Rightmove Full-Year 2023 Results: Typically Profitable and Typically Confident for UK Market Leader

The market-leading British real estate portal Rightmove has released a report on its activities in 2023, reporting "strong financial, operational and strategic progress" to the market.

Highlights include:

• Full-year revenue grew to £364.3m, up 10% from 2022
• Operating profits of £258m represent solid 7% YoY growth
• Earnings per share grew 6% to 25.2p
• Average revenue per advertiser (ARPA) grew 9% to £1,431 per month

Johan Svanstrom, overseeing his first full year as Chief Executive Officer, said:

 "In a year of economic uncertainty, consumers continued to trust Rightmove as the place to turn to help them make their move.  Customers were able to choose from an expanded, more sophisticated product suite, to continue to drive business results in a changing market environment.  

 "Our financial performance in 2023 reflects the strength of our business model and our platform network effects.

 "The results are underpinned by the commitment and talent of the Rightmove team, who are focused on innovation and delivering continuous improvement for our customers and consumers.  We reshaped our strategy during 2023, setting out a plan to further digitise the property sector, expand our business, stretch our brand and accelerate the financial performance long term. We are looking forward to 2024 with confidence and to delivering further value to all stakeholders on our platform, progressing the ambitious Rightmove strategy."

"Bigger than property"—but agents continue to leave

For those unfamiliar with Rightmove, the British portal is one of the strongest market leaders in global real estate, with rivals Zoopla and OnTheMarket languishing in the distance.

Rightmove's end-of-year results point to its dominance in more ways than one, the least of which showed that "over 86% of all time spent on property portals in the UK was spent on Rightmove" in 2023, and further evidence that "Google continued to report that more people start their property searches with 'Rightmove' than with 'Property'".

Yet Rightmove's infamous price hikes and willingness to squeeze UK agents' wallets due to their reliance on its platform remain a controversial topic of discussion. This is reflected in the fact that, despite a higher ARPA than ever, Rightmove has lost agent subscribers at a steady rate since 2018, with circa 230 leavers in the past 12 months alone:

Rightmove went on to say that it expects agent numbers to drop again in 2024, rightly pointing out that difficult market economics are likely to be the main driver—if obfuscating the fact that its annual price hikes aren't exactly designed to soften the blow.

Nevertheless, ARPA is predicted to increase by circa £100 in 2024, which would grow total revenue for the business by around 7%.

Meanwhile, rival portal OnTheMarket is reporting a major surge in agent numbers since its acquisition by CoStar Group in December. Rightmove will be under more pressure than ever to retain agents as its competitor looks to steal market share.

Looking forward, other revenue streams look good

Rightmove's Capital Markets Day in November outlined several opportunities for the portal to grow in 2024 and beyond, including affordability, moving, lifestyle, and a stronger focus on renting—which may partly explain the company's decision to acquire HomeViews for £8 million earlier this year.

Rightmove's revenue from New Homes Developments rose by a solid 26% from 2022, contributing £66.4m, and New Homes ARPA grew 21% despite a dip in memberships to the tune of 4% churn.

Mortgage revenues more than doubled via Rightmove's Mortgage in Principle product.

Meanwhile, Commercial Real Estate revenues grew by a solid 15% YoY, and Rightmove says it sees "significant long-term opportunity" by "deepening the Rightmove commercial product set."

Rightmove also said it has developed a new solution to tap into rentals, but details were scarce except to say that rental agreements can be reached in "five digitised and connected steps".

Rightmove calls on the Government: "Accelerate the market, please"

Earlier this week, Rightmove entered the political sphere to call on the UK government to accelerate the market and allow more people to move home and suggested three possible solutions:

1. Stamp duty reform (the tax you pay for buying a residential property) to take into account regional price variations to allow more people to buy in London
2. Improve a rumoured mortgage scheme to benefit buyers who put down 5%+ deposits (the rumoured mortgage scheme would only benefit buyers putting down 1% deposits)
3. Introduce incentives for landlords to maintain 'greener' rental properties so tenants can live in more energy-efficient rentals.

The UK's current housing secretary Michael Gove has held the position not once but twice previously in an infamous carousel of joiners and leavers that has seen British housebuilding deprioritised to less than half the required numbers in the past ten years.

Assuming Rightmove's calls are taken seriously, the Spring budget in March could be an interesting one—but historically, holding your breath isn't worth the risk.