Rightmove raises its profit forecast in online ads boost

City A.M. Reporter
SHARES in property website Rightmove rose yesterday after the company said it expects 2010 profits to be ahead of market forecasts as it benefits from an upturn in online advertising.

Rightmove’s website had 17,600 advertisers at the end of October.

It receives around 40m visits a month on average and has around a million properties for sale or rent.

The company said its figures had been fuelled by an increase in spending per advertiser.

Analyst house Numis now expects profits of £50m in 2010, up £5m on its previous guidance and £10m higher than the £40m it expects in 2009 results later this month.

Collins Stewart’s Robin Savage said: “Rightmove is benefiting from the cyclical rise in online property advertising. We suspect that the number of property developments has increased and that estate agents are (reluctantly) paying up for Rightmove Choice products.” The analyst said he expects to upgrade the stock, but will wait for factual evidence before increasing his revenue and profit forecasts.

Rightmove is due to publish its figures for 2009 later this month.

The company emphasised after yesterday’s trading update that its forecasts depended on there being no major change in market conditions.

It said in a statement: “The board is confident that 2010 profits will be above current market expectations, subject to no significant change in market conditions.

“This is based on the higher average spend per advertisor in January and evidence from our customers of our continued value for money.”