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Shares soar after Rightmove says it will beat 2010 targets

Wednesday 10th February 2010
Written by Rosalind Renshaw

Shares in Rightmove shot up yesterday after management said the company will beat its 2010 forecasts.

It was able to make the confident statement after reporting that estate agents signing up for the year had agreed to increases of up to 20%.

Rightmove had been talking to agents, offering them either raised rates or the chance to stick at last year’s rates if they agreed to buy at least £200 worth of extra products per month.

It seems most have, with Rightmove saying: “Trading in January saw a substantial increase in average spend per advertiser.”

It added that, as a result: “The board is confident that 2010 profits will be above current market expectations, subject to no significant change in market conditions.

“This is based on the higher average spend per advertiser achieved in January, evidence from our customers of our continued value for money, and the predictability of our subscription model.”

The shares rose by 40p to 565p, over 7% on the day.

Rightmove also confirmed that its profits for 2009, to be announced on February 26, will be in line with market expectations.

Analysts are forecasting pre-tax profits of £39m for 2009, rising to £45m for 2010.

Rightmove shares have also benefited from its deal with Google Maps, which is to launch its own property search engine site this year.

(19) Comments

Added by Tim Mather on 2010-02-11 15:58:43

Sure Portal Pete that would be good...just like Harvey Scott being "Agent of the Week" since December.
Added by Portal pete on 2010-02-11 15:46:36

I say that EAT should set up their own portal!
Added by Jason Coombes on 2010-02-11 15:36:49

Out of all the portals I'm with RM are the most expensive - but get me the most leads...speaks volumes.
Added by PeeBee on 2010-02-11 14:58:47

Reuben Barrett: Please qualify part of your statement - "I have just analysed the figures after 2 months online and Rightmove is 30 to 40 more expensive than Google Adwords." Just in terms of cost; or cost per lead? Adwords can be a MILLION times cheaper than RM, but if it brings no business then it is simply a cost. Measure all your marketing by the RESULTS each exercise brings vs. cost, not cost alone. Fatal mistake to do otherwise - trust me.
Added by Reuben Barrett on 2010-02-11 09:26:21

I suspect most of these increases have come from their over-priced Local Home Page and Featured Agent offerings which were first paid in January. I was cynical about these products when first approached by the Rightmove sales lady but agreed to try Featured Agent for a few months. I have just analysed the figures after 2 months online and Rightmove is 30 to 40 more expensive than Google Adwords. Needless to say I have cancelled this unnecessary extra spending. I would advise any agent to carefully analyse the benefit they believe they are getting from Rightmove's optional products.
Added by Natalie Sanderson on 2010-02-10 17:09:15

Peebee, Tim and Agencyinsider are correct, too many weak agents in order to 'compete' do so by chopping their fees and/or fairytale valuations. Suicide, not a sustainable business model.
As RM have shown sustainable profitability comes from creating the best in your field. Many agents come on here to complain about the cost of RM but they still use it even though they begrudge the fees. Big lesson, get yourself an edge. A real edge, not hot air, not sales pitch, invest in your vendors show them that listing with you gets them more than listing with the other guy. It will cost, but the returns are there.
All agents have local knowledge, high street presence, are experts in their fields etc etc., punters buy differences. Get a difference, or to use the correct term a usp.
There are fewer instructions available, if you want some you had better start doing something special or you will be left behind.
As RM have demonstrated if it is good then you can charge more, but it must be good.
If all around you are selling cheap and cheerful, who is catering for those who want real quality?
Added by Jo P on 2010-02-10 13:55:11

Put up or shut up is my motto! If you don't want Rightmove then leave - there is nothing to keep you if you are not satified. Or as previous postings have suggested, support the growth of an alternative like Radar Homes. The bottom line is that at present Rightmove are the best and no other property portal comes near to generating the level of business that Rightmove does. I would also urge you to consider the cost of your newspaper advertising and the area that it covers compared to the cost of Rightmove and the area that a massive website offers. I accept that in difficult times we all want to pull our horns in, but how many agents have complained to the newspapers about how much they charge? My own experience is that Rightmove generates even more interest than our local papers and I would be interested to hear if anyone else is in the same position.
Added by AgencyInsider on 2010-02-10 12:39:11

Pee Bee and Tim Mather are absolutely correct in their assessments. We are all facing another year of very low transaction volumes and the blip of last year's cash buyers is rapidly evaporating. Over-valuing and fee cutting are a recipe for disaster in this market and I fully expect to see a lot more agents shutting up shop in 2010 because there just is not enough cake for everyone. As the market tightens you'll find sellers need us more than ever and they should expect to pay a proper fee for a proper service. Those of you who buy business today on the back of a cheap fee may win the battle - but you'll end up losing the war. WAKE UP PEOPLE!
Added by Paul Morgan on 2010-02-10 11:56:05

If they take private adverts directly I'd certainly leave. They are already on notice that if their inquiries drop to below 30% of our business we will dump them, at present they bring in 40% of our business, as we are on all other major sites and are reviewing others.
Added by PeeBee on 2010-02-10 11:53:23

Paul Morgan - but where ARE the competition? Hiding in corners licking their wounds, instead of planning a retaliation, that's where! And as for your claim of "...unjustified increases...", well, that is your (and many more, of course...) opinion. RM will no doubt see it differently - like all businesses, they have costs to meet, wages to pay (increased business generally requiring increased resources) and that other little thing called PROFIT. Remember that? Methinks we are all just a little jealous of that fact... Instead of getting mad, channel your pent-up aggression into that next Instruction, sale negotiation - or if that is too taxing just stir the tea harder!
Added by Ray Evans - The Grey Vote! on 2010-02-10 11:48:42

One thing that all you agents should bear in mind is that it is YOU who have made Rightmove successful - with all the free advertising you provide for them on your own websites, property details, newpapers etc. etc.!
If you did the same for PropertyLive within 12 months it could be doing the job for you - for free!
By the way what would you all do if RM decided to carry private ads in the future - who can say they will not?



Added by Paul Morgan on 2010-02-10 11:39:51

Fleecing your customers in this way may work short term but in the long term you will be dumped when a competitor can offer the same. killing the goose that lays the golden egg is never a good idea, particularly in hard times. Rightmove beware, you may get away with it now, but you have lost any loyalty through these unjustified increases and fact is you are losing market share.
Added by Tim Mather on 2010-02-10 11:09:13

PeeBee, I could not agree more.
Rightmove do not roll over on their fees, unlike most agents do, because they offer the best available.
People (you)want/need the best and it costs more. Simple fact of life, like it or not.
The lesson to be learnt is that if you provide clearly the best availabe then you can command, and get, higher fees.
If you want to be successful increase your service and you can increase your fees.
Cutting fees is a cop out, it will not make you more money.
The trouble is, most agents really are clueless as to how to increase their service.
Added by Gary on 2010-02-10 10:53:52

Down here in the South West all us agents are banding together and building our own website which we are all taking ownership in and it is working.Take a look at Radarhomes.co.uk and see what can be done if we all start working together.You will always get the cynics but only the agents have the influence to protect themselves in the future.
Added by WAS IT JUST ME? on 2010-02-10 10:39:17

having seen a 12% increase in the last 2 years its great to hear that rightmove are going to see profits increase by just over 10% as i was wondering what I was paying for. On the other hand Find a property and associated websites are more than doubling fees from £245 to £495 and thats £100 more than rightmove. Is anyone else being increased in the same manner as I was informed all agents rates were going up?
Added by PeeBee on 2010-02-10 10:36:26

Oh, come on! Firstly, how many of you would go to "The City" with a forecast of anything other than improvement? Secondly, Rightmove are free to charge what they like, when they like. They set a value on their service, their product - and boy do they stick their heels in to get it! Agents should watch and learn - no giving in when sitting in the living room! Cheaper alternatives simply do not have the muscle to compete, so lie down on price. There is always one Agent who, by purely by outperforming all others, is able to charge greater fees. Until you get other portals to improve, there is NO alternative worth their salt. They all aspire to BE Rightmove - they just don't do anything to make it happen...
Added by J Blackmore on 2010-02-10 10:29:56

Basically the agents have paid for the stock rise by having 10-20% increase slapped on them for supporting rightmove through the recession. Roll on Google or someone.
Added by Brain on 2010-02-10 10:21:12

Go Rightmove! Shows all the negative rubbish posted about any successful biz on this blog is a complete waste of time, from no ones, with zero influence other than each other ! Lovin it, every little helps
Added by anonymous on 2010-02-10 08:30:53

In other words, the statement to the stock market said that Estate Agents nationally were prepared to bend over and take it without any gel or cream to reduce friction.

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