Rightmove PLC — Earnings Release 2014

Jul 30, 2014

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RNS Number : 6720N

Rightmove Plc

30 July 2014

Embargoed until 07.00, Wednesday 30 July 2014

2014 HALF YEAR RESULTS

Rightmove plc, the UK's no. 1 property website, announces half year results for the six months ended 30 June 2014.

Financial and Operational Highlights

for the six months ended 30 June 2014

·           Page impressions on Rightmove up 13% to 8.1bn (2013: 7.2bn)

·           Enquiries up 27% to a record 22.3m (2013: 17.5m)

·           Number of advertisers(2) up 570 (+3%) this year to 18,995 (31 December 2013: 18,425)

·           Average revenue per advertiser(2) up 13% to £671 per month (2013: £593)

·           Revenue up 20% to £80.4m (2013: £67.2m)

·           Underlying operating profit(1) up 22% to £59.6m (2013: £49.0m)

·           Underlying operating margin(1) of 74.1% (2013: 73.0%)

·           Underlying earnings per share(1) up 24% to 47.5p (2013: 38.4p)

·           Basic earnings per share up 38% to 46.8p (2013: 34.0p)

·           Interim dividend increased by 2p to 13p (2013: 11p) per ordinary share, up 18%

·           £56.3m (2013: £37.4m) of cash returned to shareholders through dividends and share buybacks in the period

(1) Before share-based payments, NI on share-based incentives and no related adjustment for tax

(2) For agency and new homes

Nick McKittrick, Chief Executive Officer, said:

"Rightmove's popularity goes from strength to strength, with home hunters visiting more often and looking at more property than ever. On the back of this record traffic we've increased enquiries to our customers by over 25%. The importance of our brand to the British home moving public is stronger than ever with nine out of ten home movers wanting their property to be advertised on Rightmove.

I am also delighted that the public continue to turn to us first for property information and can now be alerted within minutes of a property coming to market. Our newly released Instant Alerts are just one of the many innovations we've already released this year to provide the most engaging experience for home movers and the most effective advertising products, tools and insight reports to help our customers grow their businesses."

Half Year Statement

Strategic position

We continue to build on our market leading audience of UK home hunters and provide great value and cost effectiveness for our customers, to grow organically through our customers investing more in their presence on Rightmove, and to return the cash we generate promptly to shareholders.

Rightmove empowers home hunters to make informed decisions around buying, selling, renting and investing in property by providing the widest and most up to date choice of properties on the market coupled with detailed information, tools and insight.

Our audience continues to grow and set new records with home hunters visiting more often, and looking at more property content than ever.  Mobile has an ever increasing role with 40% of our traffic now coming from our mobile optimised website and our highly rated mobile apps as we fast approach our seven millionth app download.

Recent innovations include: Instant Alerts, which alert registered users within minutes of a property coming to the market; introducing our popular full-width property images and market leading 'Sold Price' functionality to mobile platforms; and recognising the importance of high speed internet access, home hunters can now see broadband speeds for every property in the UK on Rightmove.

Moving home often generates strong positive emotions. Rightmove is the site that the British home moving public know, love and trust to help them with these life-changing decisions. We launched our new 'find your happy' advertising campaign during the period across TV, outdoor, online, mobile and social media to reflect our position at the heart of home moving.  Our brand awareness with home movers continues to be extremely high and home movers are using Rightmove more than ever.

Customers are investing more on Rightmove to drive their brand exposure and to win more business. Investment has increased across our range of additional advertising products and we continue to innovate to give our customers the competitive edge. We have launched a number of new products so far this year, including Property Alert Sponsor which provides agents the opportunity to advertise in our e-mail property alerts, in addition to enhancing a number of our existing products.

We have also introduced new tools to help our customers make better informed business decisions. Our Buyer Insight report highlights where buyers for a particular area are located helping our customers target their marketing spend more effectively. Our new Market Intelligence report shows property supply and home mover demand informing land purchase decisions by new homes developers. 

We have returned all excess cash generated from operations during the period to shareholders via increased dividends and continued share buybacks.

Financial performance

Revenue grew to £80.4m (2013: £67.2m) up 20% on the previous year, driven by growth in spend on additional advertising products coupled with price increases and growth in the number of customers.

Profit after tax increased 36% to £46.3m (2013: £34.1m) and underlying operating profit(1) increased by 22% to £59.6m (2013: £49.0m).

Underlying costs(1) in the first half were £20.8m (2013: £18.2m) reflecting our investment in people to leverage the opportunity of an improving UK housing market and increased marketing spend. Costs are likely to be slightly more weighted to H2 than H1 this year.

Cash generated from operating activities was £58.9m (2013: £42.7m) representing a cash conversion ratio of 100%. We returned all free cash flow in the period to shareholders through a combination of dividends and share buybacks, buying back and cancelling 1.6m shares (2013: 1.3m shares) in the period at a cost of £39.5m (2013: £23.3m). On a cumulative basis we have now bought back and cancelled 33m shares, representing 25% of our original issued share capital.

Underlying earnings per share(1) rose 24% to 47.5p (2013: 38.4p), reflecting the strong growth in profits and the benefit of our ongoing share buyback programme.

Highlights of operating performance

Notable aspects of our operating performance for the first six months of 2014 are:

·           Audience growth, up 13% year on year to 8.1bn pages (2013: 7.2bn) keeping Rightmove firmly in the top 10 UK websites

·           Mobile traffic growth, up 45% on a year ago to 3.2bn pages (2013: 2.2bn) and now accounting for 40% of traffic (2013: 30%) 

·           Market share split of top three UK property websites unchanged at 77% (pages as measured by Comscore)

·           27% increase in the number of enquiries we generated for our customers, at an average of over 3.7m per month

(2013: 2.9m)

·           Agency and New Homes membership up 570 (+3%) since the start of the year to 18,995 offices and developments. Retention rates remain very high at over 95%

·           Average revenue per advertiser (ARPA)(2) is up £78 on the same period a year ago with over two-thirds of the growth driven by customers spending more on our additional advertising products and packages

·           Revenue from additional advertising products(2) up 32% at £29.4m (2013: £22.3m). Additional product spend now accounts for nearly 40% of agency and new homes revenue, up from 35% a year ago.

Agency

Agency ARPA is up 15% year on year at £637 per office per month as a result of further adoption of additional advertising products and price increases.  Spending by agents increased across our entire range of additional advertising products and 64% (June 2013: 55%) of independent agents now subscribe to one of our product packages, where for a minimum monthly spend they benefit from discounts across our range of products.

The number of agency offices is 3% higher since the start of the year at 16,710 (31 December 2013: 16,166), with a little over half of the growth being driven by new business formation and the remainder from existing customers opening additional offices.

New Homes

New homes ARPA increased by 7% year on year to £920 mainly from increased spend on additional advertising products.  The number of developments is 1% higher since the start of the year at 2,285 (31 December 2013: 2,259).

Other businesses

Our overseas homes advertising business has grown strongly with audience figures setting new records with over

35 million searches in the period, up 20% on the first half of 2013 and customer numbers up nearly 50% since the start of the year at 1,797.  

We continue to help a wide range of customers, including banks, surveyors and utility companies to leverage Rightmove's UK property database, which is the largest of its kind covering nearly two-thirds of the total UK owner occupied and privately rented housing stock. Our data services business achieved healthy revenue growth in the period, especially from our risk products and surveyor tools.

Our commercial property advertising business has quickly become the UK's largest commercial property site with over 45,000 properties advertised and in excess of 25 million searches in the period, up over 50% on the first half of 2013.  

Uncertainties, threats and risks

Rightmove could be vulnerable to the following main areas of risk and uncertainty:

·      Greater competition, to the extent it reduces the number of customers that increase their advertising exposure on Rightmove: we already operate in a competitive environment and we continue to see strong adoption of our additional advertising products and very high customer retention rates

·      The state of the housing market, if it leads to a reduction in the number of customers: so far this year the housing market has improved with transactions up 25% year on year and an increasing number of customers

·      Loss of audience due to failure to adapt to changing consumer behaviours: most recently we've adapted to mobile, grown our audience significantly and maintained our market leadership

·      Damage to Rightmove's reputation due to significant disruption in service or loss of sensitive data: Rightmove operates from three separate data centres and achieved 99.99% availability in the period with no significant outages

·      Loss of competitive advantage by failing to recruit and develop the best talent: our latest employee survey showed high levels of engagement and our employee retention rates remain very high. We continue to invest in people, particularly in sales and technology roles to deliver future growth.

Dividend, share buybacks and balance sheetThe Board intends to pay an interim dividend of 13p (2013: 11.0p), an increase of 18%, as part of its commitment to a progressive dividend policy.  The interim dividend will be paid on 7 November 2014 to members on the register on

10 October 2014. 

1.6m shares were bought back during the period for £39.5m. In total this period we have returned £56.3m to shareholders, through dividends and share buybacks, putting the business in a strong position to return all the cash generated in 2014 during the year.

The consolidated balance sheet position at 30 June 2014 reflects net liabilities of £0.5m

(31 December 2013: £8.9m net assets). This is principally a function of the discretionary share buyback programme, with £39.5m (2013: £23.3m) spent in the period, which is shown as a deduction from equity. Given the subscription nature of the business and the visibility of future cash flows, the directors expect the consolidated balance sheet to be in a net asset position at year end. The company balance sheet has significant distributable reserves of £353m

(31 December 2013: £411m).

Current trading and outlook

Rightmove's trading in July has been in line with the first half of the year and with the visibility provided by our subscription model the Board is confident of delivering its expectations for the year. 

Scott Forbes                                                                                         Nick McKittrick

Chairman                                                                                              Chief Executive Officer

30 July 2014

(1) Before share-based payments, NI on share-based incentives and no related adjustment for tax

(2) For agency and new homes

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF YEAR REPORT 2014

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

30 July 2014

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 June 2014

	Note	6 months ended 30 June 2014	6 months ended 30 June 2013	Year ended 31 December 2013
		£000	£000	£000
Revenue	3	80,394	67,172	139,935
Administrative expenses		(21,544)	(22,522)	(42,919)
Operating profit before share-based payments and NI on share-based incentives		59,576	49,014	103,962
Share-based payments	4	(1,320)	(1,275)	(2,408)
NI on share-based incentives	4	594	(3,089)	(4,538)
Operating profit		58,850	44,650	97,016
Financial income	5	60	83	142
Financial expenses	6	(68)	(92)	(143)
Net financial expenses		(8)	(9)	(1)
Profit before tax		58,842	44,641	97,015
Income tax expense	9	(12,521)	(10,545)	(22,680)
Profit for the period being total comprehensive income		46,321	34,096	74,335
Attributable to:
Equity holders of the Parent		46,321	34,096	74,335
Earnings per share (pence)
Basic	7	46.75	34.04	74.11
Diluted	7	46.23	33.15	72.61
Dividends per share (pence)	8	17.00	14.00	25.00
Total dividends	8	16,768	14,114	25,126

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

as at 30 June 2014

	Note	30 June 2014	30 June 2013	31 December 2013
		£000	£000	£000
Non-current assets
Property, plant and equipment		1,678	1,549	1,679
Intangible assets		1,494	1,638	1,593
Deferred tax assets	9	5,311	7,824	5,635
Total non-current assets		8,483	11,011	8,907
Current assets
Trade and other receivables	10	23,773	23,537	22,838
Cash and cash equivalents	11	6,100	6,468	6,799
Total current assets		29,873	30,005	29,637
Total assets		38,356	41,016	38,544
Current liabilities
Trade and other payables	12	(25,748)	(23,276)	(24,993)
Income tax payable		(12,937)	(6,573)	(4,472)
Total current liabilities		(38,685)	(29,849)	(29,465)
Non-current liabilities
Provisions		(181)	(146)	(164)
Total non-current liabilities		(181)	(146)	(164)
Total liabilities		(38,866)	(29,995)	(29,629)
Net (liabilities)/assets		(510)	11,021	8,915
Equity
Share capital		1,015	1,046	1,031
Other reserves		417	386	401
Retained earnings		(1,942)	9,589	7,483
Total equity attributable to the equity holders of the Parent	13	(510)	11,021	8,915

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

for the six months ended 30 June 2014

	Note	6 months ended 30 June 2014	6 months ended 30 June 2013	Year ended 31 December 2013
		£000	£000	£000
Cash flows from operating activities
Profit for the period		46,321	34,096	74,335
Adjustments for:
Depreciation charges		405	396	770
Amortisation charges		188	213	407
Loss on disposal of property, plant and equipment		4	-	-
Financial income		(60)	(83)	(142)
Financial expenses		68	92	143
Share-based payments	4	1,320	1,275	2,408
Income tax expense		12,521	10,545	22,680
Operating cash flow before changes in working capital		60,767	46,534	100,601
Increase in trade and other receivables		(2,641)	(3,410)	(2,691)
Increase/(decrease) in trade and other payables		790	(488)	1,218
Increase in provisions		17	17	35
Cash generated from operating activities		58,933	42,653	99,163
Financial expenses paid		(68)	(92)	(143)
Income taxes paid		(4,279)	(8,894)	(16,062)
Net cash from operating activities		54,586	33,667	82,958
Cash flows from investing activities
Interest received		99	106	145
Acquisition of property, plant and equipment		(408)	(188)	(762)
Acquisition of intangible assets		(89)	(235)	(314)
Deferred consideration received		1,667	-	-
Net cash generated/(used) from investing activities		1,269	(317)	(931)
Cash flows from financing activities
Dividends paid	8	(16,768)	(14,114)	(25,126)
Purchase of own shares for cancellation	13	(39,481)	(23,264)	(60,537)
Share related expenses		(312)	(137)	(387)
Proceeds on exercise of share-based incentives		7	3,551	3,740
Net cash used in financing activities		(56,554)	(33,964)	(82,310)
Net decrease in cash and cash equivalents		(699)	(614)	(283)
Cash and cash equivalents at 1 January		6,799	7,082	7,082
Cash and cash equivalents at period end	11	6,100	6,468	6,799

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

for the six months ended 30 June 2014

	Share capital £000	EBT shares reserve £000	Treasury shares £000	Other reserves £000	Reverse acquisition reserve £000		Retained earnings £000	Total equity £000
At 1 January 2013	1,059	(7,911)	(11,917)	235	138	25,909		7,513
Total comprehensive income Profit for the period	-	-	-	-	-	34,096		34,096
Transactions with owners recorded directly in equity
Share-based payments	-	-	-	-	-	1,275		1,275
Tax credit in respect of share-based incentives recognised directly in equity	-	-	-	-	-	2,127		2,127
Dividends to shareholders	-	-	-	-	-	(14,114)		(14,114)
Exercise of share-based incentives	-	4,550	-	-	-	(999)		3,551
Cancellation of own shares	(13)	-	-	13	-	(23,264)		(23,264)
Share related expenses	-	-	-	-	-	(163)		(163)
At 30 June 2013	1,046	(3,361)	(11,917)	248	138	24,867		11,021
At 1 January 2013	1,059	(7,911)	(11,917)	235	138	25,909		7,513
Total comprehensive income
Profit for the year	-	-	-	-	-	74,335		74,335
Transactions with owners recorded directly in equity
Share-based payments	-	-	-	-	-	2,408		2,408
Tax credit in respect of share-based incentives recognised directly in equity	-	-	-	-	-	7,006		7,006
Dividends to shareholders	-	-	-	-	-	(25,126)		(25,126)
Exercise of share-based incentives	-	5,493	-	-	-	(1,753)		3,740
Cancellation of own shares	(28)	-	-	28	-	(60,537)		(60,537)
Share related expenses	-	-	-	-	-	(424)		(424)
At 31 December 2013	1,031	(2,418)	(11,917)	263	138	21,818		8,915

At 1 January 2014	1,031	(2,418)	(11,917)	263	138	21,818	8,915
Total comprehensive income Profit for the period	-	-	-	-	-	46,321	46,321
Transactions with owners recorded directly in equity
Share-based payments	-	-	-	-	-	1,320	1,320
Tax debit in respect of share-based incentives recognised directly in equity	-	-	-	-	-	(548)	(548)
Dividends to shareholders	-	-	-	-	-	(16,768)	(16,768)
Exercise of share-based incentives	-	46	-	-	-	(39)	7
Cancellation of own shares	(16)	-	-	16	-	(39,481)	(39,481)
Share related expenses	-	-	-	-	-	(276)	(276)
At 30 June 2014	1,015	(2,372)	(11,917)	279	138	12,347	(510)

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 2014 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 is the UK's largest property website.

The consolidated financial statements of the Group as at and for the year ended 31 December 2013 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 from the investor relations website at www.plc.rightmove.co.uk.

Basis of preparation

The condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting and the Disclosure and Transparency Rules of the UK's Financial Conduct Authority. 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 2013.

The condensed consolidated interim financial statements were approved by the Board of directors on 30 July 2014. The half year results for the current and comparative period are unaudited. The auditor, KPMG Audit Plc, 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 2013 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 2013.

Going concern

Throughout the period, the Group was debt free, has continued to generate significant cash and has cash balances of £6,100,000 at 30 June 2014 (31 December 2013: £6,799,000).

The Group entered into a 12 month agreement with HSBC Bank plc for a £10,000,000 committed revolving loan facility on 10 February 2014. To date no amount has been drawn under this facility.

After making enquiries, notwithstanding the Group net liabilities of £510,000 (31 December 2013: £8,915,000 net assets), which is principally a function of the discretionary share buyback programme, with £39.5m (2013: £23.3m) spent in the period, 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 2013.

There are no new standards or amendments to standards that are mandatory for the first time for the financial year beginning 1 January 2014 that have an impact on the Group financial statements.

The same accounting policies are anticipated to be applied for the year ending 31 December 2014.

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 financial statements is included in the following notes:

Note 3   Revenue recognition and the associated deferral, specifically regarding the period to which services relate, when specific products have expired and the recognition of revenue membership offers including discounted or free periods.

Note 4 and 9   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.

3   Operating segmentsThe Group determines and presents operating segments based on the 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 Automated Valuation Model 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. 

Operating segments	Agency £000	New Homes £000	Sub total £000	Other £000	Central £000	Adjustments £000	Total £000
Six months ended 30 June 2014
Revenue	62,812	12,598	75,410	4,984	-	-	80,394
Operating profit(1)	-	-	-	-	59,576	(726) (2)	58,850
Depreciation and amortisation	-	-	-	-	(593)	-	(593)
Financial income	-	-	-	-	60	-	60
Financial expenses	-	-	-	-	(68)	-	(68)
Trade receivables(3)	15,367	4,559	19,926	1,322	-	49(4)	21,297
Other segment assets	-	-	-	-	17,056	3 (5)	17,059
Segment liabilities	-	-	-	-	(38,814)	(52) (4)(5)	(38,866)
Capital expenditure(6)	-	-	-	-	497	-	497

Six months ended 30 June 2013
Revenue	51,369	12,018	63,387	3,785	-	-	67,172
Operating profit(1)	-	-	-	-	49,014	(4,364) (7)	44,650
Depreciation and amortisation	-	-	-	-	(609)	-	(609)
Financial income	-	-	-	-	83	-	83
Financial expenses	-	-	-	-	(92)	-	(92)
Trade receivables(3)	13,071	5,244	18,315	1,151	-	46 (4)	19,512
Other segment assets	-	-	-	-	21,493	11 (5)	21,504
Segment liabilities	-	-	-	-	(29,938)	(57) (4)(5)	(29,995)
Capital expenditure(6)	-	-	-	-	423	-	423

Year ended 31 December 2013
Revenue	107,307	24,170	131,477	8,458	-	-	139,935
Operating profit(1)	-	-	-	-	103,962	(6,946)  (8)	97,016
Depreciation and amortisation	-	-	-	-	(1,177)	-	(1,177)
Financial income	-	-	-	-	142	-	142
Financial expenses	-	-	-	-	(143)	-	(143)
Trade receivables(3)	13,124	4,717	17,841	1,225	-	80 (4)	19,146
Other segment assets	-	-	-	-	19,347	51 (4)	19,398
Segment liabilities	-	-	-	-	(29,498)	(131) (4)(5)	(29,629)
Capital expenditure(6)	-	-	-	-	1,076	-	1,076

(1) Operating profit is stated after the charge for depreciation and amortisation.

(2) Operating profit for the six months ended 30 June 2014 does not include share-based payments charge (£1,320,000) and National Insurance (NI) credit on share-based incentives £594,000.

(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) The adjustments column reflects the reclassification of credit balances in accounts receivable made on consolidation for statutory accounts purposes.

(5) The adjustments column reflects the reclassification of debit balances in accounts payable made on consolidation for statutory accounts purposes.

(6) Capital expenditure consists of additions of property, plant and equipment and intangible assets (excluding goodwill).

(7) Operating profit for the six months ended 30 June 2013 does not include share-based payments charge (£1,275,000) and Employer's NI on share-based incentives (£3,089,000).

(8) Operating profit for the year ended 31 December 2013 does not include share-based payments charge (£2,408,000) and NI on share-based incentives (£4,538,000).

4   Share-based payments

The Group operates share-based incentive schemes for executive directors and other selected senior management 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), Deferred Share Bonus Plan (DSP) and in May 2011 the Rightmove Performance Share Plan (PSP) was introduced.

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 granted 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 by the EBT and sold to satisfy the award is equivalent to the gain due to the option holder. Consequently no proceeds are received by the EBT on exercise of unapproved share options.

The total share-based payments charge for the six months ended 30 June 2014 relating to all share-based incentive plans was £1,320,000 (2013: £1,275,000).

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 2014 relating to all awards was £594,000 (2013: £3,089,000 charge). Due to the decrease in the share price since the year end, the NI accrual has reduced during the period resulting in an overall credit in the consolidated statement of comprehensive income.

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.

140,618 PSP awards were made on 3 March 2014 (the Grant Date) subject to EPS and TSR performance. Performance will be measured over three financial years (1 January 2014 - 31 December 2016). The vesting in March 2017 (Vesting Date) of 25% of the 2014 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 2014 PSP award will be dependent on the satisfaction of an EPS growth target measured over a three year performance period. 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 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 the 2013 internal performance targets, 34,878 nil cost deferred shares were awarded to executives and senior management on 3 March 2014 with the right to the release of the shares deferred until March 2016.

Financial income

	6 months ended 30 June 2014 £000	6 months ended 30 June 2013 £000	Year ended 31 December 2013 £000
Interest income on cash balances	57	80	136
Interest income on amounts held in Escrow	3	3	6
	60	83	142

6   Financial expenses

	6 months ended 30 June 2014 £000	6 months ended 30 June 2013 £000	Year ended 31 December 2013 £000
Other financial expenses	68	92	143

7   Earnings per share (EPS)

	Weighted average number of ordinary shares	Total earnings £000	Pence per share
Six months ended 30 June 2014
Basic EPS	99,073,256	46,321	46.75
Diluted EPS	100,191,446	46,321	46.23
Underlying basic EPS	99,073,256	47,047	47.49
Underlying diluted EPS	100,191,446	47,047	46.96
Six months ended 30 June 2013
Basic EPS	100,159,039	34,096	34.04
Diluted EPS	102,855,415	34,096	33.15
Underlying basic EPS	100,159,039	38,460	38.40
Underlying diluted EPS	102,855,415	38,460	37.39
Year ended 31 December 2013
Basic EPS	100,302,258	74,335	74.11
Diluted EPS	102,375,057	74,335	72.61
Underlying basic EPS	100,302,258	81,281	81.04
Underlying diluted EPS	102,375,057	81,281	79.40

Weighted average number of ordinary shares (basic)

	6 months ended 30 June 2014 Number of shares	6 months ended 30 June 2013 Number of shares	Year ended 31 December 2013 Number of shares
Issued ordinary shares at 1 January less ordinary shares held by the EBT	102,375,411	102,492,086	102,492,086
Effect of own shares held in treasury	(2,505,430)	(2,505,430)	(2,505,430)
Effect of own shares purchased for cancellation	(807,001)	(525,846)	(1,232,171)
Effect of share-based incentives exercised	10,276	698,229	1,547,773
	99,073,256	100,159,039	100,302,258

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 and shares held in treasury.

	6 months ended 30 June 2014 Number of shares	6 months ended 30 June 2013 Number of shares	Year ended 31 December 2013 Number of shares
Weighted average number of ordinary shares (basic)	99,073,256	100,159,039	100,302,258
Dilutive impact of share-based incentives outstanding	1,118,190	2,696,376	2,072,799
	100,191,446	102,855,415	102,375,5057

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 30 June 2014 £000	6 months ended 30 June 2013 £000	Year ended 31 December 2013 £000
Basic earnings for the period	46,321	34,096	74,335
Share-based payments	1,320	1,275	2,408
NI (credit)/charge on share-based incentives	(594)	3,089	4,538
Underlying earnings for the period	47,047	38,460	81,281

8   Dividends

Company dividends

Dividends declared and paid by the Company were as follows:

	6 months ended 30 June 2014		6 months ended 30 June 2013				Year ended 31 December 2013
	Pence per share	£000		Pence per share	£000	Pence per share		£000
2012 final dividend paid				14.0	14,114	14.0		14,114
2013 interim dividend paid						11.0		11,012
2013 final dividend paid	17.0	16,768		-	-
	17.0	16,768		14.0	14,114	25.0		25,126

After the period end an interim dividend of 13.0p (2013: 11.0p) per qualifying ordinary share being £12,782,000 (2013: £11,103,000) was proposed by the Board of directors.

The 2013 final dividend paid on 6 June 2014 was £16,768,000 (31 December 2013: £14,114,000) being a difference of £140,000 compared to that reported in the 2013 Annual Report which was due to a decrease in the ordinary shares entitled to a dividend between 31 December 2013 and the final dividend record date of 9 May 2014.

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.

9   Taxation

The income tax expense 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 2014 was 21.3% (2013: 23.6%). The difference between the standard rate of 21.5% and the effective rate at 30 June 2014 is attributable to a credit in respect of research and development for 2012 and 2013 of (0.3%) offset by disallowable expenditure of 0.1%.

The net deferred tax asset of £5,311,000 at 30 June 2014 (2013: £7,824,000) 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.

10   Trade and other receivables

	30 June 2014	30 June 2013	31 December 2013
	£000	£000	£000
Trade receivables	21,749	19,926	19,582
Less provision for impairment of trade receivables	(452)	(414)	(436)
Net trade receivables	21,297	19,512	19,146
Amounts held in Escrow	-	1,677	1,680
Prepayments and accrued income	2,421	2,290	1,882
Interest receivable	15	27	41
Other debtors	40	31	89
	23,773	23,537	22,838

Amounts held in Escrow related to the completion proceeds and contingent consideration on the sale of the Group's 66.7% shareholding in Holiday Lettings Holdings Limited (HLHL), which owned 100% of the shares in the trading entity Holiday Lettings Limited (HLL). These amounts were received in full during the period and comprised completion proceeds of £1,667,000 and accrued interest of £16,000.

11   Cash and cash equivalents

	30 June 2014	30 June 2013	31 December 2013
	£000	£000	£000
Bank accounts	6,100	6,468	6,799

Cash balances attracted interest at a weighted average rate of 0.6% (2013: 0.7%).

12   Trade and other payables

	30 June 2014	30 June 2013	31 December 2013
	£000	£000	£000
Trade payables	1,337	961	685
Trade accruals	5,040	5,644	5,704
Other creditors	338	207	369
Other taxation and social security	5,716	5,123	5,961
Deferred revenue	13,317	11,341	12,274
	25,748	23,276	24,993

13   Reconciliation of movement in capital and reserves

	Share capital £000	EBT shares reserve £000	Treasury shares £000	Other reserves £000	Reverse acquisition reserve £000	Retained earnings £000	Total equity £000
At 1 January 2013	1,059	(7,911)	(11,917)	235	138	25,909	7,513
Total comprehensive income Profit for the period	-	-	-	-	-	34,096	34,096
Share-based payments	-	-	-	-	-	1,275	1,275
Tax credit in respect of share-based incentives recognised directly in equity	-	-	-	-	-	2,127	2,127
Dividends to shareholders	-	-	-	-	-	(14,114)	(14,114)
Exercise of share-based incentives	-	4,550	-	-	-	(999)	3,551
Cancellation of own shares	(13)	-	-	13	-	(23,264)	(23,264)
Share related expenses	-	-	-	-	-	(163)	(163)
At 30 June 2013	1,046	(3,361)	(11,917)	248	138	24,867	11,021
At 1 January 2013	1,059	(7,911)	(11,917)	235	138	25,909	7,513
Total comprehensive income
Profit for the year	-	-	-	-	-	74,335	74,335
Share-based payments	-	-	-	-	-	2,408	2,408
Tax credit in respect of share-based incentives recognised directly in equity	-	-	-	-	-	7,006	7,006
Dividends to shareholders	-	-	-	-	-	(25,126)	(25,126)
Exercise of share-based incentives	-	5,493	-	-	-	(1,753)	3,740
Cancellation of own shares	(28)	-	-	28	-	(60,537)	(60,537)
Share related expenses	-	-	-	-	-	(424)	(424)
At 31 December 2013	1,031	(2,418)	(11,917)	263	138	21,818	8,915

At 1 January 2014	1,031	(2,418)	(11,917)	263	138	21,818	8,915
Total comprehensive income Profit for the period	-	-	-	-	-	46,321	46,321
Share-based payments	-	-	-	-	-	1,320	1,320
Tax debit in respect of share-based incentives recognised directly in equity	-	-	-	-	-	(548)	(548)
Dividends to shareholders	-	-	-	-	-	(16,768)	(16,768)
Exercise of share-based incentives	-	46	-	-	-	(39)	7
Cancellation of own shares	(16)	-	-	16	-	(39,481)	(39,481)
Share related expenses	-	-	-	-	-	(276)	(276)
At 30 June 2014	1,015	(2,372)	(11,917)	279	138	12,347	(510)

13   Reconciliation of movement in capital and reserves (continued)

Share buy back

In June 2007, the Company commenced a share buy back programme to purchase its own ordinary shares. The total number of shares bought back in the six months to 30 June 2014 was 1,570,147 (2013: 1,250,203 shares) representing 1.6% (2013: 1.2%) of the ordinary shares in issue (excluding shares held in treasury). All the shares bought back in the period were cancelled and no shares were transferred to treasury. The shares were acquired on the open market at a total consideration (excluding costs) of £39,481,000 (2013: £23,264,000). The maximum and minimum prices paid were £27.87 (2013: £21.00) and £20.99 (2013: £14.49) per share respectively.

EBT shares reserve

This reserve represents the carrying value of own shares held by the EBT. During the period the EBT purchased no shares. 21,278 share-based incentives were exercised in the period (2013: 2,442,073), which were satisfied by shares held in the EBT. At 30 June 2014 the EBT held 719,046(2013: 1,200,450) ordinary shares of £0.01 each in the Company representing 0.7% (2013: 1.2%) of the shares in issue (excluding shares held in treasury). The market value of the shares held in the EBT at the period end was £15,388,000 (2013: £25,017,000).

	6 months ended 30 June 2014 Number of shares	6 months ended 30 June 2013 Number of shares	Year ended 31 December 2013 Number of shares
Shares held in EBT at 1 January	740,324	3,404,029	3,404,029
Share-based incentives exercised in period	(21,278)	(2,442,073)	(2,971,962)
Reduction in shares released from EBT due to net settlement	-	238,494	308,257
Shares held in EBT at period end	719,046	1,200,450	740,324

Other reserves

The movement in other reserves of £16,000 (2013: £13,000) 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 were originally acquired at and the price at which share-based incentives were exercised during the year.

14  Related parties

Inter-group transactions with subsidiaries

During the period Rightmove plc was charged interest of £182,000 (2013: £142,000) by Rightmove Group Limited in respect of balances owing under the inter-group loan agreement dated 30 January 2008. As at 30 June 2014 the balance owing under this agreement was £78,900,000 (2013: £54,576,000) including capitalised interest.

No dividends have been declared by Rightmove Group Limited during 2014. On 12 December 2013 Rightmove Group Limited paid an interim dividend of 60.0p per ordinary share to the Company. The dividend of £77,640,000 was settled via a reduction in the inter-group loan balance.

Transactions with key management staff

There were no transactions with key management staff in any period.

Independent review report to Rightmove plc

Introduction

We have been engaged by the Company to review the condensed set of consolidated interim financial statements in the half year report for the six months ended 30 June 2014 which comprises the condensed consolidated interim statement of comprehensive income, the condensed consolidated interim statement of financial position, the condensed consolidated interim statement of cash flows, the condensed consolidated interim statement of changes in shareholders' equity and the related explanatory notes. We have read the other information contained in the half year report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated interim 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 year report is the responsibility of, and has been approved by, the Board of directors. The Board of directors are responsible for preparing the half year report in accordance with the DTR of the UK FCA. 

As disclosed in Note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed consolidated interim financial statements included in this half year 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 consolidated interim financial statements in the half year 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 set of consolidated interim financial statements in the half year report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

Karen Wightman (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

Altius House

1 North Fourth Street

Milton Keynes

Buckinghamshire

MK9 1NE

30 July 2014

ADVISERS AND SHAREHOLDER INFORMATION

Contacts		Registered office	Corporate advisers
Chief Executive Officer:	Nick McKittrick	Rightmove plc	Financial adviser
Chief Operating Officer: Finance Director: Company Secretary:	Peter Brooks-Johnson Robyn Perriss Jenny Warburton	Turnberry House 30 Caldecotte Lake Drive	UBS Investment Bank
		Caldecotte	Joint brokers
		Milton Keynes	UBS Limited
		MK7 8LE	Numis Securities Limited
		Registered in England no. 6426485
Financial calendar 2014			Auditor
Half year results	30 July 2014		KPMG LLP
Interim dividend record date	10 October 2014		Bankers
Interim Management Statement	6 November 2014		Barclays Bank Plc
Interim dividend payment	7 November 2014		HSBC Bank Plc
Full year results	27 February 2015		Santander UK plc
			Solicitors
			Slaughter and May
			Pinsent Masons
			Registrar
			Capita Registrars*

*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)

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Share portal: www.capitashareportal.com

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END

IR UKSWRSRABUAR