Rightmove plc
2 Caldecotte Lake
Business Park
Caldecotte Lake Drive
Milton Keynes
MK7 8LE
Registered in England no. 6426485
Rightmove plc Annual Report 2019
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Rightmove plc | Annual Report 2019
Rightmove’s purpose
is to make home moving
easier in the UK.
We do this by creating a simpler and
more efficient property marketplace
Rightmove is the UK’s largest property portal
Contents
Strategic report
1 Highlights
2 Chair’s statement
4 Our strategy
5 Chief Executive’s review
14 Business model
16
18
22 Risk management
Principal risks and
23
uncertainties
26 The EU referendum
26 Viability statement
27 Working with our stakeholders
Corporate responsibility
30
Key performance indicators
Financial review
Corporate governance report
Governance
40
42 Directors and officers
50 Audit Committee report
58 Nomination Committee report
Directors’ remuneration
61
report
91 Directors’ report
94
Directors’ responsibilities
statement
Auditor’s report
95
106 Company statement of
changes in shareholders’ equity
107 Notes forming part of the
financial statements
140 Advisers and shareholder
information
Financial statements
100 Consolidated statement of
comprehensive income
101 Consolidated statement of
financial position
102 Company statement of
financial position
103 Consolidated statement of
cash flows
104 Company statement of
cash flows
105 Consolidated statement of
changes in shareholders’ equity
Designed and produced by The Team www.theteam.co.uk
Strategic report | Highlights
Financial highlights
Revenue
Underlying operating profit(1)
Underlying basic earnings per share(2)
+8%
Revenue up 8% year on year to £289.3m
(2018: £267.8m) driven by continued growth in our
Agency and New Homes businesses and a healthy
contribution from our Other(3) business units
+8%
Underlying operating profit up 8%(1)
to £219.7m (2018: £203.3m)
+10%
Underlying basic earnings per share(2)
up 10% to 20.2p (2018: 18.3p)
Total dividend
Operating profit
Basic earnings per share
+11%
Final dividend of 4.4p (2018: 4.0p) per
ordinary share making a total dividend of
7.2p for the year (2018: 6.5p), up 11%
+8%
Operating profit up 8% to £213.7m
(2018: £198.6m)
+10%
Basic earnings per share up
10% to 19.6p (2018: 17.8p)
(1) Before share-based payments and NI on share-based incentives.
(2) Before share-based payments, NI on share-based incentives and no related adjustment for tax.
(3) Other business units comprise Overseas and Commercial property advertising services and non-property advertising services which include our Third Party
advertising and Data Services.
Operational highlights
Customer numbers
Properties advertised
Traffic: visits
19,809
Membership numbers down 3% to
19,809 (2018: 20,454) with a decline
in Agency branches offset by strong
growth in New Homes
Traffic: time on site
1 billion
Time on site remaining over
1 billion minutes per month(4)
900,000
UK residential properties advertised on
Rightmove, which is more than any other
UK property portal
+2%
Visits up over 2% averaging
135 million visits per month(4)
Average Revenue Per Advertiser
Employee engagement
£1,088
Average Revenue Per Advertiser(5)
up £83 to £1,088 per month
(2018: £1,005)
81%
81% of employee respondents think
Rightmove is a great place to work
(4) Source: Google Analytics.
(5) Revenue from Agency and New Homes advertisers in a given month divided by the total number of advertisers during the month, measured as a monthly average over the year.
“ Rightmove’s purpose is to make home moving easier in the UK and the public once again moved
with Rightmove in 2019. In fact, Rightmove is synonymous with home moving, with 2019 being the
ninth year in a row more people searched on Google for Rightmove than for property”.
Peter Brooks-Johnson Chief Executive Officer
Rightmove plc annual report 2019
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Financial statementsStrategic reportGovernance Strategic report | Chair’s statement
I am excited about the journey ahead and
looking forward to working with the board
and management team to create further
value for all our stakeholders
Andrew Fisher
Chair
Having joined the Board of Rightmove plc in January 2020, I am
pleased to provide my first report as Chair of the Company.
In my short time at Rightmove I've had the privilege of seeing,
first-hand, the results of a highly talented and committed team
who are focused on exceeding the expectations of both
customers and consumers, further improving our technology
and best in class suite of digital advertising products and
continuing to enhance the home moving process.
Our ambition to remain an innovative and sustainable growth
company for the benefit of all stakeholders is undeterred as
we continually evolve our value proposition for the benefit of
our customers, consumers and shareholders. This model and
approach has served us well and we believe it will continue
to underpin our future success.
Given our commitment to continually increase the value
we deliver to our customers on 30 September 2019 we
acquired Van Mildert, a company that provides tenant
referencing services and rent guarantee insurance products.
We believe that Rightmove can drive scale benefits to their
proposition and having completed the first steps of sales force
integration during 2019 we have a strong foundation upon
which to innovate further to make the process of renting a
property simpler, quicker and more efficient for both agents
and tenants.
Financial results
Against the backdrop of an uncertain UK macro environment
the strength of our business model and core value proposition
once again underpinned a healthy set of financial results in
2019. Underlying operating profit(1) and operating profit were
both up 8% at £219.7m (2018: £203.3m) and £214.5m
(2018: £198.6m) respectively driven by revenue growth of 8%
to £289.3m (2018: £267.8m) and continued cost discipline.
Underlying basic earnings per share(2) and basic earnings
per share were up 10% at 20.2p (2018: 18.3p) and 19.6p
(2018: 17.8p), greater than the percentage increase in profits
and in part as a result of 16.3m shares bought back during the
year at a cost of £88.6m reflecting our policy of returning free
cash flow to shareholders.
Returns to shareholders and dividend
We have continued to promptly return excess cash to
investors. In 2019 we returned £148.8m (2018: £168.5m)
to shareholders through dividends and share buybacks. This
was slightly lower than in 2018 due to the cash used to acquire
Van Mildert of £15.9m. Operating cash conversion(3) was again
very strong and remains in excess of 100% of operating profit.
The Board increased the interim dividend to 2.8p
(H1 2018: 2.5p) per ordinary share, which was paid on
1 November 2019. We are confident in our ability to deliver
sustainable returns to shareholders and consistent with our
policy of increasing the total dividend for the year broadly in
line with earnings per share, the Board recommends a final
dividend of 4.4p (2018: 4.0p) per ordinary share. This brings the
total dividend for the year to 7.2p (2018: 6.5p), an increase of
11%. The final dividend, subject to shareholder approval, will
be paid on 29 May 2020 to all shareholders on the register on
1 May 2020.
Board changes
After more than 14 years as Rightmove’s Chairman,
Scott Forbes retired from the Board on 31 December 2019.
Scott has been a key part of Rightmove’s journey from pre IPO
to the FTSE 100 business it is today. On behalf of the Board I
would like to thank him for his invaluable contribution in guiding
Rightmove to become the UK’s largest property portal and a
digital business that is synonymous with innovation and one
of the UK’s leading online destinations.
In November 2019, we announced that Robyn Perriss, our
Finance Director, will step down from the Board by June 2020.
Throughout the 12 years that Robyn has been at Rightmove
(1) Before share-based payments charge of £4.9m (2018: £4.3m) and NI charge
(3) Cash generated from operating activities of £222.0m compared to operating
of £1.1m (2018: £0.4m) on share-based incentives.
profit as reported in the profit or loss of £213.7m.
(2) Before share-based payments charge of £4.9m (2018: £4.3m) and NI charge of
£1.1m (2018: £0.4m) on share-based incentives and no related adjustment for tax.
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rightmove.co.uk
she has been a huge asset in developing strong financial
management and controls during a period of rapid growth
which have been a vital underpin to our success. Additionally,
Robyn has kept our investors well informed and abreast of
the Rightmove story. We have commenced a search for her
successor and will keep the market appraised of our progress.
Looking ahead
On behalf of the Board I would like to thank all our customers
for their confidence and support in helping us to work together
to maintain Rightmove’s position as the essential marketplace
for home hunters and for property advertisers to reach the
widest possible audience.
During the past year we welcomed Amit Tiwari as a
Non-Executive Director to the Board. Amit brings a strong
understanding of a range of innovative online marketplace
businesses and has already made a valuable contribution,
drawing upon his extensive knowledge of financial and
capital markets.
UK Corporate Governance Code and
stakeholder engagement
2019 was the first year that the 2018 UK Corporate
Governance Code (the Code) applied to Rightmove.
Confirmation of how we have complied with the Code for
the year under review is set out on page 40.
Constructive, transparent and open engagement with our
stakeholders outside of the boardroom forms a critical aspect
of Board-level activity. On pages 27 to 29 we present our first
S172 statement which sets out our consideration of our key
stakeholders in our decision making. We have also discussed
separately within our Corporate Social Responsibility Report on
pages 34 to 35 our tailored approach to employee
engagement in response to the Code.
Continuing to innovate to make home moving easier in the
UK is key to our success and to the creation of long-term
shareholder value for Rightmove. The integration of
referencing and the further tools to help make renting more
efficient for agents and tenants, which will be delivered in 2020,
is a demonstration of our commitment to innovate for the
long term growth of Rightmove.
I am excited about the journey ahead and am looking forward
to working with the Board and management team to create
further value for all our stakeholders.
Andrew Fisher
Chair
28 February 2020
Rightmove plc annual report 2019
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Financial statementsStrategic reportGovernance
Strategic report | Our strategy
Rightmove's purpose is
to make home moving
easier in the UK
Developing our brand
Our marketing connects with the strong
positive emotions that moving home
often generates and reflects our
position at the heart of it.
Page 6
Continuing to innovate
It is not in our DNA to stand still and we
continue to restlessly innovate for both
our customers and our consumers.
Page 8
Supporting our customers
We provide the most significant and
effective exposure for customers’ brands
and properties. We are the largest source
of high quality leads and offer value adding
products and packages.
Page 10
Building great teams
We focus on building great teams and
making Rightmove a great place to work.
Page 12
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rightmove.co.uk
Strategic report | Chief Executive’s review
Our focus on innovation as a key driver to our
success and creating long-term value for our
customers remained undimmed during 2019.
Peter Brooks-Johnson
Chief Executive Officer
Rightmove’s purpose is to make home moving easier in
the UK. This clarity of purpose has meant that Rightmove is
synonymous with home moving, with 2019 being the ninth
consecutive year that Google has reported that more people
start their home search with ‘Rightmove’ rather than ‘Property’.
Our purpose drives our ongoing delivery of increased value
to our customers and home movers and our culture of
restless innovation. Against the backdrop of continued
macro uncertainty in 2019 these strengths take on an
increased significance.
Over the past year we have reinforced our position as central
to the UK home moving process for both home movers and
property professionals. Visits from home movers grew by over
2% and they spent over a billion minutes(1) on Rightmove every
month in 2019 leading to Rightmove’s market share of time
spent on the top four property portals continuing to be over
75%(2). Our central position and disciplined execution
has allowed us to deliver another year of healthy growth.
The uncertainty in 2019 proved challenging for some of our
Agency customer base. The combination of lengthening
transaction times and the tenant fee ban in June caused cash
flow issues for smaller agents with lower numbers of
properties. These cash flow issues resulted in some of those
smaller branches leaving the industry, with 6% fewer agency
branches at the end of 2019 than 31 December 2018.
Market conditions have, however, benefitted some of our
agent customers. The relative stability in number of housing
transactions and a slight increase in fees, coupled with fewer
competitors has allowed a number of agents to grow their
market share and their revenues. These agents, in particular
have invested in Rightmove products to drive their
businesses forward.
When faced with similar slowing sales rates many of our
New Homes Developer customers chose to release more
developments to market. The efficiency of the Rightmove
proposition and scale of our audience led them to spend
more on marketing those developments on Rightmove.
This increase in developments partially offset the loss of
agency branches meaning that overall customer numbers
fell 3%.
In 2019 revenue increased by 8% to £289.3m with underlying
operating profit(3) and operating profit both up 8% to £219.7m
and £213.7m respectively, once again underlining the value of
our proposition to our customers and the robustness of the
Rightmove business model.
Our focus on innovation as a key driver to our success and
creating long-term value for our customers remained
undimmed during 2019. Alongside the new product and tool
releases and upgrades to the home hunter experience on our
platforms, the acquisition of Van Mildert, a tenant referencing
company, and the beginning of our mortgage partnership with
Nationwide Building Society show that Rightmove’s
commitment to its purpose remains as strong as ever.
Rightmove’s long standing ability to build smaller businesses
which leverage and support the core property advertising
proposition continues to drive growth. In 2019 the Commercial
Property, Data Services and Overseas Property businesses
grew by 19% to contribute £24.5m (2018: £20.6m) revenue.
Our continued progress is testament to the support of our
customers and the huge effort Rightmovers have made to
build our business in partnership with our industry customers.
Our strategy – making home moving easier
The place consumers turn to
first and engage with most
Our position at the heart of the home moving process in the
UK comes from being the place which consumers turn to first
when thinking about property. Rightly, home movers are ever
more demanding of the technology and services offered to
them. Rightmove’s focus on continual improvement and
innovation to simplify the start of the home moving process
and create the most compelling experience for consumers
stands us in good stead.
Rightmove plc annual report 2019
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Financial statementsStrategic reportGovernance Strategic report | Our strategy
Developing our brand
Investing in our
market leading brand
Our marketing connects with the strong
positive emotions that moving home often
generates and reaffirms that the UK public
moves with Rightmove.
Over 75% market share
Visits from home movers grew by 2%
on Rightmove in 2019 with our market
share of time spent on our platforms
continuing to be over 75%.(1)
(1) There was a Comscore methodology change in February 2019 which resulted in our market share relative
to our competitors increasing from 77% in January to 87% in February. Our market share of time spent in
minutes on the top four UK property portals in December under this methodology was 87%.
Strategic report | Chief Executive’s review continued
More consumers than ever turned to Rightmove in 2019 with
over 1.6(1) billion visits across all our platforms, those consumers
spent over 12.1 billion(1) minutes on Rightmove. Whilst the total
time on site was marginally lower then 2018, the amount of
time spent per property listed increased over 4%.
Rightmove continues to provide the best experience for
home hunters regardless of how they choose to access our
platforms. The numerous improvements to our Android and
iPhone/iPad apps mean that we have 2.5 times more active
users on our mobile and tablet apps than any competitor with
each user spending more than twice as much time on average.
The shift to mobile platforms means that the busiest
time on Rightmove is now 20:48 on a Wednesday evening.
Home hunters are looking at both their mobile device and
the television and taking advantage of the final advert break
of many prime time television shows to search for their
‘hero’ property.
We achieve this by providing consumers with the most up to
date, engaging and comprehensive property content together
with the best search, research and home moving tools to
support their home moving journey. Of the hundreds of
updates to our platforms each month, recent improvements
have included the ability for serious home hunters to hide
properties they have already considered and a redesigned and
expanded “MyRightmove” for those home hunters to keep
track of their search preferences.
Consumers expect the platform they rely on to be available
all of the time. Testament to the engineering prowess and
dedication of the team, Rightmove again recorded an industry
leading level of “uptime” of 99.98% meaning the platform was
only unavailable for less than nine minutes per month.
A significant proportion of people buying a home also have a
home to sell. Researching the property market is an important
step for many potential home sellers and is a vital step for
potential landlords. The comprehensive, simple tools we
provide for researching the market help sellers and landlords
understand the market more easily and give them another
reason to turn to Rightmove first. Our research tools, such as
sold prices data, are by far the most widely used in the UK and
provide the unique benefit of access to our catalogue of
900,000 currently listed UK properties and over 44 million
historical property records. Perhaps reflecting the increase in
pent up demand in the marketplace, consumers spent over
482 million minutes using our research tools in 2019 which
was up by over 7% on the previous year.
We have consistently invested in our brand and product
creating a trusted brand where 80% of the visits to Rightmove
come from consumers typing the brand directly into their web
browser or launching our app.
Our brand strength has continued to be reinforced by our
‘find your happy’ marketing campaign. Given our high level
of awareness our ‘always on’ approach focusses on driving
engagement and preference amongst home hunters. In 2019
this activity focused equally on the rental market as well as
those looking to sell and or buy a home. The campaign tells
human stories to illustrate why people move, not just the
search process. Topics vary from downsizing, setting up home
with a new partner, finding a new home after a divorce and, in
our latest TV advert, having insufficient space for a growing
family. These stories cover all segments of the market from
first time buyers through to downsizers.
Our investment in brand building will continue to focus on
national television through our partnership with Channel 4
supported by online video, digital and outdoor advertising.
We will also continue to focus on our presence in London with
400 branded taxis and our exclusive partnership with the
London Evening Standard.
Unrivalled exposure, leads and
products for our customers
With visits to our platforms growing for the 19th consecutive
year we continued to increase the exposure of our customers’
brands and properties. This exposure generated over
40.5 million leads for our customers, equivalent to more than
one every second in 2019. This was down 4% year on year
reflecting the slight fall in the number of properties listed in
2019. The number of leads per property increased by 2%.
Winning the right to an instruction to sell or let a property
is critical to an agent’s success. Our premium packages,
Enhanced and Optimiser, help our customers to generate
more opportunities to win instructions cost effectively. The
packages include branding and property promotion solutions
to boost agents’ performance in the ‘awareness’ stage of the
marketing funnel, while our popular Local Valuation Alert and
Rightmove Discover products fast-track agents to the
‘consideration’ stage. We continue to enhance the
performance of these products to keep them at the forefront
of digital marketing for our customers. Following a number of
enhancements, Local Valuation Alert and Rightmove Discover
delivered over 20% more leads from people asking for a
valuation on their home in 2019 over last year.
Rightmove plc annual report 2019
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Financial statementsStrategic reportGovernance
Strategic report | Our strategy
Continuing to innovate
Focusing on making the UK property
market more efficient for home
hunters and agents
The acquisition of Van Mildert, a tenant referencing
business, provides a foundation to enable further
innovation to make the rental process more efficient
for tenants and agents.
1,423 new code updates
We have a relentless focus on continual
improvement. During 2019 our product
and development team released 1,423
updates to our platforms.
8
rightmove.co.uk
Strategic report | Chief Executive’s review continued
Against the backdrop of a cautious housing marketplace
estate agents continue to recognise the value of our additional
marketing products and packages with penetration of the
Enhanced and Optimiser packages reaching 38% of
independent estate agency customers up from 27% in
December 2018.
Our Commercial property advertising business is bringing the
efficiency benefits of the Rightmove platform to companies
looking to invest, acquire, occupy and divest of their
commercial assets. We combine the largest commercial
property audience with strong national coverage of a diverse
range of commercial properties, both in terms of type and size.
The hesitant market conditions in 2019 made it harder for our
New Homes developers to grow their sales volumes. In these
conditions our digital marketing solutions have become even
more valuable to them. Access to our unique in-market
audience of home hunters saw New Homes developers spend
a record £8.9m in 2019 on our digital marketing solutions
(up from £8.0m in 2018).
Our product innovation roadmap starts with our customers.
It is shaped by them during development and we continue
to revise our products based on their feedback. It is only by
listening to our customers and working with them that we
can develop products which meet their needs and deliver
value to them.
We continued to launch valuable new products in 2019.
Auto Featured Property was launched in May to further help
higher stock agents stand out to potential sellers, with over
700 branches signed up by the end of the year. June saw the
early roll out of our next generation digital marketing product,
Rightmove Active Extension which micro-targets home
hunters on websites beyond Rightmove based on their
search behaviour.
In November 2019 we launched our new premium package
‘Optimiser 2020’ building on the success of our existing
Optimiser package. The new package includes ‘Opportunity
Manager’ an algorithm powered intelligence tool and
‘Sold By Me’ a new dynamically targeted product to
attract potential sellers.
Sold By Me is built on the research insight that two thirds of
potential home sellers ranked ‘Handles similar property’ in their
top five reasons for choosing an agent. Sold By Me displays a
selection of properties sold by an agent on the most visited
page on Rightmove, the search results page, showcasing the
agent’s brand. It contextually targets potential home sellers by
showing them relevant properties from their home postcode,
even if they’re searching for their next home somewhere else,
allowing agents to showcase their success to potential home
sellers and identify more instruction opportunities.
In 2019 we deepened our relationships with our commercial
agent and landlord customers at all levels. We are also
innovating to take advantage of other trends in the commercial
property space, for example the growing importance of flexible
office space.
Our Data Services business supports the property industry
by delivering tools and insights based on our unparalleled
repository of property data. The Surveyor Comparable Tool,
which surveyors use to make property valuations continues
to be the de facto standard used in over 75% of mortgage
transactions in the UK and more than 2.4 million reports were
run in 2019. Our Automated Valuation Model was used by
lenders to evaluate the value of more than £1.5 trillion worth
of property in 2019.
Our Overseas property advertising business maintained
revenue at 2018 levels and continues to have the largest
audience of members of the British public looking to buy a
property abroad. Whilst there is pent up demand as the dream
of owning a property abroad remains strong, the market
slowed overall due to continued uncertainty about the
relationship of the UK with the rest of EU and the impact
of currency exchange rates over the past two years.
Innovation to create a simpler
and more efficient marketplace
We continue to focus on making the property marketplace
more efficient for home hunters and agents throughout the
journey from searching for a new home to being ready to
transact on it.
Our innovation horizon stretches from near term launches to
those things we are experimenting with today which will lead
to future opportunities.
Rightmove plc annual report 2019
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Financial statementsStrategic reportGovernance Strategic report | Our strategy
Supporting our customers
Helping our customers
win more business
We care about our customers’ business
success and building strong partnerships is
vital to support their ambitions.
38% of agency
customers take
our Optimiser and
Enhanced product
packages
Agents continue to
recognise the value of
our additional marketing
products and packages
with penetration up from
27% in December 2018.
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Strategic report | Chief Executive’s review continued
Innovating for efficiency today
By combining our software’s whole of market dataset and
our dedicated account management teams, in addition to
informing their business decisions, we help customers drive
operational efficiencies. Our focus is in the areas our
customers value most, which in the case of our agents is
identifying potential business and winning and retaining
that business.
Whilst our software tools are already recognised as being
best in class and widely adopted with nearly 90% of our
agency customers using our tools each month, our passion
to continuously improve is evident as in 2019 we further
enhanced our market intelligence software for agents,
Rightmove Plus.
Rightmove Plus, included free of charge as part of all
Rightmove membership packages, helps customers
throughout the property marketing lifecycle. For example,
agents tell us that the new version of the Best Price Guide, a
reporting tool within Rightmove Plus, which helps them gather
comparable properties to support their suggested property
price, saves them up to an hour per market appraisal. The Best
Price Guide was used over 11 million times in 2019, a 10% rise
over 2018.
Our data continues to provide the basis for a rich seam of
innovation. As part of the upgraded ‘Optimiser 2020’ package
we launched ‘Opportunity Manager’. The new tool uncovers
potential sellers within the pool of buyers an agent already
knows just before they are ready to consider instructing an
agent. It is powered by an algorithm that is constantly learning
and improving, intelligently spotting the buyers that are most
likely to turn into potential home sellers in their area.
Rightmove account managers have further tools at their
disposal to assist agents. For example, 2019 also saw the
release of a tool which helps agents identify the most valuable
markets they operate in allowing them to focus their marketing
efforts where they are likely to yield the best return.
Innovating for growth tomorrow
Renting a property is a time-consuming process for tenants
and agents alike. Tenants collate a raft of documentation and
submit it with each tenancy application, which needs to be
processed and verified by agents. The Tenant Fee ban, which
came into force in June 2019 restricts the ability of agents
to charge tenants and places extra focus on this time
intensive process.
Building on our history of innovative experiments such as
the RentLondon app in 2017, we released two further versions
of our Tenant Passport in 2019 with the aim of better
understanding how to make the process of renting a property
simpler, quicker and more efficient for tenants and agents.
In addition to creating over 40,000 passports, tenants and
agents gave invaluable feedback to shape our continued
progress in digitising the rental journey. The engagement with
the passport demonstrates both the appetite for a solution
and Rightmove’s unique position to deliver it. It was this
feedback which led us to purchase Van Mildert, an established
business providing tenant references and rent guarantee
insurance to lettings agents and landlords for £18.3m(4) in
September 2019. With the first steps of sales force integration
now complete this foundation will enable further innovation
to make the process more efficient for tenants and agents
in 2020.
In parallel with the work on tenant referencing, the next phase
of the experimentation in making the rental process more
efficient has begun with the launch in November 2019 of a
small scale trial of a system to allow potential tenants to
book viewing appointments directly with a rental agent.
In September we partnered with the Nationwide Building
Society to make the process of discovering and applying for a
mortgage easier for those home hunters who wish to apply
online. Although early in the journey we believe this will make
the mortgage research and application process easier for
some home buyers in the future.
We care about our customers’ business success and building
strong partnerships is vital to support their ambitions. To that
end we are spending more time with customers than ever
before and making sure that our recommendations add value
to their business.
In 2019 we continued our successful customer seminar
programme. Seminars covered topics which relate directly
to Rightmove, such as how to create the ultimate listing on
Rightmove to maximise the marketing opportunity of each
property and of the agency as a whole and how to make the
most of the tools and reports. However, we also recognise our
role in helping our customers keep up to date with a changing
industry, covering subjects as diverse as the changing lettings
regulations and the requirements of the new money
laundering directive. The seminars are always well attended
with nearly 11,000 agents attending seminars and webinars
throughout the year.
In keeping with an online culture these events are hosted
on the ‘Rightmove Hub’, which is an ‘on demand’ platform,
meaning our customers can benefit from this content
irrespective of whether they were able to attend on the day.
This easy access has seen agents watch over 600,000 minutes
of compelling content on the Hub in 2019.
Rightmove plc annual report 2019 11
Financial statementsStrategic reportGovernance Strategic report | Our strategy
Building great teams
A place where everyone
has the space to grow
We focus on building great teams and making
Rightmove a great place to work.
92%
94%
92%
95%
88%
2015
2016
2017
2018
2019
I enjoy working in my team
88% of respondents to our 'Have your Say'
survey enjoy working in their team.
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s
t
a
t
e
m
e
n
t
s
Strategic report | Chief Executive’s review continued
Build great teams with a culture to innovate
Our people define Rightmove and we have a culture which is
both restless and focussed. Restless, as no Rightmover ever
believes we have achieved all we can, and focussed, because
everything is guided by doing the right thing for both our
customers and consumers.
We strive to create one team of Rightmovers with as few
barriers as possible to rapid growth and innovation. We believe
that this comes from a process-light, highly connected
organisation with little constraining hierarchy and bureaucracy.
It is about employing the right people, giving them the freedom
and authority to innovate and lead, and then guiding them to
succeed. Every Rightmover is both individually empowered
and accountable.
Rightmove is not afraid to change to preserve the things we
hold dear. As we grow, maintaining the pace of execution is vital
to enhancing our innovate culture. In 2019 we restructured our
product development and technology function to streamline
our delivery and empower more of the team.
A diverse Rightmove is important to us. We recognise that a
diverse team will provide a wide range of perspectives that
promote innovation and business success. Drawing on what is
unique about individuals adds value to the way we do business
and helps us anticipate and provide what our customers want
from us and what home hunters want from the Rightmove
platforms. However, as everyone has pre-conceived ideas and
a view of normal, we have successfully delivered a ‘Thoughtful
Leadership’ programme to tackle both conscious and
unconscious bias for everyone with a people responsibility.
We will continue to build on this foundation in 2020 and beyond
and as a first step we have launched a more detailed follow up
programme for those who are responsible for significant
numbers of Rightmove people. We also recognise that
unconscious bias of peers can impact the working environment,
so we are also launching a ‘Thoughtful Community’ programme
which will be attended by all employees.
In the design of our offices we have taken care to create a
physical environment that encourages open and honest
discussion, including social spaces for the teams to enjoy
each other’s company. Our workplace is free from the usual
trappings of hierarchy.
We believe in sharing early and often, and reinforce this through
events such as town halls, showcases, stand-ups, team away
days and company days which share progress, successes and
challenges. Everything together creates a unique and driven
environment that we believe results in people feeling a sense
of belonging and a passion to perform. By striving to make
Rightmove a great place to work we can attract and retain
the best talent and provide the best service for consumers
and customers.
We are proud of our development culture and the role mobility
it promotes. For example, in 2019 we ran four mentoring circles
hosted by inspirational external thought leaders. The sessions
covered thought provoking topics to help unleash our people’s
full potential.
Development is not limited to role relevant skills. To support
the objectives of World Mental Health day we created events
to remind Rightmovers to connect with those around them
with a conversation. Rightmove was also an early adopter of
the ‘Spill’ mental health app which gives every employee
anonymous access to a qualified counsellor at the touch of a
button in the familiar environment of an app or text message.
Great talent and passion to perform is not enough to make a
great Rightmover; the way in which we behave towards each
other, our customers and consumers is vital. We expect the
very highest standards of ethical behaviour from all employees.
How we go about our work is central to our recruitment,
feedback and personal development processes.
The actions and behaviours of our people create the sense of
belonging and connection and allow the business to continue
to thrive and attract great people. In our 2019 ‘Have Your Say’
people survey, 81% (2018: 91%) of Rightmovers responded
that they think ‘Rightmove is a great place to work’. Whilst 81%
is still high, I am disappointed that we have fallen below our
long term average as we are never complacent about the
importance of acting on colleagues’ feedback. We already
have plans in place to move this measure upwards in 2020.
Our vibrant culture sets us apart from many organisations and
is defined by every one of the nearly 600 people who are proud
to call themselves Rightmovers. I would like to thank them all
for creating a culture which continues to drive such business
success.
Peter Brooks-Johnson
Chief Executive Officer
28 February 2020
(1) Source: Google analytics.
(2) There was a comScore methodology change in February 2019 which resulted
in our market share relative to our competitors increasing from 77% in January
to 87% in February. Market share of time spent in minutes on the top four
UK property portals in December 2019 under this methodology was 87%.
(3) Before share-based payments charge of £4.9m (2018: £4.3m) and NI charge
of £1.1m (2018: £0.4m) on share–based incentives.
(4) Comprises initial cash consideration of £15.9m and deferred contingent
consideration of £2.4m.
Rightmove plc annual report 2019 13
Rightmove plc annual report 2019 13
Financial statementsStrategic reportGovernance
Strategic report | Business model
The Rightmove network effect
C
E F FICIE N
Y E
M
P
O
W
E
RI
N
The place consumers
turn to first and
engage with most
BUYERS
SELLERS
RENTERS
LANDLORDS
SIMPLICITY
G
AGENTS
DEVELOPERS
Unrivalled exposure,
leads and products
for our customers
What we do
Rightmove is the UK’s number one property portal and the
UK’s largest property marketplace. We bring the UK’s largest
and most engaged property audience and the largest
inventory of properties together in one place. We benefit from
strong network effects as our property audience and the
properties our customers advertise create a ‘virtuous circle’
enhancing the Rightmove value proposition.
Our customers are primarily estate agents, letting agents and
new homes developers advertising properties for sale and to
rent in the UK.
Our aim is to create a more efficient housing
marketplace and make home moving easier
The UK housing market, both in sales and rentals, is complex
and often inefficient. Moving home can be a stressful and time
consuming experience for consumers and an inefficient and
frustrating process for professionals, often with elements of
wasted effort and unavoidable manual processes. We believe
by creating a simpler and more efficient marketplace we can
make home moving in the UK easier. A better marketplace
which empowers consumers and property professionals alike
creates a better housing market. By creating value for, and
building long-term partnerships with, both consumers and
property professionals we are able to grow our revenue.
Our continued growth allows us to innovate to create
more value for all.
How we make the market more efficient for consumers
Rightmove is free to consumers, and it is the only place where
home buyers and renters can see almost the entire UK
property market in one place. The ease of accessing almost
the entire UK property market through fast, always available
digital platforms means Rightmove has become the place
consumers turn to first when they think about moving home.
Finding your next home can be a stressful experience;
the simplicity Rightmove brings can reduce the stress.
The carefully designed website avoids distractions in pursuit
of simplicity, putting home hunters in control of their search
and research.
It is not in our DNA to stand still and we are continually investing
to deliver the most engaging experience for home movers.
Our culture is one of restless innovation and a strong focus on
driving improvement and as a result we release hundreds of
updates to our platforms each month.
A vital part of innovation is a disciplined willingness to
experiment and learn from the results. The RentLondon
experimental app in 2017 and the Tenant Passport iterations
in 2019 along with copious qualitative research were aimed
at discovering the real friction points for tenants. These
learnings have led to a strategic roadmap of future
innovations to reduce effort and stress for tenants at the
beginning of the rental journey.
14
rightmove.co.uk
before they are ready to consider instructing an agent. It is
powered by an algorithm that is constantly learning and
improving intelligently spotting the buyers that are most
likely to turn into potential home sellers in their area.
How we create value for our shareholders
Our principal sources of revenue are the monthly subscription
fees paid by customers to advertise all of their properties and
the fees paid for our additional advertising solutions. Our
additional advertising solutions increase a customer’s share
of voice and competitiveness. These are critical factors for
our customers and particularly for an agent to help to win the
instruction opportunity to sell or rent a home, which remains
the lifeblood of their business.
As the property industry becomes more digital, Rightmove’s
market leading audience, best in class software and data
driven analytics are becoming even more valuable to
customers. ARPA growth will continue to be driven by
increased product penetration, pricing and innovation and is
underpinned by the value of our unrivalled audience and data,
our substantial product inventory and our culture and track
record of innovation.
We believe that helping home hunters become more
‘transaction ready’ will in time also grow into a valuable source
of revenue. Tenant referencing and rent guarantee insurance
capability through our recent Van Mildert acquisition and our
mortgage partnership with Nationwide Building Society are
the first steps in this journey.
We also continue to develop a number of other smaller
adjacent businesses such as advertising overseas and
commercial properties and providing property-related
data and valuation services.
Beyond finding a buyer or tenant, the tools we provide for
researching the market bring simplicity and confidence to
sellers and landlords as they consider one of the largest
transactions of their lives and choose an agent to help
them on their home moving journey.
How we make the market more efficient for
industry professionals
By creating the UK’s largest property marketplace we have
brought together virtually all the audience our customers
want to attract. We are able to offer the most significant and
effective exposure for their brands and properties resulting in
the largest source of high quality leads, thereby significantly
increasing our customers’ marketing efficiency.
Our digital solutions help our customers reach their audience
faster and more efficiently. Winning new business is key, but
time consuming for our Agent customers; those customers
who buy our highest value Optimiser package, on average
win twice as many instructions as those who do not use
our solutions.
Our solutions for New Homes developers help them reach
almost every serious home buyer in the UK and also help them
target these buyers both on and off Rightmove. Based on our
deep knowledge of search habits we introduced ‘Active Display’
in 2018 to allow developers to re-target interested home
hunters within the Rightmove environment. Active Display has
increased the exposure of the properties our New Homes
customers are looking to promote by 50%. We have further
developed this in 2019 with Rightmove Active Extension (RAE).
RAE takes the learnings from Active Display and extends the
audience reach for our customers by allowing them to continue
their targeted advertising on websites beyond Rightmove.
We also help drive efficiencies within our Agent customers’
businesses by providing best in class software that delivers
data, market insight and analytical tools to help them inform
their decisions, with 90% of our Agent customers now using
our software each month.
Rightmove’s culture of restless innovation helps create more
efficiency opportunities for our customers. For example, as
part of the upgraded ‘Optimiser 2020’ package we launched
‘Opportunity Manager’. The new tool uncovers potential
sellers within the pool of buyers an agent already knows just
Rightmove plc annual report 2019 15
Financial statementsStrategic reportGovernance Strategic report | Operational key performance indicators
We use the metrics set out below to track our operational performance.
Number of advertisers
Average Revenue Per Advertiser (ARPA in £ per month)
21000
20000
19000
18000
17000
16000
15000
14000
13000
12000
19,752
20,121
20,427 20,454
19,809
2019 performance
-3%
Risks
1
2
3
2015
2016
2017
2018
2019
Source: Rightmove
Number of advertisers
Definition
The total number of paid for UK estate and lettings Agency
branches/branch equivalents and New Homes developer sites
advertising properties on Rightmove
Strategic link
The place consumers turn to first and engage with most, and
innovation to create a simpler and more efficient marketplace
922
842
754
1200
1000
800
600
400
200
0
1,088
1,005
2019 performance
+8%
Risks
1
2
3
2015
2016
2017
2018
2019
Source: Rightmove
Average revenue per advertiser
Definition
Revenue from Agency and New Homes advertisers in a given
month divided by the total number of advertisers during the
month, measured as a monthly average over the year
Strategic link
Unrivalled exposure, leads and products for our customers
Traffic (time on site measured in billions of minutes)
Employee engagement (%) – ‘Rightmove is a great place to work’
14
12
10
8
6
4
2
0
11.1
11.7
11.7
12.3
12.1
2019 performance
-1%
Risks
2
3
4
100
91
95
90
91
80
60
40
20
0
81
2019 performance
percentage
points
-10
Risks
5
2015
2016
2017
2018
2019
Source: Google Analytics
2015
2016
2017
2018
2019
Source: Rightmove
Traffic (time on site measured in ...
Definition
Total time measured in billions of minutes spent on Rightmove
platforms during the year
Strategic link
The place consumers turn to first and engage with most
Employee engagement
Definition
Based on the number of employee respondents selecting
‘Yes’ as a response to the question 'Rightmove is a great
place to work' in the annual employee survey
Strategic link
Build great teams with a culture to innovate
Risks relevant to our KPIs (read more on pages 23 to 25)
1 Macroeconomic environment
4 Cyber security and IT systems
2 Competitive environment
5 Securing and retaining the right talent
3 New or disruptive technologies and changing
consumer behaviours
16
rightmove.co.uk
Strategic report | Financial key performance indicators
We use the metrics set out below to track our financial performance.
Revenue £m
Underlying operating profit(1) £m
289.3
267.8
243.3
220.0
192.1
300
250
200
150
100
50
0
2015
2016
2017
2018
2019
Source: Rightmove
2019 performance
+8%
Risks
1 2 3 4 5
Revenue grew by 8% year on year to £289.3m
(2018: £267.8m)
184.4
166.2
144.3
250
200
150
100
50
0
219.7
203.3
2019 performance
+8%
Risks
1 2 3 4 5
2015
Source: Rightmove
2016
2017
2018
2019
Underlying operating profit(1) increased by 8% to £219.7m
(2018: £203.3m) with underlying operating margin(1) maintained
at 75.9%
Operating profit increased by 8% to £213.7m (2018: £198.6m)
with operating margin at 73.8% (2018: 74.3%)
Underlying basic EPS(2) (pence per ordinary share)
Cash returned to shareholders £m
22
20
18
16
14
12
10
16.3
14.3
12.1
20.2
18.3
2019 performance
+10%
Risks
1 2 3 4 5
2015
Source: Rightmove
2016
2017
2018
2019
Underlying basic EPS(2) increased by 10% to 20.2p (2018: 18.3p(3)).
Basic EPS grew by 10% to 19.6p (2018:17.8p(3))
168.5
148.8
140.4
131.3
112.5
180
135
90
45
0
2015
2016
Source: Rightmove
2017
2018
2019
2019 performance
-12%
Risks
1 2 3 4 5
During the year free cash flow was returned to shareholders in the
form of share buybacks and dividends with cash returns totalling
£148.8m (2018: £168.5m).
The slightly lower cash returns to shareholders reflect the fact that
we financed the acquisition of Van Mildert (net cash outflow £15.9m)
out of existing cash reserves and that we have ended the year with
a higher net cash balance of £36.3m (2018: £19.9m)
(1) Before share-based payments charge of £4.9m (2018: £4.3m) and NI charge of £1.1m (2018: £0.4m) on share-based incentives.
(2) Before share-based payments charge of £4.9m (2018: £4.3m) and NI charge of £1.1m (2018: £0.4m) on share-based incentives and no related adjustment for tax.
Rightmove plc annual report 2019 17
Financial statementsStrategic reportGovernance Strategic report | Financial review
The strength of the Rightmove subscription
business model was once again demonstrated
during 2019 with a robust financial performance,
despite the backdrop of Brexit and an uncertain
UK housing market.
Robyn Perriss
Finance Director
Revenue
Agency
New Homes
Other
Total revenue
2019
£m
209.3
55.5
24.5
289.3
2018
£m
201.0
46.2
20.6
267.8
Change
4%
20%
19%
8%
2019
2018
Change
We also continue to develop a number of adjacent businesses
which broaden our offering such as advertising overseas and
commercial properties and providing property-related data
and valuation services. In 2019 these business lines grew
strongly up 19% to £24.5m (2018: £20.6m), principally driven
by growth in our Commercial business which was up 29% year
on year to £7.1m due to strong growth in both the number of
commercial customers and the average revenue per
commercial customer.
Agency branches
New Homes developments
16,347
3,462
17,328
3,126
(6)%
11%
Total membership
at year end
19,809
20,454
(3)%
Overall revenue increased by 8% year on year to £289.3m.
Our Agency business, which is our largest business, grew by
£8.3m to £209.3m (2018: £201.0m). Revenue growth was
driven by upgrades to our product packages with penetration
of Enhanced and Optimiser product packages reaching
38% of Agency customers, together with membership
price increases.
Revenue by segment (%)
Revenue bridge (£m)
8
19
73
300
250
200
150
100
267.8
20.2
(2.6)
3.9
289.3
2018
ARPA
growth
Customer
growth
Other
growth
2019
The number of Agency offices ended 2019 down 6.0% at
16,347 (2018: 17,328). This was due to slightly tighter trading
conditions which resulted in a lengthening of transaction times
and cash flow issues for some smaller branches who typically
market a lower number of properties.
Revenue by segment (%)
Agency
New Homes
Other
Revenue bridge (£m)
8
19
Conversely slightly tighter housing market conditions
bring to the fore the strength of our New Homes proposition
with housebuilders marketing more of their stock on our
platforms and spending more on our suite of digital advertising
products to promote their developments. Strong growth
in development numbers, up 11% year on year to 3,462
73
developments (2018: 3,126) underpinned the record absolute
New Homes revenue growth of £9.3m year on year to £55.5m
(2018: £46.2m). Sales of additional advertising products were
also strong with developers spending a record £8.9m
(2018: £8.0m) on our digital marketing solutions.
New Homes
Other
Agency
300
250
200
150
100
267.8
20.2
(2.6)
3.9
289.3
2018
ARPA
growth
Customer
growth
Other
growth
2019
18
rightmove.co.uk
Underlying operating profit
Revenue
Underlying operating costs
Underlying operating profit
Share-based payments
NI on share-based incentives
Operating profit
2019
£m
289.3
(69.6)
219.7
(4.9)
(1.1)
213.7
2018
£m
267.8
(64.5)
203.3
(4.3)
(0.4)
198.6
Change
8%
8%
8%
(14%)
(175%)
8%
Underlying operating profit(1) increased by 8% to £219.7m
(2018: £203.3m) delivering an underlying operating margin(1)
of 75.9% in line with 2018, with the business continuing to have
a disciplined cost focus. Operating profit also increased by 8%
year on year to £213.7m (2018: £198.6m).
Underlying operating costs(1) increased by £5.1m to £69.6m
(2018: £64.5m). Of the increase, £3.1m related to salaries and
associated employee costs reflecting the full year impact of
the headcount increase during 2018, together with general
wage inflation. Costs also included £1.1m(2) relating to Van
Mildert since 30 September 2019 together with £0.3m of
acquisition related costs.
Underlying operating profit(1) is reported before share-based
payments, which are a significant non-cash charge driven by
a valuation model, and National Insurance on share-based
incentives, which is driven by reference to the Rightmove plc
share price and so subject to volatility, rather than operational
activity. The Directors have historically considered underlying
operating profit(1) to be the most appropriate indicator of the
performance of the business and year on year trends as
explained in Note 1 to the financial statements.
Share-based payments and National Insurance (NI)
In accordance with IFRS 2, a non-cash charge of £4.9m
(2018: £4.3m) is reflected in the income statement
representing the amortisation of the fair value of
share-based incentives granted.
NI is being accrued, where applicable, at a rate of 13.8%
on the potential employee gain on share-based incentives
granted. Based on a closing share price of £6.34 at 31
December 2019 in respect of the outstanding share-based
incentives granted, together with the realised NI cost on
share-based incentives exercised in the year, there was
a charge of £1.1m (2018: £0.4m) in the year.
Taxation and tax strategy
The consolidated effective tax rate for the year ended
31 December 2019 was 19.0% (2018: 19.1%) in line with
the UK enacted tax rate of 19.0%.
We are committed to being a responsible taxpayer acting
in a straightforward and open manner in all tax matters.
We recognise that our tax contribution supports public
services and the wider economy. We endeavour to manage
our tax affairs so that we pay and collect the right amount of
tax, at the right time, within the ambit of all applicable tax laws
and we take a conservative approach to tax risk.
This year we have again disclosed additional information in
respect of our total UK tax contribution for consistency and to
aid transparency in an area in which there remains significant
public interest. As was the case in prior years, the total amount
of taxes we pay and collect in the UK year on year is significantly
more than just the corporation tax which we pay on our UK
profits. Within the total, we again include other taxes paid such
as taxes on employment together with employee taxes and
other indirect taxes.
Rightmove’s total tax contribution to the UK Exchequer in
2019 was £106.8m (2018: £104.5m).
£43.3m (2018: £40.5m) related to taxes borne by the Group
while the remaining £63.5m (2018: £64.0m) was collected in
respect of payroll taxes and VAT. The increase in our total tax
contribution against prior year is primarily due to higher
corporation tax and VAT payments.
Taxes borne (%)
2
Taxes borne (%)
2
1
1
Taxes collected (%)
Taxes collected (%)
11
11
21
21
86
86
79
79
Corporation
Corporation
tax
tax
Business
Business
rates
rates
Employment
Employment
taxes
taxes
Stamp duty
Stamp duty
and other
and other
VAT
VAT
Employment
Employment
taxes
taxes
Rightmove plc annual report 2019 19
Financial statementsStrategic reportGovernance£213.6m£198.3m2019Profit before taxTax highlights 2018 to 2019Income tax expenseEffective tax rate2018£37.8m£40.5m19.0%19.1%
Strategic report | Financial review continued
Earnings per share (EPS)
Underlying basic EPS(3) increased by 10% to 20.2p
(2018: 18.3p). Basic EPS increased by 10% to 19.6p
(2018: 17.8p). Underlying basic EPS is considered to be more
representative of the operating performance of the business
and the year on year trends as share-based payments are
a non-cash charge and NI on share-based incentives is
subject to volatility based on the Rightmove plc share price.
A reconciliation between basic EPS and underlying basic
EPS is set out in Note 11.
The growth in EPS was mainly attributable to the increase
in profitability in the year together with the benefit of our
continued share buyback programme which reduced the
weighted average number of ordinary shares in issue to
884.4m (2018: 901.3m).
Acquisition of Van Mildert
On 30 June 2019 the Group acquired 100% of the ordinary
share capital of Van Mildert Landlord and Tenant Protection
Limited (Van Mildert), a business providing tenant references
and rent guarantee insurance to lettings agents and
landlords for total consideration of £18.3m comprising cash
consideration of £15.9m and contingent consideration
of £2.4m as set out in Note 27.
We have recognised a goodwill balance arising on acquisition
of £14.1m being intangible assets that are not separately
identifiable under IFRS 3, which has contributed to the year on
year increase in net assets recorded as set out in the balance
sheet alongside.
Balance sheet
Summary consolidated statement of financial position
2019
£m
12.8
Property, plant and equipment
21.9
Intangible assets
2.7
Deferred tax asset
24.0
Trade and other receivables
Contract assets
0.4
Cash and money market deposits 36.3
(19.5)
Trade and other payables
(2.1)
Contract liabilities
(12.2)
Lease liabilities
(0.9)
Deferred tax liability
(3.2)
Provisions
(18.9)
Income tax payable
Net assets
41.3
2018
£m
15.2
2.9
2.8
22.5
0.4
19.9
(18.1)
(2.1)
(13.0)
–
(1.1)
(16.8)
12.6
Change
£m
(2.4)
19.0
(0.1)
1.5
–
16.4
(1.4)
–
0.8
(0.9)
(2.1)
(2.1)
28.7
Rightmove’s balance sheet at 31 December 2019 shows total
equity of £41.3m (2018: £12.6m). The year on year increase
of £28.7m reflects both a higher year end cash and money
market deposit balance of £36.3m together with an increase
in intangible assets relating to the acquisition of Van Mildert
in September 2019.
Trade and other receivables increased by 7% year on year
which was slightly lower than the 8% growth in revenue,
reflecting strong cash collections in the year. Trade and other
payables increased by 8% due to the timing of accruals.
A deferred tax liability of £0.9m has been recognised in relation
to the acquisition of Van Mildert, relating to the recognition of
intangible assets on acquisition (refer to note 27).
Provisions increased by £2.1m primarily reflecting the
deferred contingent consideration of £2.4m in relation
to the Van Mildert acquisition.
20
rightmove.co.uk
Cash flow
Rightmove continues to see strong cash generation and to
return free cash generated to shareholders. Predictable cash
flows reflect the subscription nature of the business coupled
with low working capital requirements. Cash generated from
operating activities(4) was up 11% to £222.0m (2018: £200.4m)
and operating cash conversion was once again in excess of
100%.
Dividends
Consistent with our policy of growing dividends in line with the
increase in underlying EPS(3), the Directors are recommending
a final dividend of 4.4p (2018: 4.0p) per ordinary share, which
together with the interim dividend makes a total dividend for
the year of 7.2p (2018: 6.5p), an increase of 11%. The final
dividend, subject to shareholder approval, will be paid on
29 May 2020 to all shareholders on the register on 1 May 2020.
Robyn Perriss
Finance Director
28 February 2020
Tax payments were higher at £37.3m (2018: £32.8m)
reflecting the growth in taxable profits in the year.
Capital expenditure in the year was £0.8m (2018: £1.7m)
comprising hardware and software purchases. On
30 September 2019 we acquired Van Mildert for initial
net cash consideration of £15.9m.
Proceeds of £0.9m (2018: £0.6m) were received on the
exercise of share-based incentives and £2.1m (2018: £0.7m)
was applied to purchase shares to fund Rightmove employee
share plans.
During 2019, £88.6m was spent in the repurchase of our
own shares (2018: £113.5m) whilst a further £60.2m (2018:
£55.0m) was paid in dividends reflecting the increased final
dividend for 2018 and the 0.3p increase in the interim dividend
for 2019 to 2.8p. This brings the total cash returned to
shareholders in the year to £148.8m (2018: £168.5m).
As Rightmove has been a plc for more than 12 years, our cash
flows also reflect £0.3m in unclaimed dividends that were
returned to the Company in the year.
The closing Group cash and money market deposit balance
at the end of the year was £36.3m (2018: £19.9m).
(1) Before share-based payments charge of £4.9m (2018: £4.3m) and NI charge
of £1.1m (2018: £0.4m) on share-based incentives.
(2) Being costs incurred by the Van Mildert entity of £0.9m for the three months
to 31 December 2019 together with amortisation of intangibles of £0.2m.
(3) Before share-based payments charge of £4.9m (2018: £4.3m) and NI charge of
£1.1m (2018: £0.4m) on share-based incentives and no related adjustment for tax.
(4) Cash generated from operating activities of £222.0m compared to operating profit
as reported in the profit or loss of £213.7m.
Rightmove plc annual report 2019 21
Financial statementsStrategic reportGovernance Strategic report | Risk management
Approach to risk management and risk appetite
The Board has overall responsibility for determining the nature
and extent of the risk it is willing to take and for ensuring that
risks are effectively managed across the Group. The Group
operates a cautious approach to risk and its ‘risk appetite’ is
relatively low. The open culture which is embedded throughout
Rightmove is such that objective views are made when
assessing risks and internal controls, dialogue is encouraged,
and decisions are not made until risks have been appropriately
considered.
In determining its appetite for specific risks, the Board is guided
by three key principles:
1. Risks should be consistent with Rightmove’s core purpose,
financial objectives, strategy and values;
2. Risks should only be accepted where appropriate reward
is achievable on the basis of objective evidence and in a
manner that is consistent with Rightmove’s purpose,
strategy and values; and
3. Risks should be actively controlled and monitored through
the appropriate allocation of management and other
resources, underpinned by the maintenance of a healthy
business culture.
The primary method by which risks are monitored and
managed is through the monthly Executive Committee
meetings. The subject of risk is included on each monthly
agenda and any significant new risks or change in status to
existing significant risks is discussed and actions taken as
appropriate.
On a bi-annual basis, risk is reviewed by operational
management across each business area. This review includes
a detailed assessment of new and existing identified risks,
the likelihood of each risk occurring and the potential impact,
together with controls and mitigating procedures in place.
This information is combined to form a consolidated risk
register which is reported to the Executive Committee for
review and challenge, ahead of final review and approval by
the Board. The Board reviewed the risk register at both the
February 2019 and September 2019 Board meetings, with a
particular focus on the principal risks identified and any new
or emerging risks.
On 30 September 2019 the Group acquired Van Mildert, an
FCA regulated entity. Since acquisition the Audit Committee
has carefully considered any emerging risks and received
regular progress updates in relation to actions to strengthen
Van Mildert’s internal controls and compliance framework as it
transitions from being a small standalone entity to being part
of the larger Rightmove Group.
Risk management is reinforced by the Group’s continuous
process to design and embed strong internal controls across
the business as we grow, particularly in relation to other
business areas. The Group’s internal control framework is
aligned to a ’three lines of defence’ model. Operational
management is the organisation’s first line of defence as they
are primarily responsible for the direct management of risk and
ensuring that appropriate mitigating controls are in place and
that they are operating effectively. The second line is formed
by the Group’s internal compliance and oversight functions
such as company secretariat, finance, tax, treasury and legal.
The third line includes both internal and external audit reporting
to the Audit Committee.
The Audit Committee receives and analyses regular reports
from management and the outsourced internal audit function
on matters relating to risk and control and reviews the
timeliness and effectiveness of corrective action taken by
management. The Audit Committee on behalf of the Board
also considers the findings and recommendations of its
external auditor throughout the year in relation to the design
and implementation of effective financial controls. Further
detail of these activities are included within the Audit
Committee report on pages 56 to 57.
Risk management framework
Board/Audit Committee
Executive Committee
Risk register and risk review
Operational management
22
rightmove.co.uk
Internal controls
and compliance
External audit and
outsourced internal
audit activities
Strategic report | Principal risks and uncertainties
A description of the principal risks and uncertainties faced
by the Group in 2019, together with the potential impact
and monitoring and mitigating activities is set out in the
table below.
We recognise that the Group is exposed to risks wider than
those listed, however we have disclosed those that we
believe are likely to have the greatest impact on the Group
delivering its strategic objectives and those that have been
the subject of discussion at recent Board and Audit
Committee meetings.
Key risk and description
Impact
Changes in the year
Monitoring and mitigation
Change
from
prior year
1 Macroeconomic
environment
The Group derives almost
all its revenues from the
UK and is therefore
dependent on the
macroeconomic
conditions surrounding the
UK housing market and
consumer confidence
which impacts on property
transaction levels.
Specific considerations
resulting from the UK’s
decision to leave the EU
have been outlined on
page 26.
2 Competitive environment
The Group operates in a
competitive marketplace
with attractive margins
and low barriers to entry.
This may result in
increased competition
from existing competitors
or new entrants targeting
the Group’s primary
revenue markets.
Substantially fewer housing
transactions than the
norm may lead to a
reduction or consolidation
in the number of Agency
branches or a reduction in
the number of New Homes
developments advertised,
both of which are a major
determinant of the
Group’s revenue.
A more uncertain macro
and political environment
may also lead to a
lengthening of the typical
property transaction cycle,
resulting in cash flow
issues for smaller agents
with lower numbers of
properties.
In addition, a contraction in
the volume of transactions
in the UK housing market
could lead to a reduction in
advertisers’ marketing
budgets which could
reduce the demand for
the Group’s property
advertising products.
Increased competition may
impact on Rightmove’s
ability to grow revenue due
to the potential loss of:
• audience;
• advertisers; and
• demand for additional
advertising products.
Small increase in risk
Risk unchanged
(1) Source: HMRC transactions for the UK as published on 21 February 2020.
(2) Revenue from Agency and New Homes advertisers in a given month divided
by the total number of advertisers during the month, measured as a monthly
average over the year.
(3) Source: comScore, December 2019.
Housing transactions in 2019
were down 1.4% year on year
versus 2018 ending the year
at 1.2m(1).
Overall membership numbers
were down 3% since
December 2018, reflecting
a 6% reduction in Agency
branches offset to some
extent by an 11% growth in
New Homes developments.
ARPA was up £83 year on
year to £1,088(2), reflecting
continued adoption of our
suite of digital advertising
products, higher value
membership packages
and price rise activities.
• Monitoring of housing
market including leading
indicators and trends in
Rightmove membership.
• Continuing to provide the
most significant and
effective exposure for
customers’ brands and
properties, be the largest
source of high quality
leads and offer value-
adding products and
packages and help drive
operational efficiencies
for our customers,
thereby embedding the
value of our membership.
• Maintaining a flexible cost
base that can respond to
changing conditions.
Market share of the top four
property portals has seen a
small increase to 87%(3) with
Rightmove continuing to have
the largest and most engaged
audience of any UK property
portal.
• Communication of the
value of Rightmove
membership to
advertisers.
• Continued investment
in our account
management teams to
ensure we stay close to
our customers and local
markets and help our
customers run their
businesses more
efficiently.
• Sustained marketing
investment in the
Rightmove brand.
• Sustained investment
and innovation in serving
both home hunters and
our customers.
Rightmove plc annual report 2019 23
Financial statementsStrategic reportGovernance Strategic report | Principal risks and uncertainties continued
Key risk and description
Impact
Changes in the year
Monitoring and mitigation
Change
from
prior year
3 New or disruptive
technologies and
changing consumer
behaviours
Rightmove operates in a
fast-moving online
marketplace. Failure to
innovate or adopt new
technologies or failure to
adapt to changing
customer business
models and evolving
consumer behaviour may
impact the Group’s ability
to offer the best products
and services to its
advertisers and the best
consumer experience.
4 Cyber security and IT
systems
The Group has a high
dependency on
technology and internal
IT systems.
In today’s digital world
there are increased risks
associated with external
cyber attacks which could
result in unavailability
of our platforms.
A security breach such as
corruption or loss of key
data may disrupt the
efficiency and functioning
of the Group’s day to
day operations.
Failing to innovate may
impact on Rightmove’s
ability to grow revenue due
to the potential loss of:
• audience engagement;
• advertisers; and
• demand for additional
advertising products.
On 30 September 2019 we
completed the acquisition
of Van Mildert, providing a
foundation for further
innovation within our business
to make the lettings process
more efficient for tenants
and agents
• Continual improvements
to our platforms including
ongoing investment in
mobile and tablet
platforms.
• Developing our product
proposition to meet our
customers’ needs and
evolving business models.
• Large in-house
technology team with
culture of innovation.
• Ongoing monitoring of
consumer behaviour and
annual ‘Hackathons’ which
allow employees to spend
time during work hours to
develop their own online
property related ideas.
• Regular contact with the
start-up and prop-tech
communities to stay
abreast of innovations
in the marketplace.
Any loss of website
availability or theft or
misuse of data held within
the Group’s databases and
IT systems could result in:
• reputational damage to
the Group as a result of
loss of consumer and
customer confidence in
the Rightmove brand; and
• financial loss arising
from potential penalties
and fines.
During the year we have
further invested in protecting
rightmove.co.uk against the
risk of increasingly
sophisticated attacks such as
high-volume distributed denial
of service (DDoS) attacks.
We have also made significant
investments in a managed
threat detection service as well
as systems to help prevent
both accidental and malicious
data loss.
The constantly evolving threat
of a cyber attack means that
overall the risk level is
unchanged.
• Disaster Recovery and
Business Continuity Plans
in place, subject to regular
review and testing.
• Use of three data centres
to load balance and ensure
optimal performance and
business continuity
capability.
• Regular backups of
key data.
• Regular testing of the
security of the IT systems
and platforms including
penetration testing and
distributed denial of
service attack procedures.
• Ongoing investment in
security systems.
• Ongoing monitoring of
external threats through
updates from external
specialists and
collaboration with other
online organisations.
• Regular internal
security training and
‘spearphishing’ tests
to minimise risk of social
engineering attacks.
24
rightmove.co.uk
Key risk and description
Impact
Changes in the year
Monitoring and mitigation
Change
from
prior year
5 Securing and retaining
the right talent
Our continued success is
dependent on our ability
to attract, recruit, retain
and motivate our highly
skilled workforce.
The inability to recruit and
retain talented people
could impact our ability
to maintain our financial
performance and deliver
growth.
When key staff leave or
retire, there is a risk that
knowledge or competitive
advantage is lost.
• Ongoing succession
planning and development
of future leaders.
• Payment of competitive
reward, including a blend
of short and long-term
incentives for senior
management
• The ability for all
employees to participate
in the success of
the Group through the
SIP and SAYE schemes
• Regular staff
communication and
engagement
• Maintaining the culture
of the Group, which
generates significant
staff loyalty.
The Nomination Committee
continued its focus on Board
succession, with a new Chair
appointed with effect from
1 January 2020.
The Remuneration Committee
carried out a full review of
Rightmove’s Remuneration
Policy and consulted with
shareholders thereon.
In response to the changes to
the 2018 Corporate Governance
Code, our Non-Executive
Directors participated in a
programme of informal
employee engagement sessions,
before each Board meeting, to
share their own business
experience on a variety of topics
relevant to Rightmove, answer
employees’ questions raised in
the sessions and receive direct
feedback from employees about
their roles, the Rightmove culture
and what areas they’d like more
management focus in.
Early in 2019 we restructured our
sales account management
team and introduced a new
baseline for the skills, standards
and management processes in
the team to ensure the individual
account managers receive the
highest levels of management
support.
In Q4 the product and
technology team was
restructured to follow current
best practice.
This reorganisation also aligns
role responsibilities more closely
with market norms with the aim
of reducing friction in the
recruiting process.
This year we have seen some
decline in employee sentiment
with our ‘great place to work’
score falling below 90% for the
first time in several years. We are
never complacent about the
importance of acting on
colleagues’ feedback and we are
aware of some of the drivers for
these results, which include the
restructuring of our product
development team as we strive
to meet and exceed our
customers’ expectations.
Rightmove plc annual report 2019 25
Financial statementsStrategic reportGovernance Strategic report | The EU referendum
The result of the UK’s EU referendum in 2016 increased the
level of macroeconomic uncertainty and could increase the
likelihood of the housing market macroeconomic risks set out
on page 23. During 2019 the Board has continued to assess
the impact of the EU referendum result in relation to the
broader housing market, transaction levels and our customer
base and has concluded that there has been no material
change to the severity of this risk. In particular, the Directors
considered the following:
• The Rightmove business is largely subscription based and is
therefore less susceptible to short-term shocks or variations
in the property market or wider economy;
• Around two-thirds of our Agency customers also provide
lettings services which may mitigate the impact of any
downturn in the property market on their business; and
• A reduction in housing market activity increases the
propensity for advertisers to evaluate their marketing spend
both offline and on other portals and we remain confident
in the strength of the Rightmove value proposition.
The Directors believe that our strong market position and
relationships with our customers, and the value embedded
in our membership continue to position us well providing
that housing transaction volumes do not take a sharp
downward turn.
In relation to both our cost base and day to day operational
issues we perceive the potential impact on Rightmove of
ongoing Brexit negotiations to be low as:
• We are a UK domiciled business with very little interaction
with EU customers or suppliers;
• None of our employees will lose the right to stay in the UK;
we currently employ 22 EU nationals; and
• We purchased less than £500,000 in supplies from EU based
suppliers in 2019. The impact of further depreciation of
Sterling versus the US Dollar in relation to licence costs is
also not considered to be material.
Our balance sheet philosophy to date has been to maintain a
simple debt-free position, which we believe is a strength as we
have no debt-refinancing or interest-related Brexit risks.
Strategic report | Viability statement
In accordance with the Code, the Directors have assessed the
viability of the Group over a three-year period, taking into
account the Group’s current position and the potential impact
of the principal risks and uncertainties set out on pages 23 to
25. Based upon the robust assessment of the principal risks
facing the Group, including those that would threaten its
business model, future performance, solvency or liquidity, the
Directors have a reasonable expectation that the Group and
the Company will be able to continue in operation and meet
its liabilities as they fall due over the three-year period to
31 December 2022.
The Directors have determined that a three-year period to
31 December 2022 constitutes an appropriate period over
which to provide its viability statement, as the Group operates
within an online digital marketplace, and projections looking
out further than three years become significantly less
meaningful in the context of the fast moving nature of the
market. Three years is also the period considered under the
Group’s current three-year strategic plan. The three-year plan
is reviewed by the Board and is developed on a segment by
segment basis using a bottom up model. The three-year plan
makes certain assumptions about Agency and New Homes
customer numbers, ARPA growth and Other revenue streams
and considers the Group’s cost base, profitability, cash flows
and dividend cover over the period.
The plan is subject to robust downside sensitivity analysis
which involves flexing a number of the main assumptions
underlying the plan. Where appropriate, analysis is carried
out to evaluate the potential financial impact over the period
of the Group’s principal risks actually occurring. Specific
scenarios that have been modelled include downside
scenarios in relation to the key drivers of revenue being
customer numbers and ARPA together with the impact of a
plausible combination of these scenarios. Furthermore, our
business model is structured so that the Group is not overly
reliant on a concentrated customer base with no single
customer constituting more than 2.5% of Group revenue.
Our high margin levels together with significant free cash
flow generation and our ability to adjust our discretionary
share buyback programme provide long-term comfort
around viability in the face of adverse economic or
competitive conditions.
Whilst this review does not consider all the risks that the Group
may face, the Directors consider that this stress-testing based
assessment of the Group’s prospects is reasonable in the
circumstances of the inherent uncertainty involved.
26
rightmove.co.uk
Strategic report | Working with our stakeholders
Here we explain how the Directors have fulfilled their duty to
promote the success of the Company, under Section 172 of the
Companies Act 2006 (the Act), and considered the interests of
Rightmove’s key stakeholders when making decisions.
and consumers through our talented and committed
employees and close working relationships with suppliers,
providing benefits to both the wider UK property market and
our shareholders.
Rightmove has a clear purpose which is to make home
moving easier in the UK, by bringing together the largest
property audience of home hunters with the UK’s largest
inventory of properties.
Rightmove aims to be a company in which people want to invest,
which consumers and customers use as their property portal
destination of choice, with which people want to partner and for
which people want to work. This requires the Board, senior
leadership team and other employees to maintain an approach
to strategic, financial and operational decision making that is
values based and sustainable in approach, and therefore aligned
to the requirements and expectations of Section 172.
Our long-term business success relies upon delivering an
efficient, innovative and sustainable service to our customers
We are passionate about innovating our platforms to provide
the best consumer property search experience and with the
recent addition of Van Mildert we have started our journey to
make renting faster and easier. We have the opportunity
through these initiatives to further reduce the carbon footprint
of our customers and home hunters, make a positive impact
on the environment and growing a sustainable business.
Business decisions are made with the needs of our key
stakeholders in mind, in particular Rightmove’s customers,
consumers, employees, suppliers, investors and regulators.
Our strategy for each of these stakeholder groups, how we
engage or manage our relationship with them and some of
the Board and Committee decisions that demonstrate those
principles are set out below.
Shareholders
We have long-standing relationships with our largest shareholders; indeed,
many have owned Rightmove shares since the Company’s IPO in 2006.
Currently our top 10 shareholders own over 45% of shares in issue and we
have a good geographic split in the register with 53% held in the UK,
35% held in North America and 12% in the rest of the world.
Rightmove’s shareholders own the Company and expect to earn
a return on their investment.
Strategy
Engagement
Our strategy is one of
sustainable, long-term growth
and shareholder returns through
successful delivery of our
business strategy.
We are committed to maintaining
constructive dialogue with
shareholders and engage with
them regularly to understand
their perspectives and ensure
these are considered in our
decision making.
During 2019 we engaged directly
with our investors over
Rightmove’s full year and interim
results, executive remuneration
and our Board succession plans.
The Executive Directors maintain
an “open door” policy for current
and potential investors to meet in
Rightmove offices beyond the
regular results calendar.
Board and Committee decisions
• The Remuneration Committee
– consulted major shareholders about proposed changes to the
Remuneration Policy, which are designed to meet investors’
requirements for fair rewards and benefits linked to the wider
workforce (page 71 of the Directors’ Remuneration Report)
– reviewed and approved challenging financial and operational
targets for the 2019 bonus plan and Performance Share Plan to
align directors’ rewards with shareholder interests (pages 80 to 81
of the Directors’ Remuneration Report)
• The Board approved the capital management policy which is to
return all excess free cash flow to shareholders and reviewed the
allocation of cash returned through dividends and our share buyback
programme in the light of shareholders preferences (page 21 of the
Financial Review)
• The Nomination Committee focussed on the Board and business
succession plan which is key to delivering the business strategy and
value to shareholders, consulting shareholders on the Chair’s
succession plan
• The Board reviewed and endorsed a governance framework and
Company policies that meet the high standards expected of a listed
company (page 41 of the Corporate Governance Report)
Rightmove plc annual report 2019 27
Financial statementsStrategic reportGovernance
Strategic report | Working with our stakeholders continued
Customers
Our customers are principally estate agents and new home developers
who advertise properties for sale or to rent on Rightmove platforms.
Board and Committee decisions
Strategy
Engagement
Our strategy is to provide our
customers with the best
platforms to promote their
services and support them with
innovative products, market
intelligence tools and training to
achieve their business
objectives.
We actively seek to understand
and respond to our customers’
business requirements by
engaging regularly with them
through our account
management and customer
experience teams, customer
events and training.
• The strategic plan was approved by the Board in the year and
provides for:
– growth in the account management and product development
teams, to better support and meet our customers’ requirements
– more customer choice in the packages and product mix they can
choose to support their business objectives
– investment in new and improved tools and products, such as the
Best Price Guide and Sold by Me to enable customers to promote
their success and win instructions from potential home sellers
• The Board approved a cyber risk plan and supported further
investment in cyber-attack detection and prevention tools to
safeguard the reliability and resilience of Rightmove’s platforms
(pages 25 to 26 Principle Risks and Uncertainties)
Consumers
Our consumers are home hunters, home sellers and researchers who
visited Rightmove over 1.6 billion times in 2019 spending on average
a total of a billion minutes on the Rightmove platforms each month.
Strategy engagement
Engagement
Our strategy is to provide the
largest and best quality online
marketplace for property buyers,
home sellers and landlords
together with market intelligence
and research tools and advice to
help make home moving easier.
We engaged with consumers
directly through our consumer
support and marketing teams,
receiving feedback and responding
to consumer enquiries and
concerns about property
advertisements, data protection
and staying safe online.
Board and Committee decisions
• The Board approved the strategic plan which provides for:
– investment in our data quality systems to ensure the accuracy of
property data advertised on Rightmove
– increased investment in product development to provide
improved search facilities and enable the consumer experience to
be more intuitive and tailored to individual requirements
• The Board and its Committees received regular updates on data
quality and data protection matters and considers data privacy when
approving new systems or products that use consumers’ personal
data. The monthly management report includes data protection
statistics and trends
• The Audit Committee requested an internal audit review of data
protection to give the Board assurance that Rightmove’s policy and
processes protect consumers’ data
• The Board approved the acquisition of Van Mildert Landlord and
Tenant Protection Limited as part of Rightmove’s strategy to
improve the tenant referencing experience
28
rightmove.co.uk
Employees
Rightmove directly employs just under 600 people across the UK, based out
of offices in London, Milton Keynes and Newcastle. Rightmove’s long-term
success depends on the shared talent, skills and values of its employees.
Strategy
Engagement
Our strategy is to make Rightmove
a great place to work through an
open, collaborative culture and
based on the belief that ‘we are all in
it together’. Rightmove aims to be a
supportive and inclusive employer
with a diverse workforce.
The Board participated in a
programme of employee
engagement sessions through
the year gaining direct feedback
from our teams and received
feedback via management,
including the ‘Have Your Say’
survey results.
Suppliers
Rightmove works closely with our larger suppliers, principally in relation to the
provision of technology, marketing, recruitment and professional services.
Rightmove aims to build strong relationships with suppliers so it can
successfully deliver projects whilst maximising cost efficiencies and
enhancing outcomes.
Strategy
Engagement
Our strategy is to select suppliers
who meet our ethical standards,
can deliver excellent service, pay
them promptly and work closely to
ensure close alignment of interests.
We engage with suppliers before
entering into agreements, regularly
throughout the contract period and
on renewal.
Regulators and industry bodies
Rightmove is regulated by the Information Commissioner’s Office for data
protection and the FCA for some credit referencing and rent guarantee
insurance services. We work with professional property organisations
including The Property Ombudsman and ARLA Property Mark to support
our customers in meeting all relevant regulations and codes of best practice.
Strategy
Engagement
Our strategy is to work with our
regulators and professional
bodies to meet the Group’s
regulatory responsibilities and
help our customers comply with
their responsibilities to ensure
our platforms offer a safe and
transparent market for
consumers.
We engage with regulators and
professional bodies through
regulatory reporting and direct
consultation on emerging trends,
new legislation and best practice
solutions for our customers and
consumers.
Board and Committee decisions
• In response to direct employee feedback, our Non-Executive Directors
challenged management to increase investment in internal systems,
including robotics, as appropriate to further automate and improve
Rightmove’s finance, communications and data quality systems
• The Nomination Committee approved the Board and senior
leadership team succession plan (page 59 of the Nomination
Committee Report)
• The Remuneration Committee considered the framework for
employee remuneration and proposed alignment of Executive
Directors’ benefits and pensions with the wider workforce
(page 71 of the Directors’ Remuneration Report)
• The Board approved the implementation of the Real Living Wage for all
Group employees and contract staff who work regularly at Rightmove
offices (page 36 of the Corporate Responsibility Report)
• The Nomination Committee received an update on Rightmove’s
Gender Pay Gap and actions to continue to close the gap
(pages 32 to 33 of the Corporate Responsibility Report)
Board and Committee decisions
• The Audit Committee requested a review of Rightmove’s supplier risk
management framework, which has resulted in the implementation of
an enhanced procurement policy in relation to key areas of spend or risk
• The Board endorsed the Payment Practices Report and the prompt
payment of suppliers
Board and Committee decisions
• The Board considered the impact of the Tenant Fee Ban on our
UK lettings agent customers and supported the development of
customer tools and products to improve letting agents’ efficiency
• The Board is updated on emerging consumer trends and lobbying
from consumer groups, and supports Rightmove’s work with National
Trading Standards and professional bodies to reach practical solutions
that are fair to our customers and consumers for example, we issued
guidance to our customers to remove ‘No DSS’ from lettings
advertisements
• The Board approved Business Plan for 2019 provided for significant
investment in people and systems focussed on fraud prevention and
data protection
• The Board approved the Business Plan recommendation to further
automate our data quality processes to improve the accuracy and
transparency of data on Rightmove platforms and support our
customers in meeting regulatory and best practice standards
Rightmove plc annual report 2019 29
Financial statementsStrategic reportGovernance
Strategic report | Corporate responsibility
Corporate responsibility at a glance
Rightmove is committed to being a responsible
corporate member of society and we believe that our
approach to our employees, our marketplace (customers
and consumers), the environment and wider society
supports Rightmove’s success.
At the heart of everything we do are the Rightmove
Hows, the essential values and behaviours our
employees exemplify, which reflect our culture and
benefit both the business and the wider communities
in which we operate.
Making a difference to our
employees in the workplace
Recruiting the people with the
right skills, capability and
experience to build our business
and embrace the ‘Hows’ is
essential to our business plan.
Being a trusted marketplace
Rightmove is the largest property
portal in the UK, advertising
900,000 properties for sale or to
rent on behalf of estate agents
and new homes developers,
who pay to advertise their
properties across our platforms.
Making a difference to
our communities
In 2019 we continued with the
second year of our charitable
fundraising initiative ‘On The
Move’, which aims to raise funds
and awareness for charitable
causes by connecting people
particularly in our home town
of Milton Keynes.
Making a difference to
our environment
Rightmove’s purpose is to make
home moving in the UK easier
and in doing so, we will innovate
to help our consumers and
customers use technology
to save time and resources,
reducing their environmental
impact and carbon footprint.
The Hows
Do the right thing for consumers and customers
Build great teams because Rightmove is people
Be curious and go out of your way to understand
Share honestly, early and often
Take responsibility and make things that matter happen
Make complex things as simple as possible
Drive improvement, we can always be better
Dare to do, be bold. Don’t be afraid of mistakes
you can learn from
Be approachable and appreciate what others do
Enjoy the journey, be part of it
At the heart of everything we do is Rightmove’s open,
innovative and supportive culture, which emulates the Board
and senior leadership team. Our culture has been shaped by
our values, the Rightmove ‘hows’, which support our fast-
paced, customer-oriented business and benefit the business
and the wider communities in which we operate.
Rightmove acquired Van Mildert Landlord and Tenant
Protection Limited (Van Mildert) on 30 September 2019.
Beyond being a good strategic fit, the Van Mildert team stood
out for their entrepreneurial culture and for having many
shared values with the core Rightmove business. We intend for
Van Mildert to retain its own identity within the Group whilst
sharing the most appropriate practices described below. To be
clear, any reference in the body of this report to Group includes
both Rightmove and Van Mildert; where we have referred to
Rightmove, this relates to Rightmove Group Limited
employees and practices only; references to the Board are
to the board of Directors of Rightmove plc.
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Making a difference to our
employees in the workplace
A great place to work
Our people (Rightmovers) bring great talent, energy and
experience to the business and are vital to Rightmove’s
success. Making Rightmove a great place to work is a
management objective and recognises that Rightmovers
are our most valued asset.
Recruitment
Recruiting the people with the right skills, capability and
experience to build our business and embrace the ‘hows’ is
essential to our business plan. The market for individuals with
technology and customer-centric skills is highly competitive.
We are strongly focussed on maintaining a happy, supportive
working environment and providing a comprehensive range of
benefits to attract and retain the best people.
Rightmove’s success and culture relies on the long-term
commitment from Rightmovers and we are proud that 74
people (12% of Rightmove employees) have celebrated ten or
more years’ service.
Referrals from existing employees continue to be a valuable
source of new recruits, typically ensuring a higher quality
candidate with a better cultural fit. In 2019, 11 new employees
were introduced to Rightmove by an existing employee.
Equality and diversity
Rightmove’s continued success relies on people having a wide
range of experience and skills to help bring different
perspectives and promote innovation and constructive
challenge. Rightmove’s large consumer audience of home-
hunters and wide variety of customers expect excellence from
the Rightmove platforms and we need an equally wide variety
of skills and personal perspectives to meet that demand and
create value for our stakeholders.
Rightmove is committed to equal opportunities in all of our
employment policies and practices. Our recruitment and
selection processes focus on selecting the best candidate for
each role, regardless of their age, gender, ethnicity, sexuality
or disability.
The Board continues to focus on succession planning and
developing diversity and potential within the senior leadership
team. Our policy is to recruit and promote individuals on merit,
based on the skills and experience required for each role, with
an objective of achieving as near gender parity as possible on
the Board and in the wider workforce.
We note the Parker Review recommendation for all FTSE 100
Boards to have at least one Director from an ethnically diverse
background by 2021, and are pleased to confirm that
Rightmove is ahead of this target with three out of eight
(37%) Directors from ethnically diverse backgrounds as at
31 December 2019.
As at 31 December 2019, female employees made up 39%
(2018: 36%) of the Rightmove senior leadership team(1).
The Board is keen to strengthen female representation in
senior roles and has been a contributor to the Hampton-
Alexander Review, a Government sponsored initiative which
aims to increase female leadership within the FTSE 350.
Rightmove met its Hampton-Alexander Review target of
33% female leadership by 2019, ahead of schedule.
Average headcount
This year we were pleased to announce the
acquisition of Van Mildert, which resulted in
an increase in average headcount.
469
479
495
538
412
We continue to attract
the right people
The Van Mildert team stood out
for their entrepreneurial culture
and for having many shared values
with the Rightmove business.
Rightmove plc annual report 2019 31
Financial statementsStrategic reportGovernance Strategic report | Corporate responsibility continued
Our commitment to gender equality starts from our
leadership. We are proud that, as a listed company, 50% of the
Board consists of female Directors, with equal representation
at an Executive Director level, making our Board amongst the
best-balanced in the FTSE 100. This combined with our strong
female leadership team representation resulted in Rightmove
being placed second in the 2019 Hampton-Alexander FTSE
100 Women Leaders table.
A breakdown by gender of the number of Directors and
employees as at 31 December 2019 by various classifications
as required by the Companies Act 2006, is set out below:
Directors
Hampton-Alexander(1)
4
4
17
27
Female (50%)
Male (50%)
Female (39%)
Male (61%)
Directors
Hampton-Alexander(1)
Senior Leadership Team(2)
All Rightmove Employees
Gender pay
Rightmove has published its gender pay gap report for
Rightmove employees, based on data as at April 2019, and we
have seen a modest improvement in our mean gender pay
gap of 0.6% year on year. We have continued to take actions
towards closing our pay gap and remain committed to a
number of longer term actions, many of which are already well
underway, and we believe will start to have a positive impact in
2020 and beyond. Full details can be found on the Company’s
website at plc.rightmove.co.uk.
All Rightmove Employees
Rightmove employees are paid equally for working in the same
jobs and we are pleased to report that men and women are
Senior Leadership Team(2)
almost equally represented in our wider workforce. The main
contributor to Rightmove’s gender pay gap is the mix in
Rightmove communities comprising the highest and lowest
quartile salaries. Women are under-represented in the higher
paid senior management and technology teams and men are
294
under-represented in the customer experience teams.
305
16
26
Below is our gender pay gap as at April 2019 and a description
of some of the initiatives we have implemented to improve our
gender balance going forward.
Female (49%)
Female (38%)
Male (51%)
Male (62%)
Difference between male and female pay
2019
Mean Median
2018
Mean Median
Difference in hourly
rate of pay(1)
27.6%
37.7%
28.2%
36.4%
4
4
17
27
16
26
305
294
Difference in bonus pay(2)
76.9%
54.5%
63.8%
45.6%
Female (50%)
Male (50%)
Female (39%)
Male (61%)
Female (38%)
Male (62%)
Female (49%)
Male (51%)
(1) The Hampton-Alexander cohort comprises members of the Executive
Committee and their direct reports.
(2) The senior leadership team comprises the Hampton-Alexander cohort,
excluding the Executive Directors.
(1) Calculated using Rightmove Group Limited pay data from April 2019.
(2) Calculated using 12 months of Rightmove Group Limited bonus pay data to
5 April 2019. The bonus gap has increased in this period as there were several
male employees who either exercised share options for the first time or
exercised twice in this period (having not exercised in the previous one).
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We work hard to create an environment where men and
women have the opportunity to build careers throughout the
business and believe that our open, collaborative culture is key
to that objective. We are committed to a number of actions to
balance our teams in a fair and transparent way, including:
Employees with disabilities
Rightmove is committed to its policy of giving full and fair
consideration to people with disabilities for all vacancies.
We continue to support and retain employees who become
disabled during their employment with us.
Balance for all
Addressing imbalance
• Offering a range of family-
friendly and agile working
policies to both men and
women. These include
workshops to women
before, during and after
maternity leave to help us
retain talent. We also offer
workshops to all employees
to help consider how best to
balance work and family life.
• We have successfully
delivered a ‘Thoughtful
Leadership’ programme to
tackle both conscious and
unconscious bias and have
launched a follow-up
programme to enhance the
learning (detailed in the
development and training
section).
• To support our commitment
to providing a diverse
thought culture we have
hosted a series of
‘Mentoring Circles’ with
external keynote speakers
(detailed in the
development and training
section).
• We are participants in the
30% Club cross company
mentoring programme. This
supports our aim to bring
more talent diversity into
senior manager roles. We have
eight females participating
from varying career stages.
We match this with an
equivalent number of mentors
from our senior leadership
team to mentees from other
participating organisations.
• We continuously review all
job specifications and our
interview process to ensure
universal appeal and fair
progression for all to ensure
we attract the best talent.
• We ask our recruiting partners
to provide for a 50/50 shortlist
at candidate stage. Where this
is not possible, we seek to
understand how it can be
achieved. We aim for 50/50
gender representation
through the interview process.
• Our internal talent pipeline
provided role changes and
promotion opportunities for
43 people between April 2018
and April 2019, with 42% of
these being female.
People development and training
We invest in extensive training and leadership programmes,
designed to equip Rightmovers with all the necessary skills to
provide exceptional service to our customers and consumers.
All new Rightmove employees are introduced to the business
and our customers by attending two ‘How Rightmove fits
together’ courses based at our Milton Keynes and London
offices. They also attend an off-site, residential induction
course to reinforce Rightmove’s culture and values.
Our employees have different learning styles and we tailor
training opportunities to individual requirements in both
technical and non-technical skills. Our training programmes
include workshops, on the job training, attendance at
conferences, coaching and mentoring, online learning and
professional qualifications.
In 2019, everyone with line management responsibilities
attended an externally facilitated 'Thoughtful Leadership' course
to help them recognise unconscious bias and support fairness
and equality in our culture. We are implementing a follow-up
programme for managers responsible for significant numbers of
Rightmovers to help maintain and embed learning and
momentum and to ensure that those with the greatest influence
over our culture are the best equipped to be role models of
behaviour and values. We recognise that the unconscious bias of
peers can have a negative impact on the working environment
and we are launching a continuation of the ‘Thoughtful
Leadership’ programme called ‘Thoughtful Culture’ which will be
attended by all employees in 2020 to support a truly connected,
thoughtful and inclusive environment.
A diverse workforce
We work hard to create an environment
in which men and women are almost
equally represented in the workforce.
51%
Male
49%
Female
Rightmove plc annual report 2019 33
Financial statementsStrategic reportGovernance Strategic report | Corporate responsibility continued
As part of our commitment to a diverse and thoughtful culture,
we have hosted a series of ‘Mentoring Circles’ for Rightmove
employees with external keynote speakers who provided
stimulus for insightful discussion. Speakers came from a
variety of sports and business backgrounds, and covered
topics including resilience, wellbeing, creativity and innovation.
Wherever possible, we offer Rightmovers the opportunity
to apply for new roles before advertising them outside
Rightmove. In 2019, 43 Rightmove employees were promoted
into new roles, often from our customer experience team
joining our technology teams in a variety of technical roles.
Following the acquisition Van Mildert employees received data
protection and information security training in addition to their
ongoing regulatory and business specific training.
Employee benefits
Whilst we believe that being a great place to work helps us
retain the best talent, we also offer a comprehensive range
of competitive benefits to our employees.
Rightmove provides a group stakeholder pension plan, under
which Rightmove employees can contribute 3% or more of
their salary and Rightmove contributes 6%. Opt-out rates
for the Rightmove pension are low with 89% of employees
currently members of the pension plan. Van Mildert employees
can opt into a NEST pension scheme with a 71% take up rate.
We also offer private healthcare and a cash plan scheme for
all Rightmove employees’ medical needs.
We want Rightmovers to benefit directly from their
contribution to Rightmove’s success and offer two all-
employee share plans. Every Rightmove employee can join
the Group’s Save As You Earn Scheme (Sharesave), which
allows employees to save money from their salary with the
option to purchase shares at a discount after three years.
Over 54% of Rightmove employees currently participate in
Sharesave and many have benefitted from the strong share
price growth over recent years.
Every eligible Rightmove employee received a Free Share
award of 450 shares under the Share Incentive Plan (SIP)
in December 2019. Over 82% of Rightmove employees
participate in the SIP and can sell their shares, subject to tax,
after three years. In January 2019, the SIP free share award
became available for Rightmove employees to sell, allowing
them to benefit from the increase in the value of their award
since January 2016.
The Group supports flexible working arrangements, part-time
working and reduced hours to allow our employees to balance
their home and work commitments. Under the flexible holiday
scheme, Rightmove employees can buy or sell up to five days
(or the part-time equivalent) of holiday each year to suit their
personal circumstances. The scheme is popular, with 24% of
Rightmove employees taking advantage of buying or selling
holiday in 2019.
Wider workforce engagement
The Board discussed its approach to employee engagement
at the beginning of the year and the methods of employee
representation recommended in the 2018 Corporate
Governance Code (Code). The Directors considered the
relatively small, simple structure and geography of Rightmove’s
workforce, and their collective responsibility to preserve and
encourage the open, supportive culture that is key to the
Group‘s success. It was agreed that an alternative, tailored
approach to the methods set out in the Code would be
appropriate for Rightmove and all Non-Executive Directors
(NEDs) should be involved in a series of engagement sessions
with Rightmove teams to gain direct feedback from employees.
Throughout 2019, our NEDs participated in a programme of
informal employee engagement sessions, before each Board
meeting, to share their own business experience on a variety
of topics relevant to Rightmove, answer employees’ questions
raised in the sessions and receive direct feedback from
employees about their roles, the Rightmove culture and
which areas they would like more management focus in.
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The key messages and insights from these sessions have
supplemented our NEDs' understanding of the challenges
and opportunities facing Rightmove and informed some of
the Board’s decision making, particularly in management
recommendations to explore further automation in highly
manual and routine processes and to expand our customer
facing teams to provide even greater customer contact. The
engagement sessions have been well received by colleagues
in our London and Milton Keynes offices and the programme
will continue to evolve and expand to include a variety of
engagement activities for our Chairman, NEDs and employees
throughout 2020.
Employee engagement and feedback is also encouraged
through regular business updates from our Executive
Directors and senior leadership team, including town halls,
Company days and conferences. The Rightmove ‘hows’ form
the basis for an employee recognition scheme, which allows
Rightmovers to thank and commend colleagues for how
they work not just for what they achieve. Every month, we
focus on one of the Rightmove ‘hows’ and employees have
the opportunity to recognise colleagues demonstrating these
behaviours.
We conduct a bi-annual ‘Have your Say’ people survey to
gauge how Rightmove employees feel about working for
the Company. The survey results are followed up by every
manager, supported by our people and development team.
We are never complacent about the importance of acting on
colleagues’ feedback and this year have seen some decline in
employee sentiment with our ‘great place to work’ score falling
below 90% for the first time in several years. We are aware of
some of the drivers for these results, which include significant
changes to the restructuring of our product development
team and our sales force resulting in higher staff turnover as
we strive to meet and exceed our customers’ expectations.
We are proud that many underlying indicators of employee
sentiment remain strong, including:
• 81% of respondents think Rightmove is a great place to work;
• 88% of respondents enjoy working in their team; and
• 87% of respondents are proud to tell people they work
for Rightmove.
An employee satisfaction target will again form part of the
senior management bonus criteria in 2020, demonstrating
the importance of employee engagement to the continuing
success of Rightmove. No payout has been earned for 2019
as the results were below the high 90% threshold.
Being a trusted
marketplace
Rightmove is the largest property portal in the UK, advertising
900,000 properties for sale or to rent on behalf of estate
agents and new homes developers, who pay to advertise their
properties across our platforms. We carry out vetting checks
on all Rightmove customers to ensure they can meet all
relevant regulations and best practice standards before we
allow them to advertise on Rightmove.
It is important to our consumer audience and customers that
property adverts displayed on Rightmove are accurate and
genuine. In 2019, we implemented a comprehensive,
automatic detection system to identify any anomalous images
or text uploaded to Rightmove in any property advert. This has
allowed us to work very quickly with our customers to rectify
property listings and remove misleading or incorrect images
and property descriptions. Our dedicated data quality team
has continued to grow and investigates any misleading or
inaccurate adverts that are discovered or reported.
In 2019, the Tenant Fees Act, and equivalent legislation,
came into force in England and Wales. These statutes provide
additional protection for tenants, banning lettings agents from
charging tenants unpermitted payments and requiring agents
to disclose details of their redress and client money protection
schemes on Rightmove and other property websites.
We provided the technology and support for our agency
customers to comply with the new legislation and our data
quality team continues to support our customers in
compliance with the new regulations.
All Rightmove (and in future Group) employees undergo annual
training and awareness on fraud, anti-bribery, the corporate
criminal offence of facilitating tax evasion, data protection and
information security to ensure they remain up to date and alert
to unethical practices and potential risks to our consumers or
customers. We have continued to update the dedicated safety
and security section on our website and our customer hub,
which are designed to help consumers stay safe and avoid
fraud when searching for their next home online, and to
provide online security advice to our customers.
Rightmove plc annual report 2019 35
Financial statementsStrategic reportGovernance Strategic report | Corporate responsibility continued
Protecting customer and consumer data
Protecting customer and consumer data is of paramount
importance to Rightmove. We have continued to invest heavily
in data security and protection, and our fraud prevention,
data protection and information security teams work vigilantly
to ensure that the data Rightmove processes is secure and
that we comply with data protection legislation. We have
reassessed and undertaken internal audits of our cyber
security and consumer data protection provisions and
continue to review and strengthen our policies and processes
in line with legislation and to meet new threats and challenges
facing all online businesses.
Anti-bribery and corruption
We will not tolerate any form of bribery and corruption within
our business and/or in any dealings with our customers,
suppliers and other third parties we deal with in the course of
our business. We will not conduct business with any service
provider, customer or supplier which does not meet the
principles of our Anti-Bribery Policy, which can be found on
our website plc.rightmove.co.uk.
Human rights including modern slavery
Rightmove has a framework of policies and statements that
adhere to internationally recognised human rights principles,
covering equal opportunities, dignity at work, disability,
anti-slavery and anti-bribery.
Rightmove is committed to preventing slavery and human
trafficking in its business and supply chains. We require the
highest standards of honesty and integrity in all our business
dealings and relationships and will not tolerate the
mistreatment of people in our employment and, wherever
possible, employed in our supply chain. Our Modern Slavery Act
Statement can be found on our website plc.rightmove.co.uk.
All Rightmove employees have historically been paid in excess
of the Real Living Wage and, following a review in 2019 of both
Van Mildert employees and contractors who regularly work in
our offices, the Rightmove Group has been accredited as a
Living Wage employer from January 2020.
Whistleblowing
At Rightmove, we follow clear and transparent business
practices and strive to apply high ethical standards in all our
business dealings. We believe this contributes to a fairer and
honest marketplace where customers and consumers know
that we can be trusted. Rightmove operates an anonymous,
independent whistleblowing facility and Van Mildert has an
internal reporting facility for employees if they suspect
anything inappropriate or experience any serious
misconduct or wrongdoing in our business.
Making a difference to
our communities
In 2019 we continued with the second year of our charitable
fundraising initiative ‘On The Move’, which aims to raise funds
and awareness for charitable causes by connecting people
particularly in our home town of Milton Keynes.
During the year we supported local charity Winter Night Shelter
and national charity Meningitis Now. We broadened the reach
of the campaign and invited members of the local community
to join us to run and raise money for these two charitable
causes. Over ten thousand people, including 55 Rightmovers
and their supporters, came together on a May bank holiday
to run 5 kilometres, the half or the full marathon. In total over
£55,000 was raised, including a contribution of £26,000
from Rightmove.
Since the launch of our On The Move campaign in 2018 we,
together with our employees, have raised over £125,000 for
these two charities. This support has been significant, in
particular for Winter Night Shelter which has used the money
raised specifically to support their new project, Unity Park
Station. The project aims to reach out to those at risk of
homelessness before it happens, putting them in touch with
vital services from financial support to mental health advice.
Unity Park Station has launched a new centre in Central Milton
Keynes which is available for the community to use seven days
a week, and it is estimated more than 250 people a week will
benefit from the project.
Our On The Move campaign will continue into 2020, following
the success of the first two years. We will be supporting two
new charities: Harry's Rainbow, a local charity dedicated to
supporting bereaved children, and CALM, a national charity
raising awareness of mental health and suicide prevention.
Our aim, as ever, is to have more runners, raise more
awareness and to celebrate the team’s achievements on the
day by hosting the Rightmove MK Marathon Race Village, a
family-friendly event for spectators and runners alike.
We also continue to support our local community in Milton
Keynes including our support for the local volleyball and ice
hockey teams, as well as the MK College football team for
the fourth consecutive year.
Rightmove also matches any funds our employees raise
for a charity or recognised cause that is important to them.
Rightmove employees are also able to donate directly from
their monthly salary to any charity as an individual, through the
Charities Trust, which provides a tax efficient means of giving.
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Making a difference
to our environment
Rightmove’s purpose is to make home moving in the UK
easier and in doing so, we will innovate to help our consumers
and customers use technology to save time and resources,
reducing their environmental impact and carbon footprint.
Following the externally facilitated Energy Saving Opportunities
Scheme (ESOS) compliance review in 2018, we reviewed and
audited our 2018 reported energy usage in 2019, assisted by
Carbon Footprint, a sustainability and carbon management
consultant. The review identified previously unreported,
non-mandatory carbon emissions, including public transport
used by our employees and gasses used in air-conditioning
units in our offices, which will be included in our 2020
greenhouse gas report. The review has also enabled us to
accurately assess and develop strategies to reduce and off-set
100% of our carbon usage in future. Carbon Footprint
identified a number of suitable carbon off-setting initiatives
for Rightmove to support. These include UK tree planting in
educational and wildlife trust areas, and in late 2019 the Surrey
Wildlife Trust held a planting day to plant a large hedgerow at a
farm in Surrey, which was managed by them, with local Girl
Guides and Brownies volunteering to do the planting to earn
their badges. As a result of these activities, Rightmove is now
a carbon neutral Company and we are committed to the
continued reduction and off-setting of all the Group’s
greenhouse gas emissions in future.
As an operator of an online property portal, our main
environmental impact is from the power usage of our data
centres. Our policy is to purchase hardware with the best
computational performance which uses the least electrical
power. In 2020, we are committed to reviewing our energy
supply agreements across our whole business and, where
Rightmove contracts directly with electricity providers, we will
move to green energy.
As an internet-based business with fewer than 600 employees,
based in three UK office locations, our direct environmental
footprint is relatively small. However, we continue to encourage
our colleagues to minimise their use of resources, reduce
unnecessary travel, paper and energy consumption and
recycle materials wherever possible.
We encourage our employees to use public transport rather
than driving between our office locations in London, Milton
Keynes and Newcastle. In 2019, we invested in a significant
improvement in our online meeting technology, which will
further reduce the impact of working across three office
locations. We continue to encourage participation in our Cycle
to Work scheme and have many keen cyclists. Employees
entitled to a company car can select hybrid electric cars as an
alternative to petrol or diesel engines and in 2019 our fuel card
provider Allstar continued to partner with Forest Carbon to
capture the CO2 emissions from our fleet of company cars
and turn them into new UK woodlands.
As an online business, we work in a near paperless environment
and we encourage all our customers, business partners and
suppliers to use online records and reduce printing, especially
emails. Wherever possible we have replaced paper-based
services and communications with online alternatives,
including e-communications for shareholders and customers,
management information, marketing reports and product
documentation, which are all available online.
Our most significant environmental contribution continues to
be how we have changed the way people search for property.
Our platforms optimise the information available to home-
hunters, giving our customers the ability to advertise high
quality photographs, floor plans and property particulars all on
screen and available instantly, reducing unnecessary travel to
visit unsuitable properties. All our innovations help to reduce
the carbon footprint generated by prospective home buyers
and estate agents, by reducing the reliance on printed
marketing materials and property details.
Greenhouse gas reporting
The Companies Act 2006 (Strategic Report and Directors’
Report) Regulations 2013 requires all UK-quoted companies
to report on their greenhouse gas (GHG) emissions, which
are classified as either direct or indirect and which are divided
between Scope 1, Scope 2 and Scope 3 emissions.
Direct GHG emissions (Scope 1) are emissions from sources
that are owned or controlled by Rightmove, specifically
company cars. Indirect GHG emissions (Scopes 2 & 3) are
emissions that are a consequence of the activities of the
Group but that occur at sources owned or controlled by other
entities. These include our electricity consumption at our
Milton Keynes and London offices and our data centres.
Rightmove plc annual report 2019 37
Financial statementsStrategic reportGovernance Strategic report | Corporate responsibility continued
We do not have responsibility for any other material emission
sources. We have used the Greenhouse Gas Protocol
Corporate Accounting and Reporting Standard (revised
edition), ISO 14064 Part 1 2006 and emission factors from
UK Government’s Conversion Factors for Company
Reporting 2018.
The Group is required to report Scope 1 and Scope 2 emissions
for its reporting year to 31 December 2019. Scope 3 is not
mandatory, however the Group has again chosen to report
Scope 3 emissions as it relates to electricity used in data
centres, in which the Group rents space to house and operate
various servers, which host our platforms.
Emissions have also been calculated using an ‘intensity
metric’, which will enable the Group to monitor how well we
are controlling emissions on an annual basis, independent of
fluctuations in the levels of their activity. As Rightmove is a
‘people’ business, the most suitable metric is ‘Emissions per
Employee’, based on the average number of employees during
the year. The Group’s emissions per employee are shown in
the table below.
Group emissions by scope
Scope
Source
Scope 1(2) Company cars
Scope 2(3)
Scope 3
Electricity
Outsourced data centres
Total
Total (Scopes 1 & 2 only)
Scope 1, 2 & 3 emissions
normalised per employee (tCO2e)
Scope 1 & 2 emissions
normalised per employee(4) (tCO2e)
Tonnes CO2e(1)
2019
485
150
180
815
635
1.5
1.2
2018
484
187
206
877
671
1.8
1.4
(1) UK emissions factors have been used for all data. All emission factors have been
selected from the emissions conversion factors published annually: www.gov.uk/
government/publications/greenhouse-gas-reporting-conversion-factors-2018.
(2) Van Mildert has no Scope 1 emissions.
(3) Scope 2 emissions for 2019 include Van Mildert’s office emissions from 1 October
to 31 December 2019.
(4) Based on 538 (2018: 495) employees taken as the average number of employees
in the Group throughout the year, including Van Mildert employees from 1 October
to 31 December 2019.
Our overall emissions, including Scope 2 emissions for Van
Mildert, are down 7% on the previous year, attributable to more
efficient energy use in Rightmove’s offices and outsourced
data centres. Emissions per employee have also decreased by
17%, which was mainly due to the above-mentioned
efficiencies and an increase in the office-based headcount,
including three months’ headcount for Van Mildert, resulting in
a lower percentage of Group employees as a whole requiring a
company car.
We will continue to monitor and look for ways to improve our
carbon footprint.
Health and safety
Rightmove has a fully compliant Health and Safety Policy and
appropriate insurance for all its employees. Our approach to
the effective management of health and safety is to treat it as
an integral part of business management. The Group’s policy
on health and safety is to provide adequate control of the
health and safety risks arising from work activities. This is
delivered through consultation with, and training of employees,
including fire safety, first aid and work place safety training.
Rightmove also ensures the maintenance of plant and
equipment, safe handling and use of all substances and the
prevention of accidents and causes of ill-health.
FTSE4Good Index
Created by the global index provider FTSE Russell, the
FTSE4Good Index Series is designed to measure the
performance of companies demonstrating strong
Environmental, Social and Governance (ESG) practices.
The FTSE4Good indices are used by a wide variety of market
participants to create and assess responsible investment
funds and other products.
We are pleased to report that having been independently
assessed according to the FTSE4Good criteria, FTSE Russell
(the trading name of FTSE International Limited and Frank
Russell Company) has confirmed that Rightmove has
satisfied the requirements of a constituent of the
FTSE4Good Index Series.
38
rightmove.co.uk
Non-Financial Information Statement
Rightmove aims to comply with the new Non-Financial Reporting Directive requirements. The table below sets out where
relevant information can be found in this Annual Report.
Reporting Requirement
Policies
Relevant Information
Environmental matters
The Company does not have a specific policy on environmental issues, however, more information
on our business impact on the environment can be found in the Corporate Responsibility Report,
pages 37 to 38, which also contains the statutory carbon emission data on page 38
Employees
• Employee Handbook, which includes:
– Code of Conduct
– Whistleblowing Policy
• Modern Slavery Statement
• Data Retention Policy
• Privacy Policy
• Chief Executive Officer’s review, pages 5 to 13
• Corporate Responsibility Report, pages 31 to 36
• Corporate Responsibility Report,
page 36
Human rights
Social matters
Anti-bribery and
corruption
Business model
Principal Risks
Non-financial key
performance indicators
The Company does not have a specific policy on social matters however information on how our
business supports the local and wider community can be found in the Corporate Responsibility
Report, pages 36 to 37
• Anti-Bribery and Corruption, page 36
• Employee Handbook, which includes:
– Anti-Bribery and Corruption Policy
– Code of Conduct
• Business model, pages 14 to 15
• Strategic Report, page 22
• Principal risks and uncertainties, pages 23 to 25
• Operational key performance indicators, page16
Rightmove plc annual report 2019 39
Financial statementsStrategic reportGovernance Governance | Corporate governance report
Governance overview
I am pleased to introduce our Corporate
Governance Report which explains how the
Company has applied the provisions of the UK
Corporate Governance Code 2018 (the Code)
during the year, through a framework of
governance policies, procedures and initiatives.
We have also announced that our Finance Director, Robyn
Perriss, plans to step down by 30 June 2020. Peter Williams
retired from the Board on 10 May 2019, having served six
years as a Non-Executive Director, and Amit Tiwari joined
the Board on 1 June 2019. Full details of all Board changes
and the work of the Nomination Committee can be found
on pages 58 to 60.
Statement of compliance
The Code sets out the principles and provisions relating to
good governance of UK listed companies and can be found
on the FRC’s website at frc.org.uk.
We are pleased to confirm that for the year under review,
with the exception of the previous Chairman’s tenure,
described above, the Company has complied with the
principles and provisions of the Code.
Director's duties
An explanation of how Directors have engaged with and
taken into consideration the requirements of Rightmove’s
key stakeholders, in accordance with S172 of the Act, can
be found on pages 27 to 29 of the Strategic Report.
Andrew Fisher
Chair
Our Corporate Governance Report includes:
• A statement of compliance with the Code
• Rightmove’s corporate governance structure
• Our directors’ biographies
• Key Board and committee activities
and reports from the:
• Audit Committee
• Nomination Committee
• Remuneration Committee, and
• Directors
Board priorities
A key priority in 2019 was the implementation of the
Board succession plan, which resulted in my appointment
as Chair from January 2020. Other priorities were the
evolution of Rightmove’s business strategy and risk
management framework, including a comprehensive
cyber security plan, engaging with employees and other
key stakeholders, and the acquisition of Van Mildert.
Details are set out on page 45 of this report.
Board changes
2019 was a year of change for the Rightmove Board with
Scott Forbes retiring from the Board on 31 December 2019,
having served as Chairman for 14 years. In line with previous
communication and consultation with Rightmove
shareholders around orderly succession, the Board
approved my appointment as Scott’s successor, with
effect from 1 January 2020.
40
rightmove.co.uk
The Board governance structure at Rightmove
Shareholders of Rightmove plc
The Board (primarily through the Chief Executive Officer and Finance Director and supported by the Chair and the Senior Independent Director) actively
engaged with the Company’s institutional investors throughout the year.
Details of the Board’s engagement with shareholders during the year can be found on page 48
The Board of Rightmove plc
(8 Directors)
The Board is collectively responsible for promoting the long-term success of the Group for the benefit of the Company’s shareholders and also the
wider community it serves. It sets the overall direction and control of the Group and has the powers and duties set out in the Companies Act 2006
(the Act) and the Company’s Articles of Association. The Board delegates certain matters to the Board committees and delegates the day to day
operation of the business to the Executive Directors.
The Chair is responsible for leadership and governance of the Board, planning the Board’s agenda and ensuring that Directors receive sufficient,
relevant, timely and clear information and that all subjects requiring discussion are allocated sufficient time to support effective decision making.
He also ensures that the Board remains effective by encouraging constructive relationships between the Executive and Non-Executive Directors
and ensures ongoing and effective communication between the Board and its key stakeholders.
Chair
Responsible for:
• the day to day management of the Group, and its operations and results;
Executive Directors
and
Non-Executive Directors
Responsible for:
• constructively challenging the Executive Directors; and
• monitoring the delivery of the strategy within the risk and control
• implementation of the Group strategy.
framework set by the Board.
Led by the Chief Executive Officer and supported by the Finance Director
and their senior leadership team.
The roles of Chair and Chief Executive Officer are separate with clear
written guidelines on the division of responsibilities.
One of the Non-Executive Directors is appointed as the Senior
Independent Director, who is responsible for:
• acting in an advisory capacity to the Chair;
• deputising for the Chair if required;
• serve as an intermediary for other Directors when necessary;
• be available to shareholders if they have concerns which they have not
been able to resolve through the normal channels of the Chair and Chief
Executive Officer or other Executive Directors for which such contact is
inappropriate; and
• conduct an annual review of the performance of the Chair.
• Rightmove’s business strategy
• the annual business plan
• changes to the Group’s capital structure
• the capital management and dividend policies
• the system of internal control and risk management
Matters reserved to the Board:
• the annual and half year results and shareholder communications
• major acquisitions and disposals
• appointment and removal of officers of the Company
• corporate governance and policies
Further information on Board activities during the year can be found on pages 45 to 46
The Board Committees
(composed of Non-Executive Directors (NEDs) only)
The Board delegates certain matters of business to its three sub-committees. The Committees review and report back to the Board on the matters within
each of their remits.
Only Committee members are entitled to attend Committee meetings. Other Board members may attend Committee meetings by invitation only
(except where the Committee is discussing matters relating directly to that Director or to that Director’s successor).
Audit Committee
(Quorum: 2 independent NEDs)
Responsible for:
• the oversight of accounting, financial reporting
and internal control processes;
• Rightmove’s outsourced internal audit
function; and
• the relationship with the Group’s external auditor.
Audit Committee Report on pages 50 to 57.
Remuneration Committee
(Quorum: 2 independent NEDs)
Responsible for:
• making recommendations to the Board for
the overall policy and framework for the
remuneration of the Chair, the Executive
Directors and the senior leadership team.
Remuneration Committee Report on
pages 61 to 90.
Nomination Committee
(Quorum: 2 NEDs, majority must be independent)
Responsible for:
• keeping the structure, size and composition of the
Board and its Committees under review with the
primary objective of matching the skills,
knowledge and experience of Directors to
Rightmove’s business strategy and requirements.
Nomination Committee Report on pages 58 to 60.
Terms of reference for each of the Board Committees are available on the Company’s corporate website at plc.rightmove.co.uk
The Board and its Committees are supported by the Company Secretary, who is responsible for advising the Board on corporate governance matters and
assisting the Chair in ensuring that the Board has all the relevant policies, procedures in place with full and timely access to relevant information.
The Company Secretary
Rightmove plc annual report 2019 41
Financial statementsStrategic reportGovernance Governance | Directors and officers
Andrew Fisher
Chair
Peter Brooks-Johnson
Chief Executive Officer
Robyn Perriss
Finance Director
Nationality:
British
Appointment to the Board:
1 January 2020
Committee membership:
Nomination (Chair)
Current external commitments:
Non-Executive Director (and Remuneration
Committee Chair) of Marks and Spencer plc
Non-Executive Director (and Remuneration
Committee Chair) of Moneysupermarket.
com Group plc (until 7 May 2020)
Previous roles and relevant skills and
experience:
Andrew has a background in building digital,
media and entrepreneurial businesses and
executing a high growth strategy. He also
has experience of serving on the Boards
of a number of listed companies as a
non-executive director.
Andrew was previously CEO and Executive
Chair of Shazam, where he was instrumental
in developing and executing a growth strategy
to establish one of the world’s leading mobile
consumer brands. He was also European
Managing Director of Infospace Inc and the
founder and Managing Director of TDLI.com.
Until 2019, Andrew was a non-executive
director at Merlin Entertainments plc.
Nationality:
British
Appointment to the Board:
10 January 2011
Current external commitments:
Non-Executive Director of Adevinta ASA
(The international online classifieds
operation of Schibsted Media Group)
Previous roles and relevant skills and
experience:
Peter joined Rightmove in 2006 and became
Chief Operating Officer in April 2013 having
been Managing Director of rightmove.co.uk
since 2011 and Head of the Agency business
since 2008. He was promoted to Chief
Executive Officer in May 2017. Prior to
joining Rightmove, Peter was a management
consultant with Accenture and the Berkeley
Partnership.
Peter has substantial experience and
understanding of the online media and
property markets, developing Rightmove’s
business plan and strategy over many years,
with strong leadership and stakeholder
management skills.
Nationality:
British and South African
Appointment to the Board:
30 April 2013
Current external commitments:
Non-Executive Director (and Audit
Committee Chair) of Softcat plc
Previous roles and relevant skills and
experience:
Robyn joined Rightmove in 2007 as Financial
Controller with responsibility for day to day
financial operations and was promoted to the
Board as Finance Director in April 2013. She
was also Company Secretary from April 2012
to July 2014 and from June to October 2016.
Robyn qualified as a chartered accountant in
South Africa with KPMG and worked in both
audit and transaction services. Prior to joining
Rightmove, Robyn was Group Financial
Controller at the online media business,
Auto Trader.
Robyn has extensive experience in commerce
with a particular focus in online classified
businesses. Her relevant skills include
financial and corporate governance expertise
and she is also a skilled negotiator and
mentor. Robyn also has a wealth of
knowledge about capital markets and
heads up our investor relations function.
42
rightmove.co.uk
Jacqueline de Rojas CBE
Senior Independent Non-Executive Director
Rakhi Goss-Custard
Non-Executive Director
Lorna Tilbian
Non-Executive Director
Nationality:
American/British
Appointment to the Board:
28 July 2014
Committee membership:
Remuneration, Nomination
Current external commitments:
Non-Executive Director of Kingfisher plc
Non-Executive Director of Schroders plc
Previous roles and relevant skills and
experience:
Rakhi has extensive knowledge of the
customer and consumer experience and
innovation across a wide range of digital
products, desktop and mobile platforms,
augmented by a varied non-executive
portfolio in other customer centric
businesses and sectors.
Rakhi was a non-executive director of
Be Heard Group plc until August 2018
and of Intu Properties plc to May 2019,
and a Director of UK Media at Amazon to
June 2014. She held various other senior
positions during her 12-year tenure at
Amazon including Media, Entertainment,
General Merchandise and Book divisions as
well as advising Zappos. Prior to Amazon,
Rakhi held strategy roles at TomTom and
Oliver Wyman.
Nationality:
British
Appointment to the Board:
1 February 2018
Committee membership:
Remuneration (Chair), Nomination
Current external commitments:
Non-Executive Director of Jupiter UK Growth
Investment Trust plc
Non-Executive Director of Proven VCT plc
Non-Executive Director of Finsbury Growth &
Income Trust PLC
Non-Executive Director of Euromoney
Institutional Investor PLC
Previous roles and relevant skills and
experience:
Lorna has extensive experience as a media
analyst and investment adviser to the media
sector with strong financial analysis and
leadership skills. She was Executive Director
and Head of the Media Sector in Corporate
Broking & Advisory at Numis Corporation PLC
until September 2017. She was a founder of
Numis when it launched in 2001 having
worked at Sheppards, as a director of SG
Warburg and executive director of WestLB
Panmure. Lorna sits on the Advisory Panel
of TechNation’s Future Fifty programme
and has served as a Cabinet Ambassador
(for Creative Britain) for the Department
of Culture, Media & Sport. She was a
non-executive director of M&C Saatchi PLC
to December 2019.
Nationality:
British
Appointment to the Board:
30 December 2016
Committee membership:
Audit, Nomination, Remuneration
Current external commitments:
President of techUK
Non-Executive Director of Costain Group plc
Non-Executive Director of FDM Group
(Holdings) plc
Previous roles and relevant skills and
experience:
Jacqueline is a recognised technology leader
with many years’ experience in the software,
technology and digital sectors, working in
enterprise and sales-focused businesses.
She has extensive knowledge and skills in
promoting technology-based solutions and
cyber security and is a passionate advocate
for diversity and inclusion.
Jacqueline has been employed throughout
her career by global blue-chip software
companies and has held senior positions at
Citrix, CA Technologies, McAfee and Ascential
Software. She was a Non-Executive Director
of Home Retail Group from 2012 to 2016,
and of AO World plc from 2017 to 2019.
Jacqueline is the co-Chair at the Institute of
Coding, and is also an advisor to the Digital
Leaders Technology Group and the board of
accelerateHER, which addresses the under-
representation of women in technology.
She is a passionate advocate for diversity and
inclusion in the workplace with a particular
focus on getting women and girls into digital
careers and studying STEM subjects.
Jacqueline is especially delighted to lend her
support to The Youth Group to improve the
odds for young people, and to the Girlguide
Association for technology transformation.
She was awarded a CBE for services to
international trade in the technology
industry in 2018.
Rightmove plc annual report 2019 43
Financial statementsStrategic reportGovernance Governance | Directors and officers continued
Andrew Findlay
Non-Executive Director
Amit Tiwari
Non-Executive Director
Sandra Odell
Company Secretary
Appointment as officer to the Board:
1 November 2016
Current external commitments:
None
Previous roles and relevant experience:
Sandra is a Fellow of the Institute of
Chartered Secretaries and Administrators.
Prior to joining Rightmove, Sandra was
Company Secretary of Quintain, the London
property developer, and before that held
various senior company secretarial positions
in listed financial services companies.
Nationality:
British
Appointment to the Board:
1 June 2017
Committee membership:
Audit (Chair), Nomination
Current external commitments:
Director of easyJet plc
Previous roles and relevant skills and
experience:
Andrew is a chartered accountant with a wealth
of financial expertise, proven commercial
experience and strong consumer-centric
background. He has a deep knowledge of
financial reporting and risk management,
technological solutions and consumer
platforms.
Andrew has been the Chief Financial Officer of
easyJet plc since 2015. Before joining easyJet,
Andrew was Chief Financial Officer of Halfords
plc and prior to that Director of Finance, Tax and
Treasury at Marks and Spencer Group plc. He
formerly held senior finance roles at the London
Stock Exchange and at Cable and Wireless, in
the UK and US. Andrew qualified as a chartered
accountant with Coopers & Lybrand.
Nationality:
American
Appointment to the Board:
1 June 2019
Committee membership:
Audit, Nomination
Current external commitments:
Managing Director of Vitruvian Partners LLP
Previous roles and relevant skills and
experience:
Amit has a strong understanding of the online
classified sector and innovation across a
range of online marketplace businesses, with
extensive knowledge of finance and capital
markets. He was Head of International
Developed Equities at Harvard Management
Company and prior to that Head of Equities
at the Lakshmi Mittal Family Office.
He previously held senior investment
management roles at Morgan Stanley & Co
International plc, Ziff Brothers Investments
and KKR & Co. Amit has an MBA with
Distinction from Harvard Business School
and a Bachelor’s degree in Economics with
Honours from Harvard College.
Diversity on the Board
Board tenure
Board gender
Board composition
Board age
Board skills and experience
1
1
3
3
4
4
2
1
5
e
g
n
a
r
e
g
A
60+
50/
59
40/
49
4
4
7
4
2
5
0–3
years
3–6
years
6–9
years
9+
years
Female
Male
Executive
Directors
Chair
Non-
Executive
Directors
0
2
1
No. of Directors
3
4
Executive
Non-Executive
We recognise the benefits of diversity on our Board to ensure effective engagement with Rightmove’s
key stakeholders and a variety of thinking in relation to our business strategy. The age, gender, tenure
and skills of Board members as at 1 January 2020 is set out above.
Finance &
governance
Voice of the customer/
property market
Technology &
innovation
Voice of the
customer & retail
Digital marketing
& online media
Corporate
transactions
44
rightmove.co.uk
Governance | Corporate governance report continued
Board activities
The key responsibilities and actions carried out by the Board during the year are set out below:
Strategy
Performance
monitoring
People and culture
Shareholder
engagement
Governance and risk
Regular reports and activities(1)
Employee
engagement sessions
Share register and
market reports
Governance and
regulatory updates
Monthly
management
report containing
all financial and
operational KPIs
Agency and New
Homes
presentation
Full-year results
New Homes
business update
including new
digital products
Half-year results
Analysis and
implementation of
strategic initiatives
February
Presentation on
lettings innovation
May
July
Strategy day:
Potential threats and
opportunities to the
business model
arising from external
factors
Approval of Van
Mildert acquisition
September Presentation on
the future of tenant
referencing and
Van Mildert
Other business
presentation on
Commercial,
Overseas and
Data Services
Group employee
satisfaction scores
’Have your Say’ survey
results
Employee
presentations on
product innovation:
Sold by Me and
Opportunity Manager
Employee
presentations:
Making lettings easier
and Optimiser 2020
Board succession plan
Gender pay and
diversity policies
Annual approval of SIP
and Sharesave awards
AGM – analysis of
shareholder voting
and feedback
Review of capital
management (share
buyback and dividend)
policy
Analysis provided by
Rightmove’s brokers
of how investors value
Rightmove
Remuneration Policy
proposals
recommended and
consultation with
shareholders agreed
November 2020 budget and
three-year business
plan approved
December Update from the
Remuneration
Committee on 2019
bonus outcomes and
2020 performance
targets
Product
development
update
Remuneration
Policy update
Update on
shareholder
feedback on 2020
Remuneration Policy
Outcome of external
Board effectiveness
review
Risk register review
Modern Slavery Act
statement update
Rightmove Assurance
update
Cyber security update
Risk register review
Policy review and renewal
Internal Controls update
Internal Board and
Committee evaluation
Insurance renewal
Feedback from the Board
evaluation reviewed and
actions agreed
GDPR compliance update
from Audit Committee
(1) Frequency coincides with Board meetings, unless otherwise indicated.
Rightmove plc annual report 2019 45
Financial statementsStrategic reportGovernance Governance | Corporate governance report continued
There are usually seven scheduled Board meetings each
year including one meeting or away day devoted to
consideration of the Group’s strategy. Additional meetings
can be arranged at short notice at the request of any
director, if required. In addition to scheduled Board meetings,
there is frequent communication between the Directors
and management.
Directors receive Board papers in advance of meetings to
allow sufficient time for review and consideration. If any
Director raises a concern or challenges any aspect of the
business conducted at a Board meeting, the Company
Secretary will ensure their comments are appropriately
recorded in the Board minutes. In addition to formal Board
papers, Directors receive monthly management and
financial reports on the operational and financial
performance of the business, setting out actual and forecast
financial performance against approved budgets and other
key performance indicators. The Board also receives copies
of broker reports, research analyst reports and market
reviews relating to Rightmove.
Board composition
The Board at the date of this report comprises two
Executive Directors and six Non-Executive Directors,
including the Chair. The two Executive Directors are
Peter Brooks-Johnson (Chief Executive Officer) and
Robyn Perriss (Finance Director) and the Non-Executive
Directors are Andrew Fisher (Chair), Jacqueline de Rojas
(Senior Independent Director), Andrew Findlay,
Rakhi Goss-Custard, Amit Tiwari and Lorna Tilbian.
All continuing Directors will retire and offer themselves for
election or re-election at the next AGM in accordance with
the Code.
The Board is satisfied that the Directors retiring and standing
for re-election are qualified for re-appointment by virtue of
their skills, experience and contribution to the Board,
described in their biographies on pages 42 to 44. The
Executive Directors have service contracts with the
Company which can be terminated on 12 months’ notice.
The appointments of the Non-Executive Directors can be
terminated on three months’ notice.
The interests of the Directors in the share capital of the
Company as at the date of this report, the Directors’ total
remuneration for the year and details of their service
contracts and Letters of Appointment are set out in the
Directors’ Remuneration Report on pages 84 and 74 to 79.
At the date of this report, the Executive Directors were
deemed to have a non-beneficial interest in 2,208,362
ordinary shares held by The Rightmove Employees’ Share
Trust (EBT).
Biographical details of all Directors at the date of this report
appear on pages 42 to 44 and details of Committee
membership appear on page 48.
The Board’s size and composition is kept under regular
review by the Nomination Committee.
Board changes
After 14 years as Rightmove’s Chair, Scott Forbes retired as
Chairman of the Board on 31 December 2019, and Andrew
Fisher was appointed as the Chair of the Board with effect
from 1 January 2020. Andrew was independent on his
appointment to the Board.
Peter Williams retired from the Board on 10 May 2019,
having served six years as a Non-Executive Director, Senior
Independent Director, Audit Committee and Remuneration
Committee Chair. Amit Tiwari joined the Board on 1 June
2019 as a Non-Executive Director.
Following Peter’s retirement from the Board, Jacqueline de
Rojas was elected Senior Independent Director and Lorna
Tilbian became Remuneration Committee Chair from
that date.
In November 2019, the Company announced that Robyn
Perriss would retire as Finance Director by 30 June 2020.
The Nomination Committee has started the search for a
new Finance Director.
More information on the selection and appointment process
for new Directors, on further proposed Board changes and
on the work of the Nomination Committee can be found on
pages 58 to 60.
Division of responsibilities
The roles of Chair and Chief Executive Officer are
separate with clear written guidelines on the division of
responsibilities. A summary of the key responsibilities
of the Board members is included in the governance
structure table on page 41.
46
rightmove.co.uk
Board diversity and experience
Rightmove is committed to a diverse Board comprised
of Directors from different backgrounds with relevant
experience, perspectives, skills and knowledge. We believe
that diversity, including gender and ethnic diversity, amongst
Directors and employees contributes towards a high
performing and effective Board and business and promotes
the Company’s ongoing success, so we strive to maintain
the optimal balance. We use a meritocratic appointment
process and strive for balanced gender representation on
the Board.
At 31 December 2019, 50% of both Executive and Non-
Executive Board members were female. This, along with
the strong female representation amongst the senior
leadership team, led the Company to be placed second in
the 2019 Hampton-Alexander FTSE 100 Women Leaders
table. We remain committed to our policy of recruiting the
best people and appropriate talent for the business whilst
seeking to maintain as near 50:50 gender balance on the
Board as possible. We are pleased to report that as at
31 December 2019, 37% of Board members are from
ethnically diverse backgrounds, which exceeds the Parker
Review target for FTSE 100 boards. We are committed to
meeting or exceeding this target in future. Further
information can be found in the Corporate Social
Responsibility Report on pages 31 to 33.
The range of skills and experience the Board considers
necessary to deliver Rightmove’s business strategy, as
identified in the Board Strategy Review, includes:
• finance and governance
• technology and innovation
• voice of the customer and property market
• voice of the consumer and retail
• digital marketing and online media, and
• corporate transactions.
Board independence
The Board reviews each Non-Executive Director’s
independence on an annual basis and considers that all Non-
Executive Directors are fully independent of management
and in character and judgment. The review takes into
account factors such as Directors’ contribution to debate
during meetings to determine whether they demonstrate
independent judgment and whether there are relationships
or circumstances which are likely to affect, or could appear to
affect, a Director’s judgment.
The Board considers that there is an appropriate balance
between Executive and Non-Executive Directors.
As outlined above, in compliance with the new Code provision
that a Chair should remain in post for no more than nine years
from the date of first appointment, allowing for a limited
extension to facilitate effective succession planning, the
Board appointed Andrew Fisher to succeed Scott Forbes as
Chair with effect from 1 January 2020. Further details can be
found in the Nomination Committee report on pages 59 to 60.
Directors’ external appointments
In line with the Code, any of the Directors’ additional external
appointments are approved by the Board. Our Chair, Andrew
Fisher, is also a Non-Executive Director of two other publicly
listed companies. Each of the Executive Directors holds one
other non-executive directorship of a listed company, as
permitted under the Code, as the Board recognises that
non-executive directorships can broaden the knowledge
and experience of the Executive Directors which may
benefit the Company.
Conflicts of interest
Under the Companies Act 2006, the Directors have a
statutory duty to avoid situations in which they have, or may
have, a direct or indirect conflict of interest with the
Company. The Directors must also declare the nature and
extent of any interest in any existing or potential conflicting
interest. The Company’s Articles of Association does have
provisions for managing and authorising potential conflicts
of interests. The Board approved and observes Rightmove’s
Conflicts of Interest Policy and reviews the Register of
Directors’ Interests at least annually.
To safeguard their independence, a Director is not entitled
to vote on any matter in which they may be conflicted or
have a personal interest. If necessary, Directors are required
to absent themselves from a meeting of the Board while
such matters are being discussed and if there is any doubt,
the Chair of the Board is responsible for determining
whether a conflict of interest exists.
Re-election to the Board
Directors are appointed and may be removed in accordance
with the Articles of Association of the Company and the
provisions of the Act. All Directors are subject to election at the
first AGM following their appointment and in accordance with
the Code, all Directors will seek re-election at the 2020 AGM.
Rightmove plc annual report 2019 47
Financial statementsStrategic reportGovernance Governance | Corporate governance report continued
Board and Committee membership and attendance
The membership of the Committees of the Board and attendance at Board and Committee meetings for the year under
review are set out in the table below:
Board
Remuneration Committee
Audit Committee
Nomination Committee
Total meetings
Scott Forbes
Peter Brooks-Johnson
Robyn Perriss
Jacqueline de Rojas(1)
Rakhi Goss-Custard(2)
Andrew Findlay
Lorna Tilbian(3)
Amit Tiwari(4)
Peter Williams(5)
7
7
7
7
7
7
7
7
5
2
7
–
–
–
5
7
–
7
–
2
5
–
–
–
5
–
5
1
3
1
4
4
–
–
4
3
4
4
3
–
(1) Jacqueline de Rojas was appointed Senior Independent Director and joined the Remuneration Committee with effect from 10 May 2019, and has attended all
meetings from that date.
(2) Rakhi Goss-Custard was unable to attend one unscheduled Nomination Committee meeting on 15 May 2019 due to a prior commitment.
(3) Lorna Tilbian was appointed Chair of the Remuneration Committee with effect from 10 May 2019 and joined the Audit Committee from 10 May to 1 June 2019,
when Amit Tiwari was appointed to the Board and the Audit Committee.
(4) Amit Tiwari was appointed to the Board on 1 June 2019, and has attended all Board and Committee meetings since his appointment.
(5) Peter Williams retired from the Board on 10 May 2019.
In addition to the above meetings, the Chair conducts
meetings with the Non-Executive Directors without the
Executive Directors being present as required. Jacqueline de
Rojas, the Senior Independent Director, chaired a meeting
of the Non-Executive Directors in December 2019, at which
the performance of the Chair was also reviewed, without the
presence of the Chair.
Board evaluation
The Board last completed an externally facilitated
performance evaluation in 2018. Therefore, the evaluation
conducted in 2019 was internally facilitated and details can
be found in the Nomination Committee report on page 60.
Indemnification of directors
The Articles of Association of the Company allow for a
qualifying third-party indemnity provision for the purposes
of S234 of the Act between the Company and its past and
present Directors and officers, which remains in force at the
date of this report. The Group has also arranged Directors’
and officers’ insurance cover in respect of legal action
against the Directors. Neither our indemnity nor the
insurance provides cover in the event that a Director is
proven to have acted dishonestly or fraudulently.
The Company has a Dealing Code setting out the process
and timing for dealing in shares, which is compliant with the
Market Abuse Regulation. The Dealing Code applies to all
Directors, who are persons discharging managerial
responsibility, and other insiders.
Shareholder engagement
The Board welcomes opportunities to engage with
shareholders and clearly communicate the performance
and activities of the Group.
Within the regulatory framework, the Directors have
conducted regular and open dialogue with shareholders
through ongoing meetings with institutional investors and
research firms to discuss strategy and operational and
financial performance. Contact in the UK is principally
with the Chief Executive Officer and the Finance Director.
The former Chairman consulted shareholders about the
orderly Board succession plan consultation, corporate
governance, business strategy and other business matters.
The Senior Independent Director was also available to
shareholders had they wished to supplement their
communications, or if contact through the normal
channels was inappropriate.
48
rightmove.co.uk
The Remuneration Committee Chair consulted with
shareholders about the new 2020 Remuneration Policy
and took into account investor feedback in drafting the final
Policy proposals.
The Board is kept informed of the views and opinions of
those with an interest in the Company’s shares through
regular reports from the Chief Executive Officer and the
Finance Director, as well as market reports from the
Company’s brokers, UBS and Numis.
Shareholders are also kept up to date with the Group’s
activities through the half year results statement and
Annual Report and the investor relations section of its
website, at plc.rightmove.co.uk, which provides details of
all the Directors, the financial calendar, latest news including
financial results, investor presentations and Stock
Exchange announcements.
Stakeholder engagement
Under the new Code, the Board is required to report on how
it has considered the interests of its wider stakeholders in
accordance with section 172 of the Companies Act 2006.
This report can be found on pages 27 to 29.
The Board reviewed the Code’s new requirement to appoint
or nominate a Director with responsibility for workforce
engagement. The Board carefully considered this
requirement in the context of the Company’s open and
collaborative culture, as well as the fact that all the
Company’s employees are based in the UK, and accordingly
determined that all Non-Executive Directors should engage
directly and regularly with the Company’s workforce. As a
result, all Board members have participated in a programme
of employee engagement sessions throughout the year.
Further details on this can be found on pages 34 to 35.
Rightmove’s culture and values
The Board fully supports and reflects Rightmove’s open,
supportive and innovative culture, described in more detail in
the Corporate Responsibility Report on pages 30 to 38 of
the Strategic Report. Executive Directors lead by example in
maintaining Rightmove’s non-hierarchical culture with a fully
open plan office environment. All Directors have full access
to Group employees, through a variety of engagement
activities, detailed in the Corporate Responsibility Report.
The Board assesses and monitors culture through the
results of the bi-annual ‘Have your Say’ employee survey,
with a percentage of the Executive Directors’ variable bonus
directly dependent on the survey results. More information
on this can be found in the Directors’ Remuneration Report
on page 80.
Employee concerns (Whistleblowing)
During the year, the Company reviewed and revised its
Whistleblowing policy, and established a new, independently
managed whistleblowing facility, for employees to raise
concerns anonymously and in confidence. Further
information on this can be found in the Audit Committee
Report, on page 56.
Annual General Meeting
The AGM provides an opportunity for shareholders to vote
on aspects of the Company’s business, meet the Directors
and ask them questions. The AGM will be held on 4 May 2020
at the offices of UBS Limited at 5 Broadgate, London
EC2M 2QS. Each Committee’s Chair will be available at
the AGM to answer any shareholder questions on their
respective Committee’s activities.
The Company will arrange for the Annual Report and related
papers to be available on the Company’s corporate website
at plc.rightmove.co.uk or posted to shareholders (where
requested) at least 20 working days before the AGM.
The Company continues to comply with the Code with
the separation of all resolutions put to shareholders.
The Company proactively encourages shareholders to
vote at general meetings by providing electronic voting for
shareholders who wish to vote online and personalised proxy
cards to shareholders electing to receive them, ensuring
that all votes are clearly identifiable. The Company presently
takes votes at general meetings on a poll, the results of
which are reported after each resolution and published on
the Company’s website. All resolutions at the Company’s
2019 AGM were passed comfortably, and no resolutions
received more than 20% of votes against the Board’s
recommendations.
Rightmove plc annual report 2019 49
Financial statementsStrategic reportGovernance Governance | Audit Committee report
Audit Committee Report Summary
Andrew Findlay
Chair of the Audit Committee
Committee’s remit
The Committee is an essential part of Rightmove’s
governance framework to which the Board has delegated
oversight of the accounting, financial reporting and
internal control processes, the outsourced internal audit
function and the relationship with the external auditors.
Committee members and auditors
The Committee members are independent Non-Executive
Directors and comprises:
Andrew Findlay (Chair)
Jacqueline de Rojas
Amit Tiwari
The Company’s external auditors are KPMG LLP.
PricewaterhouseCoopers (PwC) provide internal audit services.
2019 Activities
The Committee met five times during 2019 and its key activities
were to
• review the appropriateness of the Group’s half-year report and
annual financial statements
• review the application of financial reporting and governance
standards including management’s approach to key judgmental
areas of reporting
• confirm that the Annual Report is fair, balanced and understandable
• review the effectiveness of Rightmove’s internal control processes
• receive internal audit reports on consumer Data Protection, cyber
security, marketing expenditure and third party supplier risks
• develop the Internal Audit Plan for 2020, and
• review the effectiveness of the external auditor and the internal
audit function
2020 Priorities
• Focus on key risk areas such as business continuity planning and
GDPR compliance, and
• a regulatory compliance review for the newly acquired Van Mildert
business
Dear shareholder
As Chair of the Audit Committee (the Committee) I am
pleased to present the report of the Committee for the year
ended 31 December 2019. In this report we aim to provide
an overview of the principal activities of the Committee and
insight into key topics discussed and how the Committee
has discharged its responsibilities during the year.
The key responsibilities are set out on page 41 of the
Corporate Governance Report.
The Committee has overseen a detailed programme of work
in 2019 in relation to its remit, including agreeing the scope
of work delivered by the PricewaterhouseCoopers LLP
(PwC) outsourced internal audit function, known as
Rightmove Assurance. The Committee reviewed the results
of PwC’s cyber security and risk management review. This
review, supplemented by further discussions at Board level
assessed progress against agreed actions to further
strengthen technical controls and enhance the Group’s
cyber posture, reflecting the ongoing focus in this key risk
area. Other PwC activities in the year included a GDPR
review focused on the Group’s controls to identify and
comply with subject access requests in a timely manner and
an assessment of employee GDPR training and awareness.
In September 2019 the Group acquired Van Mildert Landlord
and Tenant Protection Limited (Van Mildert). Since acquisition
the Committee has received progress updates in relation to
agreed actions to strengthen Van Mildert’s internal controls
and compliance framework as it transitions from being a small
standalone entity to being part of a larger FTSE Group.
In addition, the Committee assessed the application of
IFRS 3 Business Combinations in relation to the acquisition
of Van Mildert and the process adopted by the finance
team to identify and fair value the assets acquired,
including intangibles.
The Committee as part of its annual governance cycle also
reviewed the Group’s treasury, bribery and whistleblowing
policies and the gifts and hospitality register and non-audit
services policy.
In addition to its annual performance evaluation the Committee
carried out a review of its terms of reference in relation to the
2018 Code.
I will be available at the AGM to answer any questions about
the work of the Committee.
The Committee’s Terms of Reference are available on
plc.rightmove.co.uk
Andrew Findlay
Chair of the Audit Committee
50
rightmove.co.uk
Audit Committee effectiveness
The effectiveness of the operation of the Committee was
reviewed in December 2019 as part of the internal Board
and Committee evaluation process. The feedback on the
Committee was positive and confirmed that the Committee
is effective and provides appropriate challenge.
Financial reporting
The Committee is responsible for reviewing the
appropriateness of the Group’s half-year report and
annual financial statements. The Committee does this by
considering, among other things, the accounting policies
and practices adopted by the Group; the correct application
of applicable reporting standards and compliance with
broader governance requirements; the approach taken by
management to the key judgmental areas of reporting and
the comments of the external auditor on management’s
chosen approach.
Significant issues
The key significant issue in the context of the 2019
Financial Statements is revenue recognition. The
Committee considers this area to be significant taking into
account the level of materiality and degree of focus given
by management and discussed the issue in detail to ensure
that the approach taken was appropriate.
In relation to the Company Financial Statements, the key
significant issue is the recoverability of the investment by
the Company in Rightmove Group Limited, due to its
materiality in the context of the total assets of the Company.
Committee membership and meetings
All the members of the Audit Committee are Independent
Non-Executive Directors in accordance with provision
C3.1 of the UK Corporate Governance Code (the Code).
The Board has determined that Andrew Findlay as the
Committee Chair has recent and relevant financial
experience as required by the Code due to his executive
role as Chief Financial Officer of easyJet plc. Peter Williams
was a member of the Committee until his retirement in
May 2019. Both Andrew and Peter are chartered
accountants with the Institute of Chartered Accountants
in England and Wales. In line with the Code the Committee
as a whole possesses experience relevant to the business
through the digital and consumer experience of Andrew
Findlay, the technology background of Jacqueline de Rojas
and the financial and capital markets perspective of Amit
Tiwari, who joined the Committee in June 2019.
Biographies of the members of the Committee are set out
on pages 42 to 44.
The Committee met five times in 2019 and attendance of
the members is shown on page 48 of the Corporate
Governance Report. In order to maintain effective
communication between all relevant parties, the Committee
invited the Finance Director and Head of Finance, together
with appropriate members of the management team, and
the external and internal auditors, to meetings as necessary.
The Committee sets aside time periodically to seek the
views of the external auditor, in the absence of management.
The external auditor has direct access to the Chair to raise
any concerns outside formal Committee meetings. The
Committee also meets separately with the internal auditor
during the year, and in between meetings the Chair keeps
in touch with the Finance Director and external audit partner
as well as other members of the management team.
After each meeting, the Chair reports to the Board on
the main issues discussed by the Committee and minutes
of the Committee meetings are circulated to the Board
once approved.
Rightmove plc annual report 2019 51
Financial statementsStrategic reportGovernance Governance | Audit Committee report continued
Issue
Committee review
Revenue is a prime area of audit focus, particularly the timing of revenue
recognition in relation to the billing of subscription fees and additional
products and the accounting for any membership offers to customers
with discounted or free periods.
During the year, management performed data analytics procedures on
the amounts billed to the two largest customer groups (Agency and New
Homes). This included investigating anomalies such as billing gaps and
single bills raised and reporting to the Committee in this regard.
The Committee discussed any anomalies with management in relation to
the data analytics work performed. The Committee was satisfied with the
explanations provided and conclusions reached.
KPMG also perform data analytics work by using computer assisted audit
techniques to identify any unexpected or unusual revenue postings,
considering in particular whether the opposite side of the journal entry was
as expected based on the characteristics of the journal. The results of this
work were reported to the Committee.
The data analytics work above is supplemented by a detailed analytical
review of margin and ARPA together with a comprehensive analysis on the
treatment of discounted and free member offers.
The Committee reviewed the assumptions made by management, including
the strong track record of profitable growth and cash generation by RMGL.
Furthermore, the Rightmove plc share price has increased significantly in the
10 year period since 2008, resulting in a current market value in excess of
£5.5 billion, significantly higher than the investment carrying value of £0.5
billion. As RMGL is the main trading entity of Rightmove plc, we therefore
see no evidence of impairment. The Committee was satisfied with the
assumptions made.
Revenue
As more fully described on page 18 and 108
to 109 the majority of the Group’s revenue is
derived from subscriptions for core listing fees
and advertising products on Rightmove’s
platforms. The Group recognises this revenue
over the period of the contract or the point at
which advertising products are used.
Investment by Rightmove plc in Rightmove
Group Limited (RMGL)
The investment by the Company in RMGL is
carried at cost, adjusted for subsequent additions
to the investment. Cost was initially assessed as
at 28 January 2008 being the date that
Rightmove plc became the parent company of
RMGL. Share-based payment awards to RMGL
employees are accounted for as a deemed capital
contribution by Rightmove plc to RMGL of the
value of the share-based payment charge for
those awards, increasing the value of the
investment. Further details are provided in Note
15 to the financial statements. The investment is
not considered at risk of material misstatement
or subject to significant judgement, however it is
considered a significant risk due to its size in
relation to the Company balance sheet.
The Committee also reviewed and considered the following areas in relation to the 2019 financial statements.
Issue
Committee review
Accounting for the acquisition of Van Mildert
and the identification of intangibles and the
resulting goodwill carrying value on the Group
Balance Sheet.
Going concern and viability statements
The Committee carefully considered the treatment and disclosures in the
Annual Report in relation to the acquisition of Van Mildert.
The Committee also obtained a copy of an independent valuation
provided by Ernst & Young of the key intangible acquired, being customer
relationships together with a consideration of the allocation of the
remaining goodwill to the Agency cash generating unit.
The results of this review were that the Committee was satisfied that the
accounting and disclosures in relation to Van Mildert were appropriate.
KPMG also audited the application of IFRS 3 and the related disclosures.
In assessing the validity of the statements detailed on pages 26 and 107
(Going Concern), the Committee reviewed the work undertaken by
management to assess the Group’s resilience to the Principal Risks under
various stress test scenarios as set out on pages 23 to 25 and concluded that
the viability time period of three years remained appropriate.
The Committee were satisfied that sufficient rigour was built into the process
to assess going concern and viability over the designated periods.
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rightmove.co.uk
Fair balanced and understandable
One of the key governance requirements is for the Annual
Report and the Financial Statements, taken as a whole, to be
fair, balanced and understandable and provide the information
necessary for shareholders to assess the Group’s position
and performance, business model and strategy.
The Committee was provided with an early draft of the
Annual Report in order to assess the strategic direction and
key messages being communicated. Feedback was provided
by the Committee in advance of the February 2020 Board
meeting, highlighting any areas where the Committee
believed further clarity was required. The draft report was
then amended to incorporate this feedback prior to being
tabled at the Board meeting for final comment and approval.
To help the Committee in forming its opinion, management
presented a detailed fair balanced and understandable paper
to the February 2020 Audit Committee identifying the key
messages in the Annual Report and their consistent
application across both the front end and the back end.
Consideration was also given to the presentation and
disclosure of Group numbers following the acquisition of
Van Mildert in September 2019.
When forming its opinion, the Committee reflected on the
information it had received and its discussions throughout
the year. In particular, the Committee considered:
Is the report fair?
• Is the whole story presented and has any sensitive material been omitted that
should have been included?
• Are key messages in the narrative aligned with the KPIs and are they reflected
in the financial reporting?
• Are the KPIs being reported consistently from year to year?
• Is the reporting on the business areas in the narrative reporting consistent
with the financial reporting in the financial statements?
Is the report balanced?
• Do you get the same messages when reading the front end and back end of the
Annual Report independently?
• Are threats identified and appropriately highlighted?
• Are the alternative performance measures explained clearly with appropriate
prominence?
• Are the key judgements referred to in the narrative reporting and significant issues
reported in this Committee Report consistent with disclosures of key estimation
uncertainties and critical judgements set out in the financial statements?
• How do these judgements compare with the risks that KPMG are planning to
include in their Auditors’ Report?
• Is there a clear and cohesive framework for the Annual Report?
• Are the important messages highlighted appropriately throughout the
Annual Report?
• Is the Annual Report written in easy to understand language and are the key
messages clearly drawn out?
• Is the Annual Report free of unnecessary clutter?
Following its review, the Committee is of the opinion that the 2019 Annual Report,
taken as a whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position, performance, business
model and strategy.
Is the report understandable?
Conclusion
Rightmove plc annual report 2019 53
Financial statementsStrategic reportGovernance Governance | Audit Committee report continued
External audit
The Committee has primary responsibility for overseeing the
relationship with, and performance of, the external auditor,
KPMG LLP (KPMG), who is engaged to conduct a statutory
audit and express an opinion on the financial statements.
The Committee reviews the scope of KPMG’s audit, which
includes the review and testing of the systems of internal
financial control and data which are used to produce the
information contained in the financial statements.
The Committee is responsible for making recommendations
to the Board in relation to the appointment of the external
auditor. KPMG was reappointed as auditor of the Group at
the 2019 AGM. The current external audit engagement
partner is Anna Jones, who has held this role since the
beginning of 2018. A timeline setting out the tenure of
KPMG as auditor is set out below:
External Audit tendering timeline
The Committee approves the terms of engagement and
fees of the external auditor, ensuring they have appropriate
audit plans in place and that an appropriate relationship is
maintained between the Group and the external auditor.
The Committee approved the audit fees of £216,100 for
the year as set out in Note 6 of the financial statements.
Independence and non-audit services
The Committee has policies and procedures in place in
relation to the provision of non-audit services by the external
auditor and the non-audit fee policy was reviewed by the
Committee during the year. The non-audit fee policy
ensures that the Group benefits in a cost-effective manner
from the cumulative knowledge and experience of its auditor
whilst also ensuring that the auditor maintains the necessary
degree of independence and objectivity.
2000
2006
2013
2018
2023
KPMG appointed
as auditor
Rightmove becomes
a publicly listed entity
KPMG reappointed as
auditors, following a
competitive audit
tender process
Mandatory
appointment of new
audit lead partner
after five years
Competitive tender
will need to take place
prior to this date,
being 10 years since
last audit tender.
KPMG will not be
invited to re-tender
as maximum period
in office is 20 years,
i.e. 2026
Non-audit service
Policy
Assurance-related services directly related to the audit.
For example the review of the half-year Financial Statements.
Permitted non-audit services
Including but not limited to accounting advice, work related to
mergers, acquisitions, disposals, joint ventures or circulars,
employee benefit plan audits, sustainability audits and
reports required by regulators.
Prohibited services
In line with the EU Audit Reform, these are services where the
auditor’s objectivity and independence may be compromised.
Prohibited services are detailed in the FRC Revised Ethical
Standard 2016 and include tax services, accounting services,
internal audit services and valuation services.
The half year review is approved by the Committee as part of
the annual Audit Plan. Management is given the authority to
incur additional non-audit services of up to £15,000 in any
financial year without prior approval of the Committee.
Thereafter all additional fees are to be referred to the Audit
Committee in advance, subject to a cap on permitted non-
audit fees of 70% of the average audit fees over the three
preceding financial years.
Prohibited, in accordance with the EU Audit Reform and will be
assessed going forward in line with the new FRC Ethical and
Auditing Standards.
54
rightmove.co.uk
The level of non-audit fees as a proportion of the audit
fee has typically been low at Rightmove. During the year,
KPMG charged the Group £21,800 for non-audit services,
representing less than 10% of the 2019 audit fee. Of this,
£19,100 related to the half year review, and £1,700 for
agreed upon procedures in relation to the 2019 bonus
outturn. Further details of these services can be found
in Note 6 to the financial statements.
Statement of Compliance with the Competition and
Markets Authority (CMA) Order
The Group confirms that it has complied with The Statutory
Audit Services for Large Companies Market Investigation
(Mandatory Use of Competitive Processes and Audit
Committee Responsibilities) Order 2014 (Article 7.1),
including with respect to the Committee’s responsibilities
for agreeing the audit scope and fees and authorising
non-audit services.
External auditor effectiveness
The Committee places great importance on ensuring
that the external audit is of a high standard of quality and
effective. The Committee considered the quality and
effectiveness of the external audit process, in light of the
FRC’s Practice Aid for Audit Committees (May 2015). The
effectiveness of the external audit process is dependent on
a number of factors. These include the quality, continuity,
experience and training of audit personnel, business
understanding, technical knowledge and the degree
of rigour applied in the review processes of the work
undertaken, communication of key accounting and
audit judgements, together with appropriate audit risk
identification at the start of the audit cycle.
The Committee also met with KPMG at various stages
during the year, including without management present
to discuss their remit and any issues arising from their
work as the auditor.
The Committee evaluated the effectiveness of the audit
process using a questionnaire together with input from
management. Areas the Committee considered in this
review included the quality of audit planning and execution,
engagement with the Committee and management, quality
of key audit reports and the capability and experience of
the audit team. For the 2019 financial year, the Committee
was satisfied that there had been appropriate focus and
challenge on the primary areas of audit risk and concluded
that the performance of KPMG remained efficient and
effective in their role.
External auditor independence and objectivity
The Committee considered the safeguards in place to
protect the external auditor’s independence. KPMG
reported to the Committee that it had considered its
independence in relation to the audit and confirmed to
the Committee that it complies with UK regulatory and
professional requirements and that its objectivity is not
compromised. The Committee took this into account
when considering the external auditor’s independence
and concluded that KPMG remained independent and
objective in relation to the audit.
Internal audit
The Group has an Internal Audit function, known as
Rightmove Assurance which is fully outsourced to PwC.
The aim of Rightmove Assurance is to provide independent
and objective assurance on the adequacy and effectiveness
of internal control, risk management and governance
processes. This includes assurance that underlying financial
controls and processes are working effectively, as well as
specialist operational and compliance reviews that focus
on emerging risks in new and evolving areas of the business.
The Rightmove Assurance plan for 2019 was approved by
the Audit Committee and covered a broad range of core
financial and operational processes and controls, focusing
on specific risk areas. Specialist reviews were undertaken in
the following areas:
• Cyber security and risk management progress update;
• Review of Rightmove consumer facing GDPR processes
to provide assurance that data subjects are protected and
Rightmove employees have essential data protection
awareness;
• Marketing and media spend governance and PwC insights
into marketing spend allocation and activities; and
• Assistance with development of a third party supplier
risk management framework.
Reports setting out the principal findings of the Rightmove
Assurance reviews and agreed management actions were
discussed by the Committee. The Committee also reviewed
open actions from previous reviews, together with
monitoring the progress by management in completing
these actions.
Rightmove plc annual report 2019 55
Financial statementsStrategic reportGovernance Governance | Audit Committee report continued
Approach to developing the 2020 Internal Audit Plan
In recent years, the Internal Audit Plan has consisted of a
combination of traditional internal audit and compliance
reviews, primarily with a financial controls or cyber/GDPR
focus, as well as reviews with more of an advisory focus.
As the business continues to evolve, and with growth
being driven through new areas, this comes with some
exposure to new, emerging risk areas and therefore the
Internal Audit approach for 2020 and beyond will focus
on ensuring an appropriate level of coverage across more
of the audit universe.
To aid this, PwC working closely with management,
completed a detailed review of the audit universe.
The universe highlighted the various functional areas
within Rightmove, the associated key process areas
and related principal or emerging risks. In addition, it
highlighted where Internal Audit work has taken place
previously. It was then used as the basis for the
development of the Rightmove Assurance plan for 2020,
helping to ensure an appropriate level of coverage aligned
to the risks facing the business and the current assessment
of the control environment.
To help cover more of the audit universe and more functional
areas within the business, the Internal Audit Plan also sets
out a “two-tier” approach for 2020. This comprises a number
of traditional Internal Audit reviews together with “short,
sharp reviews” to gain a high level understanding of the
control environment within a specific functional area.
These reviews will not be graded but seek to provide the
Committee with further comfort by providing greater insight
into how risks are managed more broadly in the business
with a view to undertaking more detailed work if found
necessary or recommended by PwC.
Effectiveness of the internal audit process
The work of Rightmove Assurance provides a key additional
source of assurance and support to management and the
Committee on the effectiveness of internal controls as well
as providing guidance and recommendations to further
enhance the internal control environment, and provide
specialist insight into areas of change in the business.
During the year, the Committee undertook a review of
the effectiveness of the Rightmove Assurance function.
The evaluation was led by the Committee Chair and
involved issuing tailored evaluation questionnaires which
were completed by Rightmove management, KPMG, and
the Committee. The evaluation concluded that the function
had a sound appreciation of the key issues facing the
business, was realistic and robust with audit suggestions
and added value to the business.
Anti-bribery and whistleblowing
The Code includes a provision requiring the Committee to
review arrangements by which employees of the Group may
in confidence raise concerns about possible improprieties
in matters of financial reporting or other matters.
The Committee’s objective is to ensure that arrangements
are in place for the proportionate and independent
investigation of such matters and for the appropriate
follow up action.
Rightmove is committed to the highest standards of quality,
honesty, openness and accountability. The Group has a
whistleblowing process which enables employees of the
Group to raise genuine concerns on an entirely confidential
basis including a third party ‘speak up’ facility provided by
Expolink. The Committee receives reports on the
communication of the whistleblowing policy to the business
and the use of the service including any whistleblowing
incidents and their outcomes.
The Board believes that it is important for the Group and
its employees to follow clear and transparent business
practices and consistently apply high ethical standards in all
business dealings thereby supporting the objectives of the
Bribery Act 2010. A Bribery Policy and procedures have been
established to set out what is expected from employees and
other stakeholders who act on behalf of the Group to ensure
that they protect themselves as well as the Group’s reputation
and assets. Employees are required to sign up to Rightmove’s
Bribery Policy on appointment and whenever the policy is
updated; policy details are communicated to all employees.
Rightmove has a zero tolerance approach to bribery and any
breach of the Bribery Act is regarded as serious misconduct,
potentially justifying immediate dismissal.
All corporate gifts and hospitality offered or received valued
at more than £50 are recorded in the Group’s gifts and
hospitality register. For any gifts or hospitality greater than
£100 approval is required prior to accepting and the register
is examined by the Committee at least annually.
Internal controls
The Board has overall responsibility for the Group’s system
of internal controls and has established a framework of
financial and other controls which is periodically reviewed
in accordance with the FRC Internal Control: Guidance to
Directors publication (formerly known as the Turnball
Guidance) for its effectiveness.
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rightmove.co.uk
• A comprehensive disaster recovery plan and business
continuity plan based upon:
– co-hosting of the Rightmove.co.uk website across three
separate locations, which is regularly tested and reviewed;
– the ability of the business to maintain business critical
activities in the event of an incident;
– the capability for employees to remote work from home
or a third party location in the event of a loss of one of our
premises which is regularly tested through planned office
closures;
– Regular testing of the security of the IT systems and
platforms, regular backups of key data and ongoing threat
monitoring to protect against the risk of cyber-attack;
• A framework which provides guidelines in meeting the
Financial Conduct Authority regulatory requirements for
our regulated entities;
• A Group Data Protection Framework which provides
guidelines in meeting the requirements of the data
protection principles set out in the Data Protection
Act 2018; and
• Whistleblowing and bribery policies of which all employees
are made aware, to enable concerns to be raised either with
line management or, if appropriate, confidentially outside
the line management.
Through the procedures outlined above, the Board, with
advice from the Audit Committee, has considered all
significant aspects of internal control for the year and up
to the date of this Annual Report. No significant failings or
weaknesses were identified during this review. However,
had there been any such failings or weaknesses, the Board
confirms that necessary actions would have been taken to
remedy them.
The Board has taken, and will continue to take, appropriate
measures to ensure that the chances of financial
irregularities occurring are reduced as far as reasonably
possible by improving the quality of information at all levels in
the Group, fostering an open environment and ensuring that
the financial analysis is rigorously applied. Any system of
internal control is designed to manage rather than eliminate
the risk of failure to achieve business objectives and can
only provide reasonable and not absolute assurance against
material misstatement or loss.
The Group’s management has established the procedures
necessary to ensure that there is an ongoing process for
identifying, evaluating and managing the principal risks to the
Group. These procedures have been in place for the whole of
the financial year ended 31 December 2019 and up to the
date of the approval of these financial statements and they
are reviewed regularly.
Rightmove has an internal audit function, known as
Rightmove Assurance, which is fully outsourced to PwC.
Rightmove Assurance provides the Group with additional
independent assurance on the effectiveness of internal
controls.
The key elements of the system of internal control are:
• Major commercial, strategic, competitive, financial and
regulatory risks are formally identified, quantified and
assessed, discussed with the Executive Committee,
after which they are considered by the Board ;
• A comprehensive system of planning, budgeting and
monitoring Group results. This includes monthly
management reporting and monitoring of performance
against both budgets and forecasts with explanations for
all significant variances;
• An organisational structure with clearly defined lines
of responsibility and delegation of authority, and an
embedded culture of openness where business decisions
and their associated risks and benefits are discussed
and challenged;
• Clearly defined policies for capital expenditure and
investment exist, including appropriate authorisation
levels, with larger capital projects, acquisitions and
disposals requiring Board approval;
• A treasury function which manages cash flow forecasts
and cash on deposit and is responsible for monitoring
compliance with banking agreements and counterparty
exposure limits;
Rightmove plc annual report 2019 57
Financial statementsStrategic reportGovernance Governance | Nomination Committee Report
Nomination Committee Report Summary
Andrew Fisher
Chair of the Nomination Committee
Committee’s remit
The role of the Nomination Committee is to keep
the structure, size and composition of the Board and
Committees under review with the primary objective
of matching the skills, knowledge and experience of
Directors to Rightmove’s business strategy and
requirements.
Committee members
The Committee comprises the Chair and five independent
Non-Executive Directors:
Andrew Fisher (Chair)
Jacqueline de Rojas (Senior Independent Director)
Andrew Findlay
Rakhi Goss-Custard
Amit Tiwari
Lorna Tilbian
2019 Activities
The Committee met four times during 2019 and its key activities
were to:
• review the composition and diversity of the Board
• review the membership of Board committees
• approve the succession plans for Executive Directors and the senior
leadership team
• consider the Board succession plan and recommendations for
candidate profiles for a new Non-Executive Director and the Chair
• agree the process for an internal Board evaluation and consider
actions arising, and
• review Directors’ commitments, potential conflicts of interest and
appointments to other boards
2020 Priorities
The Nomination Committee will continue its focus on Board diversity,
effectiveness and succession, including the appointment of a new
Finance Director.
Dear shareholder
I am pleased to present the Nomination Committee report
for 2019.
Our priority is to optimise Board performance, enabling
Rightmove to prosper, compete and manage risk effectively
whilst continuing to innovate and evolve.
The terms of reference of the Committee were reviewed and
updated during the year. The Committee fulfilled its terms of
reference during the year by:
• reviewing the Group organisation and succession plans;
• nominating a new Non-Executive Director;
• implementing the Board succession plan and nominating
a new Chair;
• commencing the search for the appointment of a new
Finance Director; and
• approving the format of internal Board and Committee
evaluations, further details of which can be found on
page 60.
The Committee continued its focus on Board succession,
comparing Rightmove’s strategic objectives with the profiles
of its existing directors to determine future Board
requirements and shape recruitment plans. The Company’s
major shareholders were consulted on the proposed
succession plan for the Board Chair and details of our
implementation of the succession plan are set out on
pages 59 to 60 of this report.
Peter Williams retired as our Senior Independent Director and
Chair of the Remuneration Committee at the 2019 AGM.
Jacqueline de Rojas was appointed Senior Independent Director
and Lorna Tilbian was elected Remuneration Committee Chair
following the AGM on 10 May 2019. Amit Tiwari was appointed as
a Non-Executive Director on 1 June 2019.
The Board currently consists of eight directors including
six Non-Executive Directors, all of which are considered to be
independent, with gender balance in both executive and non-
executive roles.
I will be available at the AGM to answer any questions about
the work of the Committee.
Andrew Fisher
Chair
The Committee’s Terms of Reference are available on
plc.rightmove.co.uk
58
rightmove.co.uk
Composition and attendance at meetings
The Chair and Non-Executive Directors are members
of the Committee. The Chief Executive Officer, Finance
Director and the Head of People & Development attend
meetings by invitation.
The Committee met four times during the year and
attendance at the meetings is shown in the Corporate
Governance report on page 48.
Membership
The Committee is comprised of Non-Executive Directors,
whose biographical details can be found on pages 42 to 44.
As at 31 December 2019, all our Non-Executive Directors
were considered by the Board to be independent. At the
request of the Chair, the CEO is normally invited to attend the
meeting to discuss the organisation and succession plans.
The former Chair of the Company did not chair the
Committee for any discussion about the appointment of his
successor, which was led by our Senior Independent Director
in 2019.
The Chair’s induction is ongoing and has included employee
engagement sessions and meetings with each member of
the senior leadership team to understand their business or
area of responsibility. The Chair has received briefings from
the Chief Information Security Officer on cyber risks, the
Finance Director and Head of Finance on financial controls
and risk management and the Company Secretary for a full
briefing on data protection, Company policies and corporate
governance. Meetings with Rightmove’s investors and
customers are also scheduled and stakeholder engagement
will continue throughout 2020.
Individual Board members have access to training and can
seek advice from independent professional advisers, at the
Group’s expense, where specific expertise or training is
required in furtherance of their duties. The Board receives
technical briefings and updates on key business activities
and risks, such as cyber security, new digital marketing
products and changes in regulation. All Directors are
required to complete mandatory information security
training as this is a requirement for all Rightmove employees.
Appointments are for a period of up to three years,
extendable by no more than two additional three-year
periods, so long as Committee members continue to be
independent.
Board diversity and experience
Details of our Board diversity policy and the skills and
experience of our Directors are set out on pages 42 to 44
and 47 of the Corporate Governance Report.
Board induction and training
New directors joining the Board undertake a tailored
induction programme including meetings with key members
of the management team. Directors proactively arrange
meetings with Executive Directors and senior leadership
team in Rightmove’s offices outside the scheduled Board
meetings and are invited to attend employee engagement
sessions, Company events and briefings. New directors
receive a comprehensive induction pack of corporate
information and a briefing from the Company Secretary
covering corporate governance, Group policies and
relevant regulations.
Board succession and independence
The Nomination Committee takes a long-term view
of Board succession. In selecting a new Non-Executive
Director and the Chair, the Committee gave careful
consideration to the conclusions of the Board Strategy
Review (externally facilitated by Korn Ferry) in 2018, the
existing Board skills and the Group’s strategic plan.
Rightmove plc annual report 2019 59
Financial statementsStrategic reportGovernance Governance | Nomination Committee report continued
Board effectiveness and evaluation
A key mechanism to inform our future development plans
is the annual Board evaluation. Following the externally
facilitated evaluation of Board and Committee performance
in 2018, a number of actions were implemented to improve
the Board’s effectiveness, which included refreshing the
Board programme, reprioritising Board agenda items,
optimising the format and delivery of Board presentations
by the senior leadership team and implementing a
programme of employee engagement sessions
and activities.
In 2019, the Directors completed an internally facilitated
review of the Board and its Committees, which confirmed
that the Board continues to operate effectively and that the
actions previously identified had improved the efficiency
and focus of the Board meetings during the year together
with the Board’s detailed understanding of the business.
However, we continue to recognise the value of the review
and suggested areas for improvement and have agreed
further enhancements to the Board programme, including
more regular review of strategic initiatives and a wider variety
of stakeholder engagement activities involving employees
and customers.
The Board established a Committee, chaired by the Senior
Independent Director, Jacqueline de Rojas, and Chief
Executive Officer, Peter Brooks-Johnson, to oversee the
search for a new Chair. Russell Reynolds Associates
(an independent external consultancy with no other
connection with the Company or individual directors)
was appointed to shortlist for suitable candidates, who
were initially interviewed by Jacqueline and Peter, and
their preferred candidate, Andrew Fisher, met the other
Non-Executive Directors. The Nomination Committee
unanimously recommended Andrew’s appointment, based
on directors’ meetings with him and his proven track record
of growing rapidly evolving, successful digital businesses.
For the appointment of Amit Tiwari, Korn Ferry were
instructed and prepared a candidate shortlist to match
the brief agreed by the Nomination Committee. Amit was
independently recommended to the Chair, having had
no prior connection with the Board or Company, who
considered Amit’s skills and experience to be a better match
for the Board succession requirements. Korn Ferry compiled
a full candidate profile and references for Amit, who was
invited to meet other Directors before the Nomination
Committee considered and recommended his appointment
to the Board.
The Board has determined that all Non-Executive Directors
are independent in character and judgment and have
enough capacity to meet their commitments to Rightmove,
including during periods when greater involvement may be
required of them.
In November 2019, the Company announced that
Robyn Perriss planned to step down as Finance Director
by the end of June 2020. The Committee has appointed
Russell Reynolds Associates to conduct an external search
and will keep the market abreast of its progress in finding
her successor.
60
rightmove.co.uk
Governance | Directors' remuneration report
Annual Statement by the Chair of the Remuneration Committee
Remuneration report summary
Lorna Tilbian
Chair of the Remuneration Committee
Committee’s remit
The primary role of the Committee is to make
recommendations to the Board on the Company’s overall
policy and framework for setting the remuneration of the
Chair, Executive Directors and the senior leadership team.
The primary objectives of the Remuneration Policy are
the effective recruitment, retention and fair reward of
Executive Directors and employees.
Committee members and advisors
The Committee members are independent Non-Executive Directors
comprising:
Lorna Tilbian (Chair)
Jacqueline de Rojas
Rakhi Goss-Custard
The Committee appointed Deloitte LLP as remuneration
consultant in 2019.
2019 Activities
The Committee met seven times during 2019 and key activities
included the:
• approval of DSP and PSP share awards granted in March 2019
• appointment of new remuneration consultants
• review and recommendation of changes to the
Remuneration Policy
• consultation with the Company’s shareholders on the 2020
Remuneration Policy proposals
• approval of the Directors’ Remuneration Report
• review and approval of Executive Directors’ base salaries
and benefits
• review of 2019 business performance against the bonus
performance targets
• approval of appropriate benchmarks and performance measures
for the annual bonus and PSP awards
• approval of leaver arrangements for the Finance Director,
Robyn Perriss
2020 Priorities
The Committee will oversee the implementation of the 2020
Remuneration Policy and approve the remuneration of a new
Finance Director, in accordance with the 2020 Policy.
The Committee’s Terms of Reference are available on
plc.rightmove.co.uk
Dear Shareholder
I am pleased to present our Directors’ Remuneration Report
for Rightmove (the Company) together with its subsidiary
companies (the Group) for the year ended 31 December 2019.
Our report is made up of two sections, the Remuneration
Policy Report and the Annual Report on Remuneration, key
elements of which are summarised in ‘Remuneration at a
glance’ on pages 63 to 64.
Investor engagement and Remuneration Policy
The Committee’s main focus in 2019 was the review and
evolution of Rightmove’s Remuneration Policy (the Policy)
which we will ask shareholders to approve at our AGM on
4 May 2020. During 2019, the Committee appointed Deloitte
LLP as remuneration consultant to assist it in reviewing all
elements of the Policy in order to ensure alignment with our
business strategy, the expectations of our shareholders and
the interests of the wider workforce. In 2019, the Committee
consulted the Company’s largest shareholders on the new
Policy proposals, which they largely supported. In light of
our shareholders’ comments during this and previous
consultations, the Committee considered it appropriate to
introduce a post-vesting holding period for Performance
Share awards and a post-employment shareholding
requirement. The Policy changes are summarised on page 64
and detailed in the Policy Report on pages 65 to 75.
The Committee’s key objective is to develop a Policy and
remuneration framework that is fair to our employees and
aligned to shareholders’ interests in the successful delivery of
Rightmove’s long-term strategy. It must attract, reward, retain
and incentivise our management team and wider workforce to
deliver that strategy in an innovative, high growth business.
We work on the principle and belief that ‘we’re all in it together’,
which underpins Rightmove’s culture and is reflected in
alignment of executive pay rises, pensions and other benefits
with those available more broadly to employees.
The Policy is intended to deliver fixed pay at or below market
median with above market levels of variable pay opportunity
for our Executive Directors, subject to the achievement of
challenging performance measures linked to Rightmove’s key
financial and operational objectives. The current maximum
bonus and long-term incentive plan opportunities are 125%
and 200% of salary respectively. From 2020 we are proposing
to increase the bonus to 175% and decrease the LTIP to
175%, both of which remain competitive (but not overly so)
against the FTSE 50-150 market and Rightmove’s peers.
The Committee considers this adjustment to be essential in
attracting the right calibre of executive to succeed our
present Finance Director in 2020 and ensure ongoing
market competitiveness.
Rightmove plc annual report 2019 61
Financial statementsStrategic reportGovernance Governance | Directors' remuneration report continued
Rightmove has performed strongly over the three-year
performance period from 1 January 2017 to 31 December
2019, resulting in 85% of the Performance Share Plan (PSP)
awards granted in 2017 vesting in March 2020. Underlying
basic EPS(3) growth was 42% versus a maximum target of
50% and Rightmove’s TSR growth over the same three-year
performance period exceeded the FTSE 350 Index by over
50% resulting in 100% of this element vesting. The
Committee tested both performance conditions, set at the
beginning of the performance period, and believes the
overall outturn against the performance conditions is fair
and accurate.
Board succession
Our current Finance Director, Robyn Perriss, will retire from
the Board by 30 June 2020 and the Committee has
determined that she is a ‘good leaver’ for the purpose of
Rightmove’s share plan awards. Full details of Robyn’s
contractual entitlement to remuneration and the treatment
of her share-based incentives are set out on pages 89 to 90.
I will be available at the AGM to answer any questions you
may have on the new Policy and our application of the
current Policy in 2019.
Lorna Tilbian
Chair of the Remuneration Committee
28 February 2020
At the same time, we are either introducing or maintaining
several features designed with shareholder alignment and
expectations in mind. These features include a two-year
post-vesting holding period for Performance Share awards
for all Directors and a two-year post-employment
shareholding requirement, which will apply to shares
acquired through awards granted under the new Policy.
We continue our best practice approach on pensions; our
Company pension contribution of 6% of salary has been at
the same level for both Executive Directors and employees
for many years now, and this will continue to be the case.
Our performance-related pay is geared towards long-term,
sustainable performance, with 80% delivered in equity
through a combination of bonus shares, deferred for two
years, and performance shares with a three-year
performance period and two-year post-vesting holding
period.
The Committee values the feedback it has received from
Rightmove’s major shareholders and appreciates their
prompt engagement and support for our Policy proposals.
Shareholders’ views have been taken into consideration in
the final Policy detail.
2019 performance and reward
The other key decisions made by the Committee ensure
that Directors’ remuneration fairly reflects the overall
performance of the Group, through achievement of pre-set
performance targets.
The Committee reviewed business performance against the
bonus plan objectives for 2019 and recommended an annual
bonus payment of 65%. The bonus achieved reflects the
growth in revenue and underlying operating profit(1) of 8%,
continued audience growth in time spent on our platforms,
compared to a reduction in time spent on Rightmove’s
closest competitors and strong growth in our Other
business revenue of 19% year on year. These performance
targets are stretching, compared with Rightmove’s business
plan, and we believe they underpin the long-term success
and sustainability of the business. Achievement against
each performance target is detailed on page 80. The lower
bonus payout for 2019, compared with 2018, was largely due
to a lower employee ‘great place to work’ satisfaction score(2)
of 81% (2018: 91%) and lower than anticipated tenant
passport lead penetration.
(1) Before share-based payments and NI on share-based incentives.
(2) Based on the number of employee respondents selecting ‘Yes’ as a response
to this question in the annual employee survey.
(3) Before share-based payments and NI on share-based incentives with no
related adjustment for tax. Prior year EPS has been adjusted for the 10:1 share
subdivision effective on 31 August 2018.
62
rightmove.co.uk
Governance | Remuneration at a glance
2019 Financial performance
Revenue
Underlying operating profit(1)
Returns to shareholders
+8%
Pay and performance for 2019
+8%
£148.8m
The charts below show the actual remuneration for the Chief Executive Officer and the Finance Director for 2019. The charts include data
for salary, bonus and the LTIP (performance shares) granted in 2017, with a performance period ending on 31 December 2019. The data
excludes benefits, details of which can be found in the single remuneration figure table on page 78.
Chief Executive Officer
Finance Director
Maximum
£500.6
£625.8
£1,001.2
Maximum
£359.6
£449.8
£719.1
0
0
0
£
Actual
£500.6
£406.7
£787.2
£452.4
£1,239.6
0
0
0
£
Actual
£359.6
£292.1
£565.6
£331.9
£897.5
Target
£500.6
£344.2
£625.8
Target
£359.6 £247.2
£449.4
0
500
1000
Salary
Bonus
LTIP
1500
2000
LTIP (attributable to share
price growth since grant)
2500
0
500
1000
1500
Salary
Bonus
LTIP
2000
LTIP (attributable to share
price growth since grant)
2500
Long-term incentive plan performance – 85%
Annual bonus achievement – 65%
Underlying basic EPS(1)
60% out of a maximum of 75% of this
element of the 2017 PSP awards vest
on achievement of three-year EPS
growth of 42%.
Total Shareholder Return
25% out of a maximum of 25% for
this element of the 2017 PSP
awards will vest as relative three-
year TSR performance exceeding
the FTSE 350 index by over 50%.
Underlying basic EPS(2)
Underlying basic EPS(2)
20
15
10
5
0
e
r
a
h
s
r
e
p
e
c
n
e
P
14.3
16.3
18.3
20.2
2016
2017
2018
2019
Total Shareholder Return
Total shareholder return
Rightmove
FTSE 100
FTSE 350
e
v
o
m
t
h
g
R
i
:
e
c
r
u
o
S
t
e
S
t
c
a
F
:
e
c
r
u
o
S
Dec 2016
Dec 2017
Dec 2018
Dec 2019
This graph shows the value, by 31 December 2019, of £100 invested
in Rightmove on 31 December 2016, compared with the value of £100
invested in the FTSE 100 and the FTSE 350 Indices on the same date.
e
v
o
m
t
h
g
R
i
:
e
c
r
u
o
S
)
0
0
1
o
t
d
e
s
a
b
e
r
(
£
e
u
a
V
l
160
110
60
20
15
10
5
0
Performance Target
Underlying operating profit(2)
Threshold
£213.3m
Actual
£219.7m
Bonus %
achieved
40%
Innovation – growth in Other
revenue(3)
Growth in absolute time on
site in minutes relative to our
nearest competitors(4)
Total shareholder return
Tenant services – rental
160
leads including a Rightmove
Passport
Employee survey respondents
110
who think ‘Rightmove is a
great place to work’
Rightmove
FTSE 100
FTSE 350
)
0
0
1
o
t
d
e
s
a
b
e
r
(
£
e
u
a
V
l
£2.0m
£3.9m
10%
Same
absolute
growth in
minutes
4%
Growth in time spent
on Rightmove,
compared to a fall in
competitors’ traffic
2%
90%
81%
15%
0%
0%
t
e
S
t
c
a
F
:
e
c
r
u
o
S
(1) Before share-based payments and NI on share-based incentives with no related
60
adjustment for tax.
Dec 2016
Dec 2017
Dec 2018
Dec 2019
(2) Before share-based payments and NI on share-based incentives.
This graph shows the value, by 31 December 2019, of £100 invested
(3) Other revenue is all revenue excluding Agency and New Homes.
in Rightmove on 31 December 2016, compared with the value of £100
invested in the FTSE 100 and the FTSE 350 Indices on the same date.
(4) Time in minutes spent on Rightmove platforms, measured by comScore, relative
to our nearest competitors.
Shareholder alignment
Shareholding guidelines
200% of salary for all Executive
Directors
Proportion of variable awards
received in shares
85% of performance-related pay for
2019 was awarded in Rightmove
shares
Rightmove plc annual report 2019 63
Underlying basic EPS(2)
14.3
16.3
18.3
20.2
2016
2017
2018
2019
20
15
10
5
0
e
r
a
h
s
r
e
p
e
c
n
e
P
20
15
10
5
0
Financial statementsStrategic reportGovernance
Governance | Remuneration at a glance continued
Remuneration Policy changes
Base salaries
Pension
Annual bonus
Performance Share Plan
Malus and Clawback
2019
Executive Directors receive inflationary
adjustments to salaries capped at 3% above wider
workforce increases
Employer contributions of maximum of 6% of
base salary, in line with the wider workforce
Maximum 125% of salary, with 40% cash and 60%
deferred into Company shares for two years
Awards granted at 200% of salary. No post-
vesting holding period for current Executive
Directors
Clawback applies to DSP awards and PSP awards
Shareholding Guidelines
200% of base salary
Post cessation shareholding requirements
None
2020
Executive Directors will normally receive
inflationary adjustments to salaries in line with
wider workforce increases
No change
Maximum 175% of salary, with 40% cash and 60%
deferred into Company shares for two years
Awards granted at 175% of salary. Introduction of
two-year post-vesting holding period
Enhanced malus and clawback apply to DSP and
PSP awards
No change
A two-year post-employment holding period will
apply to share awards granted from May 2020, with
100% of the shareholding requirement (or actual
holding, if lower) retained for the first year, and
50% for the second year
64
rightmove.co.uk
Remuneration Policy Report (unaudited)
Introduction
This report sets out the Company’s Policy on Directors’
remuneration for the forthcoming year, and for subsequent
years, as well as information on remuneration paid to Directors
for the financial year ended 31 December 2019. The report
has been prepared in accordance with the Companies Act
2006, the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 and
The Companies (Miscellaneous Reporting) Regulations 2018
(together the Act), and the 2018 UK Corporate Governance
Code (the Code).
This report comprises a Policy Report and an Annual Report
on Remuneration. The current Remuneration Policy was
approved by shareholders at the 2017 AGM and, in
compliance with the Act, the revised Policy as set out below
(the 2020 Policy) will be put to a binding shareholder vote,
whilst the Annual Report on Remuneration will be subject to
a separate advisory vote, at the 2020 AGM.
The parts of the report which have been audited have been
highlighted.
Remuneration Policy Report (the Policy Report)
This part of the Directors' Remuneration Report sets out the
Remuneration Policy for the Company and has been
prepared in accordance with the Act.
The 2020 Policy was developed in line with Rightmove’s
approach, that our Executive Directors should be rewarded
lower than market base salaries and benefits and higher
than market equity rewards subject to the achievement of
challenging performance targets. This approach accords
with the views of our major shareholders and with ‘best
practice’ principles set out in the Code.
The key principles of the Committee's policy are that
executive remuneration should:
• be sufficient to attract and retain Executive Directors and
senior leadership team of the quality required to run the
Group successfully and be regarded as fair by both
employees and shareholders;
• be simple to explain, understand and administer;
• be at or below market levels for base salary and above
market levels of variable pay potential;
• normally be reviewed against the market every three years,
with intervening pay reviews for Executive Directors aligned
with all employees, specifically for cost of living rises in base
salary and changes in benefits, which are made available on
the same basis to the majority of Rightmove employees;
• align the interests of the Executive Directors with the
interests of shareholders and reflect the dynamic,
performance-driven culture of the Group;
• reward individuals for the overall success of the business,
measuring and incentivising Directors against key short and
long-term goals; and
• not enable Executive Directors to gain significantly from
short-term successes, which may not be consistent with
growing the overall value of the business, through the
deferral of 60% of annual bonuses for a further two years
after the performance targets have been achieved.
The following table provides an overview of the Committee's
Remuneration Policy, which has been designed to reflect the
principles described above.
The key changes to the new Policy are:
- the increase in maximum opportunity for the Annual Bonus
from 125% to 175% of base salary;
- the decrease in maximum opportunity for the Performance
Share Plan (the “PSP”) from 200% to 175% of base salary;
- the introduction of a two-year post-vesting holding period
for the PSP; and
- the introduction of post-employment shareholding
requirements.
Rightmove plc annual report 2019 65
Financial statementsStrategic reportGovernance Governance | Directors' remuneration report continued
Remuneration Policy
Element of
remuneration
Purpose and
link to strategy
Operation
Maximum
opportunity
Performance
criteria
The Committee considers both
individual and Group performance
in a broad context when
determining base salary increases.
Directors’ current salaries are
set out on page 87.
These salary levels will be
eligible for increases during
the period that the 2020
Policy operates.
During this time, salaries
may be increased each year
(in percentage of salary terms)
in line with those of the wider
workforce, subject to the
Committee’s consideration
of the overall salary budget,
individual and Group
performance and external
economic factors including
inflation.
Increases beyond workforce
pay awards (in percentage of
salary terms) will only be made
where there is a change of
incumbent, in responsibility,
experience or a significant
increase in the scale of the role
and/or size, value and/or
complexity of the Group.
The value of benefits may vary
from year to year depending on
the cost to the Company from
third party providers.
Not applicable
Salary
To provide a
base salary
which will attract
and retain high
calibre
executives to
execute the
Group’s
business
strategy.
Benefits
To provide
simple, cost-
effective
employee
benefits which
are the same as
those offered to
the wider
workforce.
Base salaries are normally reviewed
annually. The timing of any change
is at the Committee’s discretion
and will usually be effective from
1January.
When considering the executive's
eligibility for a salary increase, the
Committee considers the following
points:
• size and responsibilities of the role;
• increases awarded to the wider
workforce;
• individual and Group performance;
and
• broader economic and
inflationary conditions.
Executive Directors’ remuneration
is benchmarked against external
market data periodically (generally
every three years). Relevant market
comparators are selected, which
include other companies of a
similar size and complexity. The
Committee considers market data,
alongside the individual's skills and
experience, performance and
internal relativities.
The Executive Directors are
enrolled in the Group’s private
medical insurance scheme and
receive life assurance cover equal
to four times base salary.
Additionally, all Executive Directors
are members of the Group’s
medical cash plan.
Executive Directors will be entitled
to receive new benefits on the
same terms as those introduced
for the whole workforce.
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Element of
remuneration
Purpose and
link to strategy
Operation
Pension
To provide a
basic, cost-
effective, long-
term retirement
benefit.
Annual bonus
including
Deferred
Share Bonus
Plan (DSP)
To incentivise
and recognise
execution of the
business
strategy on an
annual basis.
Rewards the
achievement of
annual financial
and operational
objectives.
The Group operates a stakeholder
pension plan for employees under
which the Company contributes
6% of base salary subject to the
employee contributing a minimum
of 3% of base salary.
The Company does not contribute
to any personal pension
arrangements.
Whilst executives are not obliged
to join, the Company operates a
pension salary exchange
arrangement whereby executives
can exchange part of their salary
for Company paid pension
contributions. Where executives
exchange salary and this reduces
the Company’s National Insurance
Contributions, the Company
credits the full saving to the
executive’s pension.
The Company may introduce a
cash alternative to a pension
contribution where this would be
more tax efficient for the individual.
The annual bonus comprises a
cash award (40% of any bonus
earned) and a DSP award (60% of
any bonus earned).
A greater proportion of the annual
bonus may be deferred in future
years at the Committee’s
discretion.
Deferred shares will vest after two
years and be potentially forfeitable
during that period.
Payments under the annual bonus
plan may be subject to malus and/
or clawback in the circumstances
described on page 69.
Maximum
opportunity
6% of base salary
Performance
criteria
Not applicable
175% of base salary
The bonus is determined by and
based on performance against a
range of key performance
indicators which will be selected
and weighted to support delivery
of Rightmove’s business strategy.
The primary bonus metric will be
profit-based (e.g. operating profit)
with targets set in relation to a
Board-approved business plan
and requiring significant out-
performance of that plan to trigger
maximum payments.
A minority of bonus will also be
earned based on pre-set targets
drawn from the Group's other key
performance indicators relating to
underlying drivers of long-term
revenue growth.
Details of the performance
measures used for the current
year and the targets set for the
year under review and
performance against them is
provided on pages 80 and 87 to 88.
25% of the bonuses and shares
awarded vest for achieving the
threshold performance target.
Bonus is earned on a linear basis
from threshold to maximum
performance levels.
Rightmove plc annual report 2019 67
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Governance | Directors' remuneration report continued
Maximum
opportunity
175% of base salary
Performance
criteria
Awards vest based on three-year
performance against challenging
financial targets for EPS and
relative TSR performance.
Financial targets will determine
vesting in relation to at least half
of an award.
25% of the awards vest for
achieving the threshold
performance target, and vest on
a linear basis from threshold to
maximum performance levels.
The performance period for
financial targets and relative TSR
targets is three financial years,
starting with the year in which the
award is granted.
Participation limits are set by
HMRC from time to time.
None
None
Participation in the SIP is
subject to HMRC rules. Share
awards are discretionary and
made within the SIP rules and
prevailing limits.
Element of
remuneration
Purpose and
link to strategy
Operation
Performance
Share Plan
(PSP)
To incentivise
and reward
executives
for the
achievement of
superior returns
to shareholders
over a three-
year period, to
Executive
Directors and
align their
interests with
shareholders.
All-employee
Sharesave
Plan
Share
Incentive Plan
(SIP)
Provides all
employees with
the opportunity
to own shares in
the Company on
similar terms.
To provide all
employees the
opportunity to
own shares in
the Company on
equal terms.
The PSP permits annual awards of
nil cost options, contingent shares
and forfeitable shares which vest
after three years subject to
continued service and the
achievement of challenging
performance conditions.
All PSP awards will be subject to
a two-year post-vesting holding
period, to align the interests of
executives and shareholders,
followed by a 2 year exercise
period.
A dividend roll-up provision
operates enabling dividends to be
paid on PSP shares at the time of
vesting and on unexercised awards
during the holding period. These
dividend equivalents will ordinarily
be paid in shares.
PSP awards may be subject to
malus and/or clawback in the
circumstances described on
page 69.
Executive Directors are entitled to
participate on the same terms as
all other employees in the Group’s
Sharesave Plan, which has standard
terms.
Executive Directors are entitled to
participate in the SIP on the same
terms as all other employees. The
SIP has standard terms and
currently only free shares are
offered. However, Executive
Directors routinely forfeit their
entitlement to free share awards.
The Committee may award free
shares to employees, subject to
continued strong financial
performance. Share awards will
typically be made annually and will
be modest in value. Historically
shares to the value of around
£2,500 have been awarded to each
employee.
Share
ownership
guidelines
To provide
alignment
between the
Executive
Directors and
shareholders.
Not applicable
Executive Directors are required to
retain at least half of any share
awards vesting or exercised (after
selling sufficient shares to meet the
exercise price and to pay any tax
liabilities due) until they have met
the shareholding guideline.
The Committee will regularly
monitor progress towards the
guideline.
Shareholding guideline: 200%
of base salary for all Executive
Directors, comprising vested
share awards, beneficially
owned shares, and shares
under awards no longer subject
to performance (e.g. bonus
deferrals and LTIP awards in a
post-vesting holding period)
on a deemed net of tax basis.
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Element of
remuneration
Purpose and
link to strategy
Operation
Maximum
opportunity
Post-
cessation
holding
requirements
Non-
Executive
Directors
To provide a
competitive fee
which will attract
and retain high
calibre
individuals and
reflects their
relevant skills
and experience.
Business
expenses
To reimburse
Directors for
reasonable
business
expenses.
A two-year post-employment
holding period will apply to share
awards granted from May 2020,
with 100% of the shareholding
requirement (or actual holding, if
lower) retained for the first year,
and 50% for the second year.
The fees for Non-Executive
Directors (including the Company
Chair and additional fees for
chairing Board Committees) are
reviewed periodically (normally
every three years).
The Committee will consider the
Chair's fee, whilst the Non-
Executive Directors' fee is
considered by the wider Board,
excluding the non-executives.
Fee levels for each role are
determined after considering the
responsibility of the role, the skills
and knowledge required and the
expected time commitments.
Periodic benchmarking against
relevant market comparators,
reflecting the size and complexity
of the role, is used to provide
context when setting fee levels.
In exceptional circumstances,
where the normal time
commitment has been
substantially exceeded, an
additional fee may be paid at the
Board’s discretion.
Directors may claim reasonable
business expenses within the terms
of the Group’s expenses policy and
be reimbursed on the same basis as
all employees. The Group may
reimburse business expenses which
are in future classified as taxable
benefits by HMRC.
Performance
criteria
Not applicable
Not applicable
Shareholding requirement:
200% of base salary in the first
year and 100% of base salary in
the second year.
Fees for the Chair and Non-
Executive Directors were
reviewed in 2018 and the
Chair’s fees were increased on
the appointment of Andrew
Fisher, with effect from
1 January 2020. The revised
fees are set out on page 89.
Fee increases may take place if
fee levels are considered to
have become out of line with
the responsibilities and time
commitments of individual
roles.
Flexibility is retained to
increase fee levels in the event
that it is necessary to recruit a
new Chair or Non-Executive
Director of an appropriate
calibre in future years.
Expenses vary from year to
year according to each
Director’s responsibilities,
business activity and location.
Not applicable
Malus and clawback
DSP and PSP awards may be subject to malus and/or clawback in the event of a material misstatement of the Group’s
financial results, fraud or misconduct, an error in assessing any applicable performance condition; reputational damage to
the Group; material corporate failure; or where the behaviour of the participant materially fails to reflect the governance or
values of the Group.
Rightmove plc annual report 2019 69
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Discretions maintained by the Committee in operating
the incentive plans
The Committee will operate the annual bonus plan, PSP,
Sharesave Plan and SIP according to the plans’ respective
rules and in accordance with the Listing Rules and HMRC
rules where relevant.
The Committee retains and routinely exercises discretion
over the operation and administration of these plans, which
is consistent with market practice. The discretions include,
but are not limited to:
• the selection of participants in each share plan;
• the timing of any grant of an award and payments;
• the size of an award and/or a payment (within the limits
described above);
• the annual review of performance measures, targets and
weightings for the annual bonus plan and PSP from year
to year;
• the extent awards vest, based on the achievement of pre-
approved performance targets and applicable exercise or
holding periods where relevant; and
• determination of a ‘good’/’bad’ leaver for incentive plan
purposes, based on the rules of each plan and the
appropriate treatment chosen including the timing of
vesting of awards.
In addition, the Committee would exercise discretion in the
following circumstances:
• how to deal with a change of control (e.g. the timing of
testing performance targets) or restructuring of the Group;
• to settle share awards or dividend equivalents (in whole or
in part) in cash, if it considers that circumstances apply
where it is appropriate to do so, for example, where there is
a regulatory restriction on the delivery of shares;
• adjust a bonus award or PSP vesting outturn if any formulaic
output does not produce an appropriate result for either
the Executive Directors or the Group, taking account of
overall performance, or because the formulaic output is
inappropriate in the context of circumstances that were
unexpected or unforeseen at the start of the performance
period; and
• adjustments (if any) required to share awards in certain
circumstances (e.g. rights issues, corporate restructuring
events and special dividends).
The Committee also retains the discretion under the plan
rules to adjust the targets and/or set different measures
for the annual bonus plan and PSP if events occur
(e.g. a material divestment or acquisition) which cause it
to determine that the conditions are no longer appropriate
and an amendment is required so that the conditions
achieve their original purpose and are not materially less
difficult to satisfy.
Any use of the above discretions would, where appropriate,
be subject to communication with the Company's major
shareholders.
For the avoidance of doubt, all previous commitments or
entitlements agreed prior to the approval of the 2020 Policy
or appointment to the Board will be permitted to payout on
their original terms or in line with the policy in force at the
time they were agreed.
Selection of performance measures and how targets
are set
The performance measures used for the annual bonus and
long-term incentive plans are derived from the Group's key
performance indicators. Each performance measure has a
threshold target, at which 25% is payable, and a stretching
maximum target at which 100% is payable and a sliding scale
for intermediate performance.
Operating profit will continue to be the primary performance
metric for the annual bonus as it is a key financial
performance indicator used by the business and aligned
to the Group's strategy of delivering profitable growth.
The operating profit target is based around meeting and
exceeding the Board approved business plan for the year.
The annual bonus is also subject to performance against
other key operational measures, including a market share
of traffic target, growth in non-core (Other) business
revenue, a lettings or tenant referencing-related target
and an employee engagement target, for a minority of the
bonus. A sliding scale is used to determine performance
against each measure between 25% for threshold and 100%
for maximum performance.
Market share, measured as the time consumers spend on our
Rightmove platforms compared to our nearest competitors,
is a key indicator of the size and engagement of our audience
and the value which Rightmove brings to our customers.
The Committee therefore considers it important to set a
challenging target to increase Rightmove’s share of this
audience relative to its competitors from a high starting point.
The Other revenue target measures growth in revenue from
businesses other than Agency and New Homes. As some of
these businesses are at an earlier stage of development,
compared to Rightmove’s core Agency and New Homes
businesses, growth in revenue rather than in operating profit
is considered to be a more appropriate measure of success;
this element of the bonus remains a small proportion of the
total bonus opportunity.
For the longer-term PSP awards to Executive Directors,
a combination of basic earnings per share (EPS) and
relative Total Shareholder Return (TSR) are used as
performance measures.
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rightmove.co.uk
EPS is considered the most appropriate financial metric
for Rightmove, since it is the measure of profitability that
is most closely aligned with shareholders' interests and
monitored on an ongoing basis within the business. To date,
underlying basic EPS (before share-based payments and NI
on share-based incentives with no related adjustment for
tax) has been used on a non-GAAP basis to measure growth
over the three-year performance period. For awards made
from 2020 onwards, EPS will be measured on a GAAP basis
as the Group plans to move away from Alternative
Performance Measures in line with FRC best practice
recommendations. In assessing performance, the
Committee is always mindful of ensuring: (i) it measures
performance on a like-for-like basis between start and
end performance; and (ii) any changes or adoption of
new accounting standards do not result in targets being
materially easier or harder than the targets as they were
originally set.
EPS targets are set based on sliding scales that take account
of internal financial planning and external analyst forecasts.
Only 25% of the EPS element will payout for threshold
performance levels, with the maximum award requiring
substantial out-performance of business plan and analyst
consensus estimates.
The 2020 Policy also recognises that relative TSR should also
be a performance measure in order for there to be a clear
alignment of Executive Directors’ and shareholder interests.
For TSR, the range of targets measure how successful the
Company is in out-performing the FTSE 350 Index with
25% of this part of the award vesting at the threshold
performance level, through to full vesting for 25% out-
performance of the Index over the three-year performance
period. Rightmove has been in the top quartile of the
FTSE 250 for some time and a member of the FTSE 100
since 2018, therefore the wider index is considered
appropriate for comparison purposes.
Performance targets do not apply to Sharesave or SIP
awards since these awards are structured to encourage
all employees to become shareholders. To maintain tax-
favoured status the awards must operate on a consistent
basis for all employees.
How the views of employees are taken into account
Members of the Committee, along with other Non-Executive
Directors, have actively engaged with Rightmove employees
on a variety of issues. Employee engagement sessions led
by the Non-Executive Directors (described in the Corporate
Responsibility Report) are interactive and have provided
useful insight into employee concerns and aspirations.
The Committee has therefore not felt it necessary to consult
directly with employees on executive remuneration matters,
but seeks employee views regularly through management,
and takes the ‘Have your Say’ survey results into
consideration when reviewing remuneration proposals.
The Committee considered the general employment terms
and benefits within the wider workforce when setting the
Executive Directors' Remuneration Policy.
Remuneration Policy for Executive Directors compared
to other employees
The Committee considers the proposed salary budget, cost
of living and discretionary increases for the whole Group
annually when it is deciding on salary increases for Executive
Directors specifically.
It is the Group’s strategy to keep remuneration simple and
consistent, benefits and pension arrangements provided to
Executive Directors are therefore aligned to those offered to
other Group employees.
The extent to which annual bonuses are awarded varies by
the level and type of role within the Group. The quantum and
performance measures reflect the nature of the role and
responsibilities and market rates at that level.
Long-term incentive awards such as the DSP, are only
offered to senior managers as those awards are more
heavily weighted towards performance-related pay and
there is a stronger connection between the value created
for shareholders and the reward for participants. PSP
awards are only granted to Executive Directors.
Shareholders’ views
The Committee considers it vitally important to maintain
clear and open communication with the Company’s
shareholders. In 2019, the Committee consulted major
investors representing over 50% of the Company’s share
ownership on the proposed amendments to the
Remuneration Policy. The shareholders consulted were
generally supportive of the 2020 Policy. The Committee
took into account the constructive feedback from this
and previous consultations in relation to the alignment of
Director’s pay to all employee rises in basic salary and
shareholders’ preference for post-vesting holding
periods for long-term incentives together with post-
cessation provisions.
Rightmove plc annual report 2019 71
Financial statementsStrategic reportGovernance Governance | Directors' remuneration report continued
Reward scenarios
The Company’s 2020 Policy outlined above is illustrated below using three different performance scenarios: minimum,
on-target and maximum:
2500
2000
1500
0
0
0
£
1000
500
0
£2,300
39%
39%
22%
£1,563
36%
31%
33%
£513
100%
£1,122
36%
31%
33%
£368
100%
£1,652
39%
39%
22%
Minimum
Target
Chief Executive Officer
Maximum
Minimum
Target
Maximum
Finance Director
Amounts have been rounded to the nearest £1,000.
Fixed pay
Bonus
LTIP
Assumptions:
1. Minimum = fixed pay only (salary + benefits + pension).
2. On-target = 55% payable of the 2020 annual bonus and 62.5% vesting of the 2020 PSP awards being the midpoint
between threshold vesting of 25% and maximum vesting of 100%.
3. Maximum = 100% payable of the 2020 annual bonus and 100% vesting of the 2020 PSP awards.
Base salary is as set at 1 January 2020. The value of taxable benefits is based on the cost of supplying those benefits (using
the cost as disclosed on page 78) for the year ended 31 December 2019. The Executive Directors have elected not to
participate in the Company's pension arrangements.
The Executive Directors can participate in the Sharesave Plan and SIP on the same basis as other employees. The value
that may be received under these plans is subject to tax approved limits. For simplicity, the value that may be received from
participating in these plans has been excluded from the above charts. The Executive Directors do not participate in the SIP
and the value of vested Sharesave options is included in Directors’ remuneration set out on page 78.
Reward scenarios assuming future share price growth of 50%
As required by the Act, illustrated below are the same performance scenarios: minimum, on-target and maximum, based on
the same assumptions detailed above and also future share price growth of 50% across the performance period for the
2020 PSP awards.
0
0
0
£
3000
2500
2000
1500
1000
500
0
£3,015
44%
39%
17%
£1,842
42%
32%
26%
£513
100%
£1,323
45%
27%
28%
£368
100%
£2,165
44%
39%
17%
Minimum
Target
Chief Executive Officer
Maximum
Minimum
Target
Maximum
Finance Director
Amounts have been rounded to the nearest £1,000.
Fixed pay
Bonus
LTIP
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Recruitment and promotion policy
The Committee proposes an Executive Director's remuneration package for new appointments in line with the principles
outlined in the table below:
Element of remuneration
Policy
Base salary
Benefits
Pension
Annual bonus
Base salary levels will be set based on the role and responsibilities of the individual together with their
relevant skills and experience, taking into account the market rates for companies of comparable size
and complexity and internal Company relativities. In some circumstances (e.g. to reflect an individual's
experience at a listed company board level) it may be considered appropriate to set initial salary levels
above the present incumbent’s to attract the desired calibre of executive and subject to an individual's
continued performance in the role. A new salary will be positioned at or below market median.
Benefits as provided to current Executive Directors. Where necessary the Committee may approve
the payment of relocation expenses to facilitate recruitment, and flexibility is retained for the
Company to pay legal fees and other costs incurred by the individual in relation to their appointment.
Defined contributions or a cash alternative at the level provided to all Rightmove employees.
An annual bonus would operate in the same manner as outlined for the current Executive Directors (as
described above and in the Annual Report on Remuneration), although it would be pro-rated to reflect
the employment period during the bonus year. Flexibility will be retained to set equivalent objectives
for any new executive joining part way through a year.
The maximum bonus potential would not exceed 175% of base salary.
It would be expected that the bonus for a new appointment would be assessed on the same
performance metrics as that for the current Executive Directors on an ongoing basis. However,
depending on the timing and nature of appointment it may be necessary to set tailored performance
criteria for their first bonus award.
Long-term incentives
A new appointment will be eligible to receive PSP awards as outlined in the Policy table.
Share awards may be granted shortly after an appointment (subject to the Company not being in a
closed period) and would be measured against the same performance criteria as the current
executives. However, any award granted outside the normal award and performance cycle may be pro-
rated at the Committee’s discretion. The same two year post-vesting holding period under the PSP will
apply to new executives.
The ongoing maximum award would not exceed 175% of base salary.
For an internal hire, existing awards would continue over their original vesting period and remain
subject to the terms effective at the date of grant.
The new appointment would be eligible to participate in the Sharesave Plan and the SIP under the
same terms as all other employees.
To facilitate an external appointment, it may be necessary to buy-out remuneration which would
be forfeited on an individual leaving their previous employer. When determining the quantum
and structure of any buy-out awards the Committee will, as a minimum, take into account the
following factors:
• the form of remuneration (cash or shares);
• timing of expected payment/vesting of pre-existing awards; and
• expected value (i.e. taking into account the likelihood of achieving the existing performance criteria).
Buy-out awards, if used, will be granted using the Company's existing share plans to the extent
possible, although awards may also be granted outside of these plans if necessary and as permitted
under the Listing Rules.
200% of base salary, comprising vested share awards, beneficially owned shares, and shares under
awards no longer subject to performance (e.g. bonus deferrals and LTIP awards in a post-vesting
holding period) on a deemed net-of-tax basis. At least half of every share award must be retained
(after tax and other deductions) until the guideline is met.
Buy-out awards
Share ownership guidelines
Post-cessation holding
requirements
A two-year post-employment shareholding period will apply, with 100% of the shareholding
requirement (or actual holding, if lower) retained for the first year, and 50% for the second year.
Rightmove plc annual report 2019 73
Financial statementsStrategic reportGovernance Governance | Directors' remuneration report continued
Directors’ service contracts and Non-Executive
Directors’ terms of appointment
Executive Directors’ service agreements have no fixed terms
and provide for 12 months’ notice of termination by the
Company and by the executive. Any proposals for the early
termination by the Company of the service agreements of
Directors are considered by the Committee.
The service agreements for the Executive Directors allow
for lawful termination of employment by making a payment
in lieu of notice or by making phased payments over any
remaining unexpired period of notice. The phased payments
may be reduced if, and to the extent that, the executive finds
an alternative executive remunerated position.
In addition, any statutory entitlements or sums to settle
or compromise claims in connection with the termination
would be paid as necessary. The Company may also
provide a contribution toward reasonable legal fees or
outplacement services.
Peter Brooks-Johnson and Robyn Perriss are entitled to
a payment in lieu of notice, restricted to base salary and
benefits. In ‘good leaver’ circumstances, a bonus may be
paid at the normal time subject to achievement of the
performance conditions and pro-rating for the period
worked in the year.
For awards granted under the DSP, 'good leaver' status
may be determined for reasons of death, injury, disability,
redundancy, transfer or sale of the employing company or
in other circumstances at the discretion of the Committee.
If defined as a ‘good leaver’, awards will be retained and
vest on the original vesting date, except in the event of
death, when the Committee has the discretion to
accelerate vesting.
For awards granted under the PSP, 'good leaver' status may
be determined in certain prescribed circumstances, such as
death, ill health, disability, redundancy, transfer or sale of the
employing company, or in other circumstances at the
discretion of the Committee. If defined as a ‘good leaver’,
awards will remain subject to performance conditions, which
will be measured over the performance period from grant to
the original vesting date, unless the Committee determine
to assess performance from grant to the date of cessation
(which will be reduced pro-rata to reflect the proportion of
the performance period actually served). The Committee
retains the discretion to disapply time pro-rating in
exceptional circumstances and to accelerate the vesting
of awards for ‘good leavers’ in the event of death.
The Chair’s appointment may be terminated by either party
giving to the other not less than three months’ notice in
writing. The Company may also terminate the appointment
by making a payment in lieu of notice.
Letters of Appointment for Non-Executive Directors provide
for a term of up to two three-year periods and a possible
further three-year term (subject to annual re-election by
shareholders and subject to the Director remaining
independent). The appointments may be terminated
with a notice period of three months on either side.
Letters of Appointment set out the time commitments
required to meet the expectations of Directors’ roles,
including additional commitments required to chair
Board Committees.
Copies are available from the Company Secretary.
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Further details of all Directors’ contracts and Letters of Appointment are summarised below:
Executive Directors
Peter Brooks-Johnson(1)
Robyn Perriss(2)
Non-Executive Directors
Andrew Fisher (Chair)
Jacqueline de Rojas
Rakhi Goss-Custard
Andrew Findlay
Lorna Tilbian
Amit Tiwari
Date of appointment
Date of contract/
Letter of Appointment
Notice
(months)
Length of service at
28 February 2020
10 January 2011
22 February 2011
30 April 2013
1 May 2013
12
12
9 years 1 month
6 years 10 months
1 January 2020
21 November 2019
30 December 2016
10 October 2016
28 July 2014
1 June 2017
28 July 2014
11 May 2017
1 February 2018
19 January 2018
1 June 2019
15 May 2019
3
3
3
3
3
3
2 months
3 years 2 months
5 years 7 months
2 years 9 months
2 years 1 month
9 months
(1) Peter Brooks-Johnson joined the Group on 9 January 2006 and was appointed to the Board on 10 January 2011. His service with the Group at the date of this report is
14 years and 1 month.
(2) Robyn Perriss joined the Group on 1 July 2007 and was appointed to the Board on 30 April 2013. Her service to the Group at the date of this report is 12 years and
8 months.
External appointments
With the approval of the Board in each case, Executive Directors may accept one external appointment as a non-executive
director of another listed or similar company and retain any fees received.
In 2018, Peter Brooks-Johnson was appointed as a Non-Executive Director of Adevinta ASA, the international online
classifieds operation, which is listed on the Oslo Børs. Peter received a director’s fee of 597,000 Norwegian Krone from
Adevinta for the year to 31 December 2019 (2018: 149,250 Norwegian Krone for 3 months from October to December 2018).
In July 2019, Robyn Perriss was appointed as a Non-Executive Director and Audit Committee Chair of Softcat plc, a provider
of technology solutions and services. Robyn received a director’s fee of £30,070 for the period from her appointment to
31 December 2019.
Rightmove plc annual report 2019 75
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Governance | Directors' remuneration report continued
Annual Report on Remuneration
Remuneration Committee role and membership
Terms of reference
The primary role of the Committee is to make
recommendations to the Board on the Company’s overall
policy and framework and setting the remuneration of the
Chair, Executive Directors and senior leadership team.
The primary objectives of the remuneration policy are the
effective recruitment, retention and fair reward of Executive
Directors and employees.
In accordance with the Code, the Committee also
recommends the structure and monitors the level of
remuneration for management, below Board level.
The Committee is aware of, and advises on, the employee
benefit structures throughout the Group and ensures that
it is kept aware of any potential business risks arising from
those remuneration arrangements. The remuneration and
terms of appointment of the Non-Executive Directors are
determined by the Board as a whole.
The Committee has formal terms of reference which are
reviewed annually and updated as required. These are
available on the Company’s website at plc.rightmove.co.uk
or on request from the Company Secretary.
Membership
The following independent Non-Executive Directors were
members of the Committee during 2019:
Lorna Tilbian (Chair of the Committee from 10 May 2019)
Rakhi Goss-Custard
Jacqueline de Rojas (from 10 May 2019)
Peter Williams (Chair of the Committee to 10 May 2019)
The Committee met seven times during 2019 and
attendance at meetings is shown in the Corporate
Governance Report on page 48.
The quorum for meetings of the Committee is two
members. The Committee will meet as necessary, but
normally at least five times a year. The Company Secretary
acts as Secretary to the Committee.
Only members of the Committee have the right to attend
Committee meetings. The Committee Chair has invited the
Chair of the Board to attend meetings except during
discussions relating to his own remuneration. The CEO is
also invited to meetings when the Committee is considering
his recommendations on the remuneration of the Finance
Director and the senior leadership team. No Executive
Director is involved in deciding their own remuneration.
External advisors
Deloitte LLP (Deloitte), which is a member of the
Remuneration Consultants Group and has signed up to its
Code of Conduct, was appointed as the Committee’s new
remuneration advisor on 1 August 2019. The terms of
engagement between the Company and Deloitte are
available from the Company Secretary on request.
During the year, the Company paid fees of £6,925 to Aon
Hewitt (the previous remuneration advisor) in respect of
services to the Committee up to 31 July 2019, and £26,200
to Deloitte in respect of services to the Committee from
1 August to 31 December 2019.
During 2019 Aon Hewitt also provided services to the
Company in connection with the valuation of share-based
incentives (as required by IFRS 2) and confirmed that, in its
view, these services did not present a conflict of interest
with the other services provided to the Committee. The
Committee reviews its relationship with external advisors on
a regular basis and is satisfied that there are no conflicts of
interest. With the exception of advice to Rightmove Rent
Services Limited in relation to a compliance framework for its
Tenant Passport proposition, Deloitte did not provide any
other services to the Company during the year.
What has the Committee done during the year?
The Committee considered and, where appropriate,
approved key remuneration items including:
Pay and incentive plan reviews
• annual review and approval of Executive Directors’ base
salaries and benefits;
• review of 2019 business performance against relevant
performance targets to determine annual bonus payouts
and vesting of long-term incentives;
• review and approval of appropriate benchmarks and
performance measures for the annual performance-
related bonus and 2020 PSP awards to ensure measures
are aligned with strategy and that targets are appropriately
stretching;
• approval of share awards granted in March 2019 under
the Deferred Share Bonus Plan (DSP) and the PSP;
• leaver arrangements for the Finance Director, Robyn Perriss;
• remuneration package for the new Chair of the Company,
Andrew Fisher; and
• ongoing monitoring of remuneration for the senior
leadership team.
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• Proportionality – a substantial portion of the package
comprises performance based reward, linked to the
delivery of strong Group performance and the
achievement of key strategic objectives. The Committee
will use its discretion where required to ensure that
performance outcomes are appropriate.
• Alignment to culture – in determining executive
remuneration policies and practices, the Committee
considers the overall remuneration framework for our wider
workforce as part of its review, including employee
engagement and satisfaction levels, succession plans
including diversity, to ensure executive remuneration is
aligned to Rightmove’s culture.
Governance and strategy
• review of the 2019 AGM voting and feedback from
institutional investors;
• appointment of new remuneration consultants;
• review of the Remuneration Policy (see below);
• consultation with shareholders on the 2020 Remuneration
Policy proposals;
• review and approval of the Directors’ Remuneration Report;
• evaluation of the Committee’s performance during the
year; and
• review of the Committee’s terms of reference.
Remuneration Policy
In determining the 2020 Policy, the Committee followed a
thorough process including discussions on the Policy
approach to each element of remuneration at Committee
meetings during 2019 and in early 2020. The Committee
considered the input from Executive Directors, our
independent advisors, best practice corporate governance
and shareholder guidance, and specific feedback from our
major shareholders. In reaching its decisions on the 2020
Policy, the Committee considered the following principles as
recommended in the Code:
• Clarity – the 2020 policy is designed to allow our
remuneration arrangements to be structured in a way that
clearly supports the financial objectives and the strategic
priorities of the Group. The Committee remains committed
to reporting on Rightmove’s remuneration practices in a
transparent, balanced and straightforward way.
• Simplicity – the 2020 Policy consists of three main
elements: fixed pay (salary, benefits and pension), an annual
bonus award and a long term incentive award. The annual
bonus award is based on a combination of our financial and
operational KPIs. The vesting of LTIP awards is based on
EPS growth and relative TSR performance.
• Risk – the 2020 Policy is in line with Rightmove’s risk appetite.
The Committee has the discretion to reduce variable pay
outcomes where these are not considered to represent
overall Group performance or the shareholder experience.
Over half (60%) of bonus awards are deferred into shares,
and vested shares under the LTIP must be retained for a
further two years, ensuring that Executive Directors are
motivated to deliver longer-term sustainable performance.
• Predictability – the Committee considers the impact of
various performance outcomes on incentive levels when
determining overall executive pay levels. These can be
seen in the scenario charts in our Policy Report.
Rightmove plc annual report 2019 77
Financial statementsStrategic reportGovernance Governance | Directors' remuneration report continued
Directors’ remuneration
The following section sets out how the current Remuneration Policy was applied in 2019, along with changes in Directors’
share and share plan interests during 2019. The information that is audited is clearly indicated.
Directors’ Single Figure Remuneration Tables (audited)
The remuneration of the Directors of the Company during 2019 for time served as a Director is as follows:
Fixed pay
Performance-related (variable) pay
Salary/fee
£
Benefits(1)
£
Fixed pay
subtotal
£
Total
Annual Long-term Variable pay remuneration
bonus(2)
in 2019
£
incentives(3)
£
subtotal
£
£
Executive Directors
Peter Brooks-Johnson
Robyn Perriss
Non-Executive Directors(4)
Jacqueline de Rojas(5)
Rakhi Goss-Custard
Andrew Findlay(6)
Lorna Tilbian(7)
Amit Tiwari(8)
Scott Forbes
Peter Williams(9)
500,605
2,407
503,012
406,742 1,246,005 1,652,747 2,155,759
359,552
1,420
360,972
292,136
897,471 1,189,607 1,550,579
58,207
55,000
70,000
64,620
32,083
185,000
27,174
–
–
–
–
–
–
–
58,207
55,000
70,000
64,620
32,083
185,000
27,174
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
58,207
55,000
70,000
64,620
32,083
185,000
27,174
(1) Benefits in kind for the Executive Directors relate to private medical insurance and the medical cash plan.
(2) The annual bonus amount relates to the accrued payment in respect of the full year results for the year ended 31 December 2019 including the deferred element
(60% of the annual bonus is deferred in shares with a two-year vesting period).
(3) The value of the long-term incentives includes:
• nil cost PSPs where vesting is calculated by taking the number of nil cost options expected to vest in March 2020 (including dividend roll-up), which are dependent on
the three-year performance period ended 31 December 2019 and multiplying by the year end closing share price of £6.34, and
• the capital gain of £6,375 on the Sharesave option exercised by the CEO in March 2019, which reflects the difference between the option grant price of £2.96
(adjusted for the 10 for 1 share subdivision in August 2018) and £5.06, being the market value of shares on exercise.
• The increase in the value of PSP awards vesting in 2019 due to share price appreciation is £452,401 for the CEO and £331,877 for the Finance Director.
(4) The basic fee for all Non-Executive Directors (excluding the Chair) rose from £50,000 in 2018 to £55,000 from 1 January 2019. Committee Chairs (excluding Nomination
Committee) received an additional fee of £15,000, and the Senior Independent Director received an additional fee of £5,000. The Chair’s fee rose from £170,000 in 2018
to £185,000 in 2019.
(5) Fee as a Non-Executive Director to 10 May 2019, and as Senior Independent Director thereafter.
(6) Fee as a Non-Executive Director and Audit Committee Chair in 2019.
(7) Fee as a Non-Executive Director to 10 May 2019, and as Remuneration Committee Chair thereafter.
(8) Fee for seven months from appointment on 1 June 2019.
(9) Fee for the period to retirement on 10 May 2019.
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rightmove.co.uk
The remuneration of the Directors of the Company during 2018 was:
Fixed pay
Performance-related (variable) pay
Salary/fee
£
Benefits(1)
£
Fixed pay
subtotal
£
Total
Annual Long-term Variable pay remuneration
bonus(2)
in 2018
£
incentives(3)
£
subtotal
£
£
Executive Directors
Peter Brooks-Johnson
Robyn Perriss(4)
Non-Executive Directors
Scott Forbes
Ashley Martin(5)
Peter Williams
Rakhi Goss-Custard
Jacqueline de Rojas
Andrew Findlay(6)
Lorna Tilbian(7)
472,268
339,200
170,000
20,870
65,000
50,000
50,000
56,558
45,833
2,192
474,460
460,462
555,256 1,015,718 1,490,178
1,414
340,614
330,720
439,219
769,939 1,110,553
–
–
–
–
–
–
–
170,000
20,870
65,000
50,000
50,000
56,558
45,833
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
170,000
20,870
65,000
50,000
50,000
56,558
45,833
(1) Benefits in kind for the Executive Directors relate to private medical insurance and the medical cash plan.
(2) The annual bonus amount relates to the accrued payment in respect of the full year results for the year ended 31 December 2018 including the deferred element
(60% of annual bonus).
(3) The value of the long-term incentives includes nil cost PSPs where vesting is calculated by taking the number of nil cost options expected to vest in March 2019
(including dividend roll-up), which are dependent on the three-year performance period ended 31 December 2018 and multiplying by the year-end closing share
price of £4.32.
(4) In cash terms, Robyn Perriss received £6,523 less in relation to her base salary as she exchanged salary for five additional days’ holiday benefit under the Group’s flexible
holiday policy.
(5) Fee for the period to retirement on 4 May 2018.
(6) Fee as a Non-Executive Director to 4 May 2018 and as Audit Committee Chair from that date.
(7) Fee for 11 months from appointment on 1 February 2018.
Defined contribution pension
The Group operates a stakeholder pension plan for employees under which Rightmove contributes 6% of base salary,
subject to the employee contributing a minimum of 3% of base salary. None of the Directors elected to participate in
the pension plan in either year. The Company does not contribute to any personal pension arrangements.
Rightmove plc annual report 2019 79
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Governance | Directors' remuneration report continued
How was pay linked to performance in 2019?
Annual bonus plan
The incentive for the financial year ended 31 December 2019 was in the form of a cash bonus of up to 50% of salary and a
DSP bonus of up to 75% of salary (i.e. 125% in total). The bonus (both cash and DSP elements) was determined by a mixture
of underlying operating profit performance (65%) and key performance indicators (35%) relating to underlying drivers of
long-term revenue growth.
When comparing performance against the 2019 bonus targets set, the Committee determined that 65% of the maximum
achievable cash and DSP bonus should be paid to the Executive Directors. Accordingly, a cash bonus of 32.5% of base salary
(out of a maximum of 50%) will be paid to the executives and 48.75% of base salary (out of a maximum of 75%) will be
granted to the Executive Directors under the DSP, which will be deferred until March 2022. More details are provided in the
following table:
Measure
Hurdle
As a % of
maximum
bonus
opportunity
Actual performance achieved
Resulting
bonus
% achieved
Targets:
• £213.3m: 25% payout
• £226.8m: 100% payout
65% Underlying operating profit(1) achieved:
40%
£219.7m
This represents growth of 8% on 2018
Financial targets
Underlying
operating profit(1)
Strategic targets
Traffic market
share
Growth in time in minutes spent on
Rightmove platforms as measured by
comScore relative to nearest competitors
• Same absolute growth: 25% payout
• 50% higher absolute growth: 100% payout
15% Growth in time in minutes spent on
15%
Rightmove platforms year on year was
higher compared to a reduction in time
spent on our nearest competitors
platforms
10% Growth of £3.9m
10%
Other business
revenue(2)
• Growth of £2.0m: 25%
• Growth of £3.0m: 100%
Tenant Services(3) Growth in the number of Rightmove
5% 2% of rental leads include a Tenant
0%
Employee
engagement(4)
Tenant Passports completed by prospective
tenants, measured as a percentage of leads
received by customers. Target 4%.
Percentage of respondents to the employee
survey who say ‘Rightmove is a great place
to work’:
• 90%: 25% payout
• 95%: 100% payout
Passport
5% 81% of respondents say ‘Rightmove is
0%
a great place to work’
Total
100%
65%
(1) Operating profit before share-based payments and NI on share-based incentives.
(2) Revenue excluding Agency and New Homes.
(3) Percentage of rental leads including a Tenant Passport.
(4) Based on the results of the annual employee engagement survey.
80
rightmove.co.uk
Long-term incentives vesting during the year
The PSP awards granted in March 2017 were subject to EPS
(75% of the awards) and relative TSR (25% of the awards)
performance conditions that related to the three-year period
ended 31 December 2019.
The vesting schedule for the relative TSR element of
Executive Directors' 2017 PSP awards is set out below:
Share awards granted during the year (audited)
On 6 March 2019 Peter Brooks-Johnson and Robyn Perriss
were awarded shares under the PSP, which vest in March 2022,
and are subject to a mixture of EPS (75% of the awards) and
TSR relative to the FTSE 350 Index (25% of the awards)
performance with the greater weighting on EPS to reflect its
particular relevance to the performance of the business.
Relative TSR condition
Less than the Index
Equal to the Index
25% higher than the Index
% of award vesting
(maximum 25%)
Executive Director
Basis of
grant
Number of
shares
Face value
of award(1)
0%
6.25%
25%
Peter Brooks-Johnson
Robyn Perriss
200% of
base salary
200% of
base salary
204,746 £1,001,210
147,056 £719,104
Intermediate performance
Straight-line vesting
At the end of the performance period, Rightmove’s TSR
was 74.1% compared to 23.6% for the FTSE 350 Index.
This performance is over 50% above the Index and therefore
this part of the award will vest at the maximum level of 25%
on 1 March 2020.
Rightmove's EPS growth is measured over a period of
three financial years (2017 to 2019). The EPS figure used
is equivalent to Rightmove’s reported underlying basic
EPS (before share-based payments, NI on share-based
incentives and no related adjustment for tax) and the
vesting schedule is set out below:
Underlying basic EPS growth
from 2017 to 2019
Less than 20%
20%
50%
% of award vesting
(maximum 75%)
0%
18.75%
75%
Between 20% and 50%
Straight-line vesting
At the end of the performance period, underlying basic EPS
was 20.2p which from an underlying basic EPS base of 14.3p
results in three-year EPS growth of 42%, and will result in
60% vesting of this part of the award (maximum of 75%) on
1 March 2020.
(1) Based on the average mid-market share price for the three consecutive days
prior to grant, taken from the Daily Official List, of £4.89.
The vesting schedule for the relative TSR element of
Executive Directors' 2019 PSP awards is set out below. It is
consistent with the TSR condition used for previous grants
under the share option plan and will be assessed against the
FTSE 350 Index. Performance will be measured over three
financial years.
Relative TSR condition
Less than the Index
Equal to the Index
25% higher than the Index
% of award vesting
(maximum 25%)
0%
6.25%
25%
Intermediate performance
Straight-line vesting
Rightmove's EPS growth will be measured over a period of
three financial years (2019-2021). The EPS figure used will
be equivalent to the Group’s underlying basic EPS (before
share-based payments, NI on share-based incentives and
no related adjustments for tax).
The following vesting schedule will apply for Executive
Directors' awards granted in 2019:
Underlying basic EPS growth
from 2019 to 2021
Less than 20%
20%
50%
% of award vesting
(maximum 75%)
0%
18.75%
75%
Between 20% and 50%
Straight-line vesting
The benchmark underlying basic EPS for the financial year
2018 from which these targets will be measured is 18.3p.
Rightmove plc annual report 2019 81
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Governance | Directors' remuneration report continued
Share-based incentives held by the Directors and not exercised as at 31 December 2019 (audited)
Share-based incentives held
Granted/dividend
1 January 2019(1)
roll-up
Exercise price(1)
Exercised
Average share price at
date of exercise
Lapsed
Share-based incentives held
at 31 D ece m ber 2019
Vesting date
Expiry date
D ate granted
Executive Directors
Peter Brooks-Johnson
05/03/2010
(Unapproved) 525,530
02/03/2015
(PSP)
01/10/2015
(Sharesave)
01/03/2016
(PSP)
01/03/2017
(DSP)
01/03/2017
(PSP)
09/05/2017
(PSP)
01/10/2017
(Sharesave)
28/02/2018
(DSP)
28/02/2018
(PSP)
01/10/2018
(Sharesave)
06/03/2019
(DSP)
06/03/2019
(PSP)
–
–
–
£0.67
(525,530)(4)
£5.42
£0.00
(254,510)(2)
£5.42
£2.96
(3,040)
£5.01
–
–
–
– 05/03/2013 04/03/2020
– 02/03/2018 01/03/2020
– 01/11/2018 30/04/2019
254,510
3,040
183,510
4,773
£0.00
–
–
(59,751)
128,532(5) 01/03/2019 28/02/2021
£0.00
(61,410)(3)
£5.42
61,410
186,910
34,570
2,730
42,490
212,310
2,313
–
–
–
–
–
–
–
£0.00
£0.00
£3.29
£0.00
£0.00
£3.89
–
–
56,498(6)
£0.00
204,746(7)
£0.00
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 01/03/2019 29/02/2020
186,910 01/03/2020 28/02/2022
34,570 09/05/2020 08/05/2022
2,730 01/11/2020 30/04/2021
42,490 28/02/2020 27/02/2021
212,310 28/02/2021 27/02/2023
2,313 01/11/2021 30/04/2022
56,498 06/03/2021 05/03/2022
204,746 06/03/2022 05/03/2024
(59,751)
871,099
Total
1,509,323
266,017
–
(844,490)
82
rightmove.co.uk
D ate granted
Robyn Perriss
01/03/2016
(PSP)
01/03/2017
(DSP)
01/03/2017
(PSP)
01/10/2017
(Sharesave)
28/02/2018
(DSP)
28/02/2018
(PSP)
06/03/2019
(DSP)
06/03/2019
(PSP)
48,580
160,290
5,470
32,360
152,490
–
–
–
–
–
£0.00
£3.29
£0.00
£0.00
–
–
40,579(6)
£0.00
147,056(7)
£0.00
Share-based incentives held
Granted/ dividend
1 January 2019 (1)
roll-up
Exercise price (1)
Average share price at
date of exercise
Lapsed
Exercised
Share-based incentives held
at 31 D ece m ber 2019
Vesting date
Expiry date
145,160
3,775
£0.00
(101,671)
£5.42
(47,264)(5)
£0.00
(48,580) (3)
£5.42
–
–
01/03/2019
28/02/2021
01/03/2019
29/02/2020
160,290
01/03/2020
28/02/2022
–
–
(5,470)
–
01/11/2020
30/04/2021
–
–
–
–
32,360
28/02/2020
27/02/2021
152,490
28/02/2021
27/02/2023
40,579
06/03/2021
05/03/2022
147,056
06/03/2022
05/03/2024
(52,734)
532,775
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
544,350
191,410
–
(150,251)
(1) The Company’s ordinary shares of 1 pence each were divided into 10 new ordinary shares of 0.1 pence each on 31 August 2018. The option prices and the number of
shares under options granted before 31 August 2018 have been restated for the share subdivision.
(2) The nil cost performance shares awarded under the PSP to Executive Directors on 2 March 2015 vested in 2018 subject to EPS and relative TSR performance measures,
which were met in full. Peter Brooks-Johnson exercised the nil cost option over 254,510 shares (which included a dividend roll-up of 8,950 shares (as adjusted as per
note (1) above)) on 17 September 2019 and sold all the shares at an average market price of £5.42 per share.
(3) The nil cost deferred shares granted under the DSP on 1 March 2017 vested in March 2019. Peter Brooks-Johnson and Robyn Perriss exercised the nil cost option over
61,410 shares and 48,580 shares respectively on 17 September 2019 and sold all the shares at an average market price of £5.42 per share.
(4) Peter Brooks-Johnson exercised the nil cost option over 525,530 shares on 17 September 2019 and sold 282,470 shares at an average market price of £5.42 per share
to satisfy the option exercise cost and resulting tax liability and retained the balance of 243,060 shares under the unapproved option.
(5) The nil cost performance shares awarded under the PSP to Executive Directors on 1 March 2016 vested in March 2019 subject to EPS and relative TSR performance
measures. 67% of the award vested, resulting in 59,751 options and 47,264 options lapsing for Peter Brooks-Johnson and Robyn Perriss respectively. Robyn Perriss
exercised the nil cost option over the remaining 101,671 shares (which included a dividend roll-up of 3,775 shares) on 17 September 2019 and sold 74,830 shares at an
average market price of £5.42 per share to satisfy the resulting tax liability and retained the balance of 26,841 shares.
(6) On 6 March 2019, the Executive Directors were awarded nil cost deferred shares under the DSP, which vest in March 2021. The average mid-market share price for the
three consecutive preceding days, used to calculate the number of shares awarded, was £4.89.
(7) On 6 March 2019 the Executive Directors were awarded nil cost performance shares under the PSP, which vest in March 2022. Further details are set out on page 81.
Dilution (audited)
All existing executive share-based incentives can be satisfied from shares held in the Rightmove Employees’ Share Trust
(EBT) and shares held in treasury. It is intended that the 2020 share-based incentive awards will also be settled from shares
currently held in the EBT or from shares held in treasury without any requirement to issue further shares.
During 2019, treasury shares were used to satisfy vested DSP and PSP awards and unapproved options over 1,452,994 shares,
representing 0.17% of the issued share capital (less treasury shares) as at 31 December 2019.
Rightmove plc annual report 2019 83
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Governance | Directors' remuneration report continued
Directors’ interests in shares (audited)
The interests (both beneficial and family interests) of the Directors in office at the date of this report in the share capital of the
Company as at 31 December 2019 were as follows:
Interests in ordinary shares of 0.1 pence
At
31 December 2019
At
1 January 2019
Interests in share-based incentives
PSP & DSP
awards
(vested but
unexercised)
PSP & DSP
awards
(unvested)
Options
(unvested)
Executive Directors
Peter Brooks-Johnson
Robyn Perriss
Non-Executive Directors
Jacqueline de Rojas
Rakhi Goss-Custard
Andrew Findlay
Lorna Tilbian
Amit Tiwari
Scott Forbes(2)
Peter Williams(3)
Total
2,014,553
1,771,493
267,991
241,150
737,524
532,775
1,880
5,440
–
–
–
1,880
5,440
–
–
–
2,193,000 (2)
2,193,000
37,280 (3)
37,280
–
–
–
–
–
–
–
128,532
5,043
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,520,144
4,250,243
1,270,299
128,532
5,043
(1) Andrew Fisher did not serve as a Director of the Company during 2019 (he was appointed as Chair with effect from 1 January 2020). As at the date of this report,
he does not hold any shares in the Company.
(2) Scott Forbes retired from the Board on 31 December 2019 and his share interests are shown at the date of his retirement.
(3) Peter Williams retired from the Board on 10 May 2019 and his share interests are shown at the date of his retirement.
• The Company’s shares in issue (including 13,360,310 shares held in treasury) as at 31 December 2019 comprised 891,416,008 ordinary shares of 0.1p each
(2018: 907,684,330 ordinary shares of 0.1p each).
• The closing share price of the Company was £6.34 as at 31 December 2019. The lowest and highest share prices during the year were £4.27 and £6.77 respectively.
• The Executive Directors are regarded as being interested, for the purposes of the Act, in 2,208,362 ordinary shares of 0.1p each (2018: 2,248,020 ordinary shares of
0.1p each) in the Company currently held by the EBT at 31 December 2019 as they are, together with other employees, potential beneficiaries of the EBT.
• The Directors’ (except Peter Williams) beneficial holdings represent 0.5% of the Company’s shares in issue as at 31 December 2019 (2018: 0.5%) (excluding shares
held in treasury).
• There have been no changes to the share interests of continuing Directors between the year-end and the date of this report.
Share ownership guidelines (audited)
Executive Director share ownership guidelines are set out in the Remuneration Policy Report on page 68. The interests of the
Executive Directors in office at 31 December 2019 in the share capital of the Company as a percentage of base salary were as
follows:
Base salary
1 January 2020
Number of
shares held at
31 December 2019
Value of shares at
31 December 2019(1)
Value of
shares as a %
of base salary
Guideline met
(200% of salary)
Executive Directors
Peter Brooks-Johnson
Robyn Perriss
£510,617
£366,744
2,014,553
£12,772,266
267,991
£1,699,063
2501%
463%
Yes
Yes
(1) Based on £6.34 per share, being the closing share price on 31 December 2019.
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rightmove.co.uk
Payments to past Directors and payments for loss
of office
180
There were no payments to past Directors or payments
for loss of office to Directors during 2019.
170
160
)
d
e
s
a
b
e
r
(
£
e
u
a
V
l
120
130
110
150
140
Review of past performance
Share price performance
The Company’s share price ended the year at £6.34, up
46.8% year on year, making Rightmove a top ten FTSE 100
performer (the FTSE 100 Index was up 12.1% and the FTSE
350 Index was up 14.2%). On a three-year basis the share
price has increased by 62.6% and performance relative to
FTSE 100 and FTSE 350 Indices over that period is shown
in the graphs below.
100
80
70
90
7
1
c
e
D
6
1
c
e
D
for the three-year period from 1 January 2017 to
31 December 2019. TSR is the product of movements in
the share price plus dividends reinvested on the ex-dividend
date. TSR provides a useful, widely used benchmark to
illustrate the Company’s performance over the last three
years. Specifically, it illustrates the value of £100 invested in
Rightmove’s shares and in the FTSE 100 Index and the
FTSE 350 Index over that period.
+69%
As required by the Act, the Company’s TSR performance
is required to be shown against a recognised broad-based
share index and the FTSE 350 Index is considered an
appropriate comparator.
+22%
+20%
9
1
c
e
D
Rightmove
Total shareholder return (TSR)
The first graph below compares the TSR of Rightmove’s
shares against the FTSE 100 Index and the FTSE 350 Index
This graph shows the value, by 31 December 2019, of £100 invested in Rightmove on 31 December 2015,
compared with the value of £100 invested in the FTSE 100 and the FTSE 350 Indices on a daily basis.
FTSE 350
FTSE 100
The graphs below illustrate, for statutory purposes, the
TSR of Rightmove’s shares against the FTSE 100 Index
and the FTSE 350 Index for the three and ten years to
31 December 2019.
Source: Thomson Reuters
8
1
c
e
D
TSR Graph – three years
)
d
e
s
a
b
e
r
(
£
e
u
a
V
l
180
170
160
150
140
130
120
110
100
90
80
70
6
1
c
e
D
7
1
c
e
D
8
1
c
e
D
+69%
+22%
+20%
9
1
c
e
D
Rightmove
FTSE 100
FTSE 350
Source: Thomson Reuters
This graph shows the value, by 31 December 2019, of £100 invested in Rightmove on 31 December 2015,
compared with the value of £100 invested in the FTSE 100 and the FTSE 350 Indices on a daily basis.
TSR Graph – ten years
1600
1400
1200
1000
)
£
(
e
u
a
V
l
800
600
400
200
0
9
0
c
e
D
0
1
c
e
D
1
1
c
e
D
2
1
c
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D
3
1
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D
4
1
c
e
D
5
1
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e
D
6
1
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e
D
7
1
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D
8
1
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D
+1331%
+117%
+104%
9
1
c
e
D
)
£
(
e
u
l
a
V
1600
1400
1200
1000
800
600
400
200
0
Rightmove
FTSE 100
FTSE 350
Source: Thomson Reuters
This graph shows the value, by 31 December 2019, of £100 invested in Rightmove on 31 December 2009,
compared with the value of £100 invested in the FTSE 100 and the FTSE 350 Indices on a daily basis.
Rightmove plc annual report 2019 85
+1331%
9
0
c
e
D
0
1
c
e
D
1
1
c
e
D
2
1
c
e
D
3
1
c
e
D
4
1
c
e
D
5
1
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e
D
6
1
c
e
D
7
1
c
e
D
8
1
c
e
D
Rightmove
FTSE 100
FTSE 350
Source: Thomson Reuters
This graph shows the value, by 31 December 2019, of £100 invested in Rightmove on 31 December 2009,
compared with the value of £100 invested in the FTSE 100 and the FTSE 350 Indices on a daily basis.
+117%
+104%
9
1
c
e
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Financial statementsStrategic reportGovernance
Governance | Directors' remuneration report continued
Total remuneration for the Chief Executive Officer
The table below shows the total remuneration figure for the Chief Executive Officer over a ten-year performance period.
The total remuneration figure includes the annual bonus and long-term incentive awards that vested based on performance
in those years.
Year
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
Executive
Peter Brooks-Johnson
Peter Brooks-Johnson
Peter Brooks-Johnson(1)
Nick McKittrick(1)
Nick McKittrick
Nick McKittrick
Nick McKittrick
Nick McKittrick
Ed Williams(2)
Ed Williams
Ed Williams
Ed Williams
Total single
figure £
2,155,759
1,490,178
504,557
1,223,443
2,126,923
2,300,349
1,599,610
531,371
1,531,515
2,219,882
4,934,942
652,800
Annual Bonus
outturn
(% of maximum)
Long-term
incentive outturn
(% of maximum)
65%
78%
60%
n/a
92%
100%
70%
85%
n/a
90%
100%
100%
85%
67%
100%
100%
100%
100%
92%
100%
100%
100%
100%
–(3)
(1) Nick McKittrick was Chief Executive Officer and a Director until 9 May 2017 and retired from Rightmove on 30 June 2017. Peter Brooks-Johnson was appointed
Chief Executive Officer on 9 May 2017.
(2) Ed Williams was Chief Executive Officer until his retirement on 30 April 2013. Nick McKittrick was appointed Chief Executive Officer at this time.
(3) The table above includes share-based incentive awards in the period that the associated performance conditions, excluding service conditions, are satisfied.
Certain pre-float share option awards prior to 2006, which had only service conditions and no performance conditions would have been included in the single figure
remuneration table in the year of grant in accordance with Schedule 8 of the Act. The table above therefore excludes £4,151,532 of awards with no performance
conditions, which vested in 2010.
Percentage change in the remuneration of Directors compared with employees
The table below sets out the percentage change in the remuneration of all the Directors of the Company between 2018 and
2019, based on the figures shown in the single figure tables on pages 78 to 79.
% increase/(decrease) in remuneration in 2019
compared with remuneration in 2018
Peter Brooks-Johnson
Robyn Perriss
Jacqueline de Rojas
Andrew Findlay
Rakhi Goss-Custard
Lorna Tilbian
Amit Tiwari(1)
Scott Forbes
Peter Williams(2)
Employees
Salary or fees
6%
6%
16% (3)
24% (3)
10%
29% (3)
–
9%
(58%)
3%
Benefits
(10%)
(8%)
–
–
–
–
–
–
–
Bonus
(12%)
(12%)
–
–
–
–
–
–
–
26%
(11)%
Andrew Fisher does not appear in the above table, as his appointment as Chair commenced on 1 January 2020.
(1) Amit Tiwari joined the Board on 1 June 2019. There are no comparative figures for him for 2018.
(2) Peter Williams retired from the Board on 10 May 2019.
(3) Fee increases year on year reflect the appointments of Jacqueline de Rojas as Senior Independent Director and Lorna Tilbian as Remuneration Committee Chair on
10 May 2019 and a full year’s fee for Andrew Findlay as Audit Chair.
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Pay ratio information in relation to the total remuneration of the Chief Executive Officer
The table below shows the movement in the total remuneration of the Chief Executive Officer compared to Rightmove’s
full-time equivalent employees’ remuneration. (All Rightmove employees are UK-based.)
Year
Method
CEO’s total
remuneration
25th percentile
Median
75th percentile
25th percentile
pay ratio
Median 75th percentile
pay ratio
pay ratio
2019 Option A
2,155,759(1)
30,204
48,433
66,054
71
45
33
All employees
(1) £452,401 of the CEO’s total remuneration is largely attributable to share price growth in respect of the PSP award granted in 2017. The share price was £3.99 at the
grant date of the 2017 PSP award, and increased to £6.34 as at 31 December 2019. The value of the CEO’s total remuneration based on the share price at the grant
date of the 2017 PSP is £1,703,358.
Relative importance of the spend on pay
The table below shows the total pay for all Rightmove’s employees compared to other key financial indicators. Additional
information on the number of employees, total revenue and underlying operating profit(2) has been provided for context.
Employee costs (refer Note 7)
Dividends paid to shareholders (refer Note 12)
Purchase of own shares (refer Note 23)
Income tax (refer Note 10)
Average number of employees (refer Note 7)(1)
Revenue
Underlying operating profit(2)
Year ended
31 December 2019
Year ended
31 December 2018
£34,146,000
£60,173,000
£88,583,000
£40,473,000
538
£289,320,000
£219,710,000
£30,506,000
£54,977,000
£113,528,000
£37,815,000
495
£267,821,000
£203,329,000
% change
12%
9%
(22)%
7%
9%
8%
8%
(1) Average number of employees includes Executive Directors and employees of Van Mildert from 1 October to 31 December 2019.
(2) Before share-based payments and NI on share-based incentives.
Application of Policy for the year ending
31 December 2020
Salaries
The Executive Directors’ salaries for the 2020 financial year
are set out in the table below:
Salary
Salary
1 January 2020 31 December 2019 Change
Executive Directors
Peter Brooks-Johnson
£510,617
Robyn Perriss
£366,744
£500,605
£359,552
2%
2%
The 2% increase in base salaries for the Executive Directors
represents the same cost of living increase applied to other
Group employees for 2020. Salaries remain well below the
market median for executives in comparable companies.
All employee salaries are subject to annual review and
market adjustments as appropriate; the Committee also
approves salaries for the senior management team and
other key roles.
Pension and other benefits
The Group operates a stakeholder pension plan for all
employees under which Rightmove contributes 6% of base
salary, subject to the employee contributing a minimum of
3% of base salary. Peter Brooks-Johnson and Robyn Perriss
elected not to participate in the pension plan during the year.
The Company did not contribute to any personal pension
arrangements.
The Executive Directors are enrolled on the same terms as
all employees in the Group’s private medical insurance
scheme and receive life assurance cover equal to four times
base salary. Additionally, the Executive Directors are
members of the Group’s medical cash plan.
Annual bonus
The annual bonus for the 2020 financial year will be consistent
with the Policy detailed on page 67 of this report, in terms
of maximum bonus opportunity (175% of base salary),
deferral (40% cash and 60% shares) and malus and clawback
provisions. The mechanism through which the clawback can
be implemented (enabling both the recovery and withholding
of incentive pay) enables the Committee to:
Rightmove plc annual report 2019 87
Financial statementsStrategic reportGovernance
Governance | Directors' remuneration report continued
(i) reduce the cash bonus earned in a subsequent year
and/or reduce outstanding DSP/PSP share awards (i.e.
withholding provisions may be used to effect a recovery);
or
(ii) for the Committee to require that a net of tax balancing
cash payment be made to the Company.
The performance measures have been selected to reflect
a range of financial and strategic targets that continue to
support Rightmove’s key objectives. The performance
measures and weightings for the 2020 financial year are
as follows:
Measure
As a % of maximum bonus opportunity
Financial targets
Operating profit(1)
Strategic targets
Traffic market share(2)
Other business revenue(3)
Tenant Services(4)
Employee engagement(5)
65%
15%
10%
5%
5%
(1) Operating profit for the year ending 31 December 2020.
(2) Measured on a time on site basis (minutes spent relative to Rightmove’s nearest
competitors) by reference to comScore.
(3) Revenue excluding Agency and New Homes.
(4) Based on the number of Agency branches using Van Mildert’s tenant
referencing during 2020.
(5) Based on the results of the annual employee engagement survey.
In relation to the financial target a challenging sliding scale
will operate with 25% of the maximum bonus opportunity
payable at the threshold underlying operating profit target
relative to the 2020 business plan through to 100% payable
for significant outperformance relative to the plan. A greater
proportion of the award will be paid for exceeding threshold
performance.
The tenant services target reflects the ongoing strategic
focus on making lettings easier and more efficient for both
our consumers and our customers and the anticipated scale
benefits of integrating the recently acquired Van Mildert into
the broader Rightmove business. The relative weighting of
performance measures remains unchanged from 2019.
The specific targets for the 2020 financial year are
considered to be commercially sensitive. However,
retrospective disclosure of the actual targets and
performance against them will be provided in the 2020
Annual Report on Remuneration, to the extent that they
do not remain commercially sensitive at that time.
Long-term incentives
Awards to the continuing Executive Directors under the
PSP in 2020 will be consistent with the Policy detailed on
pages 68 to 71 of this report, with a maximum bonus
opportunity of 175% of base salary, subject to a mixture of
EPS (75% of awards) and relative TSR (25% of the awards)
performance conditions and subject to a two year post
vesting holding period. The 2020 targets are as follows:
EPS performance condition
The Group’s EPS growth will be measured over the period
of three financial years (2020 to 2022). The EPS figure used
will be equivalent to the Group’s basic EPS. With a view to
ensuring appropriately stretching but achievable targets
are set in light of market expectations for the Group, the
following range of targets will apply to the 2020 awards:
Underlying basic EPS growth
from 2020 to 2022(1)
Less than 14%
14%
44%
% of award vesting
(maximum 75%)
0%
18.75%
75%
Between 14% and 44%
Straight-line vesting
(1) The benchmark basic EPS for the financial year 2019 from which these targets
will be measured is 19.6p.
The targets that are intended to operate for the 2020 PSP
awards have been adjusted for prevailing and anticipated tax
rates over the performance period and are considered to be
appropriately demanding in light of the Group's starting
position, internal financial planning, external market
expectations for future growth and the current trading
environment. The targets are considered to be as stretching
as previous years and provide a realistic incentive at the lower
end of the performance range but require exceptional
performance to achieve full vesting. On this basis, the
Committee is satisfied that the range of targets remain
appropriately demanding, and no less challenging than the
range of targets set for prior year awards.
Relative TSR performance condition
The vesting schedule for the relative TSR element of
Executive Directors’ 2020 PSP awards is set out below.
Relative TSR will be assessed against the FTSE 350 Index,
reflecting the Company’s size in terms of market
capitalisation. Performance will be measured over
three financial years.
TSR performance of the Company
relative to the FTSE 350 Index(1)
% of award vesting
(maximum 25%)
Less than the Index
Equal to the Index
25% higher than the Index
0%
6.25%
25%
Intermediate performance
Straight-line vesting
(1) If the FTSE 350 Index’s TSR was 50% over the three-year performance period,
then the Company’s TSR would have to be at least 75% for all 25% of the PSP
shares to vest.
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Chair and Non-Executive Directors’ fees
In line with the current Policy, the Chair’s and Non-Executive
Directors’ fees were reviewed in a market context and in light
of Directors’ time commitments during 2018 and increased
with effect from 1 January 2019.
Following the appointment of Andrew Fisher, announced in
November 2019, the Chair’s fee was reviewed and increased
from £185,000 to £200,000 to reflect the time commitment
and responsibilities of the role with effect from 1 January
2020. No other changes are proposed to Non-Executive
Directors’ fees in 2020.
Leaver arrangements for Robyn Perriss
As announced on 6 November 2019, Robyn Perriss will step
down from the Board as Finance Director in the second
quarter of 2020 and leave Rightmove on 30 June 2020.
The arrangements described below were carefully
considered by the Remuneration Committee in consultation
with its advisor Deloitte and reflect the Committee’s
determination that Robyn is retiring from Rightmove after
seven years of service as a Director and is therefore a “good
leaver”. All payments are in line with the Company’s current
Remuneration Policy (published in the 2018 Annual Report).
Accordingly, the annual fees for the Chair and the
Non-Executive Directors for 2020 are:
Role
Chair
Non-Executive Director (basic fee)
Committee Chair (excluding the
Nomination Committee)
Senior Independent Director
Fee £
200,000
55,000
15,000
5,000
Details of all fees paid to Directors in 2019 can be found
on page 78 of this report. The next fee review for Non-
Executive Directors is scheduled for 2021 with any increase
taking effect in 2022.
Salary and benefits
Robyn will continue in her role as an Executive Director, until
the earlier of the appointment of a new Finance Director or
her proposed leaving date of 30 June 2020. In the event a
new Finance Director is appointed prior to 30 June 2020,
Robyn will remain at Rightmove until the end of June to
provide a handover and support a smooth transition
process. She will continue to receive her base salary and
other contractual benefits, including health and medical
insurance during her notice period to 8 November 2020, at
the level set out in this Annual Report. Payment will be made
in lieu of any unexpired notice period.
2019 Annual bonus and Deferred Share Bonus
Robyn was employed for the full financial year ended
31 December 2019 and is entitled to participate in
Rightmove’s annual bonus plan and DSP.
The Remuneration Committee has agreed that a
bonus award of 65% (after consideration of the relevant
performance criteria) of the maximum award would be
made to Robyn, in line with the other Executive Director,
equating to:
(i) a cash bonus of 32.5% (65% of 40% x 1.25) of basic salary;
and
(ii) a deferred share bonus award of 48.75%
(65% of 60% x 1.25) of basic salary.
2020 Annual bonus
In recognition of Robyn’s exemplary performance and
commitment to ensuring an effective handover to a new
Finance Director, the Committee will award her a cash bonus
in March 2021, pro-rated for the six months to 30 June 2020
provided she remains at Rightmove to that date and subject
to the pre-agreed bonus performance conditions and
audited results for 2020.
Rightmove plc annual report 2019 89
Financial statementsStrategic reportGovernance
Governance | Directors' remuneration report continued
Share-based incentives
Rightmove Performance Share Plan (PSP)
Robyn will be treated as a good leaver and, in accordance with our Policy, unvested PSP awards will be pro-rated to 30 June
2020 (her leaving date) and vest on the original vesting dates, subject to the achievement of TSR and EPS performance
criteria. These awards will be exercisable for 12 months from the original vesting dates. PSP awards which have already
vested by 30 June 2020 but remain unexercised will be exercisable until 30 June 2021.
Details of unexercised PSP awards (based on the maximum possible vesting if EPS and TSR performance conditions are
fully met) are set out in the table below:
Award Date
Performance Period
Normal Vesting Date
Award
(number of shares)
Pro-rated award
(number of shares)
1 March 2017
1 January 2017 to 31 December 2019
1 March 2020
160,290(1)
28 February 2018
1 January 2018 to 31 December 2020
28 February 2021
6 March 2019
1 January 2019 to 31 December 2021
6 March 2022
152,490
147,056
160,290(1)
118,603(2)
65,358(3)
All awards are subject to EPS and TSR performance conditions on vesting, before dividend roll-up is applied.
(1) No time pro-rating applies to vesting. (2) Pro-rated by 28/36 for time elapsed since grant. (3) Pro-rated by 16/36 for time elapsed since grant.
Rightmove Deferred Share Bonus Plan (DSP)
In accordance with our Policy, DSP awards granted in respect of prior years’ performance will remain capable of vesting in full
and therefore:
• Robyn’s vested but unexercised DSP awards will be exercisable for 12 months from 30 June 2020; and
• unvested DSP awards will vest on the original vesting dates and be exercisable for 12 months from vesting.
Award Date
Performance Period
Normal Vesting Date
Award (number of shares)
28 February 2018
6 March 2019
1 March 2020
1 January 2017 to
31 December 2017
1 January 2018 to
31 December 2018
1 January 2019 to
31 December 2019
28 February 2020
32,360
6 March 2021
40,579
1 March 2022
Anticipated award is 48.75% of 2019 base salary. The actual
number of shares will be determined in March 2020 based on
the share price at the award date.
Rightmove Sharesave Plan
Robyn’s outstanding option under the all-employee Sharesave plan will be treated in accordance with the terms of the plan rules.
Shareholder voting on the Remuneration Policy and Annual Report
At the AGM on 10 May 2019, shareholders again voted overwhelmingly in favour of the Directors’ Remuneration Report.
The Committee believes this indicates the strong level of shareholder support for the management and their remuneration.
The table below shows full details of the voting outcomes for the Remuneration Policy in 2017 and the Directors’
Remuneration Report at the 2019 AGM:
Votes for
% Votes for
Votes against
% Votes against
Votes withheld(1)
Remuneration Policy
(2017 AGM)(2)
Directors’ Remuneration Report
(2019 AGM)(2)
70,332,275
95.83
3,064,143
4.17
36,674
711,467,695
96.06
29,195,760
3.94
10,422,496
(1) A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes cast ‘For’ and ‘Against’ a resolution.
(2) On 31 August 2018 shareholders approved a resolution to subdivide the Company’s ordinary 1p shares into ten ordinary shares of 0.1p.
Each new 0.1p share carries the same voting rights as the old 1p shares.
In line with the Company’s commitment to ongoing dialogue with its shareholders, the Committee corresponds with
major shareholders to invite their feedback on remuneration proposals, and meetings are offered, where appropriate,
to understand the reasons for any opposition to the Company’s Remuneration Policy. Changes will be made to our Policy
in light of investor feedback, where it is considered appropriate to do so.
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Governance | Directors' report
The Directors submit their report together with the audited
financial statements for the Company (Number: 06426485)
and its subsidiary companies (the Group) for the year ended
31 December 2019.
The Directors’ Report comprises these pages, the sections
of the Annual Report referred to under the Corporate
Governance statement and other information below which
are incorporated into the Directors’ Report by reference.
The Board has included certain disclosures in the Strategic
Report in accordance with section 414C(11) of the
Companies Act 2006 (the Act).
Corporate governance statement
The Disclosure and Transparency Rules (DTR) require
certain information to be included in a corporate governance
statement in the Directors’ Report. Information that fulfils
these requirements can be found in the Corporate
Governance Report on pages 40 to 41 and 45 to 49 and is
incorporated into the Directors’ Report by reference.
Strategic Report
The Strategic Report can be found on pages 1 to 39.
The Act requires this Annual Report to present a fair,
balanced and understandable view of Rightmove’s business
during the year ended 31 December 2019 and of the
position of the Group at the end of the financial period,
together with a description of the principal risks and
uncertainties facing the business.
For the purposes of compliance with DTR 4.1 the required
content of the management report can be found in the
Strategic Report and this Directors’ Report, including the
sections of the Annual Report incorporated by reference.
Directors’ Duties
A statement of how the Directors have had regard to the
need to foster the Company’s business relationships with
suppliers, customers and others, and the effect of that
regard, including on principal decisions taken by the
Company, can be found on pages 27 to 29 of the Corporate
Governance Report.
Directors
The Directors of the Company as at the date of this report
are Andrew Fisher, Peter Brooks-Johnson, Robyn Perriss,
Jacqueline de Rojas, Andrew Findlay, Rakhi Goss-Custard,
Lorna Tilbian and Amit Tiwari. Scott Forbes was the Chair
of the Company throughout the year until his retirement on
31 December 2019, and Peter Williams was a Non-Executive
Director until his retirement on 10 May 2019. Biographies of
current Directors can be found on pages 42 to 44.
Share capital
The shares in issue, including 13,360,310 shares of 0.1p
held in treasury (2018: 14,813,304 0.1p shares) at the
year-end amounted to 891,416,008 shares of 0.1p
(2018: 907,684,330 0.1p shares), with a nominal value
of £891,416 (2018: £907,684).
The rights and obligations attached to each 0.1p ordinary
share are as set out in the Company’s Articles of
Association. The holders of each ordinary share in the
Company are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at general
meetings of the Company. Other than the usual restrictions
applicable for UK listed companies, there are no restrictions
on the transfer of the Company’s shares.
Results and dividends
The Group reported underlying operating profit(1) before tax
of £219.7m (2018: £203.3m) and operating profit before tax
for the year of £213.7 m (2018: £198.6m). The Directors are
recommending a final dividend for the year of 4.4 pence per
0.1p share (2018: 4.0 pence) amounting to £38,483,000
(2018: £35,702,000), which together with the interim
dividend of 2.8 pence per 0.1p share (2018: 2.5 pence),
makes a total for the year of 7.2 pence per 0.1p share
(2018: 6.5 pence).
Subject to shareholder approval at the Annual General
Meeting (AGM) on 4 May 2020, the final dividend will be
paid on 29 May 2020 to shareholders on the register of
members at the close of business on 1 May 2020.
Share buyback
The Company’s share buyback programme continued
during 2019. Of the 10% authority granted by shareholders
at the 2019 AGM, a total of 16,268,322 shares of 0.1p
(2018: 1,325,040 1p shares(2) and 11,723,700 0.1p shares)
were purchased in the year to 31 December 2019, being
1.8% (2018: 2.8%) of the shares in issue (excluding shares
held in treasury) at the time the authority was granted.
The average price paid per 0.1p share was £5.45
(2018: £45.46 per 1p share(2) and £4.55 per 0.1p share)
with a total consideration paid (excluding all costs) of
£89,203,000 (2018: £90,809,000).
Since the introduction of the new parent company in January
2008, the equivalent of 427,638,072 shares have been
purchased in total, of which 39,964,605 were purchased as
1p shares(2), of which 13,360,310 shares of 0.1p were held in
treasury as at 31 December 2019, with the remainder having
been cancelled. A resolution seeking to renew this authority
will be put to shareholders at the AGM on 4 May 2020.
(1) Before share-based payments and NI on share-based incentives.
2) On 31 August 2018 shareholders approved a resolution to subdivide the Company’s
ordinary shares of 1 pence each (1p shares) into ten ordinary shares of 0.1 pence
each (0.1p shares) in the capital of the Company. Following the subdivision, each
shareholder held ten 0.1p shares for each 1p share held immediately prior to the
subdivision. Each new 0.1p share carries the same rights and entitlements as the
1p shares, as set out in the Company’s Articles of Association.
Rightmove plc annual report 2019 91
Financial statementsStrategic reportGovernance Governance | Directors’ report continued
Shares held in trust
As at 31 December 2019, 2,208,362 shares of 0.1p
(2018: 2,248,020 0.1p shares) were held by The Rightmove
Employees’ Share Trust (EBT) for the benefit of Group
employees. These shares had a nominal value at
31 December 2019 of £2,208 (2018: £2,248) and a market
value of £14,001,000 (2018: £9,711,000). The shares held by
the EBT may be used to satisfy share-based incentives for
the Group’s employee share plans. During the year, 294,160
shares of 0.1p (2018: 3,579 1p shares(2) and 178,860 0.1p
shares) were transferred to Group employees following the
exercise of share options under the Sharesave plan.
Additionally, 131,110 shares of 0.1p (2018: 157,525 0.1p
shares) were purchased by the EBT for transfer to the
Rightmove Share Incentive Plan Trust (SIP) and 254,502
shares were purchased in relation to Restricted Share Plan
awards to certain members of the senior leadership team.
The terms of the EBT provide that dividends payable on the
shares held by the EBT are waived.
As at 31 December 2019, 785,130 shares of 0.1p
(2018: 810,095 0.1p shares) were held by the SIP for the
benefit of Group employees. These shares had a nominal
value at 31 December 2019 of £785 (2018: £810) and a
market value of £4,978,000 (2018: £3,500,000). The shares
held by the SIP are awarded as free shares to eligible
employees each year and are held in trust for a period of
three years before an employee is entitled to take ownership
of the shares. During the year, 156,075 shares of 0.1p
(2018: 19,500 1p shares and 4,430 0.1p shares) were
transferred to Group employees under the SIP rules.
Research and development
The Group undertakes research and development activity
in order to develop new products and to continually improve
the existing property platforms. Further details are disclosed
in Note 2 to the financial statements on page 110.
Political and charitable donations
During the year the Group did not make donations to any
political party or other political organisation and did not incur
any political expenditure within the meanings of sections
362 to 379 of the Act (2018: £nil). Details of the Group’s
charitable donations are set out in the Corporate
Responsibility Report on page 36.
Annual General Meeting
The AGM of the Company will be held at the offices of UBS
Limited at 5 Broadgate, London, EC2M 2QS on 4 May 2020
at 10am. The Notice of Annual General Meeting will be
published in April 2020.
The resolutions being proposed at the 2020 AGM include
the renewal for a further year of the limited authority of the
Directors to allot unissued share capital of the Company and
to issue shares for cash other than to existing shareholders
(in line with the Pre-Emption Group’s Statement of
Principles). A resolution will also be proposed to renew the
Directors’ authority to purchase a proportion of the
Company’s own shares. The Company will again seek
shareholder approval to hold general meetings (other than
AGMs) at 14 days’ notice. Resolutions will be proposed to
renew these authorities, which would otherwise expire at the
2020 AGM. In addition to the other Ordinary Business of the
AGM, the Directors propose a resolution to renew the
Group’s Performance Share Plan for a further 10 years.
Auditor
KPMG LLP has indicated its willingness to continue in office
as auditor of the Group. In accordance with section 489 of
the Act, separate resolutions for the re-appointment of
KPMG LLP as auditor of the Group and for the Audit
Committee to determine the auditor’s remuneration will
be proposed at the 2020 AGM.
Audit information
So far as the Directors in office at the date of this report
are aware, there is no relevant audit information of which the
auditor is unaware and each Director has taken all reasonable
steps to make themselves aware of any relevant audit
information and to establish that the auditor is aware of
that information.
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rightmove.co.uk
Substantial shareholdings
As at the date of this report, the following beneficial interests
in 3% or more of the Company’s issued ordinary share
capital (excluding shares held in treasury) held on behalf
of the organisations shown in the table below, had been
notified to the Company pursuant to DTR 5.1. The
information provided below was correct as at the date
of notification, where indicated this was not in the 2019
financial year. It should be noted that these holdings are likely
to have changed since notified to the Company. However,
notification of any change is not required until the next
applicable threshold is crossed.
Shareholder
Kayne Anderson
Rudnick
Investment
Management,
LLC (3)
BlackRock Inc(2)
Marathon Asset
Management LLP(2)
Baillie Gifford & Co(2)
Standard Life
Aberdeen
Investments(2)
Generation
Investment
Management LLP(2)
Axa Investment
Managers SA(2)
Nature of holding
Direct
American
Depository Receipts
Total voting
rights
71,571,964
% of total
voting
rights (1)
8.16%
33,746,254
3.85%
Indirect
Contracts for
difference
Stock Lending
Indirect
Indirect
50,160,300
5,473,130
5.72%
0.62%
16,304,460
1.86%
59,307,550
58,736,140
6.76%
6.70%
Indirect
45,307,190
5.17%
Indirect
Indirect
Contracts for
difference
45,181,680
44,413,780
376,620
5.15%
5.07%
0.04%
(1) The above percentages are based upon the voting rights share capital
(being the shares in issue less shares held in treasury) of 876,821,235
as at 26 February 2020.
(2) Date of notification preceded the 2019 financial year.
(3) Date of notification followed the 2019 financial year end.
Articles of association
Any amendment to the Articles may be made in accordance
with the provisions of applicable English law concerning
companies, specifically the Act (as amended from time to
time), by way of special resolution at a general meeting of
the shareholders.
Compensation for loss of office
There are no additional agreements between the Company
and its Directors or employees providing for compensation
for loss of office or employment that occurs because of a
takeover bid, except that provisions of the Company’s share
plans may allow options and awards granted to Directors and
employees to vest on a takeover.
Post-balance sheet events
There have been no balance sheet events since the end of
the 2019 financial year.
Branches
Neither the Company nor its subsidiaries have branches
outside the UK.
Other Information
Information
Page(s)
Location in Annual Report
Financial instruments
and financial risk
management
113 to 115
and
135 to 137
Notes 3 and 26, Financial
Statements
Appointment, removal
and powers of Directors
Future developments of
the Group’s business
41 and 47 Corporate Governance
Report
5 to 13
Strategic Report (1)
Employee engagement 34 to 35
Employee share
schemes
34 and
67 to 68
Strategic Report: Corporate
Responsibility Report(1)
Strategic Report: Corporate
Responsibility Report(1) and
Directors’ Remuneration
Report
Health and safety and
employee related
policies including
diversity and disability
31 to 35
and 38
Strategic Report: Corporate
Responsibility Report(1)
Movements in share
capital
128
Note 23, Financial
Statements
Share-based incentives 130 to 135 Note 25, Financial
Statements
Long-term incentive
plans
Green House Gas
Emissions
Fair, balanced and
understandable
61 to 90
37 to 38
Directors’ Remuneration
Report
Strategic Report: Corporate
Responsibility Report(1)
53 and 94 Audit Committee report
and Directors’ statement
of responsibilities
Directors’ indemnities
48
Corporate Governance
Report
(1) The Board has taken advantage of section 414C(11) of the Act to include
disclosures in the Strategic Report on the items indicated above.
The Directors’ Report was approved by the Board on
28 February 2020.
Signed on behalf of the Board:
Peter Brooks-Johnson
Chief Executive Officer
28 February 2020
Rightmove plc annual report 2019 93
Financial statementsStrategic reportGovernance
Governance | Directors’ responsibilities statement
Directors’ responsibilities statement in respect of the
annual report and the financial statements
The Directors are responsible for preparing the
Annual Report and the Group and parent Company
financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare Group and
parent Company financial statements for each financial year.
Under that law they are required to prepare the Group
financial statements in accordance with International
Financial Reporting Standards as adopted by the European
Union (IFRSs as adopted by the EU) and applicable law and
have elected to prepare the parent Company financial
statements on the same basis.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
parent Company and of their profit or loss for that period. In
preparing each of the Group and parent Company financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable,
relevant and reliable;
• state whether they have been prepared in accordance
with IFRSs as adopted by the EU;
• assess the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern; and
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report and Corporate
Governance Statement that complies with that law and
those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Responsibility statement of the Directors in respect
of the annual financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole; and
• the strategic report includes a fair review of the
development and performance of the business and the
position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face.
We consider the annual report and accounts, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess
the Group’s position and performance, business model
and strategy.
• use the going concern basis of accounting unless they
Signed on behalf of the Board:
either intend to liquidate the Group or the parent Company
or to cease operations, or have no realistic alternative but
to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and
other irregularities.
Peter Brooks-Johnson
Chief Executive Officer
Robyn Perriss
Finance Director
28 February 2020
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rightmove.co.uk
Governance | Independent auditor’s report to the members of Rightmove plc
1. Our opinion is unmodified
We have audited the financial statements of Rightmove plc
(“the Company”) for the year ended 31 December 2019
which comprise the Consolidated statement of
comprehensive income, Consolidated statement of
financial position, Company statement of financial position,
Consolidated statement of cash flows, Company statement
of cash flows, Consolidated statement of changes in
shareholders’ equity, Company statement of changes in
shareholders’ equity, and the related notes, including the
accounting policies in note 1.
In our opinion:
• the financial statements give a true and fair view of the
state of the Group’s and of the parent Company’s affairs
as at 31 December 2019 and of the Group’s profit for the
year then ended;
• the Group financial statements have been properly
prepared in accordance with International Financial
Reporting Standards as adopted by the European Union
(IFRSs as adopted by the EU);
• the parent Company financial statements have been
properly prepared in accordance with IFRSs as adopted by
the EU and as applied in accordance with the provisions of
the Companies Act 2006; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006 and, as
regards the Group financial statements, Article 4 of the
IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities are described below. We believe that
the audit evidence we have obtained is a sufficient and
appropriate basis for our opinion. Our audit opinion is
consistent with our report to the Audit Committee.
We were first appointed as auditor by the Directors to the
Group’s previous holding company, prior to it becoming
a public interest entity, for the financial period ended
31 December 2000. The period of total uninterrupted
engagement is for the 14 financial years ended
31 December 2019 as a public-interest entity and 20 years in
total. We were first appointed as auditor by the Directors for
the financial period ended 31 December 2000, and later
reappointed as auditors following a competitive audit tender
process for the period ended 31 December 2013. We have
fulfilled our ethical responsibilities under, and we remain
independent of the Group in accordance with, UK ethical
requirements including the FRC Ethical Standard as applied
to listed public interest entities. No non-audit services
prohibited by that standard were provided.
Overview
Materiality:
Group financial
statements as a whole
Coverage
Key audit matters
Recurring risks
£9.3m (2018: £8.5m)
4.4% (2018: 4.3%)
of profit before tax
99.4% (2018: 99.8%) of
Group profit before tax
vs 2018
Agency and New
Homes revenue
recognition
Recoverability of
parent Company’s
investment in
subsidiaries
2. Key audit matters: including our assessment of risks
of material misstatement
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the
financial statements and include the most significant
assessed risks of material misstatement (whether or not
due to fraud) identified by us, including those which had the
greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the
engagement team. We summarise below the key audit
matters in arriving at our audit opinion above, together with
our key audit procedures to address those matters and, as
required for public interest entities, our results from those
procedures. These matters were addressed, and our results
are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial
statements as a whole, and in forming our opinion thereon,
and consequently are incidental to that opinion, and we do
not provide a separate opinion on these matters.
Rightmove plc annual report 2019 95
Financial statementsStrategic reportGovernance
The risk
Our response
Processing error:
Our procedures included:
Governance | Auditor's report continued
Revenue
recognition
(£264.8 million;
2018: £247.1 m)
Refer to page 52
(Audit Committee
Report), pages 108
to 109 (accounting
policy) and pages
116 to 117
(financial
disclosures).
The key revenue streams are Agency
and New Homes which consist of
subscription fees and customer spend
on additional advertising products in
respect of properties listed on
Rightmove platforms. There are a
variety of packages and products
available and customers are able to
tailor the combination of products they
receive. The resulting large volume of
non-homogenous transactions
creates a risk of processing error, in
particular the amount of revenue being
incorrectly recognised. In addition,
revenue is the most material figure in
the financial statements and is
considered to be a main driver of
results, and as such had the greatest
effect on our allocation of resources in
planning and completing the audit.
Control operation: Testing the design, implementation and operating
effectiveness of the Group’s controls over the review of monthly
revenue recognised compared to the Group’s expectation as well as
controls over the review of analysis of outliers in billing.
Tests of details: For a sample of the highest revenue generating
customers we inspected contracts signed in the year, to assess whether
revenue had been recognised in accordance with the specific contract
terms and conditions; we also reviewed the standard packages against
the revenue recognition policy.
Test of details: We analysed credit notes raised during the year and
tested a sample of post year end credit notes to determine whether
they related to revenue recognised in the year.
Tests of details: We obtained all journals posted in respect of revenue
and, using computer assisted audit techniques, analysed these to
identify any entries which were unexpected based upon the specific
characteristic of the journal, considering in particular whether the
opposite side of the journal entry was as expected, based on our
business understanding. We tested a sample of expected entries back
to supporting evidence to assess whether revenue was recognised
appropriately.
Our results
We found no exceptions performing the procedures described above.
Our procedures included:
Comparing valuations: comparing the carrying amount of the
investment to the market capitalisation of the Group, as Rightmove
Group Limited contains all of the Group’s trading operations, to
ascertain whether there are any indicators of impairment.
Our results
We found no indicators of impairment.
Recoverability of
parent
Company’s
investment in
subsidiaries
(£554.6million;
2018: £551.5m)
Refer to page 52
(Audit Committee
Report), page 110
(accounting policy)
and page 124
(financial
disclosures).
Low risk, high value:
The carrying amount of the parent
Company’s investments in the
subsidiary company Rightmove Group
Limited represents 99% (2018: 99%)
of the Company’s total assets. Its
recoverability is not at a high risk of
significant misstatement or subject to
significant judgment. However, due to
its materiality in the context of the
parent Company financial statements,
this is considered to be the area that
had the greatest effect on our overall
parent Company audit.
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rightmove.co.uk
3. Our application of materiality and an overview of the
scope of our audit
Materiality for the Group financial statements as a whole was
set at £9.3m (2018: £8.5m), determined with reference to a
benchmark of Group profit before tax, of which it represents
4.4% (2018: 4.3%).
Materiality for the parent Company financial statements as a
whole was set at £6.8m (2018: £6.8m), determined with
reference to a benchmark of Company net assets, of which it
represents 1.3% (2018: 1.3%).
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding £0.47m
(2018: £0.43m), in addition to other identified misstatements
that warranted reporting on qualitative grounds.
Of the Group’s four (2018: four) reporting components,
we subjected two (2018: two) to full scope audits for Group
purposes. The components within the scope of our work
accounted for the percentages illustrated below.
Group revenue
Group profit before tax
0.3
99.7%
(2018: 100%)
99.7
Group total assets
1.1
0.4
98.9%
(2018: 99.6%)
99.6
98.9
0.6
0.2
99.4%
(2018: 99.8%)
99.8
99.4
Full scope for Group audit
purposes 2019
Full scope for Group audit
purposes 2018
Residual components
Profit before tax
£213.6m
(2018: £198.3m)
Group materiality
£9.3m (2018: £8.5m)
£9.3m
Whole financial statements
materiality (2018: £8.5m)
£6.8m
Materiality at two components
(£6.8m) (2018: £6.8m)
Profit before tax
Group materiality
£0.47m
Misstatements reported to the
Audit Committee (2018: £0.43m)
4. We have nothing to report on going concern
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the
Company or the Group or to cease their operations, and as
they have concluded that the Company’s and the Group’s
financial position means that this is realistic. They have also
concluded that there are no material uncertainties that could
have cast significant doubt over their ability to continue as a
going concern for at least a year from the date of approval of
the financial statements (“the going concern period”).
Our responsibility is to conclude on the appropriateness of
the directors’ conclusions and, had there been a material
uncertainty related to going concern, to make reference to
that in this audit report. However, as we cannot predict all
future events or conditions and as subsequent events may
result in outcomes that are inconsistent with judgments that
were reasonable at the time they were made, the absence of
reference to a material uncertainty in this auditor’s report is
not a guarantee that the Group and the Company will
continue in operation.
In our evaluation of the directors’ conclusions, we
considered the inherent risks to the Group’s and Company’s
business model, including the impact of Brexit, and analysed
how those risks might affect the Group’s and Company’s
financial resources or ability to continue operations over the
going concern period. We evaluated those risks and
concluded that they were not significant enough to require
us to perform additional audit procedures.
Rightmove plc annual report 2019 97
Financial statementsStrategic reportGovernance
Governance | Auditor's report continued
Based on this work, we are required to report to you if:
• we have anything material to add or draw attention to in
relation to the directors’ statement in Note 1 to the
financial statements on the use of the going concern basis
of accounting with no material uncertainties that may cast
significant doubt over the Group and Company’s use of
that basis for a period of at least twelve months from the
date of approval of the financial statements; or
• the related statement under the Listing Rules set out on
page 107 is materially inconsistent with our audit
knowledge.
We have nothing to report in these respects, and we did not
identify going concern as a key audit matter.
5. We have nothing to report on the other information in
the Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does
not cover the other information and, accordingly, we do not
express an audit opinion or, except as explicitly stated below,
any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial
statements audit work, the information therein is materially
misstated or inconsistent with the financial statements or
our audit knowledge. Based solely on that work we have not
identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the
strategic report and the directors’ report;
• in our opinion the information given in those reports for the
financial year is consistent with the financial statements;
and
• in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Disclosures of principal risks and longer-term viability
Based on the knowledge we acquired during our financial
statements audit, we have nothing material to add or draw
attention to in relation to:
• the directors’ confirmation within the Viability Statement
on page 26 that they have carried out a robust assessment
of the principal risks facing the Group, including those that
would threaten its business model, future performance,
solvency and liquidity;
• the principal risks and uncertainties disclosures describing
these risks and explaining how they are being managed and
mitigated; and
• the directors’ explanation in the Viability Statement of how
they have assessed the prospects of the Group, over what
period they have done so and why they considered that
period to be appropriate, and their statement as to whether
they have a reasonable expectation that the Group will be
able to continue in operation and meet its liabilities as they
fall due over the period of their assessment, including any
related disclosures drawing attention to any necessary
qualifications or assumptions.
Under the Listing Rules we are required to review the Viability
Statement. We have nothing to report in this respect.
Our work is limited to assessing these matters in the
context of only the knowledge acquired during our financial
statements audit. As we cannot predict all future events
or conditions and as subsequent events may result in
outcomes that are inconsistent with judgments that were
reasonable at the time they were made, the absence of
anything to report on these statements is not a guarantee
as to the Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to report to you if:
• we have identified material inconsistencies between the
knowledge we acquired during our financial statements
audit and the directors’ statement that they consider that
the annual report and financial statements taken as a whole
is fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Group’s position and performance, business model
and strategy; or
• the section of the annual report describing the work of the
Audit Committee does not appropriately address matters
communicated by us to the Audit Committee; or
We are required to report to you if the Corporate governance
report does not properly disclose a departure from the
provisions of the UK Corporate Governance Code specified
by the Listing Rules for our review.
We have nothing to report in these respects.
6. We have nothing to report on the other matters on
which we are required to report by exception
Under the Companies Act 2006, we are required to report
to you if, in our opinion:
• adequate accounting records have not been kept by the
parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent Company financial statements and the part of
the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
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rightmove.co.uk
• certain disclosures of directors’ remuneration specified
by law are not made; or
• we have not received all the information and explanations
we require for our audit.
We have nothing to report in these respects.
7. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on
page 94, the directors are responsible for:
the preparation of the financial statements including being
satisfied that they give a true and fair view; such internal
control as they determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error;
assessing the Group’s and the parent Company’s ability
to continue as a going concern, disclosing, as applicable,
matters related to going concern; and using the going
concern basis of accounting unless they either intend to
liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or other
irregularities (see below), or error, and to issue our opinion in
an auditor’s report. Reasonable assurance is a high level of
assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from
fraud, other irregularities or error and are considered
material if, individually or in aggregate, they could reasonably
be expected to influence the economic decisions of users
taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
Irregularities – ability to detect
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
financial statements from our general commercial and
sector experience, through discussion with the directors
and other management (as required by auditing standards),
and discussed with the directors and other management
the policies and procedures regarding compliance with laws
and regulations. We communicated identified laws and
regulations throughout our team and remained alert to
any indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the
financial statements varies considerably.
The Group is subject to laws and regulations that directly
affect the financial statements including financial reporting
legislation (including related companies legislation),
distributable profits legislation and taxation legislation and
we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial
statement items.
Whilst the Group is subject to other laws and regulations,
we did not identify any others where the consequences of
non-compliance alone could have a material effect on
amounts or disclosures in the financial statements.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our audit
in accordance with auditing standards. For example, the
further removed non-compliance with laws and regulations
(irregularities) is from the events and transactions reflected
in the financial statements, the less likely the inherently
limited procedures required by auditing standards would
identify it. In addition, as with any audit, there remained a
higher risk of non-detection of irregularities, as these may
involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls.
We are not responsible for preventing non-compliance and
cannot be expected to detect non-compliance with all laws
and regulations.
8. The purpose of our audit work and to whom we owe
our responsibilities
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s
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 and the Company’s
members, as a body, for our audit work, for this report,
or for the opinions we have formed.
Anna Jones (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
Milton Keynes
28 February 2020
Rightmove plc annual report 2019 99
Financial statementsStrategic reportGovernance Consolidated statement of comprehensive income for the year ended 31 December 2019
Revenue
Administrative expenses
Underlying operating profit
Share-based payments
NI on share-based incentives
Operating profit
Financial income
Financial expenses
Net financial expense
Profit before tax
Income tax expense
Profit for the year being total comprehensive income
Attributable to:
Equity holders of the Parent
Earnings per share (pence)
Basic
Diluted
Dividends per share (pence)
Dividends paid
Note
4,5
25
25
6
8
9
10
11
11
12
12
2019
£000
289,320
(75,590)
219,710
(4,911)
(1,069)
2018
£000
267,821
(69,231)
203,329
(4,320)
(419)
213,730
198,590
318
(486)
(168)
171
(491)
(320)
213,562
(40,473)
198,270
(37,815)
173,089
160,455
173,089
160,455
19.57
19.49
6.80
60,173
17.80
17.69
6.10
54,977
100
rightmove.co.uk
Consolidated statement of financial position as at 31 December 2019
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax asset
Total non-current assets
Current assets
Trade and other receivables
Contract assets
Money market deposits
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Contract liabilities
Income tax payable
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Deferred tax liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Other reserves
Retained earnings (net of own shares held)
Total equity attributable to the equity holders of the Parent
Note
13
14
16
17
5
18
18
19
21
5
22
21
22
16
23
2019
£000
12,802
21,954
2,718
2018
£000
15,203
2,873
2,798
37,474
20,874
23,985
429
4,141
32,117
22,479
427
4,090
15,847
60,672
42,843
98,146
63,717
(19,516)
(1,709)
(2,111)
(18,930)
(256)
(18,081)
(1,213)
(2,146)
(16,753)
(671)
(42,522)
(38,864)
(10,499)
(2,914)
(871)
(11,845)
(424)
–
(14,284)
(12,269)
(56,806)
(51,133)
41,340
12,584
892
540
39,908
908
524
11,152
41,340
12,584
The financial statements were approved by the Board of directors on 28 February 2020 and were signed on its behalf by:
Peter Brooks-Johnson
Director
Robyn Perriss
Director
Rightmove plc annual report 2019
101
Financial statementsStrategic reportGovernance
Company statement of financial position as at 31 December 2019
Non-current assets
Investments
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Net assets
Equity
Share capital
Other reserves
Retained earnings (net of own shares held)
23
Total equity attributable to the equity holders of the Parent
Note
15
16
2019
£000
2018
£000
554,554
1,010
551,478
966
555,564
552,444
555,564
552,444
19
(15,240)
(42,140)
(15,240)
(42,140)
540,324
510,304
892
121,466
417,966
908
118,374
391,022
540,324
510,304
The financial statements were approved by the Board of directors on 28 February 2020 and were signed on its behalf by:
Peter Brooks-Johnson
Director
Robyn Perriss
Director
102
rightmove.co.uk
Consolidated statement of cash flows for the year ended 31 December 2019
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation charges
Amortisation charges
Financial income
Financial expenses
Re-measurement of leased assets
Loss on disposal of property, plant and equipment
Share-based payments
Income tax expense
Note
13
14
8
9
13
13
25
10
2019
£000
2018
£000
173,089
160,455
3,114
480
(318)
486
283
–
4,911
40,473
3,307
545
(171)
491
–
7
4,320
37,815
Operating cash flow before changes in working capital
222,518
206,769
Increase in trade and other receivables
Increase/(Decrease) in trade and other payables
(Decrease)/Increase in provisions
Decrease/(Increase) in contract assets
(Decrease)/Increase in contract liabilities
Cash generated from operating activities
Financial expenses paid
Income taxes paid
Net cash from operating activities
Cash flows used in investing activities
Interest received on cash and cash equivalents
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of subsidiary, net of cash acquired
Net cash used in investing activities
Cash flows used in financing activities
Net dividends
Purchase of own shares for cancellation
Purchase of own shares for share incentive plans
Share-related expenses
Payment of lease liabilities
Proceeds on exercise of share-based incentives
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
(481)
35
(371)
28
(44)
(5,344)
(1,069)
46
(261)
287
221,685
200,428
(198)
(37,263)
(190)
(32,798)
184,224
167,440
259
(543)
(236)
(15,627)
118
(1,614)
(128)
–
(16,147)
(1,624)
(59,856)
(88,583)
(2,112)
(619)
(1,535)
898
(54,977)
(113,528)
(685)
(778)
(1,532)
601
(151,807)
(170,899)
16,270
15,847
(5,083)
20,930
13
14
27
12
23
24
23
21
Cash and cash equivalents at 31 December
18
32,117
15,847
Rightmove plc annual report 2019
103
Financial statementsStrategic reportGovernance
Company statement of cash flows for the year ended 31 December 2019
Note
28
28
25
Cash flows from operating activities
Profit for the year
Adjustments for:
Dividend income
Financial expenses
Share-based payments
Income tax credit
Operating cash flow before changes in working capital
Increase in trade and other payables
Cash generated from operating activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
18
2019
£000
2018
£000
174,618
148,740
(179,398)
542
1,835
(927)
(152,845)
471
1,669
(799)
(3,330)
(2,764)
3,330
2,764
–
–
–
–
–
–
–
–
104
rightmove.co.uk
Consolidated statement of changes in shareholders’ equity for the year ended 31 December 2019
Share
capital
£000
Own
shares held
£000
Other
reserves
£000
Note
Reverse
acquisition
reserve
£000
Retained
earnings
£000
Total
equity
£000
At 1 January 2018
933
(12,995)
361
138
28,746
17,183
Total comprehensive income
Profit for the year
Transactions with owners recorded directly in equity
Share-based payments
Tax credit in respect of share-based incentives
recognised directly in equity
Dividends to shareholders
Exercise of share-based incentives
Purchase of shares for share incentive plans
Cancellation of own shares
Share-related expenses
25
10
12
24
24
23
23
–
–
–
–
–
–
(25)
–
–
–
–
–
2,542
(685)
–
–
–
–
–
–
–
–
25
–
–
160,455
160,455
–
–
–
–
–
–
–
4,320
4,320
10
(54,977)
(1,941)
–
(113,528)
(795)
10
(54,977)
601
(685)
(113,528)
(795)
At 31 December 2018
908
(11,138)
386
138
22,290
12,584
At 1 January 2019
908
(11,138)
386
138
22,290
12,584
Total comprehensive income
Profit for the year
Transactions with owners recorded directly in equity
Share-based payments
Tax credit in respect of share-based incentives
recognised directly in equity
Net dividends
Exercise of share-based incentives
Purchase of shares for share incentive plans
Cancellation of own shares
Share-related expenses
–
–
–
–
–
–
(16)
–
–
–
–
–
1,506
(2,112)
–
–
–
–
–
–
–
–
16
–
25
10
12
24
24
23
23
–
173,089
173,089
–
–
–
–
–
–
–
4,911
4,911
1,028
1,028
(59,856)
(608)
–
(88,583)
(619)
(59,856)
898
(2,112)
(88,583)
(619)
At 31 December 2019
892
(11,744)
402
138
51,652
41,340
Rightmove plc annual report 2019
105
Financial statementsStrategic reportGovernance
Company statement of changes in shareholders’ equity for the year ended 31 December 2019
Share
capital
£000
Own
shares held
£000
Other
reserves
£000
Note
Reverse
acquisition
reserve
£000
Retained
earnings
£000
Total
equity
£000
At 1 January 2018
933
(11,017)
12,178
103,520
422,293
527,907
Total comprehensive income
Profit for the year
Transactions with owners recorded directly in equity
Share-based payments
Tax credit in respect of share-based incentives
recognised directly in equity
Capital contribution
Dividends to shareholders
Transfer of shares to SIP
Exercise of share-based incentives
Cancellation of own shares
Share-related expenses
25
10
24
12
23
23
–
–
–
–
–
–
–
(25)
–
–
–
–
–
–
(1,446)
2,438
–
–
–
–
–
2,651
–
–
–
25
–
–
148,740
148,740
–
–
–
–
–
–
–
–
1,669
1,669
83
–
(54,977)
–
(2,438)
(113,528)
(795)
83
2,651
(54,977)
(1,446)
–
(113,528)
(795)
At 31 December 2018
908
(10,025)
14,854
103,520
401,047
510,304
At 1 January 2019
908
(10,025)
14,854
103,520
401,047
510,304
Total comprehensive income
Profit for the year
Transactions with owners recorded directly in equity
Share-based payments
Tax credit in respect of share-based incentives
recognised directly in equity
Capital contribution
Dividends to shareholders
Transfer of shares to SIP
Exercise of share-based incentives
Cancellation of own shares
Share-related expenses
25
10
24
12
23
23
–
–
–
–
–
–
–
(16)
–
–
–
–
–
–
(826)
1,299
–
–
–
–
–
3,076
–
–
–
16
–
–
174,618
174,618
–
–
–
–
–
–
–
–
1,835
1,835
375
–
(59,856)
–
(1,299)
375
3,076
(59,856)
(826)
–
(88,583)
(619)
(88,583)
(619)
At 31 December 2019
892
(9,552)
17,946
103,520
427,518
540,324
106
rightmove.co.uk
Notes forming part of the financial statements
1 General information
Rightmove plc (the Company) is a public limited company registered in England (Company no. 6426485) domiciled in the United
Kingdom (UK). The consolidated financial statements of the Company as at and for the year ended 31 December 2019 comprise
the Company and its interest in its subsidiaries (together referred to as the Group). Its principal business is the operation of the
Rightmove platforms, which have the largest audience of any UK property portal (as measured by time on site).
The consolidated financial statements of the Group as at and for the year ended 31 December 2019 are available upon request
to the Company Secretary from the Company’s registered office at 2 Caldecotte Lake Business Park, Caldecotte Lake Drive,
Caldecotte, Milton Keynes, MK7 8LE or are available on the corporate website at plc.rightmove.co.uk.
Statement of compliance
The Group and Company financial statements have been prepared and approved by the Board of directors in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union (Adopted IFRSs).
The consolidated financial statements were authorised for issue by the Board of directors on 28 February 2020.
Basis of preparation
On publishing the Company financial statements here together with the Group financial statements, the Company is taking
advantage of the exemption in s408 of the Companies Act 2006 not to present its individual statement of comprehensive
income and related notes that form a part of these approved financial statements. The profit for the year of the Company
was £174,618,000 (2018: £148,740,000).
The financial statements have been prepared on an historical cost basis.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has existing rights that give it the ability to direct
the relevant activities of an entity and has the ability to affect the returns the Group will receive as a result of its involvement with
the entity. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The
financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences
until the date that control ceases.
On 30 September 2019 the Group acquired 100% of the ordinary share capital of Van Mildert Landlord and Tenant Protection
Limited (Van Mildert). The results of this entity have been consolidated in these Group financial statements. Further details of the
investment and acquisition are set out in Note 15 and Note 27.
Going concern
Throughout 2019, the Group was debt free and has continued to generate significant cash and has an overall positive net asset
position. The Group had cash balances of £32,117,000 at 31 December 2019 (2018: £15,847,000). The Group also had
£4,141,000 of money market deposits (2018: £4,090,000).
During the year £148,756,000 (2018: £168,505,000) of cash was returned to shareholders via dividends and discretionary share
buy backs.
The agreement with Barclays Bank plc for a £10,000,000 committed revolving loan facility was terminated on 7 February 2020.
This has been replaced with a new 12 month agreement with Barclays Bank plc for a £10,000,000 committed revolving loan facility
that expires on 6 February 2021. No amount has been drawn under either facility in either year.
The Board of directors is confident that with the existing cash resources and banking facilities in place, coupled with the strength
of the underlying business model, the Group and the Company will remain cash positive and will have adequate resources to
continue in operational existence for a period of 12 months from the date of signing these accounts.
Further information regarding the Group’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the Strategic Report on pages 1 to 39. The financial position of the Group, its cash flows,
liquidity position and borrowing facilities are described on pages 18 to 21. In addition, Note 3 to the financial statements includes
the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its
financial instruments and its exposures to credit risk and liquidity risk.
Rightmove plc annual report 2019
107
Financial statementsStrategic reportGovernance Notes continued
1 General information continued
Judgements and estimates
The preparation of the consolidated and Company financial statements in conformity with Adopted IFRSs requires management
to make judgements, estimates and assumptions that affect the application of accounting policies and the 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
judgements 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 any future periods, if applicable.
Management has determined that there are no significant areas of estimation uncertainty or critical judgements in applying
accounting policies that have a significant effect on the amounts recognised in the consolidated and Company financial statements.
Alternative performance measures
In the analysis of the Group’s financial performance certain information disclosed in the financial statements may be prepared on
a non-GAAP basis or has been derived from amounts calculated in accordance with IFRS but is not itself an expressly permitted
GAAP measure. These measures are reported in line with how financial information is analysed by management. The key
alternative performance measures presented by the Group are:
• Underlying operating profit – which is defined as operating profit before share-based payments and National Insurance (NI) on
share-based incentives; and
• Underlying basic earnings per share (EPS) – which is defined as profit for the year before share-based payments and National
Insurance on share-based incentives, with no related adjustment for tax, divided by the weighted average number of ordinary
shares in issue for the year.
The directors believe that these alternative performance measures provide a more appropriate measure of the Group’s business
performance as share-based payments are a significant non-cash charge and are driven by a valuation model, and NI on share-
based incentives is driven by reference to the Rightmove plc share price and so subject to volatility, rather than reflecting
operational activity. The directors therefore consider underlying operating profit to be the most appropriate indicator of the
performance of the business and year on year trends. For simplicity no adjustment for tax is made within the calculation of
underlying basic EPS. The alternative performance measures are designed to increase comparability of the Group’s financial
performance year on year. These measures are consistent with the prior year.
Following recent guidance by the FRC in relation to alternative performance measures and in line with best practice, the directors
have made the decision to move away from these measures for the financial year beginning 1 January 2020 and will instead report
on a GAAP basis. The timing of the change aligns with the start of a new three-year Remuneration Policy which will also refer to
GAAP measures (see the Directors’ Remuneration Report page 71 for further details).
2 Significant accounting policies
The Group adopted IFRS 9 Financial Instruments, IFRS 15 Revenue from contracts with customers and IFRS 16 Leases with effect
from 1 January 2018 with IFRS 15 and IFRS 16 having a material effect on the Group’s financial statements; further details were
provided in the Group’s 2018 financial statements. The following accounting policies applied by the Group in these consolidated
financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year
ended 31 December 2018.
(a) Revenue
Revenue is measured based on the consideration specified in a contract with a customer and is recognised when a customer
obtains control of the services.
Revenue principally represents the amounts receivable from customers in respect of property products, primarily membership
of the Rightmove platforms, together with the provision of tenant referencing and rent guarantee insurance. Rightmove also
provides non-property advertising services, including Data Services and third-party advertising. Revenue is recognised as services
are provided to customers. Contract assets primarily relate to the Group’s rights to consideration for services provided but not
invoiced at the reporting date. Contract assets are transferred to receivables when invoiced and the rights have become
unconditional. Contract liabilities primarily relate to the advance consideration received from Estate Agency, Overseas and
Commercial customers, for which revenue is recognised as or when the services are provided.
108
rightmove.co.uk
2 Significant accounting policies continued
The table below covers the different types of products and services offered to customers along with the nature and timing of
satisfaction of performance obligations:
Type of product/service Nature and timing of satisfaction of performance obligations
Property products –
membership of
Rightmove platforms
Property products –
provision of tenant
referencing and rent
guarantee insurance
For membership listing services customers pay monthly subscriptions to list their properties on
the Rightmove platforms. Control is obtained by customers across the life of the contract as their
properties are continuously listed on the different platforms. The continuous listing of properties is
a distinct performance obligation for each customer. Contracts for these services are per branch
location or branch equivalent for Agency and per development for New Homes. They vary in length
from one month to five years, but are typically for periods of six to 12 months.
Agency, Overseas and Commercial services are typically billed in advance and New Homes developers
are billed monthly in arrears.
For additional advertising products customers have the option to enhance their property listings and
presence on Rightmove through additional advertising products. Each additional advertising product
is a distinct performance obligation. For products that provide enhanced brand exposure or property
exposure across the life of the product, control is passed to the customer over time. Revenue is only
recognised at a point in time for additional advertising products where the customer does not receive
the benefit until they choose to apply the product.
Additional advertising products are principally billed on a monthly subscription basis in line with core
listing services, however certain products are billed on an individual charge basis.
Rightmove performance obligations change on a regular basis as customers add or remove
additional advertising products from their contracts. Each contract modification is treated as a
separate performance obligation. Following a contract modification, the customer is billed in line
with the delivery of the remaining performance obligations.
A receivable is recognised when the Group’s right to consideration is only conditional on the passage
of time.
Discounted services may be offered to customers as part of membership or package offers.
Referencing revenue relates to the supply of tenant referencing services primarily to lettings agents.
Control is obtained by the customer when the service has been completed.
Revenue related to insurance broking commission is generated on the sale of rent guarantee
insurance to lettings agents and landlords. Control is obtained when an invoice is raised or at the date
of inception of the insurance policy, whichever is later. Insurance commission revenue is stated net of
insurance costs payable, and less any expected adjustment for cancellations.
Non-property products Data Services revenue relates to fees generated for data and valuation services under a variety of
contractual arrangements, with each service being a separate performance obligation. Control is
obtained by customers either across the life of the contract where customers are licensed to use
Rightmove’s property tools or at a point in time when a one-off data service is provided. Discounted
services may be offered to customers and are taken into consideration in the transaction price for
each performance obligation.
Third party advertising revenue represents amounts paid in respect of non-property advertising on
the Rightmove platforms and control is obtained by customers across the life of the contract as their
advertising is displayed on the different platforms. Some of the Group’s arrangements with third
parties need to be considered to determine if the Group acts as a principal or an agent in providing the
services to the customer. If, on evaluation of a number of indicators it is appropriate for the Group to
be treated as the agent, revenue is recognised at a net amount reflecting the margin earned.
A receivable is recognised only when the Group’s right to consideration is only conditional on the
passage of time.
Rightmove plc annual report 2019
109
Financial statementsStrategic reportGovernance
Notes continued
2 Significant accounting policies continued
(b) Investments
Investments in subsidiaries are held at cost less any provision for impairment in the parent Company financial statements.
(c) Intangible assets
(i) Goodwill
Goodwill arising on a business combination represents the difference between the fair value of the consideration paid and the
fair value of the net identifiable assets acquired and is included in intangible assets.
In respect of acquisitions prior to 1 January 2004, goodwill is included on the basis of its deemed cost, which represents the
amount previously recorded under UK GAAP. The classification and accounting treatment of business that occurred prior to
1 January 2004 was not reconsidered in preparing the Group’s opening IFRS statement of financial position at 1 January 2004.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is tested annually for impairment. This applies to
all goodwill arising both before and after 1 January 2004.
(ii) Research and development
The Group undertakes research and development expenditure in view of developing new products and improving the existing
property platforms. Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge and
understanding, is recognised in profit or loss as incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of a
new product or substantially enhanced website, is capitalised if the new product or the enhanced website is technically and
commercially feasible, the Group has sufficient resources to complete development, future economic benefits are probable
and the Group can measure reliably the expenditure attributable to the intangible asset during its development. Capitalised
costs are held as an asset in progress until such point that the asset is brought into use, at which point it is transferred to the
appropriate intangible asset category and amortisation is charged.
The expenditure capitalised includes subcontractors and direct labour. Capitalised development expenditure is stated at cost
less accumulated amortisation and accumulated impairment losses. Subsequent expenditure on capitalised intangible assets
is capitalised only when it increases the economic benefits embodied in the specific asset to which it relates. All other
expenditure is expensed when incurred.
(iii) Computer software and licences
Computer software and externally acquired software licences are capitalised and stated at cost less accumulated
amortisation and impairment losses. Amortisation is charged from the date the asset is available for use. Amortisation is
provided to write off the cost less the estimated residual value of the computer software or licence by equal annual
instalments over its estimated useful economic life as follows:
Computer software
Software licences
20.0% – 33.3% per annum
20.0% – 33.3% per annum
(iv) Market appraisal algorithm
The market appraisal algorithm identified on the acquisition of the Outside View Analytics Ltd is valued using the reproduction
cost method based on market rate salaries. Amortisation is expensed in the profit or loss on a straight-line basis over the
estimated useful economic life as follows:
Market appraisal algorithm
33.3% per annum
(v) Credit referencing software
The credit referencing software identified on the acquisition of Van Mildert is valued using the reproduction cost method
based on market rate salaries. Amortisation is expensed in the profit or loss on a straight-line basis over the estimated useful
economic life as follows:
Credit referencing software 20% per annum
(vi) Customer relationships
The customer relationships identified on the acquisition of Van Mildert are valued using the income approach, calculating the
multi-period excess earnings. Amortisation is expensed in the profit or loss on a straight-line basis over the estimated useful
economic life as follows:
Customer relationships
10% per annum
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2 Significant accounting policies continued
(d) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Capitalised costs are
held as an asset in progress until such point that the asset is brought into use, at which point it is transferred to the appropriate
property, plant and equipment category and depreciation is charged. Depreciation is provided to write off the cost less the
estimated residual value of property, plant and equipment by equal annual instalments over their estimated useful economic
lives as follows:
Office equipment, fixtures and fittings
Computer equipment
Leasehold improvements
20.0% per annum
20.0% – 33.3% per annum
remaining life of the lease
(e) Impairment
The carrying value of property, plant and equipment is reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount of
non-financial assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash flows,
the recoverable amount is determined for the cash generating unit to which the asset belongs.
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation but are tested for impairment
annually and whenever there is an indication that they might be impaired. An impairment loss is recognised for the amount by
which the carrying value of the asset exceeds its recoverable amount.
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is
estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable
amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of
impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets
(the “cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated
to cash-generating units, or (“CGU”). Goodwill acquired in a business combination is allocated to groups of CGUs that are
expected to benefit from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit
(group of units) on a pro rata basis.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
(g) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessment
of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost.
Rightmove plc annual report 2019
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Financial statementsStrategic reportGovernance Notes continued
2 Significant accounting policies continued
(h) Employee benefits
(i) Pensions
The Group provides access to stakeholder pension schemes (defined contribution pension plans). Obligations for
contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss
when they are incurred.
(ii) Employee share schemes
The Group provides share-based incentive plans allowing executive directors and other employees to acquire shares in the
Company. An expense is recognised in profit or loss, with a corresponding increase in equity, over the period during which the
employees become unconditionally entitled to acquire equity settled share-based incentives.
Fair value at the grant date is measured using either the Monte Carlo or Black Scholes pricing model as is most appropriate for
each scheme. Measurement inputs include share price on measurement date, exercise price of the instrument, expected
volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information),
weighted average expected life of the instruments (based on historical experience and general option behaviour), expected
dividends, and risk-free interest rates (based on government bonds). Service and non-market performance conditions
attached to the awards are not taken into account in determining the fair value.
For share-based incentive awards with non-vesting conditions, the grant date fair value of the share-based incentives is
measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. When
either the employee or the Company chooses not to meet the non-vesting condition, the failure to meet the non-vesting
condition is treated as a cancellation and the cost that would have been recognised over the remainder of the vesting period
is recognised immediately in profit or loss.
(iii) Own shares held by The Rightmove Employees’ Share Trust (EBT)
The EBT is treated as an agent of Rightmove Group Limited, and as such EBT transactions are treated as being those of
Rightmove Group Limited and are therefore reflected in the Group’s consolidated financial statements. In particular, at a
consolidated level, the EBT’s purchases of shares in the Company are charged directly to equity.
(iv) Own shares held by The Rightmove Share Incentive Plan Trust (SIP)
The SIP is treated as an agent of Rightmove plc, and as such SIP transactions are treated as being those of Rightmove plc
and are therefore reflected in the Group’s consolidated financial statements. In particular, at a consolidated level, the SIP’s
purchases of shares in the Company are charged directly to equity.
(v) National Insurance (NI) on share-based incentives
Employer’s NI is accrued, where applicable, at a rate of 13.8%, which management expects to be the prevailing rate when
share-based incentives are exercised. In the case of share options, it is provided on the difference between the share price at
the reporting date and the average exercise price of share options. In the case of nil cost performance shares and deferred
shares, it is provided based on the share price at the reporting date.
(i) Treasury shares and shares purchased for cancellation
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable
costs, is recognised as a deduction from equity. Repurchased shares are either held in treasury or cancelled.
(j) Segmental reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating
segment’s operating results are reviewed regularly by the Group’s Chief Executive Officer to make decisions about resources to
be allocated to the segment and assess its performance and for which discrete financial information is available.
(k) Financial income and expenses
Financial income comprises interest receivable on cash balances and money market deposits and dividend income. Interest
income is recognised as it accrues, using the effective interest method. Dividend income is recognised on the date that the
Company’s right to receive payment is established.
Financial expenses comprise banking facility fees and bank charges and the unwinding of the discount on provisions and
lease liabilities.
112
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2 Significant accounting policies continued
(l) Taxation
Income tax on the results for the year comprises current and deferred tax. Income tax is recognised in profit or loss except to
the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the period net of any charge or credit posted directly to
equity, using tax rates enacted or substantially enacted at the reporting date and any adjustment to tax payable in respect of
previous periods.
Deferred tax is provided in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the
initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other
than in a business combination, and the differences relating to investments in subsidiaries to the extent that they will probably
not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted by the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
asset can be utilised.
In accordance with IAS 12, the Group policy in relation to the recognition of deferred tax on share-based incentives is to include
the income tax effect of the tax deduction in profit or loss to the value of the income tax charge on the cumulative IFRS 2 charge.
The remainder of the income tax effect of the tax deduction is recognised in equity.
(m) Dividends
Dividends unpaid at the reporting date are only recognised as a liability (and deduction to equity) at that date to the extent that
they are appropriately authorised and are no longer at the discretion of the Company. Unpaid dividends that do not meet these
criteria are disclosed in the notes to the financial statements.
(n) Earnings per share (EPS)
The Group presents basic, diluted and underlying basic and diluted EPS data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to equity holders of the Company by the weighted average number of ordinary shares
outstanding during the year, adjusted for own shares held. 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, the SIP and shares held
in treasury. The calculation of underlying basic and diluted EPS is disclosed in Note 11.
3 Risk and capital management
Overview
The Group has exposure to the following risks from its use of financial instruments:
• credit risk
• liquidity risk
• market risk
This note presents information about the Group and Company’s exposure to each of the above risks, the Group’s objectives,
policies and processes for measuring and managing risk and the Group’s management of capital. Further quantitative disclosures
are included throughout these consolidated financial statements.
The Board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The primary method by which risks are monitored and managed by the Group is through the monthly Executive Management
Committee, where any significant new risks or change in status to existing risks will be discussed and actions taken as appropriate.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk
limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and
obligations.
The Audit Committee oversees how management monitors compliance with the Group’s internal controls and reviews the
adequacy of the risk management framework in relation to the risks faced by the Group.
Rightmove plc annual report 2019
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Financial statementsStrategic reportGovernance Notes continued
3 Risk and capital management continued
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or banking institution fails to meet its contractual obligations.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group provides
credit to customers in the normal course of business. The Group provides its services to a wide range of customers in the UK and
overseas and therefore believes it has no material concentration of credit risk.
More than 87.0% (2018: 88.0%) of Rightmove Group Limited’s Agency and New Homes customers pay via monthly direct debit,
minimising the risk of non-payment. The Group establishes an expected credit loss that represents its estimate of losses in
respect of trade and other receivables. Further details of these are given in Note 26.
The Group’s treasury policy is to monitor cash and deposit balances on a daily basis and to manage counterparty risk by ensuring
that no more than £30,000,000 is held with any single institution.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated with its financial liabilities
that are settled by delivering cash. The Group and Company’s approach to managing liquidity is to ensure, as far as possible, that
it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group’s revenue model is largely subscription-based, which results in a regular level of cash conversion allowing it to service
working capital requirements.
The Group and Company ensure that they have sufficient cash on demand to meet expected operational expenses excluding
the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Throughout the
year, the Group typically had sufficient cash on demand to meet operational expenses, before financing activities, for a period
of 232 days (2018: 138 days).
The agreement with Barclays Bank plc for a £10,000,000 committed revolving loan facility was terminated on 7 February 2020.
This has been replaced with a new 12 month agreement with Barclays Bank plc for a £10,000,000 committed revolving loan facility
that expires on 6 February 2021.
Market risk
Market risk is the risk that changes in market prices such as foreign exchange and interest rates will affect the Group’s income.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return on risk.
(i) Currency risk
All of the Group’s sales and more than 97.0% (2018: 97.0%) of the Group’s purchases are Sterling denominated, accordingly
it has no significant currency risk.
(ii) Interest rate risk
The Group has interest bearing lease liabilities, although the interest on these is insignificant. The Group is exposed to
interest rate risk on cash and money market deposit balances. The Company has no interest-bearing financial liabilities.
Capital management
The Board of directors’ policy is to maintain an efficient statement of financial position so as to maintain investor, creditor and
market confidence and to sustain future development of the business. The Board of directors considers that the future working
capital and capital expenditure requirements of the Group will continue to be low and accordingly return on capital measures are
not key performance targets. The Board of directors monitors the spread of the Company’s shareholders as well as underlying
basic EPS.
114
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3 Risk and capital management continued
The Board’s policy is to return surplus capital to shareholders through a combination of dividends and share buybacks.
(i) Dividend policy
The Board of directors has a progressive dividend policy and monitors the level of dividends to ordinary shareholders in
relation to the growth in underlying basic EPS. The Board has adopted this policy in order to align shareholder returns with the
underlying growth achieved in the profitability of the Group.
The capacity of the Group to make dividend payments is primarily determined by the level of available retained earnings in the
Company, after deduction of own shares held, and the cash resources of the Group. The retained earnings of the Company,
after deduction of own shares held, are £417,966,000 (2018: £391,022,000) as set out in the Company statement of changes
in shareholders’ equity on page 106. The Group has cash and money market deposits at 31 December 2019 of £36,258,000
(2018: £19,937,000), the majority of which are held by the principal operating subsidiary Rightmove Group Limited. The Group
is well positioned to fund its future dividends given the strong cash generative nature of the business and in 2019 cash
generated from operating activities was £221,681,000 (2018: £200,428,000) representing an operating cash conversion in
excess of 100%.
(ii) Share buybacks
The Company purchases its own shares in the market; the timing of these purchases depends on available free cash flow and
market conditions. In 2019, 16,268,322 (2018: 24,977,740) shares were bought back and were cancelled at an average price
of £5.45 (2018: £4.55).
There were no changes in the Group’s approach to capital management during the year. Neither the Company nor any of its
subsidiaries are subject to externally imposed capital requirements.
Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s processes,
personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those
arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise
from all of the Group’s operations.
The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Group’s
reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.
The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior
management within each business unit. This responsibility is supported by the development of overall Group standards for the
management of operational risk in the following areas:
• requirements for appropriate segregation of duties, including the independent authorisation of transactions;
• requirements for the reconciliation and monitoring of transactions;
• compliance with regulatory and other legal requirements, including Financial Conduct Authority requirements
for regulated entities;
• documentation of controls and procedures;
• requirements for the periodic assessment of operational risks faced and the adequacy of controls and procedures
to address the risks identified;
• requirements for reporting of operational losses and proposed remedial action;
• development and regular testing of business continuity and disaster recovery plans;
• regular testing of the security of the IT systems and platforms, regular backups of key data and ongoing threat monitoring
to protect against the risk of cyber attack;
• training and professional development and ongoing succession planning; and
• risk mitigation, including insurance where this is effective.
Rightmove plc annual report 2019
115
Financial statementsStrategic reportGovernance
Notes continued
4 Operating segments
The Group determines and presents operating segments based on internal 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 includes resale and lettings property advertising services provided on Rightmove’s platforms and
tenant referencing and insurance products sold by Van Mildert; and
• The New Homes segment which provides property advertising services to new home developers and housing associations on
Rightmove’s platforms.
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 advertising and Data 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 revenue in both years is derived from third parties
and there is no inter-segment revenue.
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 below.
The Company has no reportable segments.
Year ended 31 December 2019
Revenue
Operating profit(1)
Depreciation and amortisation
Financial income
Financial expenses
Trade receivables(3)
Other segment assets
Segment liabilities
Capital expenditure
Year ended 31 December 2018
Revenue
Operating profit(1)
Depreciation and amortisation
Financial income
Financial expenses
Trade receivables(3)
Other segment assets
Segment liabilities
Capital expenditure
Agency
£000
209,268
–
–
–
–
5,324
–
–
–
201,022
–
–
–
–
5,367
–
–
–
New
Homes
£000
55,482
–
–
–
–
11,086
–
–
–
46,167
–
–
–
–
9,942
–
–
–
Subtotal
£000
Other
£000
Central Adjustments
£000
£000
Total
£000
264,750
–
–
–
–
16,410
–
–
–
247,189
–
–
–
–
15,309
–
–
–
24,570
–
–
–
–
2,944
–
–
–
20,632
–
–
–
–
1,461
–
–
–
–
219,710(2)
(3,594)
318
(486)
–
77,668
(55,682)
(779)
–
203,329(2)
(3,852)
171
(491)
–
46,768
(50,934)
1,742
–
289,320
(5,980)(2) 213,730
(3,594)
318
(486)
19,552
77,723
(55,935)
(779)
–
–
–
198(4)
55(4)
(253)(4)
–
–
267,821
(4,739)(2) 198,590
(3,852)
171
(491)
16,937
46,780
(51,113)
1,742
–
–
–
167(4)
12(4)
(179)(4)
–
(1) Operating profit is stated after the charge for depreciation and amortisation.
(2) Central operating profit does not include share-based payments charge of £4,911,000 (2018: £4,320,000) and NI on share-based incentives charge of £1,069,000
(2018: £419,000).
(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 trade receivables and debit balances in trade payables made on consolidation for statutory
accounts purposes.
116
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4 Operating segments continued
Geographic information
In presenting information on the basis of geography, revenue and assets are based on the geographical location of customers.
Group
UK
Rest of the world
2019
Revenue Trade receivables
£000
£000
2018
Revenue Trade receivables
£000
£000
281,993
7,327
18,982
570
261,031
6,790
16,864
73
289,320
19,552
267,821
16,937
5 Revenue
The Group’s operations and main revenue streams are those described in these annual financial statements. The Group’s
revenue is derived from contracts with customers.
Disaggregation of revenue
In the following table, revenue is disaggregated by property and non-property advertising revenue. The table also includes a
reconciliation of the disaggregated revenue with the Group’s reportable segments (see Note 4).
Year ended 31 December 2019
Revenue stream
Property products
Non-property products
Year ended 31 December 2018
Revenue stream
Property products
Non-property products
Agency
£000
New Homes
£000
Other
£000
Total
£000
209,268
–
55,482
–
13,961
10,609
278,711
10,609
209,268
55,482
24,570
289,320
Agency
£000
New Homes
£000
Other
£000
Total
£000
201,022
–
46,167
–
12,300
8,332
259,489
8,332
201,022
46,167
20,632
267,821
Contract balances
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
Receivables, which are included in trade and other receivables
Contract assets
Contract liabilities
Note
17
2019
£000
20,285
429
(2,111)
2018
£000
17,655
427
(2,146)
The contract assets primarily relate to the Group’s rights to consideration for services provided but not invoiced at the reporting
date. The contract assets are transferred to receivables when invoiced and the rights have become unconditional.
The contract liabilities primarily relate to the advance consideration received from Agency, Overseas and Commercial customers,
for which revenue is recognised as or when the services are provided.
Rightmove plc annual report 2019
117
Financial statementsStrategic reportGovernance
Notes continued
6 Operating profit
Operating profit is stated after charging:
Employee benefit expense
Depreciation of property, plant and equipment
Amortisation of intangibles
Bad debt impairment charge
Auditor’s remuneration
Fees payable to the Company’s auditor in respect of the audit
Audit of the Company’s financial statements
Audit of the Company’s subsidiaries pursuant to legislation
Total audit remuneration
Fees payable to the Company’s auditor in respect of non-audit related services
Half year review of the condensed financial statements
All other services
Total non-audit remuneration
2019
£000
34,146
3,114
480
740
2019
£000
19
197
216
19
2
21
2018
£000
30,506
3,307
545
819
2018
£000
19
132
151
19
9
28
7 Employee numbers and costs
The average number of persons employed (including executive directors) during the year, analysed by category, was as follows:
Administration
Management
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Pension costs
2019
Number of
employees
2018
Number of
employees
502
36
538
2019
£000
29,125
3,664
1,357
461
34
495
2018
£000
26,087
3,280
1,139
34,146
30,506
Employee numbers and costs include the average number of Van Mildert employees for the 3-month period since acquisition with
an and aggregate Van Mildert payroll cost of £534,000.
Wages and salaries include £8,890,000 (2018: £7,541,000) relating to the product development and technology teams; these teams
spend a significant proportion of their time on research and development activities, including innovation of our product proposition
and enhancements to the Rightmove platforms. Social security costs do not include a charge of £1,069,000 (2018: £419,000)
relating to NI on share-based incentives which has been disclosed in the Consolidated Statement of Comprehensive Income.
118
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8 Financial income
Interest income on cash and cash equivalents
Interest income on money market deposits
9 Financial expenses
Other interest payable
Interest unwind on lease liabilities
10 Income tax expense
Current tax expense
Current year
Adjustment to current tax charge in respect of prior years
Deferred tax
Origination and reversal of temporary differences
Reduction in tax rate
Total income tax expense
Income tax credit recognised directly in equity
Current tax
Share-based incentives
Deferred tax
Share-based incentives (refer Note 16)
Reduction in tax rate
Total income tax credit recognised directly in equity
2019
£000
267
51
318
2019
£000
198
288
486
2019
£000
2018
£000
126
45
171
2018
£000
190
301
491
2018
£000
40,689
(385)
37,744
(106)
40,304
37,638
14
155
169
50
127
177
40,473
37,815
2019
£000
2018
£000
(904)
(2,780)
(124)
–
(124)
2,594
176
2,770
(1,028)
(10)
Total income tax recognised directly in equity in respect of the Company was a credit of £375,000 (2018: £83,000 credit).
Rightmove plc annual report 2019
119
Financial statementsStrategic reportGovernance
Notes continued
10 Income tax expense continued
Reconciliation of effective tax rate
The Group’s consolidated effective tax rate on the profit of £213,562,000 for the year ended 31 December 2019 is 19.0%
(2018: 19.0%) in line with the standard rate of corporation tax in the UK of 19.0%.
A reconciliation of the components of the tax charge is set out below:
Profit before tax
Current tax at 19.0% (2018: 19.0%)
Reduction in tax rate at which deferred tax is being provided
Non-deductible expenses
Share-based incentives
Adjustment to current tax charge in respect of prior years
11 Earnings per share (EPS)
Year ended 31 December 2019
Earnings
Underlying earnings
Year ended 31 December 2018
Earnings
Underlying earnings
Weighted average number of ordinary shares (basic)
Issued ordinary shares at 1 January less ordinary shares
held by the EBT and SIP Trust
Less own shares held in treasury at the beginning of the year
Effect of own shares purchased for cancellation
Effect of share-based incentives exercised
Effect of shares purchased by the EBT
Issued ordinary shares at 31 December less ordinary shares
held by the EBT and SIP Trust
2019
£000
2018
£000
213,562
198,270
40,579
155
129
(5)
(385)
37,671
127
127
(4)
(106)
40,473
37,815
£000
Basic
Diluted
Pence per share
173,089
179,069
160,455
165,194
19.57
20.25
17.80
18.33
19.49
20.16
17.69
18.22
2018
Number of shares Number of shares
2019
904,626,215
(14,813,304)
(6,097,026)
863,996
(216,744)
929,347,400
(18,924,560)
(11,423,051)
2,284,329
(7,768)
884,363,137
901,276,350
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rightmove.co.uk
11 Earnings per share (EPS) continued
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, the SIP and shares held in treasury.
Weighted average number of ordinary shares (basic)
Dilutive impact of share-based incentives outstanding
2018
Number of shares Number of shares
2019
884,363,137
3,670,032
901,276,350
5,515,657
888,033,169
906,792,007
The average market value of the Group’s shares for the purposes of calculating the dilutive effect of share-based incentives was
based on quoted market prices for the period during which the share-based incentives were outstanding.
Underlying EPS
Underlying EPS is calculated by taking basic earnings for the year and adding back the charge for share-based payments and the
charge for 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 year to the underlying earnings is presented below:
Basic earnings for the year
Share-based payments
NI on share-based incentives
Underlying earnings for the year
12 Dividends
Dividends declared and paid by the Company were as follows:
2017 final dividend paid
2018 interim dividend paid
2018 final dividend paid
2019 interim dividend paid
Unclaimed dividends returned
Net dividends included in the statement of cash flows
2019
£000
173,089
4,911
1,069
2018
£000
160,455
4,320
419
179,069
165,194
Pence per share
£000
Pence per share
2019
2018
–
–
4.00
2.80
–
–
35,510
24,663
3.60
2.50
–
–
£000
32,559
22,418
–
–
6.80
60,173
6.10
54,977
(317)
59,856
–
54,977
After the reporting date a final dividend of 4.4p (2018: 4.0p) per qualifying ordinary share being £38,483,000 (2018: £35,613,000)
was proposed by the Board of directors.
The 2018 final dividend paid on 31 May 2019 was £35,510,000 being £103,000 lower than that reported in the 2018 Annual
Report, which was due to a decrease in the ordinary shares entitled to a dividend between 31 December 2018 and the final
dividend record date of 2 May 2019.
The 2019 interim dividend paid on 2 November 2019 was £24,663,000 being £182,000 lower than that reported in the 2019
Half Year Report, which was due to a decrease in the ordinary shares entitled to a dividend between 30 June 2019 and the
interim dividend record date of 4 October 2019.
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 final dividend in either year and there are no income tax consequences.
Rightmove plc annual report 2019
121
Financial statementsStrategic reportGovernance
Notes continued
13 Property, plant and equipment
Group
Cost
At 1 January 2019
Acquired through a business combination
Additions
Leased asset additions
Re - measurement of leased assets
Office
equipment,
fixtures &
fittings
£000
Computer
equipment
£000
Leasehold
improvements
£000
Motor
vehicles
£000
Total
£000
951
48
23
–
–
9,009
109
520
–
–
1,115
–
–
–
–
941
–
–
190
–
25,269
278
543
305
(283)
Land &
buildings
£000
13,253
121
–
115
(283)
At 31 December 2019
13,206
1,022
9,638
1,115
1,131
26,112
Depreciation
At 1 January 2019
Acquired through a business combination
Charge for year
At 31 December 2019
Net book value
At 31 December 2019
At 31 December 2018
(1,467)
(29)
(1,456)
(490)
(24)
(141)
(7,369)
(77)
(993)
(344)
–
(132)
(396)
–
(392)
(10,066)
(130)
(3,114)
(2,952)
(655)
(8,439)
(476)
(788)
(13,310)
10,254
11,786
367
461
1,199
1,640
639
771
343
12,802
545
15,203
The re-measurement of leased assets relates to a cash refund in relation to a rent-free period on an office lease.
Group
Cost
At 1 January 2018
Recognised on application of IFRS 16
Additions
Leased asset additions
Transfers
Disposals
Depreciation
At 1 January 2018
Charge for year
Disposals
At 31 December 2018
Net book value
At 31 December 2018
At 31 December 2017
Office
equipment,
fixtures &
fittings
£000
Land &
buildings
£000
Computer
Leasehold
equipment improvements
£000
£000
Motor
vehicles
£000
Assets in
progress
£000
–
10,059
–
3,194
–
–
857
–
266
–
22
(194)
7,824
–
1,165
–
20
–
834
–
183
–
145
(47)
–
671
–
270
–
–
941
–
(1,467)
–
(567)
(110)
187
(6,143)
(1,226)
–
(283)
(108)
47
–
(396)
–
(1,467)
(490)
(7,369)
(344)
(396)
Total
£000
9,702
10,730
1,614
3,464
–
(241)
25,269
(6,993)
(3,307)
234
(10,066)
15,203
187
–
–
–
(187)
–
–
–
–
–
–
–
11,786
–
461
290
1,640
1,681
771
545
551
–
187
2,709
At 31 December 2018
13,253
951
9,009
1,115
The Company had no property, plant or equipment in either year.
122
rightmove.co.uk
14 Intangible assets
Group
Cost
At 1 January 2019
Additions
Arising on a business combination
At 31 December 2019
Amortisation
At 1 January 2019
Charge for year
At 31 December 2019
Net book value
At 31 December 2019
At 31 December 2018
Goodwill
£000
Computer
software
£000
Customer
relationships
£000
Total
£000
2,465
–
14,051
16,516
–
–
–
5,208
236
753
–
–
4,521
7,673
236
19,325
6,197
4,521
27,234
(4,800)
(367)
–
(113)
(4,800)
(480)
(5,167)
(113)
(5,280)
16,516
1,030
4,408
21,954
2,465
408
–
2,873
The goodwill arising on a business combination in the year of £14,051,000 relates to the goodwill recognised on the acquisition
of Van Mildert, being intangible assets that are not separately identifiable under IFRS 3 (refer to Note 27). The goodwill figure
recognised includes the knowledge and experience of the company which is established within the credit referencing and rent
guarantee insurance markets, the skilled workforce employed by Van Mildert, and the reputation of the business. This is together
with the synergy benefits expected to the Group through leveraging the scale and reach of the Rightmove customer base, sales
and marketing teams and technological capability.
Group
Cost
At 1 January 2018
Additions
At 31 December 2018
Amortisation
At 1 January 2018
Charge for year
At 31 December 2018
Net book value
At 31 December 2018
At 31 December 2017
The Company had no intangible assets in either year.
Goodwill
£000
Computer
software
£000
Market
appraisal
algorithm
£000
2,465
–
5,080
128
2,465
5,208
309
–
309
Total
£000
7,854
128
7,982
–
–
–
(4,401)
(399)
(163)
(146)
(4,564)
(545)
(4,800)
(309)
(5,109)
2,465
2,465
408
679
–
2,873
146
3,290
Rightmove plc annual report 2019
123
Financial statementsStrategic reportGovernance
Notes continued
14 Intangible assets continued
Impairment testing for cash generating units containing goodwill
For the purpose of impairment testing, goodwill is allocated to the Group’s Agency segment which represents the lowest level
within the Group at which goodwill is monitored for internal management purposes, which is not higher than the Group’s
operating segments as reported in Note 4.
The goodwill recognised on the acquisition of Van Mildert of £14,051,000 has been allocated to the Agency segment as the
revenue and future synergy benefits primarily relate to Agency customers. The carrying value of £2,465,000 goodwill brought
forward comprises £732,000 of purchased goodwill arising pre-transition to IFRS and £1,733,000 arising on the acquisition of
The Outside View Analytics Ltd in May 2016. The goodwill in relation to the Outside View was allocated at the time of the initial
acquisition to the Agency segment as the revenue from their market appraisal product, known as Rightmove Discover, is derived
from Rightmove’s Agency customer base.
Given the low level of significance of the brought forward goodwill balance and strong growth in the Agency segment revenue in
the year, with no impairment indicators present, the disclosures as required by IAS 36 impairment of assets have not been made.
15 Investments
The subsidiaries of the Group as at 31 December 2019 were as follows:
Company
Rightmove Group Limited
Rightmove Rent Services Limited
Rightmove Property Services Limited
Van Mildert Landlord and Tenant
Protection Limited
Nature of business
Online property advertising
Online rental services
Online rental services
Credit referencing and rent
guarantee insurance services
Country of
incorporation
England and Wales
England and Wales
England and Wales
England and Wales
Holding
Class of shares
100%
100%
100%
100%
Ordinary
Ordinary
Ordinary
Ordinary
All the above subsidiaries are included in the Group consolidated financial statements. The registered office for all subsidiaries of
the Group is 2 Caldecotte Lake Business Park, Caldecotte Lake Drive, Caldecotte, Milton Keynes, MK7 8LE.
The Outside View Analytics Ltd is in the process of liquidation with liquidators appointed in February 2019. Final confirmation from
HMRC that the company has been dissolved is still outstanding.
Company
Investment in subsidiary undertakings
At 1 January
Additions – subsidiary share-based payments charge
At 31 December
2019
£000
2018
£000
551,478
3,076
548,827
2,651
554,554
551,478
In 2008, the Company became the holding company of Rightmove Group Limited (formerly Rightmove plc, Company no.
03997679) and its subsidiaries pursuant to a Scheme of Arrangement under s425 of the Companies Act 1985 by way of a
share-for-share exchange. Following the Scheme of Arrangement, the Company underwent a court-approved capital reduction.
The consolidated assets and liabilities of the Group immediately after the Scheme were substantially the same as the
consolidated assets and liabilities of the Group immediately prior to the Scheme.
Following the capital reconstruction in 2008 all employees’ share-based incentives were transferred to the new holding company,
Rightmove plc. In addition certain directors’ contracts of employment were transferred from Rightmove Group Limited to
Rightmove plc, whilst all other employees remained employed by Rightmove Group Limited. Accordingly the share-based
payments charge has been split between the Company and Rightmove Group Limited with £3,076,000 (2018: £2,651,000)
being recognised in the Company accounts as a capital contribution to its subsidiary.
124
rightmove.co.uk
16 Deferred tax asset and deferred tax liability
The deferred tax asset and deferred tax liability are attributable to the following:
Deferred tax asset
Group
Share-
based
incentives
£000
Property,
plant and
equipment
£000
Provisions
£000
At 1 January 2019
Arising on business combination
Recognised in profit and loss
Recognised directly in equity
At 31 December 2019
At 1 January 2018
Recognised in income
Recognised directly in equity
At 31 December 2018
2,261
-
(67)
124
2,318
5,222
(191)
(2,770)
2,261
368
(9)
(51)
–
308
315
53
–
368
169
–
(77)
–
92
231
(62)
–
Company
Share-
based
incentives
£000
966
–
(84)
128
Total
£000
2,798
(9)
(195)
124
2,718
1,010
5,768
(200)
(2,770)
2,490
(278)
(1,246)
169
2,798
966
The increase in the deferred tax asset relating to share-based incentives at 31 December 2019 is primarily due to the increase in
the Company’s share price from £4.32 at 31 December 2018 to £6.34 at 31 December 2019.
Deferred tax liability
Group
At 1 January 2019
Arising on business combination
Recognised in profit and loss
At 31 December 2019
Intangibles
£000
–
(897)
26
(871)
A deferred tax liability of £871,000 has been recognised in relation to the acquisition of Van Mildert, relating to the recognition of
intangible assets on acquisition (refer Note 27).
A reduction in the UK corporation tax rate from 20% to 19% (effective from 1 April 2017) and to 18% (effective 1 April 2020)
was substantively enacted on 26 October 2015, and an additional reduction to 17% (effective 1 April 2020) was substantively
enacted on 6 September 2016. This will reduce the Group’s future tax charge accordingly. The deferred tax asset and liability
as at 31 December 2019 have been calculated at the rate of 17% which represents the average expected rate at which they
are expected to reverse in the future, based on currently enacted UK tax rates.
17 Trade and other receivables
Group
Trade receivables
Less provision for impairment of trade receivables
Net trade receivables
Prepayments
Interest receivable
Other debtors
2019
£000
20,285
(733)
19,552
3,922
32
479
2018
£000
17,655
(718)
16,937
5,446
24
72
23,985
22,479
Exposure to credit and currency risks and expected credit losses relating to trade and other receivables are disclosed in Note 26.
The Company had no trade and other receivables in either year.
Rightmove plc annual report 2019
125
Financial statementsStrategic reportGovernance
Notes continued
18 Cash and deposits
Group
Cash and cash equivalents
Money market deposits
2019
£000
32,117
4,141
2018
£000
15,847
4,090
36,258
19,937
Cash balances with an original maturity of less than three months were held in current accounts during the year and
attracted interest at a weighted average rate of 0.5% (2018: 0.4%). The cash and cash equivalents balance includes £507,000
(2018: £1,718,000) which is restricted to use in accordance with the deeds of the EBT.
Money market deposits with an original maturity of more than three months and less than a year, attracted interest at a weighted
average rate of 1.3% (2018: 1.1%).
The Company had no cash and cash equivalents in either year.
19 Trade and other payables
Trade payables
Trade accruals
Other creditors
Other taxation and social security
Inter-group payables
Group
Company
2019
£000
1,384
6,705
481
10,946
–
2018
£000
2,653
5,197
368
9,863
–
2019
£000
–
1,202
–
–
14,038
2018
£000
–
1,483
–
–
40,657
19,516
18,081
15,240
42,140
20 Loans and borrowings
The agreement with Barclays Bank plc for a £10,000,000 committed revolving loan facility was terminated on 7 February 2020.
This has been replaced with a new 12 month agreement with Barclays Bank plc for a £10,000,000 committed revolving loan facility
that expires on 6 February 2021. The Company had no bank loans and borrowings in either year.
21 Leases
The Group leases assets including land and buildings and motor vehicles that are held within property, plant and equipment.
Information about leases for which the Group is a lessee is presented below.
Analysis of property, plant and equipment between owned and leased assets
Net book value of property, plant and equipment owned
Net book value right of use assets
2019
£000
2,205
10,597
2018
£000
2,872
12,331
12,802
15,203
126
rightmove.co.uk
21 Leases continued
Net book value of right of use assets
At 1 January 2019
Additions
Acquired through business combination
IFRS 16 re-measurement
Depreciation charge
At 31 December 2019
At 1 January 2018
Additions
Depreciation charge
At 31 December 2018
Lease liabilities
Maturity analysis – contractual undiscounted cash flows
Less than one year
One to five years
More than five years
Lease liabilities included in the statement of financial position
Current
Non-current
Amounts recognised in profit or loss
Interest on lease liabilities
Expenses relating to short-term leases
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets
Amount recognised in the statement of cash flows
Total cash outflow for leases
Property
£000
11,786
115
92
(283)
(1,456)
10,254
10,059
3,194
(1,467)
Vehicles
£000
545
190
–
–
(392)
343
671
270
(396)
Total
£000
12,331
305
92
(283)
(1,848)
10,597
10,730
3,464
(1,863)
11,786
545
12,331
2019
£000
1,983
7,391
3,921
2018
£000
1,517
7,283
5,736
13,295
14,536
2019
£000
1,709
10,499
2018
£000
1,213
11,845
12,208
13,058
2019
£000
288
87
31
406
2019
£000
2018
£000
301
81
37
419
2018
£000
1,535
1,532
Rightmove plc annual report 2019
127
Financial statementsStrategic reportGovernance
Notes continued
22 Provisions
At 1 January
Utilised during the year
Arising on business combination
Charged in the year
At 31 December
Current
Non-current
Dilapidations
provision
£000
2019
Contigent
Employee
provisions consideration
£000
£000
Dilapidations
provision
£000
Total
£000
424
–
37
46
507
–
507
507
671
(417)
2
–
–
–
2,407
–
1,095
(417)
2,446
46
256
2,407
3,170
256
–
256
–
2,407
256
2,914
2,407
3,170
381
–
-
43
424
–
424
424
2018
Employee
provisions
£000
668
(250)
-
253
Total
£000
1,049
(250)
-
296
671
1,095
671
–
671
671
424
1,095
The dilapidations provision is in respect of a number of the Group’s leased properties where the Group has obligations to make
good dilapidations. The non-current liabilities are estimated to be payable over periods from one to nine years. Where appropriate
the provision may form part of the cost of the asset.
During the year the Group has accrued amounts in relation to a number of employee related provisions, principally holiday pay.
The provisions are based on the estimated future payroll cost to the Group and have not been discounted as the time value of
money is not significant.
The present value of the contingent and deferred consideration arising on acquisition of Van Mildert Landlord and Tenant
Protection Limited is £2,407,000. This is discounted over a two year period and is therefore classified as a non-current liability.
The Company had no provisions in either year.
23 Share capital
In issue ordinary shares
At 1 January
Effect of 10:1 subdivision of shares*
Purchase and cancellation of shares
2019
2018
Amount
£000
Number
of shares
Amount
£000
Number of 0.1
pence shares
908
–
(16)
907,684,330
–
(16,268,322)
933
–
(25)
–
932,662,070
(24,977,740)
At 31 December
892
891,416,008
908
907,684,330
*This was the result of a ten for one subdivision of the Company’s ordinary share capital, effective 31 August 2018.
All issued shares are fully paid. The holders of ordinary shares are entitled to receive dividends as declared from time to time and
are entitled to one vote per ordinary share at general meetings of the Company.
In June 2007, the Company commenced a share buyback programme to purchase its own ordinary shares. The total number of
shares bought back in 2019 was 16,268,322 (2018: 24,977,740) shares representing 1.8% (2018: 2.8%) of the ordinary shares in
issue (excluding shares held in treasury). All of the shares bought back in both years were cancelled. The shares were acquired on
the open market at a total consideration (excluding costs) of £88,583,000 (2018: £113,528,000). The maximum and minimum
prices paid were £6.40 (2018: £5.30) and £4.28 (2018: £4.15) per share respectively. Share-related expenses in relation to stamp
duty charges and broker expenses were £619,000 (2018: £795,000).
Included within shares in issue at 31 December 2019 are 2,208,362 (2018: 2,248,020) shares held by the EBT, 785,130
(2018: 810,095) shares held by the SIP and 13,360,310 (2018: 14,813,304) shares held in treasury.
128
rightmove.co.uk
24 Reconciliation of movement in capital and reserves
Group
Own shares held – £000
Own shares held as at 1 January 2018
Shares purchased for share incentive plans
Shares transferred to SIP
Share-based incentives exercised in the year
Reduction in shares released due to net settlement
SIP releases in the year
EBT shares
reserve
£000
SIP shares
reserve
£000
(1,978)
(685)
1,446
104
–
–
(2,018)
–
(1,446)
68
–
411
Treasury
shares
£000
(8,999)
–
–
2,027
(68)
–
Total
£000
(12,995)
(685)
–
2,199
(68)
411
Own shares held as at 31 December 2018
(1,113)
(2,985)
(7,040)
(11,138)
Own shares held as at 1 January 2019
Shares purchased for share incentive plans
Shares transferred to SIP
Share-based incentives exercised in the year
Reduction in shares released due to net settlement
SIP releases in the year
(1,113)
(2,112)
826
208
–
–
(2,985)
–
(826)
424
–
182
(7,040)
–
–
723
(31)
–
(11,138)
(2,112)
–
1,355
(31)
182
Own shares held as at 31 December 2019
(2,191)
(3,205)
(6,348)
(11,744)
Own shares held – number of shares
Own shares held as at 1 January 2018
Effect of 10:1 subdivision of shares
Shares purchased for share incentive plans
Shares transferred to SIP
Share-based incentives exercised in the year
Reduction in shares released due to net settlement
SIP releases in the year
EBT shares
reserve
263,767
2,373,903
157,525
(332,525)
(214,650)
–
–
Number of shares
SIP shares
reserve
67,700
609,300
–
332,525
(17,000)
–
(182,430)
Treasury
shares
1,892,456
17,032,104
–
–
(4,254,160)
142,904
–
Total
2,223,923
20,015,307
157,525
–
(4,485,810)
142,904
(182,430)
Own shares held as at 31 December 2018
2,248,020
810,095
14,813,304
17,871,419
Own shares held as at 1 January 2019
Shares purchased for share incentive plans
Shares transferred to SIP
Share-based incentives exercised in the year
Reduction in shares released due to net settlement
SIP releases in the year
2,248,020
385,612
(131,110)
(294,160)
–
–
810,095
–
131,110
(111,800)
–
(44,275)
14,813,304
–
–
(1,518,184)
65,190
–
17,871,419
385,612
–
(1,924,144)
65,190
(44,275)
Own shares held as at 31 December 2019
2,208,362
785,130
13,360,310
16,353,802
Rightmove plc annual report 2019
129
Financial statementsStrategic reportGovernance
Notes continued
24 Reconciliation of movement in capital and reserves continued
(a) EBT shares reserve
This reserve represents the cost of own shares acquired by the EBT less any exercises of share-based incentives.
At 31 December 2019, the EBT held 2,208,362 (2018: 2,248,020) ordinary shares in the Company, representing 0.3%
(2018: 0.3%) of the ordinary shares in issue (excluding shares held in treasury). The market value of the shares held in the EBT
at 31 December 2019 was £14,001,000 (2018: £9,711,000).
(b) SIP shares reserve (Group and Company)
In November 2014, the Company established the Rightmove Share Incentive Plan Trust (SIP). This reserve represents the cost
of acquiring shares less any exercises or releases of SIP awards. Employees of Rightmove Group Limited and Rightmove plc were
offered 450 free shares with effect from 20 December 2019 (2018: 475), subject to a three year service period. 111,800 shares
were exercised and 44,275 (2018: 17,000) shares were released by the SIP during the year in relation to good leavers and retirees.
131,110 (2018: 332,525) shares were transferred to the SIP reserve from the EBT.
At 31 December 2019 the SIP held 785,130 (2018: 810,095) ordinary shares in the Company, representing 0.04% (2018: 0.09%)
of the ordinary shares in issue (excluding shares held in treasury). The market value of the shares held in the SIP at 31 December
2019 was £4,978,000 (2018: £3,500,000).
(c) Treasury shares (Group and Company)
This represents the cost of acquiring shares held in treasury less any exercises of share-based incentives. These shares were
bought in 2008 at an average price of 47.60 pence and may be used to satisfy certain share-based incentive awards. An additional
23,085 (2018: 142,904) shares were issued as a result of rolled up dividend payments in relation to performance shares. The
market value of the shares held in treasury at 31 December was £84,704,000 (2018: £63,993,000).
Other reserves
This represents the Capital Redemption Reserve in respect of own shares bought back and cancelled. The movement of £16,000
(2018: £25,000) is the nominal value of ordinary shares cancelled during the year.
Retained earnings
The loss on the exercise of share-based incentives of £608,000 (2018: £1,941,000 loss) is the difference between the value
that the shares held by the EBT, SIP and treasury shares were originally acquired at and the exercise price at which share-based
incentives were exercised or released during the year. Details of share buybacks and cancellation of shares are included in Note 23.
Company
Reverse acquisition reserve
This reserve resulted from the acquisition of Rightmove Group Limited by the Company and represents the difference between
the value of the shares acquired at 28 January 2008 and the nominal value of the shares issued.
Other reserves
Awards relating to share-based incentives made to Rightmove Group Limited employees have been treated as a deemed capital
contribution. The principal movement in other reserves for the year comprises £3,076,000 (2018: £2,651,000) in respect of the
share-based incentives charge for employees of Rightmove Group Limited.
In addition, other reserves include £402,000 (2018: £386,000) of Capital Redemption Reserve. A movement of £16,000 (2018:
£25,000) has been recorded in relation to the nominal value of ordinary shares cancelled during the year.
25 Share-based payments
The Group and Company operate a number of share-based incentive schemes for executive directors and employees.
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 is measured using either the
Monte Carlo or Black Scholes pricing model as is most appropriate for each scheme.
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 charge for the year relating to all awards was £1,069,000
(2018: £419,000). The share price at 31 December 2019 was £6.34 (2018: £4.32).
130
rightmove.co.uk
25 Share-based payments continued
The Group recognised a total share-based payments charge for the year of £4,911,000 (2018: £4,320,000) with a Company
charge for the year of £1,835,000 (2018: £1,669,000), as set out below:
Group
Company
Sharesave Plan
Performance Share Plan (PSP)
Deferred Share Bonus Plan (DSP)
Share Incentive Plan (SIP)
Restricted Share Plan (RSP)
Total share-based payments charge
NI on applicable share-based incentives at 13.8%
2019
£000
267
1,302
2,364
676
302
4,911
1,069
2018
£000
308
1,766
1,585
661
–
4,320
419
2019
£000
(1)
1,206
630
–
–
1,835
597
2018
£000
3
1,289
377
–
–
1,669
205
A 2% reduction or increase in the employee leaver assumption (excluding executive directors) for the DSP and the PSP would
have increased or decreased the share-based payments charge in the year by £58,000 (2018: £34,000).
Approved and Unapproved Plans
There has been no award of share options for Approved and Unapproved Plans since 5 March 2010.
Group
Outstanding at 1 January
Exercised
Outstanding at 31 December
Exercisable at 31 December
2019
Weighted average
exercise price
(pence)
Number
2018
Weighted average
exercise price
(pence)
Number
525,530
(525,530)
66.60
66.60
3,317,720
(2,792,190)
–
–
525,530
525,530
29.41
22.40
66.69
66.69
The weighted average market value per ordinary share for options exercised in 2019 was 541.60 pence (2018: 436.51 pence).
There are no options outstanding at 31 December 2019 (2018: 525,530 options with an exercise price of 66.69 and a weighted
average contractual life of 1.2 years).
Sharesave Plan
The Group operates an HMRC Approved Sharesave Plan under which employees of Rightmove plc and Rightmove Group Limited
are granted an option to purchase ordinary shares in the Company at up to 20% less than the market price at invitation, in three
years’ time, dependent on their entering into a contract to make monthly contributions into a savings account over the relevant
period. These funds are used to fund the option exercise. No performance criteria are applied to the exercise of Sharesave
options. The assumptions used in the measurement of the fair value at grant date of the Sharesave Plan are as follows:
Share
price at
grant
date
(pence)
Exercise
price
(pence)
Expected
volatility
(%)
Option
life
(years)
Risk free
rate
(%)
Employee
turnover
before
vesting/
Dividend non-vesting
condition
(%)
yield
(%)
476.35
558.60
389.00
430.00
25.4
22.4
3.0
3.0
0.8
0.8
1.3
1.2
25.0
25.0
Fair
value per
option
(pence)
118.49
146.94
Grant date
1 October 2018
1 October 2019
Rightmove plc annual report 2019
131
Financial statementsStrategic reportGovernance
Notes continued
25 Share-based payments continued
Expected volatility is estimated by considering historic average share price volatility at the grant date.
The requirement that an employee has to save in order to purchase shares under the Sharesave Plan is a non-vesting condition.
This feature has been incorporated into the fair value at grant date by applying a discount to the valuation obtained from the Black
Scholes pricing model. The discount has been determined by estimating the probability that the employee will stop saving based
on expected future trends in the share price and past employee behaviour.
Group
Outstanding at 1 January
Granted
Forfeited
Exercised
Outstanding at 31 December
Exercisable at 31 December
2019
Weighted average
exercise price
(pence)
Number
2018
Weighted average
exercise price
(pence)
Number
954,274
316,047
(187,093)
(279,007)
349.15
387.97
359.04
324.83
971,400
315,208
(117,684)
(214,650)
318.25
385.44
325.92
280.72
804,221
387.28
954,274
349.15
22,220
331.50
53,340
296.00
The weighted average market value per ordinary share for Sharesave options exercised in 2019 was 585.88 pence (2018: 428.89
pence). The Sharesave options outstanding at 31 December 2019 have an exercise price in the range of 296.00 pence to 430.00
pence (2018: 296.00 pence to 389.00 pence) and a weighted average contractual life of 2.4 years (2018: 2.2 years).
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.
351,802 PSP awards were made on 6 March 2019 (the Grant Date) subject to Earnings Per Share (EPS) and Total Shareholders
Return (TSR) performance. Performance will be measured over three financial years (1 January 2019 – 31 December 2021).
The vesting in March 2022 (Vesting Date) of 25% of the 2019 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 2019 PSP award will be dependent
on the satisfaction of an EPS growth target measured over a three year performance period.
The PSP awards have been valued using the Monte Carlo model for the TSR element and the Black Scholes model for the EPS
element and the resulting share-based payments charge is being spread evenly over the three-year period between Grant Date
and Vesting Date. 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. The assumptions used in the measurement of the fair value at grant date of the PSP awards
are as follows:
Exercise
price
(pence)
Expected
volatility
(%)
Option
life
(years)
Risk free
rate
(%)
Employee
turnover
before
vesting/
Dividend non-vesting
condition
(%)
yield
(%)
Fair
value per
option
(pence)
nil
nil
nil
nil
25.4
n/a
22.4
n/a
3.0
3.0
3.0
3.0
0.8
0.8
0.8
0.8
0.0
0.0
0.0
0.0
0.0
199.80
0.0
427.70
0.0
270.00
0.0
495.10
Share
price at
grant
date
(pence)
427.70
427.70
495.10
495.10
Grant date
28 February 2018
(TSR dependent)(1)
28 February 2018
(EPS dependent)(1)
6 March 2019
(TSR dependent)(1)
6 March 2019
(EPS dependent)(1)
(1) For details of TSR and EPS performance conditions refer to the Directors’ Remuneration Report on pages 76 to 90.
Expected volatility is estimated by considering historic average share price volatility at the grant date.
132
rightmove.co.uk
25 Share-based payments continued
Group
Outstanding at 1 January
Granted
Lapsed(1)
Exercised
Outstanding at 31 December
Exercisable at 31 December
2019
Number
1,719,070
351,802
(326,905)
(612,049)
2018
Number
2,423,340
364,800
–
(1,069,070)
1,131,918
1,719,070
123,758
245,562
(1) Following the achievement of 67% of the 2016 PSP performance targets, 326,905 nil cost PSP options were lapsed in the year.
The weighted average market value per ordinary share for options exercised in 2019 was 529.79 pence (2018: 453.33 pence).
The weighted average exercise price was nil in both years. The PSP awards outstanding at 31 December 2019 have a weighted
average contractual life of 2.9 years (2018: 2.7 years).
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 nil cost 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.
The assumptions used in the measurement of the fair value of the deferred share awards are calculated at the date on which the
potential DSP bonus is communicated to directors and senior management (the grant date) as follows:
Share
price at
grant
date
(pence)
Award date
Exercise
price
(pence)
Expected
term
(years)
Risk free
rate
(%)
Employee
turnover
before
vesting/
Dividend non-vesting
condition
(%)
yield
(%)
28 February 2019(1)
6 March 2019(2)
427.70
495.10
nil
nil
3.0
3.0
0.8
0.8
1.3
1.3
10.0
12.0
Fair
value per
option
(pence)
411.80
476.02
Grant date
28 February 2018
6 March 2019
(1) Following the achievement of 63% of the 2018 internal performance targets, 572,387 nil cost deferred shares were awarded to executives and senior management on
6 March 2019 (the Award Date) with the right to the release of the shares deferred until March 2021.
(2) Based on the 2019 internal performance targets, the Remuneration Committee determined that 65% of the maximum award in respect of the year will be made in
March 2020. The number of shares to be awarded will be determined based on the share price at the Award Date in March 2020.
Group
Outstanding at 1 January
Awarded
Forfeited
Exercised
Outstanding at 31 December
Exercisable at 31 December
2019
Number
789,640
572,387
(201,337)
(357,520)
2018
Number
711,130
432,120
–
(353,610)
803,170
789,640
–
–
The weighted average market value per ordinary share for deferred shares exercised in 2019 was 523.19 pence (2018: 450.86
pence). The weighted average exercise price was nil in both years.
Rightmove plc annual report 2019
133
Financial statementsStrategic reportGovernance
Notes continued
25 Share-based payments continued
The DSP awards outstanding at 31 December 2019 have a weighted average contractual life of 1.7 years (2018: 1.7 years).
Share Incentive Plan
In 2014, the Group established the Rightmove Share Incentive Plan Trust (SIP). Employees in Rightmove plc and Rightmove
Group Limited were offered 450 shares on 20 December 2019 (2018: 500 shares and 475 shares across two different tax years)
subject to a three year service period (the Vesting Period). The SIP awards have been valued using the Black Scholes model and
the resulting share-based payments charge spread evenly over the Vesting Period of three years. The SIP shareholders are
entitled to dividends paid in cash over the Vesting Period. No performance criteria are applied to the exercise of SIP options.
The assumptions used in the measurement of the fair value at grant date of the SIP awards are as follows:
Exercise
price
(pence)
Expected
volatility
(%)
Option
life
(years)
Risk free
rate
(%)
Employee
turnover
before
vesting/
Dividend non-vesting
condition
(%)
yield
(%)
nil
nil
nil
25.4
25.4
22.4
3.0
3.0
3.0
0.8
0.8
0.8
nil
nil
nil
33.0
33.0
33.0
Share
price at
grant
date
(pence)
456.80
420.90
642.40
Grant date
1 January 2018
21 December 2018
20 December 2019
Expected volatility is estimated by considering historic average share price volatility at the grant date.
Fair
value per
option
(pence)
456.80
420.90
642.40
2018
Number
592,000
475,400
(77,500)
(17,000)
(182,430)
2019
Number
790,470
223,650
(96,200)
(111,800)
(44,275)
761,845
790,470
79,770
55,570
Group
Outstanding at 1 January
Granted
Forfeited
Released
Exercised
Outstanding at 31 December
Exercisable at 31 December
The weighted average market value per ordinary share for SIP awards released and exercised in 2019 was 496.24 pence
(2018: 454.90 pence). The weighted average exercise price in both years was nil.
The SIP shares released relate to good leavers and retirements from the SIP, in accordance with the terms of the SIP.
The SIP options outstanding at 31 December 2019 have a weighted average contractual life of 1.4 years (2018: 1.5 years).
Restricted Share Plan (RSP)
In March 2019 a RSP was established that awards shares to selected senior management, subject only to service conditions.
254,502 nil cost deferred shares were awarded to senior management on 6 March 2019. All these awards will vest three years
from the date of grant, subject to a three-year service period.
Participants are not entitled to receive dividends on these awards. RSP awards have been valued using the Black Scholes model
and the resulting share-based payments charge is being spread evenly over the Vesting Period of the shares, being three years.
Share
price at
grant
date
(pence)
495.10
Exercise
price
(pence)
Expected
volatility
(%)
nil
22.4
Option
life
(years)
3.0
Employee
turnover
before
vesting/
Dividend non-vesting
condition
(%)
yield
(%)
Fair
value per
option
(pence)
Risk free
rate
(%)
0.8
nil
25.0
476.02
Grant date
6 March 2019
134
rightmove.co.uk
25 Share-based payments continued
Group
Awarded
Forfeited
Exercised
Outstanding at 31 December
Exercisable at 31 December
2019
Number
254,502
(28,786)
(14,393)
211,323
–
The weighted average market value per ordinary share for RSP awards exercised in 2019 in relation to a good leaver was
525.10 pence. The weighted average exercise price was nil.
The RSP options outstanding at 31 December 2019 have a weighted average contractual life of 2.2 years.
26 Financial instruments
Credit risk
The carrying amount of financial assets, represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
Group
Net trade receivables
Accrued interest receivable
Contract assets
Other debtors
Cash and cash equivalents
Money market deposits
Note
17
17
5
17
18
18
2019
£000
19,552
32
429
479
32,117
4,141
2018
£000
16,937
24
427
72
15,847
4,090
56,750
37,397
The Company had no exposure to credit risk in either year.
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
Group
UK
Rest of the world
Note
2019
£000
18,982
570
2018
£000
16,864
73
17
19,552
16,937
The maximum exposure to credit risk for trade receivables at the reporting date by type of customer was:
Group
Property products
Other
Note
2019
£000
17,355
2,167
2018
£000
15,688
1,249
17
19,522
16,937
The Group’s most significant customer accounts for £861,000 (2018: £791,000) of net trade receivables as at 31 December 2019.
Rightmove plc annual report 2019
135
Financial statementsStrategic reportGovernance
Notes continued
26 Financial instruments continued
Expected credit loss assessment
For Rightmove Group Limited’s smaller Agency and Overseas customers, expected credit losses are measured using
a provisioning matrix based on the reason the trade receivable is past due. The provision matrix rates are based on actual credit
loss experience over the past three years and adjusted, when required, to take into account current macro-economic factors.
For all other customers the Group applies experienced credit judgement that is determined to be predictive of the risk of loss
to assess the expected credit loss, taking into account external ratings, financial statements and other available information.
The following table provides information about the exposure to credit risk and expected credit losses for trade receivables from
individual customers as at 31 December 2019. The increase in the weighted-average loss rate in the more than 91 days past due
category relates to the timing of payments by New Homes developers which have credit terms and in 2019 formed a larger
proportion of Group revenue. The loss allowance as a percentage of gross carrying amount within the category 61-90 days in
2018 is higher than other categories due to a specific provision for one customer.
2019
Current
Past due 1 – 30 days
Past due 31 – 60 days
Past due 61 – 90 days
More than 91 days past due
2018
Current
Past due 1 – 30 days
Past due 31 – 60 days
Past due 61 – 90 days
More than 91 days past due
Weighted-average
loss rate
Gross carrying
amount
£000
Loss allowance
£000 Credit-impaired
1.1%
7.8%
5.8%
2.1%
14.3%
13,099
4,904
867
402
1,013
20,285
(149)
(381)
(50)
(8)
(145)
(733)
No
No
No
No
No
Weighted-average
loss rate
Gross carrying
amount
£000
Loss allowance
£000
Credit-impaired
2.1%
6.4%
10.9%
21.1%
5.6%
11,813
4,064
963
370
445
17,655
(249)
(261)
(105)
(78)
(25)
(718)
2019
£000
718
71
740
(796)
733
No
No
No
No
No
2018
£000
463
–
819
(564)
718
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
Group
At 1 January
Arising on business combination
Charged during the year
Utilised during the year
At 31 December
The Group has identified specific balances for which it has provided an impairment allowance on a line by line basis across all
ledgers, in both years. No general impairment allowance has been provided in either year.
The allowance accounts in respect of trade receivables are used to record impairment losses unless the Group is satisfied that no
recovery of the amount owing is possible; at that point the amounts considered irrecoverable are written off against the financial
asset directly.
136
rightmove.co.uk
26 Financial instruments continued
Liquidity risk
The contractual maturities of undiscounted financial liabilities, including undiscounted estimated interest payments, as at year
end were:
Group
At 31 December 2019
Trade payables being non-derivative financial liabilities
At 31 December 2018
Trade payables being non-derivative financial liabilities
Carrying
amount
£000
Contractual
cash flows
£000
6 months
or less
£000
1,384
(1,384)
(1,384)
2,653
(2,653)
(2,653)
The Company had no derivative financial liabilities in either year.
It is not expected that the cash flows included in the maturity analysis could occur earlier or at significantly different amounts
and all payables are due within six months of the balance sheet date.
Currency risk
During 2019 all the Group's sales and more than 97.0% (2018: 97.0%) of the Group’s purchases were Sterling denominated
and accordingly it has no significant currency risk.
Interest rate risk
The Group has exposure to interest rate risk on its cash and cash equivalent balances and money market deposit balances.
As at 31 December 2019 the Group had total cash and cash equivalents of £32,117,000 (2018: £15,847,000) and money
market deposits of £4,141,000 (2018: £4,090,000).
Fair values
The fair values of all financial instruments in both years are equal to the carrying values.
27 Acquisition of subsidiary
On 30 September 2019, the Group acquired the entire ordinary share capital of Van Mildert Landlord and Tenant Protection Limited
(Van Mildert), a business providing tenant references and rent guarantee insurance to lettings agents and landlords. Van Mildert
provides the Group with an established tenant referencing product, together with rent guarantee insurance capabilities and
operational expertise. This augments our lettings proposition and is a key step in Rightmove’s strategy of improving the efficiency
of the under-served rental marketplace. The Van Mildert and Rightmove teams will work together to leverage the scale benefits
that the Rightmove platform and customer base bring to both the referencing and insurance propositions.
The total consideration comprises an initial cash consideration of £15,882,000 together with a maximum contingent cash
consideration of £4,000,000 if Van Mildert’s cumulative revenue over the next two years exceeds £12,034,000. At the acquisition
date, the fair value of the contingent consideration was estimated at £2,407,000, based on discounted expected future revenue
streams of the business over the period to which the consideration relates and is unchanged at 31 December 2019.
Cash consideration
Contingent consideration (Note 22)
Total consideration
The following table provides a reconciliation of the amounts included in the Consolidated Statement of Cash Flows:
Net cash flow on acquisition
Cash paid for subsidiary
Net of cash and cash equivalents acquired
Net cash outflow included in the statement of cash flows
2019
£000
15,882
2,407
18,289
2019
£000
15,882
(255)
15,627
Rightmove plc annual report 2019
137
Financial statementsStrategic reportGovernance
Notes continued
27 Acquisition of subsidiary continued
The total cash consideration paid of £15,882,000 excludes acquisition costs of £322,000, which have been recognised as an
expense in the period in the Consolidated Statement of Comprehensive Income. Included within transaction costs on acquisition
of £322,000 are legal and due diligence fees and stamp duty.
In the three-month period to 31 December 2019, Van Mildert contributed revenue of £833,000 and a trading loss after tax of
£74,000 to the Group’s results. If the acquisition had occurred on 1 January 2019, management estimates that consolidated
revenue would have been £292,253,000 and consolidated profit for the year would have been £172,925,000. In determining
these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date
of acquisition would have been the same if the acquisition had occurred on 1 January 2019.
The following table details the fair values of the assets and liabilities acquired at the date of acquisition.
Net assets acquired
Non-current assets
Property, plant and equipment
Intangible assets – IT development costs
Intangible assets – credit referencing software (Note 14)
Intangible assets – customer relationships (Note 14)
Total non-current assets
Current assets
Trade and other receivables
Contract assets
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities (Note 21)
Income tax payable
Provisions (Note 22)
Total current liabilities
Non-current liabilities (Note 16)
Fair value of net assets acquired
Carrying
values
pre-acquisition
£000
Fair value
adjustments
£000
61
(127)
753
4,521
5,208
31
–
–
31
(494)
–
(92)
–
(37)
(623)
(897)
87
127
–
–
214
847
30
255
1,132
(767)
(9)
–
(40)
(2)
(818)
(9)
519
Fair
values
£000
148
–
753
4,521
5,422
878
30
255
1,163
(1,261)
(9)
(92)
(40)
(39)
(1,441)
(906)
3,719
4,238
Trade and other receivables comprise gross contractual amounts of £979,000 of which £71,000 was not expected to be
collectable at the date of acquisition.
Goodwill
Goodwill arising from the acquisition has been recognised as follows:
Total consideration
Fair value of net assets acquired
Goodwill
138
rightmove.co.uk
£000
18,289
(4,238)
14,051
27 Acquisition of subsidiary continued
The goodwill figure recognised above includes the knowledge and experience of the company which is established within the
credit referencing and rent guarantee insurance markets, the skilled workforce employed by Van Mildert, and the reputation of
the business. This is together with the synergy benefits expected to the Group through leveraging the scale and reach of the
Rightmove customer base, sales and marketing teams and technological capability. The Directors have considered the fair
value of assets and liabilities acquired and have concluded that there are no other intangible assets to be recognised.
28 Related party disclosures
Inter-group transactions with subsidiaries
Under the inter-group loan agreement dated 30 January 2008, Rightmove Group Limited settles all expenses on behalf of the
Company, including dividends paid to shareholders and share buybacks and related costs. During the year, the Company was
charged interest of £542,000 (2018: £471,000) under this agreement and at 31 December 2019 the unsecured inter-group
loan balance was £14,038,000 (2018: £40,657,000) including capitalised interest (refer Note 19).
On 24 June 2019 Rightmove Group Limited declared an interim dividend of 73p per ordinary share to the Company. Additionally,
on 12 December 2019, Rightmove Group Limited declared a further interim dividend of 65p per ordinary share to the Company.
The dividends of £178,572,000 (2018: £151,399,000) were settled via a reduction in the inter-group loan balance owed by
Rightmove plc to Rightmove Group Limited. Rightmove Group Limited also declared a dividend in specie of £826,000
(2018: £1,446,000), representing the cost of the SIP shares transferred from the EBT to the SIP during the year.
The Company grants share options to employees of Rightmove Group Limited. This transaction is recognised as a recharge
arrangement with an increase in the carrying value of the investment of Rightmove Group Limited (refer Note 15).
Inter-group transactions between subsidiaries
During the year Van Mildert became a related party to the Company following its acquisition on 30 September 2019. Rightmove
Group Limited has settled liabilities on behalf of Van Mildert and the balance owing under the inter-group loan agreement dated
30 September 2019 was £86,000 as at 31 December 2019 (2018: £nil).
During the year, Rightmove Group Limited has settled liabilities on behalf of Rightmove Rent Services Limited and the balance
owing under the inter-group loan agreement dated 28 March 2018 was £1,359,000 as at 31 December 2019 (2018: £365,000).
Under IFRS 9 this loan has been fully impaired within Rightmove Group Limited as it is not expected to be recovered. The interest
charged under this agreement was £13,000 (2018: nil).
Directors’ transactions
There were no transactions with directors in either year other than those disclosed in the Directors’ Remuneration Report.
Information on the emoluments of the directors who served during the year, together with information regarding the beneficial
interest of the directors in the ordinary shares of the Company is included in the Directors’ Remuneration Report on pages 76 to 90.
During the year, the directors in office in total had gains of £5,791,000 (2018: £8,157,000) arising on the exercise of share-based
incentive awards. The total share-based payments charge in relation to the directors in office was £1,835,000 (2018: £1,669,000).
Robyn Perriss became a non-executive director of Softcat plc on 1 July 2019. Softcat provides Rightmove Group with computer
equipment, software and IT consumables on an arms-length basis, under contractual terms agreed prior to Robyn’s appointment.
Since Robyn’s appointment the value of purchases by Rightmove from Softcat plc has totalled £43,000 with no amounts
outstanding at the year-end.
Key management personnel
No other Rightmove employees are considered to meet the definition of key management personnel other than those disclosed
in the Directors’ Remuneration Report on pages 76 to 90.
29 Contingent liabilities
The Group and the Company had no contingent liabilities in either year.
30 Subsequent events
There have been no subsequent events having a material impact on the financial statements between 31 December 2019 and
the reporting date.
Rightmove plc annual report 2019
139
Financial statementsStrategic reportGovernance Advisers and shareholder information
Contacts
Chief Executive Officer:
Finance Director:
Company Secretary:
Website:
Peter Brooks-Johnson
Robyn Perriss
Sandra Odell
www.rightmove.co.uk
Financial calendar 2020
2019 full year results
Final dividend record date
Annual General Meeting
Final dividend payment
Half year results
Interim dividend payment
28 February 2020
1 May 2020
4 May 2020
29 May 2020
31 July 2020
30 October 2020
Registered office
Rightmove plc
2 Caldecotte Lake
Business Park
Caldecotte Lake Drive
Milton Keynes
MK7 8LE
Registered in
England no. 06426485
Corporate advisers
Financial adviser
UBS Investment Bank
Joint brokers
UBS AG London Branch
Numis Securities Limited
Auditor
KPMG LLP
Bankers
Barclays Bank plc
Santander UK plc
HSBC UK Bank plc
Lloyds Banking Group plc
Solicitors
EMW LLP
Slaughter and May
Herbert Smith Freehills LLP
Registrar
Link Asset Services*
*Shareholder enquiries
The Company’s registrar is Link Asset Services (formerly 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:
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Link Asset Services is a trading name of Link Market Services Limited.
Shareholder helpline: 0371 664 0391 (calls cost 10p per minute plus network extras) (Overseas: +44 20 8639 3399)
Email: enquiries@linkgroup.co.uk
Share portal: www.signalshares.com
Through the website of our registrar, Link Asset Services, shareholders are able to manage their shareholding online and
facilities include electronic communications, account enquiries, amendment of address and dividend mandate instructions.
140
rightmove.co.uk
Rightmove plc | Annual Report 2019
Rightmove’s purpose
is to make home moving
easier in the UK.
We do this by creating a simpler and
more efficient property marketplace
Rightmove is the UK’s largest property portal
Contents
Strategic report
1 Highlights
2 Chair’s statement
4 Our strategy
5 Chief Executive’s review
14 Business model
16
18
22 Risk management
Principal risks and
23
uncertainties
26 The EU referendum
26 Viability statement
27 Working with our stakeholders
Corporate responsibility
30
Key performance indicators
Financial review
Corporate governance report
Governance
40
42 Directors and officers
50 Audit Committee report
58 Nomination Committee report
Directors’ remuneration
61
report
91 Directors’ report
94
Directors’ responsibilities
statement
Auditor’s report
95
106 Company statement of
changes in shareholders’ equity
107 Notes forming part of the
financial statements
140 Advisers and shareholder
information
Financial statements
100 Consolidated statement of
comprehensive income
101 Consolidated statement of
financial position
102 Company statement of
financial position
103 Consolidated statement of
cash flows
104 Company statement of
cash flows
105 Consolidated statement of
changes in shareholders’ equity
Designed and produced by The Team www.theteam.co.uk
Rightmove plc
2 Caldecotte Lake
Business Park
Caldecotte Lake Drive
Milton Keynes
MK7 8LE
Registered in England no. 6426485
Rightmove plc Annual Report 2019
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