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RNS
Rightmove Plc  -  RMV   

Half-year Report

Released 07:00 28-Jul-2017

RNS Number : 3503M
Rightmove Plc
28 July 2017
 

 

Embargoed until 07.00 on 28 July 2017

Half year results for the six months ended 30 June 2017

Rightmove, the UK's number one property site, has delivered another strong period of growth in the six months ended 30 June 2017.  Revenue increased by 11% to £119.5m with underlying operating profit(1) up 11% to £91.0m and operating profit up 9% to £87.6m.

Financial highlights


 

H1 2017
 

H1 2016
 

Change

Revenue

£119.5m

£107.9m

+11%

Operating profit

£87.6m

£80.6m

+9%

Underlying operating profit(1)

£91.0m

£82.3m

+11%

Basic earnings per share

76.6p

68.4p

+12%

Underlying basic earnings per share(2)

80.3p

70.3p

+14%

Interim dividend

22.0p

19.0p

+16%

·           Revenue up 11% year on year driven by continued growth in our Agency and New Homes businesses

·           Underlying operating profit(1) up 11% and operating profit up 9%

·           Underlying earnings per share(2) up 14% and basic earnings per share up 12%

·           £72.0m (2016: £66.0m) of cash returned to shareholders through dividends and share buybacks in the period

·           Interim dividend increased by 3.0p to 22.0p (2016: 19.0p) per ordinary share, up 16%

Operational Highlights

·           Record customer numbers with Agency and New Homes customers up 237 (+1%) since the start of 2017 to 20,358

·           1.1 million UK residential properties advertised on Rightmove, a third(3) more than on any other portal

·           Continued traffic growth with visits(4) up 3% to 131.8 million per month compared to the same period a year ago and time on site(4) averaging over 1 billion minutes per month

·           Average revenue per advertiser (ARPA)(6) up £81(+10%) on the same period a year ago to £911 per month

·           Integration of the Outside View product complete and launched to customers in July. This innovative predictive analytics product is based on artificial intelligence techniques and delivers instruction opportunities to agents

Current trading and outlook
Rightmove's trading in July has been in line with the strong monthly revenue achieved in the first half of the year. The visibility provided by our subscription model coupled with the value provided by our products and the strength of the Rightmove brand and traffic give the Board confidence in delivering its expectations for the current year.

Peter Brooks-Johnson, Chief Executive Officer, said:

"Home hunters visited Rightmove a record 3,000 times a minute in the first half of 2017, turning to us first to search and research on the only place you can see almost the entire UK residential property market.

 

Our continued development to deliver the richest experience and fastest way for home hunters to 'find their happy' from 1.1 million residential properties has been recognised by Forbes Magazine naming Rightmove "the world's most innovative growth company" for the second year in a row. This recognition is thanks to innovation such as our latest search feature, 'Where can I live?', which finds homes in areas which are affordable and convenient, offering home hunters help when their inspiration has run dry.

 

Our aim has always been to help our agents and developers succeed by delivering great value marketing and

building strong relationships to support their ambitions. This approach continues to serve us well as we have

grown our customer base to an all-time high demonstrating that Rightmove is the site of choice, not only for Britain's home movers, but also its property professionals.

 

With consumers and customers becoming increasingly digital our clear market leadership coupled with the

value of our products and data positions us well for the future."

 

Half Year Statement

Our strategy and operating priorities

 

Our aim is to be the place where people both turn to first and engage with most when searching, researching and moving home; to make it easy for them; and to provide the most significant and effective exposure for our customers' brands and properties. By combining our commitment to innovative software, data analysis capability and our unique view of the whole market we also help our customers drive operational efficiencies and inform their business decisions.

 

Our brand building continues to major on national TV, through our partnership with Channel 4 augmented with highly targeted outdoor media, 400 branded taxis and further partnerships with the Evening Standard and Time Out in London.

 

In the first half of the year Rightmove attracted over 3,000 visits every minute leading to a record 790 million visits in the six months, resulting in home hunters spending six billion minutes on the website and apps. Our market share of traffic across both desktop and mobile is 75%(4) with the mobile component even higher.

 

Rightmove keeps investing to deliver the most engaging experience for home movers and our culture of restlessness continues to drive improvement and innovation. In addition to the hundreds of updates to our platforms released each month, recent improvements and innovations include: redesigning map-based search; 'Where can I live?', which identifies the areas home hunters can afford and are within their desired travel times to multiple locations such as work, family or friends and an experimental app, 'RentLondon', which explores trends in search to make the process of finding a rental property more efficient and incorporates a messenger bot to enable renters to conduct their entire search using natural language via Facebook Messenger.

 

We also continue to create innovative tools and products for our customers to help them be more efficient. The latest version of the market leading Surveyors Comparable Tool has entered the beta test phase. The tool is used by surveyors to support their valuations in the majority of all successful mortgage applications. The new version supports our surveyor customers' increasingly mobile ways of working both on and offline giving them flexible access to key data and allowing them to have more choice on where and when they work.

 

Following the acquisition of the Outside View in 2016 we have developed our new 'Rightmove Discover' product, using our combined knowhow and Rightmove's unique dataset. Rightmove Discover, which was launched to our customers in July after successful testing, uses predictive analytics to identify the most likely potential sellers in a local area within the next six months and markets to them on behalf of an agent.

 

To help agents' operational efficiency we prioritise the delivery of high quality leads and we now generate well over six(5) times as many sales and lettings for our agency customers as our nearest competitor. To help our customers provide a better service for these home hunters, our 'Lead Feedback Survey Tool' has had over 140,000 responses from home hunters which can be filtered to give specific insight to an individual company and branch.

 

In addition to the support customers receive from their dedicated Rightmove account manager we continue to help our customers with training. The new Rightmove Live series of inspirational talks by leading figures from outside the property industry, together with our webinars and seminars, have covered topics as broad-ranging as creating the ultimate listing on Rightmove and innovating in a small business. In the first half of the year over 10,000 agents from over 4,500 customers have attended one of our events.

 

Testament to the value property professionals see in our products and services, we gained over 200 new customers in the period to reach an all-time high of 20,358 Agents and New Homes developments, and continue to be the only place to see almost the entire UK property market with a third(3) more UK residential properties than on any other portal. Customers also continued to increase their spend on Rightmove products and packages to help drive and support their business ambitions resulting in half year ARPA increasing by £81 to £911(6) per month.

 

 

Agency

 

Agency ARPA(7) is up 10% year on year at £865 (2016: £789) per office per month as a result of further adoption of additional advertising products and price increases. Revenue increased across our range of additional advertising products with continued adoption of our Optimiser package, which was launched in H2 2015 and provides the highest value returns to our customers. At 30 June 2017 nearly 2,000 resale branches are Optimiser members, spending a minimum of £1,500 per month compared to just over 1,000 branches a year ago. The number of Agency offices continues to increase, up 1% since the start of the year to a record high of 17,589 (31 December 2016: 17,462), with the growth being driven by an increase in resale office numbers (including growth in the number of branch equivalents for members operating a hybrid model).

 

New Homes

New Homes ARPA(8) increased by £90 year on year to £1,210 per development per month with the growth being driven by the sale of additional advertising products, including email campaigns, and by increases to core membership prices. The number of developments is up 4% since the start of the year at 2,769 (31 December 2016: 2,659).

 

Financial performance

 

Revenue

Revenue grew to £119.5m (2016: £107.9m) up 11% on the previous year.

 


 

H1 2017
£m

 

H1 2016
£m

 

Change

Agency

90.6

82.7

10%

New Homes

19.7

16.3

21%

Other

9.2

8.9

3%

Total revenue

119.5

107.9

11%


Our Agency business revenue increased by £7.9m year on year, driven by growth in spend on additional advertising products and packages, as well as membership fee price increases and growth in customer numbers. 

 

Revenue from our New Homes business grew strongly, up 21% year on year, driven by growth in development numbers together with increases to core membership prices and continued adoption of additional advertising products, including email campaigns.

 

Other revenue which includes overseas, data services, commercial and third party advertising services, increased to £9.2m in the first half of 2017, driven by growth in our Commercial business.

 

Underlying operating profit
Underlying operating profit(1) increased by 11% to £91.0m (2016: £82.3m) delivering an underlying operating margin(1) of 76.2%. Underlying operating costs(1) in the first half increased to £28.5m (2016: £25.6m) reflecting general wage inflation and the impact of additional staff recruited during 2016. There has also been ongoing investment in marketing and fit out and higher rent costs relating to new leases for our London office.  

 

Underlying operating profit(1) is reported before share-based payments, which are a significant non-cash charge driven by a valuation model, and National Insurance (NI) on share-based incentives, which is driven by reference to the Rightmove plc share price and so subject to volatility, rather than operational activity. The directors therefore consider underlying operating profit to be the most appropriate indicator of the performance of the business and year on year trends.

 

 

 

 


 

H1 2017
£m

 

H1 2016
£m

 

Change

Revenue

119.5

107.9

11%

Underlying operating costs

(28.5)

(25.6)

11%

Underlying operating profit

91.0

82.3

11%

Share-based payments

(2.7)

(1.9)

42%

NI on share-based incentives

(0.7)

0.2

 

Operating profit

87.6

80.6

9%

 

 

 

 

Share-based payments and NI on share-based incentives
In accordance with IFRS 2, a non-cash charge of £2.7m (2016: £1.9m) is charged to income representing the amortisation of the fair value of share-based incentives granted. NI is being accrued, where applicable, on the potential employee gain on share-based incentives granted. Based on an increase in the closing share price from £39.03 at 31 December 2016 to £42.50 at 30 June 2017 in respect of the outstanding share-based incentives granted, together with the actual NI on share-based incentives exercised in the period, there was a charge of £0.7m (2016: credit of £0.2m).

 

Earnings per share (EPS)
Underlying basic EPS(2) rose 14% to 80.3p (2016: 70.3p), with basic EPS increasing 12% to 76.6p
(2016: 68.4p), reflecting the growth in profits together with the benefit of our ongoing share buyback programme which reduced the weighted average number of ordinary shares in issue to 92.4m (2016: 94.4m).

 

Cash flow and share buybacks
Cash generated from operating activities was £89.8m (2016: £82.2m), once again representing a cash conversion ratio of over 100%.


We bought back and cancelled 1.0m shares (2016: 1.0m shares) in the period at a cost of £42.5m
(2016: £40.5m) bringing the total cash returned to shareholders to over £750m since our flotation in March 2006. We have now bought back 40.7m shares since we commenced our share buyback programme in 2007 reducing our share capital by nearly a third.

 

The closing Group cash and money market deposit balance was £17.6m (31 December 2016: £17.8m).

 

Dividend
In June 2017, the Company paid the final dividend for the year ended 31 December 2016 of £29.5m. The Board has announced an interim dividend of 22.0p (2016: 19.0p), an increase of 16%, as part of its commitment to a progressive dividend policy, reflecting the growth in underlying EPS.
 

The interim dividend will be paid on 3 November 2017 to members on the register on 6 October 2017. 

 

 

Principal risks and uncertainties


As set out within the Strategic Report within the 2016 Annual Report, the Group has identified the following principal risks and uncertainties:

 

The macroeconomic environment
The macroeconomic environment significantly impacts confidence in the UK housing market, which in turn impacts transaction levels.

Substantially fewer housing transactions than the norm may lead to a reduction in the number of Agency offices or New Home developments, both of which are major determinants of Rightmove's revenue. Housing transactions in the first half of 2017 were down 8% year on year against the high levels of activity of the first half of 2016, a comparison distorted by the impact of buyers bringing forward purchases in the first quarter to avoid additional Stamp Duty liabilities. Transactions were however up 3% year on year versus the more normalised activity of 2015.

A contraction in the volume of transactions in the UK housing market could lead to a reduction in advertisers' marketing budgets which could reduce the demand for the Group's property advertising products. ARPA(6) was up 10% year on year to £911 in the period reflecting continued strong adoption of advertising products and packages.

Our strong market position, the strength of our value proposition relative to all other forms of home advertising and relationships with our customers, continue to position us well.

Competitive environment
Increased competition from existing competitors or future new entrants targeting the Group's primary revenue markets may impact Rightmove's ability to grow revenue due to the potential loss of audience, advertisers and demand for additional advertising products.

We have always operated in a competitive environment and have demonstrated that we can continue to grow alongside competition from existing players and new entrants to the market. We have increased customer numbers by 1% since the beginning of the year to an all-time high of 20,358 and have continued to see strong adoption of our additional advertising products.

We have continued to invest in the best people and training for our account management teams together with market intelligence tools and reporting to ensure that we stay close to our customers and help them run their businesses more efficiently.

New or disruptive technologies and changing consumer behaviours
Rightmove operates in a fast-moving online marketplace. Failure to innovate or adopt new technologies or failure to adapt to changing customer business models and evolving consumer behaviour may impact the Group's ability to offer the best products and services to its advertisers and the best consumer experience.

We continue to innovate to make Rightmove even more compelling to home movers and advertisers. Our market share amongst the top four property websites on a time basis is 75%(4) and consistent with being a multi-platform digital leader, two thirds of time spent on Rightmove is now on mobile devices. 

Cyber security and IT systems
Any loss of website availability or theft or misuse of data held within the Group's databases and IT systems could have both reputational and financial implications for the Group.

Rightmove operates from three separate data centres to ensure optimal performance and business continuity capability. Disaster recovery and business continuity plans are subject to regular review and testing and backups, penetration testing and distributed denial of service attack procedures are routinely undertaken.

We continue to monitor external threats through updates from external specialists and collaboration with other online organisations.

Securing and retaining the right talent
The inability to recruit and retain talented people could impact our ability to deliver growth or result in a loss of competitive advantage.

Our latest employee survey showed high levels of engagement with 95% of Rightmovers thinking that "Rightmove is a great place to work" and our employee retention rates remain high. We continue to invest in people, particularly in sales and technology roles, to deliver future growth and ensure that rewards are competitive including a blend of short and long-term incentives for senior management and the ability for all employees to participate in the success of the Group through the share incentive plan.

 

 

Next trading update

Our next scheduled reporting date is 23 February 2018 when we will announce our results for the year ending 31 December 2017.

                                                                                                             

                             
Scott Forbes                                                                                         Peter Brooks-Johnson

Chairman                                                                                    Chief Executive Officer

28 July 2017

 

 

 

Notes to the half year results for the six months ended 30 June 2017

 

(1)   Before share-based payments and NI on share-based incentives as share-based payments are a non-cash charge and NI on share-based incentives is subject to volatility based on the Rightmove plc share price.

(2)   Before share-based payments, NI on share-based incentives and no related adjustment for tax as share-based payments are a non-cash charge and NI on share-based incentives is subject to volatility based on the Rightmove plc share price. Underlying basic earnings per share is therefore considered to be more representative of the operating performance of the business and the year on year trends. A reconciliation between basic earnings per share and underlying basic earnings per share is set out in Note 5.

(3)   Source: AlphaWise, Morgan Stanley Research July 2017.

(4)   Source: Comscore June 2017.

(5)   Source: Independent software provider to the estate agent industry.

(6)  ARPA is calculated as Agency and New Homes revenue for the six-month period divided by the average number of Agency and New Homes branches/developments for the period of 20,169. Increases in ARPA have been a significant component of revenue growth in recent years and hence ARPA is disclosed as a key performance indicator of the business.

(7)   Agency ARPA is calculated as Agency revenue for the six-month period divided by the average number of Agency branches for the period of 17,460.

(8)   New Homes ARPA is calculated as New Homes revenue for the six-month period divided by the average number of developments for the period 2,709

 

 

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF YEAR REPORT 2017

 

We confirm that to the best of our knowledge:

·    The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

·     The interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

By order of the Board of directors

                                 

                    
Scott Forbes                                                                                         Peter Brooks-Johnson

Chairman                                                                                               Chief Executive Officer

 

28 July 2017

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2017
 

 



Note



6 months ended
30 June 2017



6 months ended
30 June 2016



Year ended
31 December 2016

 

 

£000

£000

£000

 

 

 

 

 

Revenue

3

119,541

107,882

219,993

 

 

 

 

 

Administrative expenses

 

(31,959)

(27,295)

(58,346)

 

 

 

 

 

Operating profit before share-based payments and NI on share-based incentives

 

 

 

91,032

 

 

82,326

 

 

166,240

Share-based payments

4

(2,714)

(1,957)

(4,142)

NI on share-based incentives

4

(736)

218

(451)

 

 

 

 

 

Operating profit

 

87,582

80,587

161,647

Financial income

 

71

68

109

Financial expenses

 

(116)

(104)

(209)

 

 

 

 

 

Net financial expenses

 

(45)

(36)

(100)

 

 

 

 

 

Profit before tax

 

87,537

80,551

161,547

Income tax expense

7

(16,792)

(15,942)

(32,005)

 

 

 

 

 

Profit for the period being total comprehensive income

 

 

70,745

 

64,609

 

129,542

 

 

 

 

 

Attributable to:

 

 

 

 

Equity holders of the Parent

 

70,745

64,609

129,542

 

 

 

 

 

 

 

 

 

 

Earnings per share (pence)

 

 

 

 

Basic

5

76.55

68.42

137.87

Diluted

5

75.73

67.73

136.41

 

 

 

 

 

 

 

 

 

 

Dividends per share paid (pence)

6

32.00

27.00

46.00

Total dividends paid

6

29,507

25,442

43,206

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

.

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
as at 30 June 2017
 

 



Note



30 June 2017



30 June 2016



31 December 2016

 

 

£000

£000

£000

Non-current assets

 

 

 

 

Property, plant and equipment

 

2,547

2,512

2,288

Intangible assets

 

3,693

3,541

3,525

Deferred tax assets

7

7,424

6,791

6,942

 

 

 

 

 

Total non-current assets

 

13,664

12,844

12,755

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

8

34,509

31,311

29,924

Money market deposits

 

4,024

4,007

4,026

Cash and cash equivalents

 

13,611

9,279

13,749

 

 

 

 

 

Total current assets

 

52,144

44,597

47,699

 

 

 

 

 

Total assets

 

65,808

57,441

60,454

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

9

(38,740)

(34,218)

(35,796)

Income tax payable

 

(16,834)

(16,242)

(16,256)

Provisions

 

-

-

(185)

 

 

 

 

 

Total current liabilities

 

(55,574)

(50,460)

(52,237)

 

 

 

 

 

Non-current liabilities

 

 

 

 

Provisions

 

(491)

(254)

(175)

 

 

 

 

 

Total non-current liabilities

 

(491)

(254)

(175)

 

 

 

 

 

Total liabilities

 

(56,065)

(50,714)

(52,412)

 

 

 

 

 

Net assets

 

9,743

6,727

8,042

 

 

 

 

 

Equity

 

 

 

 

Share capital

 

945

967

955

Other reserves

 

487

465

477

Retained earnings

 

8,311

5,295

6,610

Total equity attributable to the equity holders of the Parent


 

 

9,743

 

6,727

 

8,042

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the six months ended 30 June 2017

 


Note


6 months ended
30 June 2017


6 months ended
30 June 2016


Year ended
31 December 2016

 

 

£000

£000

£000

Cash flows from operating activities

 

 

 

 

Profit for the period

 

70,745

64,609

129,542

 

 

 

 

 

Adjustments for:

 

 

 

 

Depreciation charges

 

645

590

1,241

Amortisation charges

 

236

167

378

Financial income

 

(71)

(68)

(109)

Financial expenses

 

116

104

209

Share-based payments

4

2,714

1,957

4,142

Profit on disposal of property, plant and equipment

 

(1)

-

-

Transaction costs on acquisition of subsidiary

 

-

42

42

Income tax expense

7

16,792

15,942

32,005

Operating cash flow before changes in working capital

 

 

91,176

                 

83,343

 

167,450

 

 

 

 

 

Increase in trade and other receivables

 

(4,582)

(3,612)

(2,237)

Increase in trade and other payables

 

3,065

2,415

3,913

Increase in provisions

 

131

18

124

 

 

 

 

 

Cash generated from operating activities

 

89,790

82,164

169,250

 

 

 

 

 

Financial expenses paid

 

(116)

(104)

(209)

Income taxes paid

 

(16,256)

(11,863)

(27,807)


Net cash from operating activities

 

 

73,418

 

70,197

 

141,234

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Interest received

 

68

81

134

Acquisition of property, plant and equipment

 

(905)

(854)

(1,281)

Proceeds on disposal of property, plant and equipment

 

2

-

-

Acquisition of intangible assets

 

(404)

                   (283)

(478)

Acquisition of subsidiary, net of cash acquired

 

-

(2,088)

(2,088)

Money market deposits

 

2

(7)

(26)

 

 

 

 

 

Net cash used in investing activities

 

(1,237)

(3,151)

(3,739)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Dividends paid

6

(29,507)

(25,442)

(43,206)

Purchase of own shares for cancellation

10

(42,490)

(40,527)

(88,083)

Purchase of own shares for share incentive plans

 

-

(10)

(751)

Share related expenses

 

(419)

(244)

(497)

Proceeds on exercise of share-based incentives

 

97

38

373

 

 

 

 

 

Net cash used in financing activities

 

(72,319)

(66,185)

(132,164)

Net (decrease)/ increase in cash and cash equivalents

 

(138)

861

5,331

Cash and cash equivalents at 1 January

 

13,749

8,418

8,418


Cash and cash equivalents at period end


 

 

13,611

 

9,279

 

13,749

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the six months ended 30 June 2017
 

 


Share
capital
£000

Own shares held

£000


Other
reserves
£000

Reverse acquisition
reserve
£000


Retained
earnings
£000


Total
equity
£000

 

At 1 January 2016

977

(14,062)

317

138

19,267

6,637

 

 

 

 

 

 

 

 

 

Total comprehensive income
Profit for the period

 

-

 

-

 

-

 

-

 

64,609

 

64,609

 

 

 

 

 

 

 

 

 

Transactions with owners recorded directly in equity

 

 

 

 

 

 

Share-based payments

-

-

-

-

1,957

1,957

 

Tax debit in respect of share-based incentives recognised directly in equity

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(252)

 

 

(252)

 

Dividends to shareholders

-

-

-

-

(25,442)

(25,442)

 

Purchase of shares for share incentive plan

 

-

 

(10)

 

-

 

-

 

-

 

(10)

 

Exercise of share-based incentives

-

149

-

-

(111)

38

 

Cancellation of own shares

(10)

-

10

-

(40,527)

(40,527)

 

Share related expenses

-

-

-

-

(283)

(283)

 


At 30 June 2016

 

967

 

(13,923)

 

327

 

138

 

19,218

 

6,727

 

 

 

 

 

 

 

 

 

 

At 1 January 2016

977

(14,062)

317

138

19,267

6,637

 

 

 

 

 

 

 

 

 

Total comprehensive income

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

129,542

129,542

 

 

 

 

 

 

 

 

 

Transactions with owners recorded directly in equity

 

 

 

 

 

 

 

Share-based payments

-

-

-

-

4,142

4,142

 

Tax credit in respect of share-based incentives recognised directly in equity

 

 

-

 

 

-

 

 

-

 

 

-

 

 

5

 

 

5

 

Dividends to shareholders

-

-

-

-

(43,206)

(43,206)

 

Exercise of share-based incentives

-

366

-

-

7

373

 

Purchase of shares for share incentive plan

 

-

 

(751)

 

-

 

-

 

-

 

(751)

 

Cancellation of own shares

(22)

-

22

-

(88,083)

(88,083)

 

Share related expenses

-

-

-

-

(617)

(617)

 


At 31 December 2016

 

955

 

(14,447)

 

339

 

138

 

21,057

 

8,042

 

 

 

 

 

 

 

 

 

At 1 January 2017

955

(14,447)

339

138

21,057

8,042

 

 

 

 

 

 

 

 

 

Total comprehensive income
Profit for the period

 

-

 

-

 

-

 

-

 

70,745

 

70,745

 

 

 

 

 

 

 

 

 

Transactions with owners recorded directly in equity

 

 

 

 

 

 

Share-based payments

-

-

-

-

2,714

2,714

 

Tax credit in respect of share-based incentives recognised directly in equity

 

 

-

 

 

-

 

 

-

 

 

-

 

 

440

 

 

440

 

Dividends to shareholders

-

-

-

-

(29,507)

(29,507)

 

Exercise of share-based incentives

-

575

-

-

(478)

97

 

Cancellation of own shares

(10)

-

10

-

(42,490)

(42,490)

 

Share related expenses

-

-

-

-

(298)

(298)

 


At 30 June 2017

 

945

 

(13,872)

 

349

 

138

 

22,183

 

9,743

 

                           

 

 

NOTES

1   General information


Rightmove plc (the Company) is a Company registered in England (Company no. 6426485) domiciled in the United Kingdom (UK). The condensed consolidated interim financial statements of the Company as at and for the six months ended 30 June 2017 comprise the Company and its interest in its subsidiaries (together referred to as the Group). Its principal business is the operation of the Rightmove platforms, which have the largest audience of any UK property portal (as measured by time on site).
 

The consolidated financial statements of the Group as at and for the year ended 31 December 2016 are available upon request to the Company Secretary from the Company's registered office at Turnberry House, 30 Caldecotte Lake Drive, Caldecotte, Milton Keynes, MK7 8LE or are available on the corporate website at plc.rightmove.co.uk.

Basis of preparation

This condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

 

The annual financial statements of Rightmove plc are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the company's published consolidated financial statements for the year ended 31 December 2016. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2016.

The condensed consolidated interim financial statements were approved by the Board of directors on 28 July 2017. The half year results for the current and comparative period are unaudited. The auditor, KPMG LLP, has carried out a review of the condensed consolidated interim financial statements and their report is set out at the end of this document.

The comparative figures as at and for the year ended 31 December 2016 are extracted from the Group's statutory accounts for that financial year. Those accounts have been reported on by the auditor and delivered to the Registrar of Companies. The report of the auditor was:
(i) unqualified;
(ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report; and
(iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

The Group's financial risk management objectives and policies are consistent with that disclosed in the consolidated financial statements as at and for the year ended 31 December 2016.

Going concern

Throughout the period, the Group was debt free, has continued to generate significant cash and has cash balances of £13,611,000 at 30 June 2017 (31 December 2016: £13,749,000). The Group also had £4,024,000 (31 December 2016: £4,026,000) of money market deposits.


The agreement with HSBC for a £10,000,000 committed revolving loan facility expired on 9 February 2017. This was replaced with a new 12 month agreement with Barclays Bank Plc for a £10,000,000 committed revolving loan facility that expires on 12 February 2018. To date, no amount has been drawn under this facility.

After making enquiries the Board of directors has a reasonable expectation that the Group and the Company have adequate resources and banking facilities to continue in operational existence for the foreseeable future. Accordingly the Board of directors continues to adopt the going concern basis in preparing these condensed consolidated interim financial statements.

 

Non-GAAP (Generally Accepted Accounting Principles) performance measures

In the analysis of the Group's financial performance certain information disclosed in the financial statements may be prepared on a non-GAAP basis or has been derived from amounts calculated in accordance with IFRS but is not itself an expressly permitted GAAP measure. These measures are reported in line with how financial information is analysed by management. The key non-GAAP measures presented by the Group are:

• Underlying operating profit - which is defined as operating profit before share-based payments and NI on share-based incentives; and

• Underlying basic EPS - which is defined as profit for the period before share-based payments and NI on share-based incentives, with no related adjustment for tax, divided by the weighted average number of shares in issue for the period.

 

The Directors believe that these non-GAAP measures provide a more appropriate measure of the Group's business performance as share-based payments, which are a significant non-cash charge are driven by a valuation model, and NI on share-based incentives, is driven by reference to the Rightmove plc share price and so subject to volatility, rather than operational activity. The directors therefore consider underlying operating profit to be the most appropriate indicator of the performance of the business and year-on-year trends. For simplicity no adjustment for tax is made within the calculation of underlying basic EPS. The non-GAAP measures are designed to increase comparability of the Group's financial performance year-on-year.

 

2   Significant accounting policies


The accounting policies applied by the Group in these condensed consolidated interim financial statements are in accordance with International Financial Reporting Standards as adopted by the European Union (Adopted IFRSs) and are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2016.

The same accounting policies are anticipated to be applied for the year ending 31 December 2017.

 

IFRS 16 Leases

IFRS 16 Leases was issued in January 2016, although it has not yet been endorsed by the EU. The standard is effective for annual periods beginning on or after 1 January 2019. Early adoption is permitted for entities that apply IFRS 15 Revenue from Contracts with Customers at or before the date of initial application of IFRS 16.

 

We are currently in the process of quantifying the impact of IFRS 16. Based on current and expected future arrangements that fall within IFRS 16, on transition the Group is expecting to recognise material new right-of-use assets and lease liabilities in respect of office premises and company cars. There is expected to be a change to the profile of the Group's expenses as  the straight-line operating lease expense will be replaced with a depreciation charge for right-of-use assets and interest expense on lease liabilities, however this is not expected to be significant.

Judgements and estimates
The preparation of the condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods if applicable.

In particular information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the condensed consolidated financial statements is included in the following notes:

 

Note 3              Revenue recognition, specifically regarding the period to which services relate and the recognition of revenue from membership offers including discounted or free periods.

 

Notes 4 and 7        The choice of valuation methodology and the inputs and assumptions used to calculate the initial fair value for new share-based incentives granted and the rate at which the related deferred tax asset is measured. The key estimates used in calculating the fair value of the share-based incentives are the fair value of Company's shares at the grant date, expected share price volatility, risk-free interest rate, expected dividends, and weighted average expected life of the instrument. In respect of share-based incentives granted to employees, the number of share-based incentives that are expected to vest is based upon estimates of the number of employees that will forfeit their awards through leaving the Group and the likelihood of any non-market performance conditions being satisfied. Management regularly performs a true-up of the estimate of the number of shares that are expected to vest; this is dependent on the anticipated number of leavers.

 
3   Operating segments

The Group determines and presents operating segments based on internal information that is provided to the Chief Executive Officer, who is the Group's Chief Operating Decision Maker.

The Group's reportable segments are as follows:

·      The Agency segment which provides resale and lettings property advertising services on Rightmove's platforms; and

·      The New Homes segment which provides property advertising services to new home developers and housing associations on Rightmove's platforms.


The Other segment which represents activities under the reportable segments threshold comprises overseas and commercial property advertising services and non-property advertising services which include our third party and consumer services as well as data and valuation services.

 

 

Management monitors the business segments at a revenue and trade receivables level separately for the purpose of making decisions about resources to be allocated and of assessing performance. All revenues in all periods are derived from third parties and there are no inter-segment revenues.

Operating costs, financial income, financial expenses and income taxes in relation to the Agency, New Homes and the Other segment are managed on a centralised basis at a Rightmove Group Limited level and as there are no internal measures of individual segment profitability, relevant disclosures have been shown under the heading of Central in the table overleaf. 




Operating segments



Agency
£000


New Homes
£000



Sub total £000



Other
£000



Central
£000



Adjustments
£000



Total £000

 

 

 

 

 

 

 

 

Six months ended
30 June 2017

 

 

 

 

 

 

 

Revenue

90,645

19,667

110,312

9,229

-

-

119,541

Operating profit(1)

-

-

-

-

91,032

(3,450)(2)

87,582

Depreciation and amortisation

 

-

 

-

 

-

 

-

 

(881)

 

-

 

(881)

Financial income

-

-

-

-

71

-

71

Financial expenses

-

-

-

-

(116)

-

(116)

Trade receivables(3)

20,497

7,060

27,557

2,414

-

107(4)

30,078

Other segment assets

-

-

-

-

35,714

16(4)

35,730

Segment liabilities

-

-

-

-

(55,942)

(123)(4)

(56,065)

Capital expenditure(5)

-

-

-

-

(1,309)

-

(1,309)

 

Six months ended
30 June 2016

 

 

 

 

 

 

 

Revenue

82,704

16,309

99,013

8,869

-

-

107,882

Operating profit(1)

-

-

-

-

82,326

(1,739) (2)

80,587

Depreciation and amortisation

 

-

 

-

 

-

 

-

 

(757)

 

-

 

(757)

Financial income

-

-

-

-

68

-

68

Financial expenses

-

-

-

-

(104)

-

(104)

Trade receivables(3)

18,734

5,901

24,635

2,733

-

138(4)

27,506

Other segment assets

-

-

-

-

29,852

83(4)

29,935

Segment liabilities

-

-

-

-

(50,493)

(221)(4)

(50,714)

Capital expenditure(5)

-

-

-

-

1,137

-

1,137

 

Year ended
31 December 2016

 

 

 

 

 

 

 

Revenue

168,311

33,893

202,204

17,789

-

-

219,993

Operating profit(1)

-

-

-

-

166,240

(4,593)(6)

161,647

Depreciation and amortisation

 

-

 

-

 

-

 

-

 

(1,619)

 

-

 

(1,619)

Financial income

-

-

-

-

109

-

109

Financial expenses

-

-

-

-

(209)

-

(209)

Trade receivables(3)

19,040

5,266

24,306

2,188

-

139(4)

26,633

Other segment assets

-

-

-

-

33,753

68(4)

33,821

Segment liabilities

-

-

-

-

(52,205)

(207)(4)

(52,412)

Capital expenditure(5)

-

-

-

-

1,759

-

1,759

 

(1) Operating profit is stated after the charge for depreciation and amortisation.
(2) Operating profit for the six months ended 30 June 2017 includes share-based payments charge of £2,714,000                                        (30 June 2016: £1,957,000) and NI charge on share-based incentives of £736,000 (30 June 2016: credit of £218,000).
(3) The only segment assets that are separately monitored by the Chief Operating Decision Maker relate to trade receivables net of any associated provision for impairment. All other segment assets are reported on a centralised basis.
(4) These adjustments reflect the reclassification of credit balances in accounts receivable and debit balances in accounts payable made on consolidation for statutory accounts purposes.
(5) Capital expenditure consists of additions of property, plant and equipment and intangible assets (excluding goodwill and intangibles on the acquisition of The Outside View Analytics Limited).
(6) Operating profit for the year ended 31 December 2016 includes share-based payments charge of £4,142,000 and NI charge on share-based incentives of £451,000.

 

 

 

4   Share-based payments
 

The Group operates share-based incentive schemes for executive directors and employees. Since flotation, the Company has awarded share options under the Rightmove Unapproved Executive Share Option Plan (Unapproved Plan) and the Rightmove Approved Executive Share Option Plan (Approved Plan). The Group also operates a Savings Related Share Option Scheme (Sharesave Plan), a Deferred Share Bonus Plan (DSP) and Performance Share Plan (PSP) and in November 2014, the Rightmove Share Incentive Plan (SIP) was established.

 

All share-based incentives are subject to a service condition. Such conditions are not taken into account in the fair value of the service received. The fair value of services received in return for share-based incentives is measured by reference to the fair value of share-based incentives granted. The estimate of the fair value of the share-based incentives is measured using either the Monte Carlo or Black Scholes pricing model as is most appropriate for each scheme.
 

During 2013 the Group amended the rules of the Unapproved Plan to enable such awards to be net settled whereby the number of shares released and sold to satisfy the award is equivalent to the gain due to the option holder. Consequently no proceeds are received on exercise of unapproved share options.

 

The total share-based payments charge for the six months ended 30 June 2017 relating to all share-based incentive plans was £2,714,000 (2016: £1,957,000).

 

NI is being accrued, where applicable, at a rate of 13.8%, which management expects to be the prevailing rate when the awards are exercised, based on the share price at the reporting date. The total NI charge for the six months ended 30 June 2017 relating to all awards was £736,000 (2016: credit of £218,000). The share price at 30 June 2017 was £42.50 (30 June 2016: £36.48).

 

Approved and Unapproved Plans

There has been no award of share options since 5 March 2010.

Performance Share Plan (PSP)

The PSP permits awards of nil cost options or contingent shares which will only vest in the event of prior satisfaction of a performance condition.

 

34,720 PSP awards were made on 1 March 2017 (the Grant Date) subject to Earnings Per Share (EPS) and Total Shareholders Return (TSR) performance. A further 3,457 awards were made to Peter Brooks-Johnson on 9 May 2017 to bring his 2017 PSP award in line with his Chief Executive Officer salary. Performance for all 2017 awards will be measured over three financial years (1 January 2017 - 31 December 2019). The vesting in March and May 2020 (Vesting Date) of 25% of the 2017 PSP award will be dependent on a relative TSR performance condition measured over a three year performance period and the vesting of the 75% of the 2017 PSP award will be dependent on the satisfaction of an EPS growth target measured over a three year performance period. The PSP awards have been valued using the Monte Carlo model for the TSR element and the Black Scholes model for the EPS element and the resulting charge is being spread over the three year period between Grant Date and Vesting Date.

 

PSP award holders are entitled to receive dividends accruing between the Grant Date and the Vesting Date and this value will be delivered in shares.

 

Deferred share bonus plan (DSP)

In March 2009 a DSP was established which allows executive directors and other selected senior management the opportunity to earn a bonus determined as a percentage of base salary settled in nil cost deferred shares. The award of shares under the plan is contingent on the satisfaction of pre-set internal targets relating to underlying drivers of long-term revenue growth (the Performance Period). The right to the shares is deferred for two years from the date of the award (the Vesting Period) and potentially forfeitable during that period should the employee leave employment. The deferred share awards have been valued using the Black Scholes model and the resulting share-based payments charge is being spread evenly over the combined Performance Period and Vesting Period of the shares, being three years.

 

Following the achievement of 92% of the 2016 internal performance targets, 38,416 nil cost deferred shares were awarded to executives and senior management on 1 March 2017 with the right to the release of the shares deferred until March 2019.

 

Share Incentive Plan (SIP)

In November 2014, the Group established the Rightmove Share Incentive Plan (SIP). Employees were offered 50 free shares (2016: 50) subject to a three year service period (the Vesting Period), with effect from 1 January 2017. The SIP awards have been valued using the Black Scholes model and the resulting share-based payments charge spread evenly over the Vesting Period of three years. The SIP shareholders are entitled to a dividend paid in cash over the Vesting Period.

 

The Rightmove Employees' Share Trust (EBT) used surplus cash held by the EBT to purchase 20,000 shares in December 2016 to fund the share requirements of the SIP. These shares were subsequently transferred into the SIP Trust in 2017.

 

 

5   Earnings per share (EPS)

 


Weighted average
number of ordinary shares



Total earnings
£000



Pence
per share

Six months ended 30 June 2017

 

 

 

Basic EPS

92,419,550

70,745

76.55

Diluted EPS

93,419,854

70,745

75.73

Underlying basic EPS

92,419,550

74,195

80.28

Underlying diluted EPS

93,419,854

74,195

79.42

 

 

 

 

Six months ended 30 June 2016

 

 

 

Basic EPS

94,425,506

64,609

68.42

Diluted EPS

95,390,183

64,609

67.73

Underlying basic EPS

94,425,506

66,348

70.26

Underlying diluted EPS

95,390,183

66,348

69.55

 

 

 

 

Year ended 31 December 2016

 

 

 

Basic EPS

93,960,353

129,542

137.87

Diluted EPS

94,967,543

129,542

136.41

Underlying basic EPS

93,960,353

134,135

142.76

Underlying diluted EPS

94,967,543

134,135

141.24

 

 

 

 

 

Weighted average number of ordinary shares (basic)
 

 

6 months ended
30 June 2017
Number of shares

6 months ended
30 June 2016
Number of shares

Year ended
31 December 2016
Number of shares

Issued ordinary shares at 1 January less ordinary shares held by the EBT and SIP Trust

 

 

95,096,841

 

 

97,318,120

 

 

97,318,120

Effect of own shares held in treasury

(2,271,725)

(2,322,314)

(2,322,314)

Effect of own shares purchased for cancellation

 

(458,764)

 

(589,208)

 

(1,069,275)

Effect of share-based incentives exercised

53,198

19,151

34,560

Effect of shares purchased by the EBT

-

(243)

(738)

 

92,419,550

94,425,506

93,960,353

 

Weighted average number of ordinary shares (diluted)

For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive shares. The Group's potential dilutive instruments are in respect of share-based incentives granted to employees, which will be settled by ordinary shares held by the EBT, SIP Trust and shares held in treasury.
 

 

6 months ended
30 June 2017
Number of shares

6 months ended
30 June 2016
Number of shares

Year ended
31 December 2016
Number of shares

Weighted average number of ordinary shares (basic)

 

92,419,550

 

94,425,506

 

93,960,353

Dilutive impact of share-based incentives outstanding

 

1,000,304

 

964,677

 

1,007,190

 

93,419,854

95,390,183

94,967,543


Underlying EPS is calculated by taking basic earnings for the year and adding back the charge for share-based payments and the charge for NI on share-based incentives but without any adjustment to the tax charge in respect of these items. A reconciliation of the basic earnings for the period to the underlying earnings is presented below:
 

6 months ended
30 June 2017
£000

6 months ended
30 June 2016
£000

Year ended
31 December 2016
£000

Basic earnings for the period

70,745

64,609

129,542

Share-based payments

2,714

1,957

4,142

NI on share-based incentives

736

(218)

451

Underlying earnings for the period

74,195

66,348

134,135

         

 

 

 

 

6   Dividends

Company dividends

Dividends declared and paid by the Company were as follows:
 


 

6 months ended 30 June 2017

6 months ended
30 June 2016

Year ended 31 December 2016

 

Pence per share


£000

Pence per share


£000

Pence per share


£000

2015 final dividend paid

-

-

27.0

25,442

27.0

25,442

2016 interim dividend paid

-

-

-

-

19.0

17,764

2016 final dividend paid

32.0

29,507

-

-

-

-

 

32.0

29,507

27.0

25,442

46.0

43,206

               


After the period end an interim dividend of 22.0p (2016: 19.0p) per qualifying ordinary share being £20,219,000 (2016: £17,936,000) was proposed by the Board of directors.

The 2016 final dividend paid on 2 June 2017 was £29,507,000 (2015 final dividend: £25,442,000) being a difference of £(189,000) compared to that reported in the 2016 Annual Report which was due to a decrease in the ordinary shares entitled to a dividend between 31 December 2016 and the final dividend record date of 5 May 2017.

The terms of the EBT provide that dividends payable on the ordinary shares held by the EBT are waived.

No provision was made for the interim dividend in either period and there are no income tax consequences.
 

 

7   Taxation

The income tax expense of £16,792,000 (2016: £15,942,000) is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year applied to the profit before tax for the six month period. The Group's consolidated effective tax rate for the six months ended 30 June 2017 was 19.2% (2016: 19.8%). The difference between the standard rate of 19.3% and the effective rate at 30 June 2017 is attributable to a prior year adjustment of 0.2% in respect of tax relief, offset by disallowable expenditure of 0.1%.

The deferred tax asset of £7,424,000 (2016: £6,791,000) is presented net on the balance sheet in so far as a right of offset exists. The deferred tax asset of £7,455,000 at 30 June 2017 (2016: £6,840,000) is in respect of equity settled share-based incentives and depreciation in excess of capital allowances. The deferred tax asset arising on equity settled share-based incentives was recognised in profit or loss to the extent that the related equity settled share-based payments charge was recognised in the statement of comprehensive income. The deferred tax liability of £31,000 at 30 June 2017 (2016: £49,000) is in respect of the intangible asset recognised on acquisition of The Outside View Analytics Limited.

 

A reduction in the UK corporation tax rate from 21% to 20% (effective from 1 April 2015) was substantively enacted on 2 July 2013. Further reductions to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020) were substantively enacted on                         26 October 2015, and an additional reduction to 17% (effective 1 April 2020) was substantively enacted on 6 September 2016. This will reduce the Group's future tax charge accordingly. The deferred tax asset at 30 June 2017 has been calculated based on the rate of 19% which represents the average expected rate at which this asset will reverse in the future.

 

 

8   Trade and other receivables
 

 


30 June 2017


30 June 2016 


31 December 2016

 

£000

£000 

£000

Trade receivables

30,515

27,952

27,061

Less provision for impairment of trade receivables

(437)

(446)

(428)

Net trade receivables

30,078

27,506

26,633

Prepayments

4,030

3,317

2,826

Accrued income

326

338

338

Interest receivable

3

12

-

Other debtors

72

138

127

 

34,509

31,311

29,924

 

 

 

 

 

 

 

9   Trade and other payables
 

 


30 June 2017


30 June 2016 


31 December 2016

 

£000

£000 

£000

Trade payables

2,358

1,514

1,266

Trade accruals

8,028

7,083

7,644

Other creditors

204

261

46

Other taxation and social security

9,795

7,982

9,172

Deferred revenue

18,355

17,378

17,668

 

38,740

34,218

35,796

 

 

10   Reconciliation of movement in capital and reserves

Share buy back
In June 2007, the Company commenced a share buyback programme to purchase its own ordinary shares. The total number of shares bought back in the six months to 30 June 2017 was 1,039,297 (2016: 1,042,915 shares) representing 1.1% (2016: 1.1%) of the ordinary shares in issue (excluding shares held in treasury). All the shares bought back in the period were cancelled. The shares were acquired on the open market at a total consideration (excluding costs) of £42,490,000 (2016: £40,527,000). The maximum and minimum prices paid were £43.00 (2016: £42.50) and £38.48 (2016: £33.11) per share respectively.
 

Own shares held - £000

 

 

EBT shares reserve

£000

 

SIP shares reserve

£000

 

Treasury shares

£000

Total

own shares held

£000

Own shares held as at 1 January 2016

(2,165)

(852)

(11,045)

(14,062)

Shares purchased for SIP

(10)

-

-

(10)

Shares transferred to SIP

517

(517)

-

-

Share-based incentives exercised in the year

27

-

118

145

Increase in shares released due to rolled up dividend payments

 

-

 

-

 

4

 

4

Own shares held as at 30 June 2016

(1,631)

(1,369)

(10,923)

(13,923)

Own shares held as at 1 January 2016

(2,165)

(852)

(11,045)

(14,062)

Shares purchased for SIP

(751)

-

-

(751)

Shares transferred to SIP

517

(517)

-

-

Share-based incentives exercised in the year

107

-

232

339

SIP releases in the year

-

17

-

17

Increase in shares released due to rolled up dividend payments

 

1

 

-

 

9

 

10

Shares held as at 31 December 2016

(2,291)

(1,352)

(10,804)

(14,447)

Own shares held as at 1 January 2017

(2,291)

(1,352)

(10,804)

(14,447)

Shares transferred to SIP

741

(741)

-

-

Share-based incentives exercised in the year

107

-

409

516

SIP releases in the year

-

44

-

44

Increase in shares released due to rolled up dividend payments

 

-

 

-

 

15

 

15

Shares held as at 30 June 2017

(1,443)

(2,049)

(10,380)

(13,872)

 

 

 

Own shares held - number of shares

 

 

 

EBT shares reserve

 

SIP shares reserve

 

Treasury shares

Total

own shares held

Own shares held as at 1 January 2016

386,057

37,800

2,322,314

2,746,171

Shares purchased for SIP

250

-

-

250

Shares transferred to SIP

(12,950)

12,950

-

-

Share-based incentives exercised in the year

(12,224)

-

(24,799)

(37,023)

Increase in shares released due to rolled up dividend payments

 

-

 

-

 

(911)

 

(911)

Own shares held as at 30 June 2016

361,133

50,750

2,296,604

2,708,487

Own shares held as at 1 January 2016

386,057

37,800

2,322,314

2,746,171

Shares purchased for SIP

20,250

-

-

20,250

Shares transferred to SIP

(12,950)

12,950

-

-

Share-based incentives exercised in the year

(49,985)

-

(48,750)

(98,735)

SIP releases in the year

-

(600)

-

(600)

Increase in shares released due to rolled up dividend payments

 

(97)

 

-

 

(1,839)

 

(1,936)

Shares held as at 31 December 2016

343,275

50,150

2,271,725

2,665,150

Own shares held as at 1 January 2017

343,275

50,150

2,271,725

2,665,150

Shares transferred to SIP

(20,000)

20,000

-

-

Share-based incentives exercised in the year

(30,313)

-

(86,027)

(116,340)

SIP releases in the year

-

(1,400)

-

(1,400)

Increase in shares released due to rolled up dividend payments

 

-

 

-

 

(3,058)

 

(3,058)

Shares held as at 30 June 2017

292,962

68,750

2,182,640

2,544,352

 

(a) EBT shares reserve

This reserve represents the cost of own shares acquired by the EBT less any exercises of share-based incentives. No shares were issued as a result of rolled up dividend payments in relation to PSP shares (2016: 97).

 

At 30 June 2017, the EBT held 292,962 (2016: 361,133) ordinary shares in the Company of £0.01 each, representing 0.3% (2016: 0.4%) of the ordinary shares in issue (excluding shares held in treasury). The market value of the shares held by the EBT at 30 June 2017 was £12,451,000 (2016: £13,174,000).

 

(b) SIP shares reserve

In November 2014, the Group established the Rightmove SIP Trust SIP. This reserve represents the cost of acquiring shares less any exercises or releases of SIP awards. On 3 January 2017 employees of the Group were offered 50 free shares (4 January 2016: 50) subject to a three year service period.

 

At 30 June 2017 the SIP Trust held 68,750 (2016: 50,750) ordinary shares in the Company of £0.01 each, representing 0.07% (2016: 0.05%) of the ordinary shares in issue (excluding shares held in treasury). The market value of the shares held in the SIP Trust at the period end was £2,922,000 (30 June 2016: £1,851,000).

 

(c) Treasury Shares

This represents the cost of acquiring shares held in treasury less any exercises of share-based incentives. These shares were bought back in 2008 at an average price of £4.76 and may be used to satisfy certain share-based incentive awards. An additional 3,058 shares were issued as a result of rolled up dividend payments in relation to performance shares (2016: 911).

 

Other reserves

This represents the Capital Redemption Reserve in respect of own shares bought back and cancelled. The movement in other reserves of £10,000 (2016: £10,000) comprises the nominal value of ordinary shares cancelled during the period.
 

Retained earnings

The loss on exercise of share-based incentives is the difference between the value that the shares held by the EBT and treasury shares were originally acquired at and the exercise price at which share-based incentives were exercised during the period.
 


 

11 Related parties

Inter-group transactions with subsidiaries
During the period Rightmove plc was charged interest of £107,000 (2016: £315,000) by Rightmove Group Limited in respect of balances owing under the inter-group loan agreement dated 30 January 2008. As at 30 June 2017 the balance owing under this agreement was £29,153,000 (2016: £29,279,000) including capitalised interest.

On 30 May 2017 Rightmove Group Limited declared an interim dividend of 55p per ordinary share to the Company. The dividend of £71,170,000 was settled via a reduction in the inter-group loan balance owed by Rightmove plc to Rightmove Group Limited. Rightmove Group Limited also declared a dividend in specie of £741,000 (2016: £517,000), representing the cost of the SIP shares transferred from the EBT to the SIP.

 

Inter-group transactions between subsidiaries

Following its acquisition on 31 May 2016, The Outside View Analytics Ltd became a related party to Rightmove Group Limited. Since acquisition Rightmove Group Limited has settled liabilities on behalf of The Outside View Analytics Ltd and the balance owing under an inter-group loan agreement dated 13 June 2016 was £23,000 as at 30 June 2017 (2016: nil).


Transactions with key management staff

There were no transactions with key management in any period.


 

 

 

INDEPENDENT REVIEW REPORT TO RIGHTMOVE PLC 

Conclusion 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the Condensed Consolidated Interim Statement of Comprehensive Income, Condensed Consolidated Interim Statement of Financial Position, Condensed Consolidated Interim Statement of Cash Flow and Condensed Consolidated Interim Statement of Changes in Shareholders' Equity and the related explanatory notes. 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").   

Scope of review 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

Directors' responsibilities 

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.  As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the EU.  The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU. 

Our responsibility 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. 

The purpose of our review work and to whom we owe our responsibilities

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the DTR of the UK FCA.  Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached. 

 

K Wightman

for and on behalf of KPMG LLP 

 

Chartered Accountants 

Altius House

One North Fourth Street

Milton Keynes, MK9 1NE  

 

28 July 2017

 

 

 

ADVISERS AND SHAREHOLDER INFORMATION
 

Contacts

 

Registered office

Corporate advisers

Chief Executive Officer:

Peter Brooks-Johnson

Rightmove plc

Financial adviser

Finance Director:

Company Secretary:

Robyn Perriss

Sandra Odell

Turnberry House
30 Caldecotte Lake Drive

UBS Investment Bank

Joint brokers

Website:

www.rightmove.co.uk

Caldecotte

Milton Keynes

UBS Limited

Numis Securities Limited

 

 

MK7 8LE

Joint brokers

 

 

 

UBS Limited

 

 

Registered in

England no. 6426485

Numis Securities Limited

Auditor

Financial calendar 2017

 

 

KPMG LLP

Half year results

28 July 2017

 

Bankers

Interim dividend record date

6 October 2017

 

Barclays Bank Plc

Interim dividend payment

3 November 2017

 

Santander UK plc

Full year results

23 February 2018

 

Solicitors

 

 

 

Slaughter and May

 

 

 

Pinsent Masons

 

 

 

Registrar

 

 

 

Capita Asset Services*

 

 

 

 


 


*Shareholder enquiries
The Company's registrar is Capita Asset Services. They will be pleased to deal with any questions regarding your shareholding or dividends. Please notify them of your change of address or other personal information. Their address details are:

Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU

Capita Asset Services is a trading name of Capita Registrars Limited.

Capita shareholder helpline: 0371 664 0300 (calls cost 10p per minute plus network extras) (Overseas: +44 20 8639 3399)
Email:
shareholderenquiries@capita.co.uk

Share portal: www.capitashareportal.com

Through the website of our registrar, Capita Asset Services, shareholders are able to manage their shareholding online and facilities include electronic communications, account enquiries, amendment of address and dividend mandate instructions.




 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Half-year Report - RNS