Rightmove's revenues soar 69 per cent as nine out of 10 agencies sign up

Click to follow

Revenue at Rightmove, the UK's largest property website, soared 69 per cent as it attracted listings from new agents and the largest developers in the business last year.

The company, which counts 90 per cent of the UK's estate agents among its subscribers, said that it expected pre-tax profits for the 12 months to December to land at the "upper end of analysts estimates of £29.3m to £32.2m," compared with £17.7m in 2006, on revenues of £56.7m.

Customer growth was also healthy. The number of estate agent subscribers rose to 12,519 by December 2007, up 11 per cent from 12,295 in December 2006, while 39 per cent of new homes developers came into the fold, rising from 2,801 in December 2006 to 3,880 last month. The number of overseas agencies increased too, from 423 a little over a year ago to 515 in December, a 22 per cent change.

The website generates money from a monthly listing fee and is largely insulated from worries about a slowdown in the housing market. The cost of a property, or the amount of time it remains on the market, does not impact the company's bottom line, and it was able to hike its subscription by 30 per cent over the last six months, taking them from £250 to £325 for approximately 7,000 estate agent customers. Higher bills also landed on the doorsteps of new homes developers.

Analysts at UBS are recommending investors to buy the stock. They forecast revenues of £57.1m and, excluding share option costs, pre-tax profits of £31.1m for 2007.

Numis, another broker, was also optimistic about the business. "The group is performing well in a tough housing market, and we believe this reflects the subscription nature of the business model and the low absolute cost of the product. We believe the main impact of the housing slowdown on the business will be through branch closures as agents cut costs," said Numis analysts.

Rightmove was founded in February 2000 by Countrywide, which operates the UK's largest chain of estate agents. Months later, in July 2000, Halifax Estate Agencies, RSA and Connells became joint venture partners in the company.

Rightmove came to the London market in 2006.

Last year it acquired a 66.7 per cent interest in Holiday Lettings, a holiday home rental website.