Rightmove plans to expand non-core businesses; shares fall on customer outlook

Rightmove plans to expand non-core businesses; shares fall on customer outlook

By Aby Jose Koilparambil

(Reuters) -Property portal Rightmove plans to grow its non-core businesses, such as commercial real estate, as the group forecast a drop in 2024 customer numbers, sending its shares down sharply.

The company, which charges estate agents and homebuilders a fee to list their properties on its website, aims to expand the non-core businesses, which also include mortgage services, over the next five years, its CEO said.

Analysts at Jefferies said Rightmove’s forecast for falls in customer numbers was a “negative surprise.”

“The results confirm what the market probably already appreciated: Rightmove is a business in a period of transition, as its core business faces increased competition and heightened macro pressures,” they said.

Shares in the UK’s largest property website company, were down about 5% by 0900 GMT.

“Over the next five years, we are looking at a little bit of a rebalance amid continued good growth and product innovation in core (business),” CEO Johan Svanstrom told Reuters. “And we think that growth is going to be faster in the strategic growth areas where we are looking at a split like 75%-25% in the medium term.”

Rightmove’s core business, which also generates revenue through advertising, currently accounts for about 90% of overall revenue.

The company forecast a 7%-9% revenue growth this year, as customers upgraded packages and increased use of digital products.

Rightmove said its average revenue per advertiser (ARPA) – a key measure for the company – rose 9% to 1,431 pounds ($1,807.6) per month in 2023, and it expects ARPA growth of 100 pounds-110 pounds in 2024.

Rightmove reported a 7% rise in 2023 operating profit to 258 million pounds, in line with market expectations.

($1 = 0.7916 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sherry Jacob-Phillips and Jane Merriman)