Rightmove operating profits double

01-09-2006

Property website Rightmove has announced a 138 per cent increase in first-half operating profits, with growth fuelled by an increase in online advertising sales.

The group, majority owned by Countrywide, HBOS and Connells, said that its operating profit before Home Information Pack (Hips) project costs, flotation costs and share option charges had risen to £8.3 million in the six months to June 30th.

Revenue also doubled over the period to £15.1 million as a result of increased sales and price rises.

Rightmove said the number of advertisers using its site had increased by 53 per cent over the first half to 14,680, while the average price paid per advertiser each month had risen by 22 per cent to £181.

The website, which allows estate agents to advertise their available properties online said it now had a market penetration among estate agents of 74 per cent nationally.

But despite a growth in operating profits and advertising sales, Rightmove acknowledged that its first-half pre-tax profits were down from £3.4 million a year ago, to £1.6 million, with the fall resulting from the website's decision to abort the multi-million pound development of its Hips business.

The company announced in July that it no longer intended to proceed with a plan to provide the home information packs after the government decided that home conditions reports would not longer be a compulsory element of the scheme.

Under the government's original plans, the cost of compiling the home condition reports, which will include key information about the condition of properties for sale, would have fallen entirely on the shoulders of home sellers.

Rightmove said that it had invested £7 million in its proposed Hips business and anticipated exit costs of £1.2 million after deciding to abandon the development of the service.

Looking ahead, Rightmove stressed that its future outlook remained positive in light of a continuing shift away from traditional advertising to the internet.

"We will focus all our sales efforts on increasing advertiser numbers and to focus our technology resources on delivering new advertising products more rapidly than we had originally planned," the company said.





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