 days Past due 31 – 60 days Past due 61 – 90 days The Group’s most significant customer accounts for £499,000 most Group’s The significant (2019: accounts customer £861,000) asreceivables of at net 2020. 31 December trade credit Expected loss assessment using a measured losses are credit expected customers, Overseas and smaller Agency Limited’s For Rightmove Group credit based on actual are matrix rates provision is past due. The receivable the trade based on the reason matrix provisioning factors. macro-economic current account take into loss experience to over and when the adjusted, required, past years three For all the judgement applies credit Group other that experienced customers is be of to determined predictive the risk of loss financial and statements other ratings, availableexternal information. to assess taking loss, the account into credit expected in the slowdown risks arising due to credit and any on its customers the impact of Covid-19 Management has considered have been very limited there However market. in the property the additional activity cash, due to sales into property converting the risk is minimal due to on credit the impact Overall, the Group. pay to ability indications that this is impacting customers’ on a subscription basis. in advance paying of customers majority from receivables trade losses for credit risk and expected credit to about the exposure information table provides following The 2020. as at 31 December individual customers Past due 61 – 90 days More than 91 days past due than 91 days More More than 91 days past due than 91 days More Notes continued
26 Financial instruments continued The movement in the allowance for impairment in respect of trade receivables during the year was as follows: 2020 2019 Group £000 £000 At 1 January 733 718 Arising on business combination – 71 Charged during the year 701 740 Utilised during the year (554) (796)
At 31 December 880 733
The Group has identified specific balances for which it has provided an impairment allowance on a line by line basis across all ledgers, in both years. No general impairment allowance has been provided in either year. The allowance accounts in respect of trade receivables are used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible; at that point the amounts considered irrecoverable are written off against the financial asset directly. Liquidity risk The contractual maturities of undiscounted financial liabilities, including undiscounted estimated interest payments, as at year end were: Carrying Contractual 6 months amount cash flows or less Group £000 £000 £000 At 31 December 2020 Trade payables being non-derivative financial liabilities 2,742 (2,742) (2,742)
At 31 December 2019 Trade payables being non-derivative financial liabilities 1,384 (1,384) (1,384)
The Company had no derivative financial liabilities in either year.
It is not expected that the cash flows included in the maturity analysis could occur earlier or at significantly different amounts and all payables are due within six months of the balance sheet date. Currency risk During 2020 all the Group’s sales and more than 97.8% (2019: 97.0%) of the Group’s purchases were Sterling denominated and accordingly it has no significant currency risk. Interest rate risk The Group has exposure to interest rate risk on its cash and cash equivalent balances and money market deposit balances. As at 31 December 2020 the Group had total cash and cash equivalents of £96,690,000 (2019: £32,117,000) and money market deposits of nil (2019: £4,141,000). Fair values The fair values of all financial instruments in both years are equal to the carrying values.
136 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
2019 £000 2019 £000 (255) 2,407 15,882 15,882 15,627 18,289 ANNUAL REPORT 2020 | 137 REPORT | ANNUAL RIGHTMOVE PLC Contingent consideration (Note 22) (Note consideration Contingent Net of cash and cash equivalents acquired Net cash outflow included in the of statement cash flows as an expense in recognised of £322,000, which was acquisition costs paid of £15,882,000 excludes cash consideration total The were on acquisition of £322,000 costs Included within transaction Income. of Comprehensive Statement the 2019 Consolidated and stamp duty. fees legal and due diligence tax loss after of £833,000 and a trading revenue 2019, Van Mildert contributed 31 December period to In the three-month that the 2019 estimated on 1 January 2019, management If the acquisition had occurred results. the Group’s of £74,000 to would have revenue been £292,253,000 forconsolidated yearwouldand the havethe profit been 2019 consolidated £172,925,000. In these amounts, determining management has assumed that the value fair determined adjustments, that on arose the of acquisitiondate would have been the provisionally, same if the on acquisition 1 had January occurred 2019. Cash paid for subsidiary Cash paid for Cash consideration Total consideration Total The following table provides a reconciliation of table the a following provides The amounts of reconciliation included Cash in Flows: Statement the Consolidated Net cash flow on acquisition 27 Acquisition of subsidiary Protection and Tenant Mildert Landlord capital of Van share ordinary the entire acquired 2019, the Group On 30 September landlords. agents and lettings to insurance guarantee and rent references tenant a business providing (Van Mildert), Limited insurance guarantee with rent together product, referencing tenant with an established the Group provides Van Mildert of in Rightmove’s strategy step a key and is proposition our lettings augments expertise. This and operational capabilities the improving efficiency rental of marketplace. the under-served cash contingent with a maximum of £15,882,000 together an initial cash consideration comprises consideration total The the acquisition £12,034,000. At and 2021 exceeds in 2020 cumulative revenue of £4,000,000 if Van Mildert’s consideration future expected at £2,407,000, based on discounted estimated was consideration value of the contingent the fair date, 2020. at 31 December and is unchanged relates which the consideration over the period to of the business streams revenue Notes continued
27 Acquisition of subsidiary continued The following table details the fair values of the assets and liabilities acquired at the date of acquisition. Carrying values Fair value pre-acquisition adjustments Fair values Net assets acquired £000 £000 £000 Non-current assets Property, plant and equipment 87 61 148 Intangible assets – IT development costs 127 (127) – Intangible assets – credit referencing software (Note 14) – 753 753 Intangible assets – customer relationships (Note 14) – 4,521 4,521
Total non-current assets 214 5,208 5,422
Current assets Trade and other receivables 847 31 878 Contract assets 30 – 30 Cash and cash equivalents 255 – 255
Total current assets 1,132 31 1,163
Current liabilities Trade and other payables (767) (494) (1,261) Contract liabilities (9) – (9) Lease liabilities (Note 21) – (92) (92) Income tax payable (40) – (40) Provisions (Note 22) (2) (37) (39)
Total current liabilities (818) (623) (1,441)
Non-current liabilities (Note 16) (9) (897) (906)
Fair value of net assets acquired 519 3,719 4,238
Trade and other receivables comprise gross contractual amounts of £979,000 of which £71,000 was not expected to be collectable at the date of acquisition. Goodwill Goodwill arising from the acquisition has been recognised as follows:
£000 Total consideration 18,289 Fair value of net assets acquired (4,238)
Goodwill 14,051
The goodwill figure recognised above includes the knowledge and experience of the company which is established within the credit referencing and rent guarantee insurance markets, the skilled workforce employed by Van Mildert, and the reputation of the business. This is together with the synergy benefits expected to the Group through leveraging the scale and reach of the Rightmove customer base, sales and marketing teams and technological capability. The Directors considered the fair value of assets and liabilities acquired and concluded that there were no other intangible assets to be recognised.
138 | RIGHTMOVE PLC | ANNUAL REPORT 2020 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT 2020 | 139 REPORT | ANNUAL RIGHTMOVE PLC and the reporting date. and the reporting 29 Contingent liabilities disclosed in consideration than the contingent other liabilities in either year, had no contingent and the Company Group The Note 22. 30 Subsequent events have been There no subsequent events having a impact material on the financial 2020 31 between December statements 28 Related party 28 disclosures Related transactions with subsidiaries Inter-group on behalf of the all expenses settles Limited Rightmove Group 30 January 2008, dated loan agreement Under the inter-group was the Company During the year, costs. and related buybacks and share shareholders to dividends paid including Company, of £279,000 (2019: interest charged £542,000) under this and agreement at 2020 31 the December inter-group unsecured loan balance was £46,799,000 19). (2019: Note £14,038,000) (refer including capitalised interest no or interim were final dividends inThere declared 2020 (2019: £178,572,000). a declared Rightmove dividend Limited Group in specie of the £734,000 from EBT the (2019: the of to cost £826,000), SIP the representing during SIP transferred the shares year. as a recharge is recognised transaction This Limited. of Rightmove Group employees options to share grants Company The 15). Note (refer Limited Group in the carrying value of the investment of Rightmove an increase with arrangement transactions subsidiaries between Inter-group Limited. Protection and Tenant on behalf of Van Mildert Landlord liabilities has settled Limited Group Rightmove During the year, 2020 £384,000 as at 31 December 2019 was 30 September dated loan agreement the inter-group under owing balance The on under charged 29 this was £1,400 April (2019: agreement (2019: interest 2020, £86,000).The £nil). a During the year, amount The the value of £900,000. for Limited Protection and Tenant Van Mildert Landlord to granted loan was subordinated owing at 2020 31 was December £904,000 was £4,000 charge (2019: (2019: nil). nil). interest The and the balance Limited Services Rent liabilities on behalf of Rightmove has settled Limited Rightmove Group During the year, 28 loan 2018 dated March agreement was £1,534,000 owing under as the at inter-group 2020 31 (2019: December £1,359,000). interest The recovered. be to expected as it is not Limited within Rightmove Group impaired 9 this loan has been fully Under IFRS under charged this was £11,000 agreement (2019: £13,000). transactions Directors’ Report. Remuneration in the Directors’ than those disclosed other in either year with directors no transactions were There the regarding with information together who served during the year, on the emoluments of the directors Information Report. in ofRemuneration the shares of isCompany the ordinary thebeneficial included directors interest in the Directors’ totalin in hadoffice gainsthe ofdirectors £2,153,000 (2019: £5,791,000) arisingDuring onthe the of year, exercise share-based incentive awards. The total share-based payments credit in relation to the directors was in £965,000 office the in to credit payments directors relation share-based total The awards. incentive share-based (2019: in as £1,835,000 credit arose The the a year of charge). current result a of in reduction the performance estimated schemes in the period. incentive long-term 2019. plc on 1 July of Softcat director until 30 June 2020, became a non-executive Director Finance who was Perriss, Robyn under basis, on an arms-length and IT consumables equipment, software with computer Rightmove Group provides Softcat plc in 2020 was Softcat by Rightmove from of purchases value appointment. The Robyn’s prior to agreed terms contractual £58,000 (2019: £43,000) with no amounts outstanding at the end. year management personnel Key meet to the definition considered No of managementkey are other other personnel thanRightmove those employees Report. Remuneration disclosed in the Directors’ Advisers and shareholder information
Contacts Registered office Corporate advisers Chief Executive Officer: Peter Brooks-Johnson Rightmove plc Financial adviser Chief Financial Officer: Alison Dolan 2 Caldecotte Lake UBS Investment Bank Company Secretary: Sandra Odell Business Park Joint brokers Website: www.rightmove.co.uk Caldecotte Lake Drive UBS AG London Branch Milton Keynes Numis Securities Limited MK7 8LE Auditor KPMG LLP Registered in England no. 06426485 Bankers Financial calendar 2021 Barclays Bank plc 2020 full year results 26 February 2021 Santander UK plc Final dividend record date 30 April 2021 HSBC UK Bank plc Annual General Meeting 7 May 2021 Lloyds Banking Group plc Final dividend payment 28 May 2021 Solicitors Half year results 30 July 2021 EMW LLP Slaughter and May Herbert Smith Freehills LLP Registrar Link Group*
*Shareholder enquiries The Company’s registrar is Link Group. They will be pleased to deal with any questions regarding your shareholding or dividends. Please notify them of your change of address or other personal information. Their contact details are: Shareholder helpline: 0371 664 0300 calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00 - 17:30, Monday to Friday excluding public holidays in England and Wales. Email: [email protected] Signal Shares shareholder portal: www.signalshares.com Address: Link Group 10th Floor Central Square 29 Wellington Street Leeds LS1 4DL
Shareholders can register online to view your holdings using the shareholder portal, a service offered by Link Group at www.signalshares.com. The shareholder portal is an online service enabling you to quickly and easily access and maintain your shareholding online – reducing the need for paperwork and providing 24 hour access for your convenience. You may: • View your holding balance and get an indicative valuation • View the dividend payments you have received • Cast your proxy vote on the AGM resolutions online • Update your address • Register and change bank mandate instructions so that dividends can be paid directly to your bank account • Elect to receive shareholder communications electronically • Access a wide range of shareholder information and download shareholder forms
140 | RIGHTMOVE PLC | ANNUAL REPORT 2020 Rightmove plc | Annual Report 2020 Rightmove’s purpose is to make home moving easier in the UK. We do this by creating a simpler and more efficient property marketplace. Rightmove is the UK’s number one property portal
Contents Strategic report Governance Financial statements 1 Highlights 46 Corporate governance report 98 Consolidated statement of 104 Company statement of 2 Chair’s statement 48 Directors and officers comprehensive income changes in shareholders’ equity 4 Chief Executive’s review 56 Audit Committee report 99 Consolidated statement of 105 Notes forming part of the 5 Our strategy 64 Nomination Committee report financial position financial statements 14 Business model 67 Directors’ remuneration report 100 Company statement of 140 Advisers and shareholder 16 Key performance indicators 87 Directors’ report financial position information 18 Financial review 90 Directors’ responsibilities 101 Consolidated statement of 22 Risk management statement cash flows 23 Principal risks and 91 Auditor’s report 102 Company statement of uncertainties cash flows 27 Withdrawal from the EU 103 Consolidated statement of 27 Going concern and viability changes in shareholders’ equity statement 28 Working with our stakeholders 31 Environmental, social and governance report Designed and produced by The Team www.theteam.co.uk This is it Annual Report 2020 Report Annual
Rightmove plc Annual Report 2020
Registered in England no. 6426485 Registered MK7 8LE Rightmove plcRightmove Lake 2 Caldecotte Business Park Drive Lake Caldecotte Keynes Milton