Rightmove raises profits forecast as agents spend more

Rightmove has raised its pre-tax profit forecasts for the current year after a surprisingly good start to 2009, according to interim management results out today.

“Given the positive results so far this year, coupled with the subscription-based business model and the significantly lower costs, the board believes that 2009 pre-tax profits will be ahead of its previous expectations,” it stated. Last year, Rightmove restructured and made redundancies across its staff. These savings are now helping this year’s financial prospects.

Rightmove added that the outlook for the UK property market is “cautiously positive” albeit from an unprecedented low level.

Last month, its site traffic rose for the first time for a year and inquiries to advertisers soared to record levels.

A “significant” decline in the rate at which estate agents are leaving the industry was seen in the first quarter. Agents also maintained their spend with Rightmove while dramatically cutting their off-line spending, the statement added.

Rightmove points out: “This experience is markedly different from other major property advertising businesses, who have recently reported 52-60% reduction in year-on-year advertising revenues.” Rightmove is claiming up to 80% of the portals advertising market.

The overall number of agents listing properties on Rightmove is unchanged at 9,800 since the end of 2008, but average revenue per advertiser is up, aided by a large number of estate agents entering the lettings market and upgrading their Rightmove membership accordingly.

The number of lettings-only agents on the site has grown by over 300 to 3,500 – a rise of 10% since the end of last year.

Major signings to Rightmove include LSL for two years and Halifax for three, whilst Countrywide has renewed its listing contract to the end of 2011 and Connells to 2012.