Half-year Report
Embargoed until 07.00 on 27 July 2016
Half year results for the six months ended 30 June 2016
Rightmove, the UK's number one property site, has delivered another strong period of growth in the six months ended 30 June 2016. Rightmove's market leading audience continued to grow strongly with customers spending more on Rightmove's products and services, resulting in revenue increasing by 16% to £107.9m with underlying operating profit up 17% to £82.3m and operating profit up 21% to £80.6m.
Financial highlights
|
|
H1 2016 |
H1 2015 |
Change |
|
Revenue |
£107.9m |
£93.1m |
+16% |
|
Operating profit |
£80.6m |
£66.7m |
+21% |
|
Underlying operating profit(1) |
£82.3m |
£70.3m |
+17% |
|
Basic earnings per share |
68.4p |
55.2p |
+24% |
|
Underlying basic earnings per share(2) |
70.3p |
58.9p |
+19% |
|
Interim dividend |
19.0p |
16.0p |
+19% |
|
|
|
|
|
· Revenue up 16% year on year with growth across all business areas
· Underlying operating profit(1) up 17% and operating profit up 21%
· £66.0m (2015: £52.9m) of cash returned to shareholders through dividends and share buybacks in the period
· Interim dividend increased by 3.0p to 19.0p (2015: 16.0p) per ordinary share, up 19%
Operational Highlights
· Record customer numbers with Agency and New Homes customers up 229 (+1%) since the start of 2016 to 19,981
· 1.1 million UK residential properties advertised on Rightmove which is 40%(3) more than on any other portal
· Strong traffic growth with visits(4) up 15% to 127.5m per month and time on site(4) up 9% to 1.05 billion minutes per month
· Average revenue per advertiser (ARPA)(5) up a record £90 to £830 per month on the same period a year ago
· Further product, software and data innovation including the launch of our new search technology enhancing both the consumer experience and value of our product set
Nick McKittrick, Chief Executive Officer, said:
"Rightmove was visited over 750 million times in the first half of 2016, up 15% on last year, as consumers continue to turn to us first to search and research on the only place you can see virtually the whole of the UK property market. With the recent launch of our new search technology we are now delivering an even faster and richer experience for consumers to 'find their happy' from the 1.1 million UK residential properties advertised on Rightmove.
We are focused on helping our customers succeed by delivering the most significant and effective exposure for their properties and brand and being the largest source of high quality leads. In addition to the advertising efficiencies we deliver, we have continued to help our customers drive operational efficiencies through the software, tools and support we provide which draw on our unique data and insight across the UK property market.
Whilst the economic outlook is more uncertain due to the result of the EU referendum, 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 us confidence in delivering expectations for the current year."
Half Year Statement
Strategic position
Our aim is to be the place consumers 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. Combining our software, data analysis capability and unique view of the whole market we also help our customers drive operational efficiencies and inform their business decisions.
Rightmove keeps investing to deliver an ever more engaging experience for home movers. To that end, our new search technology is now live providing a faster and richer search experience with more images, larger images, simplified filtering options and a fully responsive design across all devices, whilst also enhancing the value of our products for customers. The future is also exciting with our next search innovation 'Where can I live' in beta testing. This search identifies the commutable areas home hunters can afford, and then shows them the properties available in those areas.
In the first half of the year we attracted a record 765 million visits, up 15% on last year, resulting in consumers spending 6.3 billion minutes on Rightmove. Our market share of traffic across both desktop and mobile is 77%(4) with the mobile component even higher at 81%(4). Not only has our focus further increased the exposure for our customers' brands and properties, it has increased the number of high-quality leads we generate for our customers to 25.7 million.
We gained over 200 new customers in the period to reach an all-time high of 19,981 Agents and New Homes developments, and continue to be the only place to see virtually the whole of the UK property market with 40%(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 a record £90 to £830 per month.
We have always focused on the quality of our leads and this continues to stand us in good stead as our leads are resulting in even more sales and lettings for our customers. We now generate six(6) times as many sales and lettings for our agency customers as our nearest competitor. No wonder, when home sellers and landlords are six(6) times more likely to find their buyer or tenant on Rightmove compared to any other portal, that 85%(7) of people selling their home rank Rightmove as the most important site for marketing their property.
To help our customers drive more efficiencies, we introduced the next wave of market share analysis tools within our popular market intelligence software 'Rightmove Intel' along with the capability for multi-branch agents to easily see metrics at branch and area levels. Our tools have become embedded in the industry over many years of use and, in an independent survey, over 50%(8) of agents cited that our software makes them more efficient not just in marketing but in other areas of their business as well.
We have continued to innovate our products alongside the development of our new search technology to further increase the value we deliver to customers. Our Property products, Featured Property and Premium Listings are attracting more attention with their larger and premium designs. The Featured Agent branding product now gains more visibility as a larger creative space in the search results that gives our customers more flexibility to better communicate their message to the largest home hunting audience in the UK.
On 31 May 2016 we acquired the Outside View, a predictive analytics company, for net cash consideration of £2.0m. They have developed an algorithm that identifies the most likely potential sellers in a local area enabling agents to more accurately identify and market to them. The founding shareholders will be remaining with the business and together we will be launching an enhanced version of this product using our combined knowhow and Rightmove's unique dataset, which will work in tandem with our popular Local Valuation Alert product.
Agency
Agency ARPA(9) is up 12% year on year at £789 per office per month as a result of further adoption of additional advertising products and price increases. Spending by agents increased across our range of additional advertising products with encouraging adoption of our Optimiser package which provides the highest value to our customers. The number of agency offices continues to increase, up 1% since the start of the year at a record high of 17,534 (31 December 2015: 17,336), with the growth being driven by an increase in resale office numbers.
New Homes
New Homes ARPA(10) increased by £128 year on year to £1,120 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 1% since the start of the year at 2,447
(31 December 2015: 2,416).
Other businesses
We continue to leverage our brand strength beyond the main UK residential property business, generating strong growth in our other businesses in the first half of 2016.
The popularity of our Overseas advertising business continues to grow with audience figures setting new records with over 50 million searches in the period and record overseas customer numbers of 2,664. Rightmove now has around 250,000 overseas homes advertised for sale in over 100 countries, up 18% on a year ago.
Rightmove's Data Services business provides insight, analysis and risk assessment tools to businesses who are making decisions around property, particularly valuation and investment. Our Automated Valuation Model is at the heart of our offering and is used by property professionals to provide data backed valuation of properties across the UK.
Our property comparison and background check toolset is now the de facto standard for valuers in the surveying industry, used by all leading surveying firms in their day to day operations. Each month over 100,000 comparable reports are completed by surveyors using Rightmove's tools. All our tools and services are based on the bedrock of our uniquely powerful property dataset, providing our customers with constantly updated property insight and information across the UK.
Financial performance
Revenue grew to £107.9m (2015: £93.1m) up 16% on the previous year with all business areas experiencing year on year growth. Our Agency business revenue increased by £11.3m year on year, driven by growth in spend on additional advertising products and packages, as well as membership fee price increases.
Underlying operating profit(1) increased by 17% to £82.3m (2015: £70.3m) with underlying operating margin(1) increasing to 76.3% (2015: 75.5%). Underlying costs(1) in the first half increased to £25.6m
(2015: £22.9m) reflecting increased investment in people and site functionality and infrastructure. Underlying costs are likely to be slightly more weighted to H2 than H1 this year due to the full year impact of additional heads recruited in the first half and the timing of marketing spend.
In accordance with IFRS 2, a non-cash charge of £2.0m (2015: £1.8m) is charged to income representing the amortisation of the fair value of share-based incentives granted. National Insurance is being accrued, where applicable, at a rate of 13.8% on the potential employee gain on share-based incentives granted. Based on a decrease in the closing share price from £41.25 at 31 December 2015 to £36.48 at 30 June 2016 in respect of the outstanding share-based incentives granted, together with the actual NI charge on share-based incentives exercised in the period, there was a credit of £0.2m (2015: charge of £1.8m).
Cash generated from operating activities was £82.1m (2015: £67.6m), representing a cash conversion ratio of over 100%. We have continued our policy of returning all excess cash flow to shareholders through a combination of share buybacks and dividends, returning £66.0m (2015: £52.9m) in the period and putting the business in a strong position to return all the excess cash generated in 2016 during the year.
Underlying basic earnings per share(2) rose 19% to 70.3p (2015: 58.9p), with basic earnings per share increasing 24% to 68.4p (2015: 55.2p), reflecting the strong growth in profits and the benefit of our ongoing share buyback programme.
Dividend and share buybacks
In June 2016, the Company paid the final dividend for the year ended 31 December 2015 of £25.4m. The Board has announced an interim dividend of 19p (2015: 16.0p), an increase of 19%, as part of its commitment to a progressive dividend policy, reflecting the growth in underlying earnings per share.
The interim dividend will be paid on 4 November 2016 to members on the register on 7 October 2016.
We bought back and cancelled 1.0m shares (2015: 1.1m shares) in the period at a cost of £40.5m
(2015: £31.7m) bringing the total cash returned to shareholders to over £660m since our flotation in March 2006.
Principal risks and uncertainties
As set out within the Strategic Report within the 2015 Annual Report, the Group has identified the following principal risks and uncertainties:
The state of the UK housing market - 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 a major determinant of Rightmove's revenue.
· Transactions in the first half of 2016 were up 12% year on year and Rightmove customer numbers have increased by 1% since the beginning of the year to 19,981. Whilst transactions were up overall in the first half of 2016, they were lower year on year in the second quarter as a consequence of buyers having brought forward purchases in the first quarter to avoid additional Stamp Duty liabilities and due to the increased economic uncertainty in the lead up to the EU referendum.
It is too early to gauge the impact of the result of the EU referendum on housing transactions. In the near term there is likely to be a period of economic uncertainty, however our strong market position and relationships with our customers, and the value embedded in our membership continue to position us well providing that housing transaction volumes do not take a sharp downward turn.
· Increased competition from existing competitors or new entrants - this 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 to an all-time high and have continued to see strong adoption of our additional advertising products.
· New or disruptive technologies and changing consumer behaviours - failure to innovate or adopt new technologies and adapt to changing consumer behaviours may result in a potential loss of audience, advertisers and demand for additional advertising products.
We continue to innovate to make Rightmove even more compelling to home movers and advertisers. We have grown our audience during the period and our market share amongst the top four property websites on a time basis is 77%. Consistent with being a multi-platform digital leader, two thirds of time spent on Rightmove is now on mobile devices.
· Cyber attack - potential damage to Rightmove's reputation due to significant disruption in service or loss of key data.
Rightmove operates from three separate data centres to ensure optimal performance and business continuity capability. Disaster recovery and business continuity plans are tested and reviewed regularly and backups and denial of service testing 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 and our employee retention rates remain high. We continue to invest in people, particularly in sales and technology roles, to deliver future growth.
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. Whilst the economic outlook is currently more uncertain due to the result of the EU referendum, 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 expectations for the current year.
Next trading update
Our next reporting date will be the 24 February 2017 when we will announce our results for the year ending
31 December 2016.
Scott Forbes Nick McKittrick
Chairman Chief Executive Officer
27 July 2016
Notes to the half year results for the six months ended 30 June 2016
(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. Underlying operating profit is therefore considered to be more representative of the operating performance of the business and the year on year trends. A reconciliation to this balance can be seen on the face of the consolidated statement of comprehensive income.
(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 April 2016
(4) Source: Comscore June 2016
(5) 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 19,890. 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.
(6) Source: Independent software provider to the estate agent industry
(7) Source: The Property Academy 2015 Home Moving Trends Survey
(8) Source: Barclays Capital October 2015
(9) Agency ARPA is calculated as Agency revenue for the six-month period divided by the average number of Agency branches for the period of 17,463.
(10) New Homes ARPA is calculated as New Homes revenue for the six-month period divided by the average number of developments for the period of 2,427.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF
YEAR REPORT 2016
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 Nick McKittrick
Chairman Chief Executive Officer
27 July 2016
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2016
|
|
|
|
|
|
|
|
|
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
Revenue |
3 |
107,882 |
93,113 |
192,129 |
|
|
|
|
|
|
|
Administrative expenses |
|
(27,295) |
(26,460) |
(54,954) |
|
|
|
|
|
|
|
Operating profit before share-based payments and NI on share-based incentives |
|
82,326 |
|
|
|
Share-based payments |
4 |
(1,957) |
(1,805) |
(3,765) |
|
NI on share-based incentives |
4 |
218 |
(1,804) |
(3,331) |
|
|
|
|
|
|
|
Operating profit |
|
80,587 |
66,653 |
137,175 |
|
Financial income |
|
68 |
64 |
112 |
|
Financial expenses |
|
(104) |
(95) |
(183) |
|
|
|
|
|
|
|
Net financial expenses |
|
(36) |
(31) |
(71) |
|
|
|
|
|
|
|
Profit before tax |
|
80,551 |
66,622 |
137,104 |
|
Income tax expense |
7 |
(15,942) |
(13,422) |
(27,636) |
|
|
|
|
|
|
|
Profit for the period being total comprehensive income |
|
64,609 |
53,200 |
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
Equity holders of the Parent |
|
64,609 |
53,200 |
109,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (pence) |
|
|
|
|
|
Basic |
5 |
68.42 |
55.17 |
114.01 |
|
Diluted |
5 |
67.73 |
54.56 |
112.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share (pence) |
6 |
27.00 |
22.00 |
38.00 |
|
Total dividends |
6 |
25,442 |
21,162 |
36,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
. |
||||
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
as at 30 June 2016
|
|
|
|
|
|
|
|
|
£000 |
£000 |
£000 |
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
2,512 |
2,181 |
2,239 |
|
Intangible assets |
|
3,541 |
1,407 |
1,383 |
|
Deferred tax assets |
7 |
6,791 |
5,834 |
6,791 |
|
|
|
|
|
|
|
Total non-current assets |
|
12,844 |
9,422 |
10,413 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Trade and other receivables |
8 |
31,311 |
27,361 |
27,523 |
|
Money market deposits |
|
4,007 |
- |
4,000 |
|
Cash and cash equivalents |
|
9,279 |
11,681 |
8,418 |
|
|
|
|
|
|
|
Total current assets |
|
44,597 |
39,042 |
39,941 |
|
|
|
|
|
|
|
Total assets |
|
57,441 |
48,464 |
50,354 |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
9 |
(34,218) |
(29,075) |
(31,618) |
|
Income tax payable |
|
(16,242) |
(13,538) |
(11,863) |
|
|
|
|
|
|
|
Total current liabilities |
|
(50,460) |
(42,613) |
(43,481) |
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Provisions |
|
(254) |
(217) |
(236) |
|
|
|
|
|
|
|
Total non-current liabilities |
|
(254) |
(217) |
(236) |
|
|
|
|
|
|
|
Total liabilities |
|
(50,714) |
(42,830) |
(43,717) |
|
|
|
|
|
|
|
Net assets |
|
6,727 |
5,634 |
6,637 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital |
|
967 |
989 |
977 |
|
Other reserves |
|
465 |
443 |
455 |
|
Retained earnings |
|
5,295 |
4,202 |
5,205 |
|
Total equity attributable to the equity holders of the Parent |
|
6,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the six months ended 30 June 2016
|
|
|
|
|
|
|
|
|
£000 |
£000 |
£000 |
|
Cash flows from operating activities |
|
|
|
|
|
Profit for the period |
|
64,609 |
53,200 |
109,468 |
|
|
|
|
|
|
|
Adjustments for: |
|
|
|
|
|
Depreciation charges |
|
590 |
430 |
934 |
|
Amortisation charges |
|
167 |
185 |
361 |
|
Financial income |
|
(68) |
(64) |
(112) |
|
Financial expenses |
|
104 |
95 |
183 |
|
Share-based payments |
4 |
1,957 |
1,805 |
3,765 |
|
Income tax expense |
|
15,942 |
13,422 |
27,636 |
|
Operating cash flow before changes in working capital |
|
83,301 |
|
|
|
|
|
|
|
|
|
Increase in trade and other receivables |
|
(3,612) |
(3,078) |
(3,230) |
|
Increase in trade and other payables |
|
2,415 |
1,571 |
4,140 |
|
Increase in provisions |
|
18 |
17 |
36 |
|
|
|
|
|
|
|
Cash generated from operating activities |
|
82,122 |
67,583 |
143,181 |
|
|
|
|
|
|
|
Financial expenses paid |
|
(104) |
(95) |
(183) |
|
Income taxes paid |
|
(11,863) |
(12,949) |
(26,869) |
|
|
|
70,155 |
54,539 |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Interest received |
|
81 |
79 |
117 |
|
Acquisition of property, plant and equipment |
|
(854) |
(1,031) |
(1,593) |
|
Acquisition of intangible assets Acquisition of subsidiary, net of cash acquired |
12 |
(283) (2,046) |
(27) - |
(179) - |
|
Money market deposits |
|
(7) |
- |
(4,000) |
|
|
|
|
|
|
|
Net cash used in investing activities |
|
(3,109) |
(979) |
(5,655) |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Dividends paid |
6 |
(25,442) |
(21,162) |
(36,469) |
|
Purchase of own shares for cancellation |
10 |
(40,527) |
(31,702) |
(76,071) |
|
Purchase of own shares for share incentive plans |
|
(10) |
- |
(507) |
|
Share related expenses |
|
(244) |
(278) |
(615) |
|
Proceeds on exercise of share-based incentives |
|
38 |
58 |
401 |
|
|
|
|
|
|
|
Net cash used in financing activities |
|
(66,185) |
(53,084) |
(113,261) |
|
|
|
861 |
|
|
|
Cash and cash equivalents at 1 January |
|
8,418 |
11,205 |
11,205 |
|
|
|
9,279 |
|
|
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
for the six months ended 30 June 2016
|
|
|
EBT |
SIP shares reserve £000 |
|
|
Reverse acquisition |
|
|
|
At 1 January 2015 |
1,000 |
(2,906) |
- |
(11,917) |
294 |
138 |
15,839 |
2,448 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
- |
|
|
|
53,200 |
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners recorded directly in equity |
|
|
|
|
|
|
|
|
|
Share-based payments |
- |
- |
- |
- |
- |
- |
1,805 |
1,805 |
|
Tax debit in respect of share-based incentives recognised directly in equity |
|
|
- |
|
|
|
|
|
|
Dividends to shareholders |
- |
- |
- |
- |
- |
- |
(21,162) |
(21,162) |
|
Exercise of share-based incentives |
- |
223 |
2 |
- |
- |
- |
(167) |
58 |
|
Cancellation of own shares |
(11) |
- |
- |
- |
11 |
- |
(31,702) |
(31,702) |
|
Share related expenses |
- |
- |
- |
- |
- |
- |
(222) |
(222) |
|
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2015 |
1,000 |
(2,906) |
- |
(11,917) |
294 |
138 |
15,839 |
2,448 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
|
|
|
|
|
|
|
Profit for the year |
- |
- |
- |
- |
- |
- |
109,468 |
109,468 |
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners recorded directly in equity |
|
|
|
|
|
|
|
|
|
Share-based payments |
- |
- |
- |
- |
- |
- |
3,765 |
3,765 |
|
Tax credit in respect of share-based incentives recognised directly in equity |
|
|
- |
|
|
|
|
|
|
Dividends to shareholders |
- |
- |
- |
- |
- |
- |
(36,469) |
(36,469) |
|
Transfer of shares to share incentive plan (SIP) |
- |
863 |
(863) |
- |
- |
- |
- |
- |
|
Exercise of share-based incentives |
- |
385 |
11 |
872 |
- |
- |
(867) |
401 |
|
Purchase of shares for share incentive plan |
|
|
- |
|
|
|
|
|
|
Cancellation of own shares |
(23) |
- |
- |
- |
23 |
- |
(76,071) |
(76,071) |
|
Share related expenses |
- |
- |
- |
- |
- |
- |
(533) |
(533) |
|
|
|
|
(852) |
|
|
|
|
|
|
At 1 January 2016 |
977 |
(2,165) |
(852) |
(11,045) |
317 |
138 |
19,267 |
6,637 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
- |
- |
- |
- |
- |
- |
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) |
|
Transfer of shares to share incentive plan (SIP) |
- |
517 |
(517) |
- |
- |
- |
- |
- |
|
Exercise of share-based incentives |
- |
27 |
- |
122 |
- |
- |
(111) |
38 |
|
Cancellation of own shares |
(10) |
- |
- |
- |
10 |
- |
(40,527) |
(40,527) |
|
Share related expenses |
- |
- |
- |
- |
- |
- |
(283) |
(283) |
|
|
967 |
(1,631) |
(1,369) |
(10,923) |
327 |
138 |
19,218 |
6,727
|
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 2016 comprise the Company and its interest in its subsidiaries (together referred to as the Group). Its principal business is the operation of the rightmove.co.uk website, which has the largest audience of any UK property website (as measured by page impressions).
The consolidated financial statements of the Group as at and for the year ended 31 December 2015 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 2015. 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 2015.
The condensed consolidated interim financial statements were approved by the Board of directors on 27 July 2016. 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 2015 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 2015.
Going concern
Throughout the period, the Group was debt free, has continued to generate significant cash and has cash balances of £9,279,000 at 30 June 2016 (31 December 2015: £8,418,000). The Group also had £4,007,000
(31 December 2015: £4,000,000) of money market deposits.
The Group agreed to extend a 12 month agreement with HSBC for a £10,000,000 committed revolving loan facility. This agreement will expire on 9 February 2017. 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.
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 2015.
Amendments to IAS 1 were adopted for the first time for the financial year beginning 1 January 2016. This did not have a significant impact on the condensed Group financial statements.
The same accounting policies are anticipated to be applied for the year ending 31 December 2016.
2 Significant accounting policies (continued)
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 judgments 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 options 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 options 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 www.rightmove.co.uk; and
· The New Homes segment which provides property advertising services to new home developers and housing associations on www.rightmove.co.uk.
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.
3 Operating segments (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
|
|
|
|
|
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 |
|
Six months ended |
|
|
|
|
|
|
|
|
Revenue |
71,382 |
14,973 |
86,355 |
6,758 |
- |
- |
93,113 |
|
Operating profit(1) |
- |
- |
- |
- |
70,262 |
(3,609) (2) |
66,653 |
|
Depreciation and amortisation |
|
|
|
|
|
|
|
|
Financial income |
- |
- |
- |
- |
64 |
- |
64 |
|
Financial expenses |
- |
- |
- |
- |
(95) |
- |
(95) |
|
Trade receivables(3) |
16,690 |
6,203 |
22,893 |
1,565 |
- |
91(4) |
24,549 |
|
Other segment assets |
- |
- |
- |
- |
23,880 |
35 (4) |
23,915 |
|
Segment liabilities |
- |
- |
- |
- |
(42,704) |
(126) (4) |
(42,830) |
|
Capital expenditure(5) |
- |
- |
- |
- |
1,058 |
- |
1,058 |
|
Year ended |
|
|
|
|
|
|
|
|
Revenue |
147,102 |
30,475 |
177,577 |
14,552 |
- |
- |
192,129 |
|
Operating profit(1) |
- |
- |
- |
- |
144,271 |
(7,096)(6) |
137,175 |
|
Depreciation and amortisation |
- |
- |
- |
- |
(1,295) |
- |
(1,295) |
|
Financial income |
- |
- |
- |
- |
112 |
- |
112 |
|
Financial expenses |
- |
- |
- |
- |
(183) |
- |
(183) |
|
Trade receivables(3) |
17,184 |
5,626 |
22,810 |
1,654 |
- |
145(4) |
24,609 |
|
Other segment assets |
- |
- |
- |
- |
25,742 |
3(4) |
25,745 |
|
Segment liabilities |
- |
- |
- |
- |
(43,569) |
(148)(4) |
(43,717) |
|
Capital expenditure(5) |
- |
- |
- |
- |
1,772 |
- |
1,772 |
(1) Operating profit is stated after the charge for depreciation and amortisation.
(2) Operating profit for the six months ended 30 June 2016 includes share-based payments charge of £1,957,000
(30 June 2015: £1,805,000) and National Insurance (NI) credit on share-based incentives of £(218,000)
(30 June 2015: charge of £1,804,000).
(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 2015 does not include share-based payments charge £3,765,000 and NI charge on share-based incentives of £3,331,000.
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 2016 relating to all share-based incentive plans was £1,957,000 (2015: £1,805,000).
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 credit for the six months ended
30 June 2016 relating to all awards was £218,000 (2015: charge of £1,804,000). The share price at 30 June 2016 was £36.48 (30 June 2015: £32.77).
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.
89,041 PSP awards were made on 1 March 2016 (the Grant Date) subject to Earnings Per Share (EPS) and Total Shareholders Return (TSR) performance. Performance will be measured over three financial years
(1 January 2016 - 31 December 2018). The vesting in March 2019 (Vesting Date) of 25% of the 2016 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 2016 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 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 100% of the 2015 internal performance targets, 36,276 nil cost deferred shares were awarded to executives and senior management on 1 March 2016 with the right to the release of the shares deferred until March 2018.
Share Incentive Plan (SIP)
In November 2014, the Group established the Rightmove Share Incentive Plan (SIP). Employees were offered 50 free shares (2014: 100) subject to a three year service period (the Vesting Period), with effect from 4 January 2016. 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 3 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 12,700 shares in December 2015 to fund the share requirements of the SIP, with a further 250 purchased in January 2016. These shares were subsequently transferred into the Rightmove Share Incentive Plan (SIP) Trust in 2016.
5 Earnings per share (EPS)
|
|
|
|
|
|
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 |
|
|
|
|
|
|
Six months ended 30 June 2015 |
|
|
|
|
Basic EPS |
96,435,311 |
53,200 |
55.17 |
|
Diluted EPS |
97,512,732 |
53,200 |
54.56 |
|
Underlying basic EPS |
96,435,311 |
56,809 |
58.91 |
|
Underlying diluted EPS |
97,512,732 |
56,809 |
58.26 |
|
|
|
|
|
|
Year ended 31 December 2015 |
|
|
|
|
Basic EPS |
96,014,753 |
109,468 |
114.01 |
|
Diluted EPS |
97,097,566 |
109,468 |
112.74 |
|
Underlying basic EPS |
96,014,753 |
116,564 |
121.40 |
|
Underlying diluted EPS |
97,097,566 |
116,564 |
120.05 |
|
|
|
|
|
Weighted average number of ordinary shares (basic)
|
|
6 months ended |
6 months ended |
Year ended |
|
Issued ordinary shares at 1 January less ordinary shares held by the EBT and SIP Trust |
97,318,120 |
|
|
|
Effect of own shares held in treasury |
(2,322,314) |
(2,505,430) |
(2,505,430) |
|
Effect of own shares purchased for cancellation |
(589,208) |
|
|
|
Effect of share-based incentives exercised |
19,151 |
59,588 |
158,344 |
|
Effect of shares purchased by the EBT |
(243) |
- |
(313) |
|
|
94,425,506 |
96,435,311 |
96,014,753 |
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 |
6 months ended |
Year ended |
|
Weighted average number of ordinary shares (basic) |
94,425,506 |
|
96,014,753 |
|
Dilutive impact of share-based incentives outstanding |
964,677 |
|
1,082,813 |
|
|
95,390,183 |
97,512,732 |
97,097,566 |
Underlying EPS is calculated before the charge for share-based payments and 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 |
6 months ended |
Year ended |
|
Basic earnings for the period |
64,609 |
53,200 |
109,468 |
|
Share-based payments |
1,957 |
1,805 |
3,765 |
|
NI charge on share-based incentives |
(218) |
1,804 |
3,331 |
|
Underlying earnings for the period |
66,348 |
56,809 |
116,564 |
6 Dividends
Company dividends
Dividends declared and paid by the Company were as follows:
|
|
6 months ended 30 June 2016 |
6 months ended |
Year ended 31 December 2015 |
|||||
|
|
Pence per share |
|
Pence per share |
|
Pence per share |
|
||
|
2014 final dividend paid |
- |
- |
22.0 |
21,162 |
22.0 |
21,162 |
||
|
2015 interim dividend paid |
- |
- |
- |
- |
16.0 |
15,307 |
||
|
2015 final dividend paid |
27.0 |
25,442 |
- |
- |
- |
- |
||
|
|
27.0 |
25,442 |
22.0 |
21,162 |
38.0 |
36,469 |
||
After the period end an interim dividend of 19p (2015: 16.0p) per qualifying ordinary share being £17,936,000 (2015: £15,353,000) was proposed by the Board of directors.
The 2015 final dividend paid on 3 June 2016 was £25,442,000 (2014 final dividend: £21,162,000) being a difference of £105,000 compared to that reported in the 2015 Annual Report which was due to a decrease in the ordinary shares entitled to a dividend between 31 December 2015 and the final dividend record date of 6 May 2016.
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 £15,942,000 (2015: £13,422,000) 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 interim period. The Group's consolidated effective tax rate for the six months ended 30 June 2016 was 19.8% (2015: 20.2%). The difference between the standard rate of 20.0% and the effective rate at 30 June 2016 is attributable to a credit in respect of research and development for 2015 of 0.2%.
Deferred tax is presented net on the balance sheet in so far as a right of offset exists. The deferred tax asset of £6,840,000 at 30 June 2016 (30 June 2015: £5,834,000) 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 £49,000 at 30 June 2016 (30 June 2015: nil) 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 from 1 April 2020) were substantively enacted on 26 October 2015. This will reduce the Group's future tax charge accordingly. The deferred tax asset at 30 June 2016 has been calculated based on the rate of 19% which represents the average expected rate at which this asset will reverse in the future. An additional reduction to 17% (effective from 1 April 2020) was announced in the Budget on
16 March 2016. This will reduce the company's future current tax charge and net deferred tax asset accordingly.
8 Trade and other receivables
|
|
|
|
|
|
|
£000 |
£000 |
£000 |
|
Trade receivables |
27,952 |
25,008 |
25,055 |
|
Less provision for impairment of trade receivables |
(446) |
(459) |
(446) |
|
Net trade receivables |
27,506 |
24,549 |
24,609 |
|
Prepayments |
3,317 |
2,471 |
2,529 |
|
Accrued income |
338 |
222 |
301 |
|
Interest receivable |
12 |
15 |
25 |
|
Other debtors |
138 |
104 |
59 |
|
|
31,311 |
27,361 |
27,523 |
|
|
|
|
|
9 Trade and other payables
|
|
|
|
|
|
|
£000 |
£000 |
£000 |
|
Trade payables |
1,514 |
790 |
592 |
|
Trade accruals |
7,083 |
6,475 |
7,336 |
|
Other creditors |
261 |
254 |
69 |
|
Other taxation and social security |
7,982 |
6,424 |
7,428 |
|
Deferred revenue |
17,378 |
15,132 |
16,193 |
|
|
34,218 |
29,075 |
31,618 |
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 2016 was 1,042,915 (2015: 1,081,955 shares) representing 1.1% (2015: 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 £40,527,000 (2015: £31,702,000). The maximum and minimum prices paid were £42.50 (2015: £33.50) and £33.11 (2015: £21.18) per share respectively.
EBT shares reserve
This reserve represents the carrying value of own shares held by the EBT. An additional 911 (2015: 2,173) shares were issued as a result of rolled up dividend payments in relation to performance shares. On 22 December 2015, the EBT used surplus cash held by the EBT to purchase 12,700 shares for use by the SIP and a further 250 shares were acquired in
January 2016. There shares were transferred to the SIP in 2016.
At 30 June 2016, the EBT held 361,133 (2015: 449,380) ordinary shares in the Company of £0.01 each, representing 0.4% (2015: 0.5%) of the ordinary shares in issue (excluding shares held in treasury). The market value of the shares held by the EBT at 30 June 2016 was £13,174,000 (2015: £14,726,000).
|
|
6 months ended |
6 months ended |
Year ended |
|
Shares held in EBT at 1 January |
386,057 |
596,499 |
596,499 |
|
Shares purchased for SIP |
250 |
- |
12,700 |
|
Shares transferred to SIP |
(12,950) |
(38,300) |
(38,300) |
|
Share-based incentives exercised in period |
(12,224) |
(106,646) |
(181,552) |
|
Increase in shares released from EBT due to rolled up dividend payments |
- |
|
|
|
Shares held in EBT at period end |
361,133 |
449,380 |
386,057 |
SIP shares reserve
In November 2014, the Group established the Rightmove Share Incentive Plan Trust (SIP). This reserve represents the cost of acquiring shares less any exercises or releases of SIP awards. On 4 January 2016 employees of the Group were offered 50 free shares (2015: 100) subject to a three year service period. During the period there were no (2015: 100) shares released by the SIP in relation to good leavers and retirees.
At 30 June 2016 the SIP Trust held 50,750 (2015: 38,200) ordinary shares in the Company of £0.01 each, representing 0.05% (2015: 0.04%) 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 £1,851,000 (30 June 2015: £1,252,000).
|
|
6 months ended |
6 months ended |
Year ended |
|
Shares held in SIP at 1 January |
37,800 |
- |
- |
|
Shares transferred into SIP from EBT |
12,950 |
38,300 |
38,300 |
|
SIP releases in the period |
- |
(100) |
(500) |
|
Shares held in SIP at period end |
50,750 |
38,200 |
37,800 |
10 Reconciliation of movement in capital and reserves (continued)
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.
|
|
6 months ended |
6 months ended |
Year ended |
|
Shares at 1 January |
2,322,314 |
2,505,430 |
2,505,430 |
|
Share-based incentives exercised in year |
(24,799) |
- |
(199,751) |
|
Reduction in shares released due to net settlement |
|
|
|
|
Increase in shares released due to rolled up dividend payments |
|
|
|
|
Shares at period end |
2,296,604 |
2,505,430 |
2,322,314 |
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 (2015: £11,000) 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 £315,000 (2015: £289,540) by Rightmove Group Limited in respect of balances owing under the inter-group loan agreement dated 30 January 2008. As at 30 June 2016 the balance owing under this agreement was £29,279,000 (30 June 2015: £31,283,000) including capitalised interest.
On 30 June 2016 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 £517,000 (2015: nil), representing the cost of the SIP shares transferred from the EBT to the SIP.
Transactions with key management staff
There were no transactions with key management staff in any period.
12 Acquisition of subsidiary
On 31st May 2016, Rightmove Group Limited, a subsidiary of Rightmove plc, acquired the entire ordinary share capital of The Outside View Analytics Limited ("Outside View"), a predictive analytics business. Outside View have developed an algorithm to predict which homeowners are most likely to sell their property in the next 180 days. Rightmove Group Limited plans to launch an enhanced version of the product using its combined know how and unique dataset. The product will help customers to identify and market to their target audience and will complement the Local Valuation Alert product. The total cash consideration paid of £2,096,000 excludes acquisition costs of £42,000 recognised as an expense in the period within administrative expenses in the Condensed Consolidated Interim Statement of Comprehensive Income.
The following table provides a reconciliation of the amounts included in the consolidated statement of cash flows.
|
|
|
|
6 months ended |
|
|
|
|
|
|
Cash paid for subsidiary |
|
|
(2,096) |
|
Cash acquired |
|
|
50 |
|
|
|
|
|
|
Net cash outflow |
|
|
(2,046) |
In the month to 30 June 2016, Outside View contributed revenue of £47,000 and profit of £24,000 to the Group's results.
12 Acquisition of subsidiary (continued)
The following table details the fair values of the assets and liabilities acquired at the date of acquisition. The fair value adjustments detailed have been determined on a provisional basis in accordance with IFRS 3:
|
|
|
Carrying values pre-acquisition |
Fair value adjustments |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
9 |
- |
9 |
|
Intangible assets - market appraisal algorithm |
|
- |
309 |
309 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Trade and other receivables(1) |
|
191 |
(2) |
189 |
|
Cash and cash equivalents |
|
50 |
- |
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
(145) |
- |
(145) |
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Deferred tax liabilities |
|
- |
(49) |
(49) |
|
|
|
|
|
|
|
Fair value of net assets acquired |
|
105 |
258 |
363 |
|
|
|
|
|
|
|
Cash consideration |
|
|
|
2,096 |
|
|
|
|
|
|
|
Total consideration |
|
|
|
2,096 |
|
|
|
|
|
|
|
Goodwill |
|
|
|
1,733 |
(1) The receivables acquired (which principally comprised trade receivables) with a fair value of £191,000 had gross contractual amounts of £210,000. The best estimate at acquisition date of the contractual cash flows not expected to be collected is £21,000.
The goodwill recognised on acquisition represents value arising from intangible assets that are not separately identifiable under IFRS 3. These items include the skills and knowledge of Outside View's workforce as well as the ability to develop an enhanced product and service offering that the Board believe will drive an increase in the quantity and quality of predictive analytical data services provided to customers.
In addition to the goodwill recognised on consolidation, the market appraisal algorithm and supporting technology obtained through the acquisition met the requirements to be separately identifiable under IFRS 3. The fair value has been obtained by estimating the cost of independently building similar technology. The asset will be amortised over its useful economic life of three years. A deferred tax liability has been recognised in respect of this asset and will be unwound over the useful economic life.
INDEPENDENT REVIEW REPORT TO RIGHTMOVE PLC
Introduction
We have been engaged by the Company to review the condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 June 2016 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. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
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 Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("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.
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 IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting 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.
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. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) 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.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Karen Wightman
for and on behalf of KPMG LLP
Chartered Accountants
Altius House
One North Fourth Street
Milton Keynes
MK9 1NE
27 July 2016
ADVISERS AND SHAREHOLDER INFORMATION
|
Contacts |
|
Registered office |
Corporate advisers |
|
Chief Executive Officer: |
Nick McKittrick |
Rightmove plc |
Financial adviser |
|
Chief Operating Officer: Company Secretary: |
Peter Brooks-Johnson |
Turnberry House |
UBS Investment Bank |
|
|
|
Caldecotte |
Joint brokers |
|
|
|
Milton Keynes |
UBS Limited |
|
|
|
MK7 8LE |
Numis Securities Limited |
|
|
|
Registered in England no. 6426485 |
|
|
Financial calendar 2016 |
|
|
Auditor |
|
Half year results |
27 July 2016 |
|
KPMG LLP |
|
Interim dividend record date |
7 October 2016 |
|
Bankers |
|
Interim dividend payment |
4 November 2016 |
|
Barclays Bank Plc |
|
Full year results |
24 February 2017 |
|
HSBC Bank Plc |
|
|
|
|
Santander UK plc |
|
|
|
|
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: 0871 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
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