rightmove plc annual report 2010 rightmove rightmove plc annual report rightmove. 2010 where sellers get started. Rightmove plc 4th Floor 33 Soho Square London W1D 3QU Registered in England no. 6426485 see more at Rightmove plc Rightmove.co.uk is the UK’s largest property portal. Our aim is to be the place for all UK home movers to find details of all properties available to buy or rent. The website provides an easy-to-use but sophisticated online property search. With the depth of information that it provides, home hunters can immediately identify a preferred property. The service is directed at four key membership groups: • estate agents • lettings agents • new homes developers • overseas homes agents offering properties outside the UK but interested in advertising to UK-based home hunters. Contents 1 Highlights 25 Corporate governance 50 Company statement of cash flows 2 Chairman’s statement 32 Remuneration report 51 Consolidated statement of 4 Innovations in the year 45 Auditor’s report changes in shareholders’ equity 5 Business and financial review 46 Consolidated statement of 52 Company statement of changes – 6 Key performance indicators comprehensive income in shareholders’ equity 16 Directors and officers 47 Consolidated statement of 53 Notes (forming part of the 18 Senior management team financial position financial statements) 19 Corporate social responsibility 48 Company statement of 88 Advisers and shareholder 21 Directors’ report financial position information 49 Consolidated statement of cash flows Designed and produced by TeamPublishing www.teampublishing.co.uk highlights • Revenue(1) increased by 26% to £81.6m (2009: £64.5m) • Underlying operating profit(1)(2) increased by 39% to £56.6m (2009: £40.6m) • Underlying operating margin(1)(2) up from 62.9% to 69.4% • Underlying basic earnings per share(1) up 34% to 39.8p from 29.6p • Net cash at 31 December 2010 of £23.1m (2009: £3.4m) • 4.2m shares bought back during 2010 (2009: 1.1m) at an average price of £7.05 (2009: £4.84) • Number of advertisers grew by 2% to 18,042 (2009: 17,664) • Average revenue per advertiser (ARPA) at £379 per month (2009: £308 per month) • Proposed final dividend of 9.0p (2009: 7.0p) making a total dividend of 14.0p for the year (2009: 10.0p) • Net consideration for Rightmove’s 66.7% stake in the Holiday Lettings business, sold in June 2010, of £20.9m including £5.1m contingent consideration, representing a seven-fold return on investment since 2007 (1) From continuing operations. Comparative figures have been restated where necessary to reflect the treatment of Holiday Lettings as a discontinued operation. (2) Before share-based payments and NI on share-based incentives. (3) Total dividend of 14.0p, up 40% year on year, in line with underlying operating profit.(1)(2) REVENUE PROFIT DIVIDEND % % %(3) + + 26 39 + Revenue(1) up to £81.6m Underlying operating profit(1)(2) 40 Final dividend 9.0p (2009: £64.5m) increased by 39% to £56.6m Total dividend 14.0p (2009: £40.6m) rightmove rightmove plc annual report 2010 1 chairman’s statement It is my pleasure to present Despite a tough housing market, the progression from 2009 Rightmove plc’s results for the to 2010 has represented the least disruptive period and the year ended 31 December 2010. greatest continuity in moving from one year to another. The 2010 marks the tenth comparison of Rightmove’s 2010 performance with 2009 anniversary of Rightmove, which reveals clearly the strength of our business. This reflects the has become the place where UK increased importance of the internet for finding one’s next home hunters find their next home. home and, for our customers, their choice of how to advertise. There is much we take for granted Scott Forbes today which was merely an A record year by every measure Chairman aspiration ten years ago. Today 2010 was the busiest year in our history. Website traffic grew most people in the UK use the year on year with page impressions up 17% to 7.6bn, internet to find their next home and the vast majority of those generating record visibility and enquiries for our advertisers. use Rightmove. Millions of people use Rightmove every month In terms of financial results, 2010 set new records for to look for their next home or market their existing home. We organic growth, revenue and profits. We have continued with serve 18,000 customers, in terms of advertisers, representing our commitment to return surplus cash to shareholders and the considerable majority of estate agents, lettings agents and we recorded the strongest share price in our history by a volume house builders. It is our view that a growing number wide margin. of home sellers, who are generally buyers as well, are using Rightmove to help them choose which agent to best market The result of a sustained commitment their home. I want to express my thanks to our customers as well as our employees who continue to put their efforts into making Rightmove’s history Rightmove the best place for home hunters to find their next March 2011 marks Rightmove’s fifth year as a public home and for property advertisers to reach the widest company. Each year that followed our initial public offering possible audience. seems to have included a major change in the housing market. Often these events have diverted focus from the Financial results online advertising market in which we operate and our strong Profits and earnings per share for 2010 were up strongly on underlying performance, which has seen a continual and 2009. Underlying operating profit(1)(2) was up 39% to £56.6m substantial improvement except for 2009 when our underlying (2009: £40.6m) driven by strong organic revenue growth operating profit(2) was essentially flat. coupled with only a small increase in operating costs In 2006 we withdrew from the prospective market for year on year. Home Information Packs when the government withdrew its Underlying basic earnings per share (EPS)(1)(2) was up commitment to implement the full terms of its legislation. 34% to 39.8p (2009: 29.6p), although using a normalised tax 2007 saw the peak of the UK property market, but also with rate of 28% underlying basic EPS was up 44%. The increase the collapse and nationalisation of Northern Rock, the in underlying EPS was strengthened by the repurchase of downturn of the UK economy. 2008 was a disastrous year for 4.2m shares at an average price of £7.05 per share during the residential property market with more than a fifth of estate 2010. Due to the share buy backs being weighted towards agency offices forced to close. 2009 surprised us all, not as a the second half of the year, the full benefit to the EPS will only good year for the property market, but in terms of how estate be realised in 2011. agents and house builders managed to cut their costs, survive As at 31 December 2010 the net cash position was £23.1m and in some instances thrive. (2009: £3.4m) with cash boosted by the initial net proceeds of rightmove rightmove plc annual report 2010 £13.3m on the disposal of the Holiday Lettings business. 2 Sale of Holiday Lettings Annual General Meeting and resolutions We sold our 66.7% shareholding in Holiday Lettings (Holdings) The Board is proposing amendments to the remuneration of Limited in June 2010 for a net consideration of £20.9m of which the executive directors. These changes are seen by the Board £14.8m has been received in cash, £1m is held in Escrow and as an important next step in our transition from a new public the balance is contingent consideration. Holiday Lettings has company to a more substantial business that is now able to been a very successful business under our three year period benefit from additional senior management talent necessary of stewardship. We are delighted with our financial returns to achieve our growth objectives. Our proposal is to phase on our original £3.1m investment in 2007 and thank founders these changes in over three years, so that the transition will be Ross Elder and Andy Firth for their excellent contributions. achieved in full by 2013. Otherwise, the resolutions being proposed at the Annual Dividend General Meeting are similar in nature to resolutions from The Board announced that it would increase the interim dividend prior years. to 5.0p per ordinary share which was paid on 12 November 2010 A summary of the business to be conducted is described and to rebalance dividends between the interim and final in the Directors’ Report. The Notice of Annual General payments. Consistent with our policy of increasing the total Meeting will be published in March 2011. I and the rest of the dividend for the year in line with underlying operating profits, Board look forward to answering any questions and updating the Board proposes to pay a final dividend of 9.0p per ordinary shareholders further on the development of the business at share for a total dividend for the year of 14.0p (2009: 10.0p). our Annual General Meeting which will take place at 10am on The final dividend, subject to shareholder approval, will be paid 4 May 2011 at the offices of UBS Limited at 1 Finsbury on 10 June 2011 to members on the register on 13 May 2011. Avenue, London, EC2M 2PP. The Board of directors On behalf of shareholders, I would like to thank Ed Williams I was delighted to announce the appointment of Peter and his team for the achievements of the past year.