High-flying Rightmove dragged down to earth by the property market freeze as it scraps its dividend and forecasts
- People have been told not to move and agents instructed not to market homes
- FTSE 100 group has ‘suspended’ all its financial forecasts for the year
- Online property portal has also axed its 4.4p a share final dividend
High-flying property listings website Rightmove has been dragged back down to earth by the coronavirus crisis and freeze on the housing market.
It revealed today that it would scrap its final dividend in a bid to save over £38million as mounting uncertainty hits the housing market and agents were told not to market any more homes.
The group announced it had also ‘suspended’ all its financial forecasts for the year, given that no one knows how long or to what extent the fallout from the pandemic will continue and what the effect on the property market will be.
Across the country property sales have been paused or cancelled, viewings axed and estate and lettings agents have shut their doors.
All change: Rightmove’s shareholders had been in line for a 4.4p a share payout for the year
Banks have started pulling swathes of mortgages from the market and the Government has announced that no house move should take place unless it is deemed essential.
This has left home buyers and sellers in limbo and unsure whether to exchange contracts, or even whether they will be able to move home if they are due to complete on a new property.
The lockdown has hit estate agents – who make up Rightmove’s customer base – hard and will hammer their income from sales and lettings agreed. It is also likely to lead to a dramatic drop in properties coming onto the market and being listed on the site.
Before turmoil hit the housing sector, Rightmove’s shareholders had been in line for a 4.4p a share payout for the year.
Although it scrapped its final dividend, the FTSE 100 listed group said it remained ‘confident’ its financial clout could withstand the challenges that lie ahead.
While the company remains upbeat, its share price fell nearly 6 per cent in early morning trading today, before regaining a little ground to trade 3.6 per cent down at 471.7p.
Rightmove’s share price has tumbled about a third from its peak as the coronavirus troubles the housing market
Since the coronavirus pandemic started to bite, Rightmove’s share price is down about a third from its recent high of 691p.
The group, which is due to hold its annual general meeting on 4 May, told its shareholders: ‘The Board recognises the importance of the dividend to our shareholders and will consider the timing of the reinstatement of the share buyback programme and the quantum of any interim dividend for 2020 in due course.’
After facing a backlash from subscribers, on 20 March, Rightmove announced it would slash its fees for businesses using its site to advertise homes on their books by 75 per cent for four months.
Rightmove admitted that it got it badly wrong with its original proposed deferred payment scheme.
Instead, the hugely profitable property portal said it would slash fees for the next four months.
In a statement on 20 March, Rightmove said: ‘I don’t think many of us would have predicted sitting in our offices last week that we’d be where we are today, with the possibility of more restrictive measures approaching.
‘Earlier this week we offered our independent estate and lettings agents a deferred payment scheme to help them through the next few months. The situation in the UK has changed rapidly and we’re sorry that it was too little and now inappropriate for the challenges we all face.
‘Instead of offering the deferred payment scheme to independent estate and lettings agents, we’re going to reduce your Rightmove bill by 75 per cent for four months, starting from 1st April whether you advertise residential properties, new homes or commercial premises.
‘You don’t need to apply for this discount, your invoice will automatically come through reduced by 75 per cent. To be clear, this is not a deferred payment, this is a discount that you don’t need to pay back.’
Rightmove said it believed the pandemic looked set to hit its profits by between £65million to £75million this year.