Rightmove plc

good morning everyone um for those of you who don't know me i'm andrew fisher i have the great privilege to be chair of rightmove and welcome and thank you for joining us uh in for the 2022 results q a um as most of you will be aware in fact probably all of you today is peter's last results presentation for rightmove and for the past 17 years and actually the last six years as our ceo peter has continued to lead our success as a business for which we want to recognize and thank him this morning i'd also like to thank you uh for the support and the collaboration that you've provided to both peter and the whole team at rightmove and i'm also extremely delighted to welcome johan sunstrom who as of monday will officially succeed peter as our ceo

so without further ado peter for the very last time over to you thank you andrew uh good morning everyone hopefully you've had a chance to see the presentation uh i thought maybe i'd take a couple of minutes just to start off with a quick summary of all the words if you haven't quite made it to the end of the presentation in 2022 we really saw three distinct housing markets we began the year with a continuation of that frenetic post lockdown activity of the supply constraint market. By the start of the second quarter we began to ease back to a much more normal market and the interest rate shocks of the fourth quarter rapidly knocked that transition off course and that caused the market to slow significantly. I think our results in 2022 again demonstrate the strength of the right move model in all markets. underscoring that resilience we saw standout arpa growth of 125 pounds which is a record absolute amount for a normal year and i think it's testament to the innovation of the last two years which have helped drive that arpa growth to higher levels as a reminder we've delivered more new products in the last two years than we have done in the last decade over 60% of that ARPA growth again came from customers choosing to upgrade their package or buy more products from us which I think again testament to that innovation and we successfully completed the migration of the optimizer 2015 to optimizer 2020 package it's also worth pointing out that 40% of new optimizer customers continue to come from the essential and enhanced packages and upgrade through the package ladder and on top of that the ARPA from optimizer customers increased by about 7% over the year too again just demonstrating the value in our products membership was more or less flat in 2021 with a small drop drop in the number of agents in the second half offset by an increase in number of developments particularly in the fourth quarter The number of agents we saw leaving the industry in the second half was below recent norms, but the net new number of branches was lower because we saw a slowdown in new branch formation. Unsurprisingly, unsurprising given the nature of the economic outlook in Q4. Those last few months of 2022, I think, provide us a good early indication of the manner in which Rightmove business model responds to a slowing property market. notable rise in new homes ARPA growth rate and development numbers offsetting a slight slowdown in the agency ARPA growth. Looking forward I know there are worries about interest rates and inflation and I've no doubt that there will be some very difficult impacts for a number of people. However looking at the data home movers appetite to move is recovering well. Sales agreed rates as of yesterday were about 11% down on 2019. And sales agreed is about a three to six month leading indicator of when someone's going to move house. Given that, I think it's not unreasonable to expect transactions in the year to be 1 to 1.1 million, which is just below pre-pandemic norms. And the resilience of our model means that we are only impacted by the housing market at the extremes. And I still see no signs of those extremes on the horizon. And we're seeing that momentum from Q4, particularly in new homes, carried forward into 2023. Just a word on innovation. It continues at a pace. Second half of 2022 alone, we launched a new product for our build to rent customers. There were more releases of the lead to keys flow, which means tenants can now search, view, secure, contract, and pay their deposits all from a mobile phone. We've also launched a new lead pre-qualification system, which will help agents cope with the higher lead levels from a busier lettings market. And further expansion of our mortgage in principle flow, which now means we're encompassing more borrower types and we're seeing a better than expected take up of the flow by consumers. Looking forward from a Rightmove perspective, I think we'll probably see broadly stable membership numbers with a small shift from agency branches to new homes developers. And that momentum at the end of 22 has given us more confidence. We now expect ARPA growth to be more in the middle of the 95 to 105 range that we've previously spoken about. To add to that, we continue to see healthy growth from our other segment.

Before I open up to questions for one last time,