Has Rightmove run out of ideas?

Rightmove’s decision to return £100m to its shareholders has been called into question.

The property portal giant announced in its recent half-year results that it has returned £100.2m to shareholders through share buybacks and dividends.

But Michael Nettleton, founder of lead generation management firm Agent Response has queried if the money could have been better spent on innovation.

He warned the estate agency industry is ripe for disruption and companies that fail to innovate risk being left behind. 

It comes as Rightmove is facing increased competition from CoStar-backed OnTheMarket.
 

Nettleton said: “This action suggests that Rightmove might have run out of creative ways to deploy its capital for growth, which is concerning for a company in an industry with so much potential for innovation. 

“The best firms build moats around their businesses and continually invest in innovation. They don't rest on their laurels or become complacent with their success. They understand that the key to long-term survival is constant reinvention.”

He said Rightmove could learn a lot from the strategies of industry giants such as Amazon and Walmart, adding: "These companies are relentless in their pursuit of innovation, consistently pushing boundaries and exploring new opportunities.

“They recognise that consumers don’t necessarily want more choices; they want to be more confident in the choices they make. By focusing on enhancing user experience and offering innovative solutions, these companies maintain their market leadership.”

A statement from Rightmove in response said: "Rightmove has a long-standing and public capital allocation policy, which prioritises organic investment in the business – innovating for both customers and consumers.  Only once we have allocated what we deem to be sufficient to meet our business plans do we then consider how best to distribute surplus funds to shareholders via both dividends and buybacks.  

"In the past year, we have also broadened the scope of the business, increasing our investment not just in the core estate agency and new homes business but across commercial real estate, mortgages and rental services.

"During the first half of this year we worked on over 130 features and enhancements, continuing to bolster our market leading platform. This includes our end-to-end lettings solution in lead to keys, which is the only fully integrated advertising, enquiry management and tenancy progression system in the industry."