Rightmove plc

Good morning, everyone, and welcome to the presentation of Rightmove's results for the first half of 2021. My name is Peter Brooks-Johnson, and I'm joined by Alison Dolan, our CFO. I'm going to talk through the highlights of the year. Alison's going to go through the more detailed financials, and then I'm going to spend a little more time giving you more colour on the housing market and our strategic developments. In the first half of this year, we've delivered financially and more importantly, strategically, which sets us up for the future. In 2020, COVID-19 upended the lives of everyone across the UK. And the last time we met, there was much questioning about how long it would take Rightmove to regain its momentum as the housing market emerged from lockdown. The Rightmove network effect has emerged stronger than ever as home hunters continue to turn to Rightmove first and customers invest more in our digital solutions. To demonstrate how we've emerged from the shadow of 2020, I've compared our performance versus June 2019. The 2020 numbers are here too, so if you wish, you can calculate that our revenue is up 58% on a year ago, but I think that's a level of flattery we don't need. Site traffic in the first six months of the year was again a record, with an average of 1.7 billion minutes per month being spent on the platform. The busy property market has created very different dynamics in our agency and new homes customer bases. Agency customers are very busy and focused on winning the right to sell properties efficiently. Our agency business continues to grow back from a year ago with a further 130 branches added in the first half of the year. Many of our new homes customers are forward sold until early 2022 and therefore we've seen a drop in the new homes developments and developers easing back on marketing as they have less to sell. In total, ARPA is up £86 on June 2019, with the agency ARPA growth of £107 driven by a good mix of price and product. We've been flattered a little with some of the one-off cost savings in the first half, which Alison will detail later. As promised at the full year, we've been returning the extra cash we built up in 2020, with £128 million returned, and consistent with our long-established policy, we are increasing our interim dividend in line with EPS to three pence. Beyond our KPIs, we've made much strategic progress this year. Rightmove's purpose is to make home moving easier in the UK. We'll satisfy our purpose and drive growth through innovation. Our strategy has three reinforcing segments. Firstly, we are the place home hunters turn to and return to first. This in turn makes us the UK's property platform unparalleled roi for our customers and then we are in a unique position to help both customers and home hunters by making the process more digital and also create new revenue opportunities for us this slide gives you some examples of our strategic delivery in the first part of the year we continue to innovate in our heartland of property advertising and tools for property professionals we generate return for our customers in four distinct ways we help them save time we have products which help them actively grow their market share we help them market more efficiently by using the power of by far the largest audience of home hunters in the uk and we help them grow new revenue streams for example the secure video viewings platform we introduced last year has saved our agency customers nearly 6 000 days in wasted time arranging and performing viewings in the last year we continue to innovate and deliver new efficient marketing products to our customers i previewed the advanced development listing back in february it launched in april and we've been really pleased by the performance it's delivering a lead uplift to developers of around 30 developers also seem pleased with it with over 20 of developments now listing using the new product and to demonstrate the value of this innovation to us given its trajectory this product is likely to add three million pounds revenue to new homes next year during a time when developers are reducing their marketing spend As we previously talked about, we're experimenting with demystifying online conditional auctions on site. And this is to help agents grow a new revenue stream. The first provider is now live with four more in the process of integration. I'll talk more about the benefits of our unrivaled data asset in Opportunity Manager later. We believe there's much opportunity in making the home moving process more efficient by being more digital. I'll talk more about the digital tenant journey and what we've learned from our mortgage experiment later. There's much excitement for the future, but this is all built on our strong position today. Before I give a little more colour on our strategic position, I'll hand over to Alison to talk more about the numbers in detail.

Thanks, Peter. Good morning, everyone. The first half of 2021 shows a pleasing continuation of the growth scene in 2019. As Peter just explained, our revenue, product and ARPA growth in the first half of this year is best illustrated by a comparison to 2019, the last full year of no pandemic-related disruption. So compared against the half year to June 2019, revenue has increased by £6 million, 4%, comprising a £4.8 million increase in agency revenues, a 3.7 million increase in the other operating segment what we call our breath businesses all partially offset by a 2.5 million pound reduction in new homes revenues the agency growth of 4.8 million was driven by strong product purchase and package upgrades on both 2019 and 2020 as agents competed to win vendor mandates in this strong market In fact, product revenue as a percentage of overall agency revenue has increased by almost five percentage points since 2019 and is currently at 57% of total agency revenues. Upgrades to our premium package optimizer 2020 contributed particularly strongly to revenue growth in the six months of 2021. New homes revenues continue to reflect the challenges of a forward sold market where developers are selling off plan are struggling to build at the pace necessary to meet current demand and therefore have less of a need to market new properties. In other revenues, with the exception of overseas which continues to be impacted by travel restrictions, each of the third party advertising, commercial and data services businesses has grown relative to June 2019 and each is up by about a million pounds on that date. Mortgages revenue is now two million pounds The product launched late in 2019, but is up by about a quarter of a million pounds on June 2020. Year to date ARPA at the 30th of June was up 8% on 2019 and at 1163 pounds is our highest ARPA to date. Within that, agency ARPA was up over 11%, an uplift of 107 pounds driven in part, as I mentioned earlier, by product upgrades, particularly to Opti 2020. The period overall saw a big uplift in the purchase of incremental digital products, both as package upgrades and on an a la carte basis. New homes ARPA was slightly down on 2019 by one and a quarter percent, reflecting the current market. The new homes market tends to run counter cyclical to the agency market This is a dynamic we have seen before and seen recover, but we do expect the current situation to remain consistent for the remainder of 2021 and into the first half of next year. The six-month trailing ARPA has been shown here also as it shows the clear line of continual growth in ARPA since 2019, looking through all of the business disruption of 2020. The charts on this slide show the drivers of ARPA since June 2019. Of the agency 11% uplift, 45% or £49 is due to price increases over the two-year period. Included in this is £9 of ARPA from the six months to June 2021, in which we brought forward a number of price increases which had been scheduled for later in the year.

A further 36%