Rightmove hit as London housing market dries up
SIGNS that the London property market has dried up hit investors hard today after Rightmove warned earnings would be damaged this year.
The online property portal, which charges estate agents for listing properties on its site, said revenues would come in £75 million lower than expected as they will be offering all customers a 75% discount for the next four months.
Estate agents typically pay £1088 per month per branch to advertise on FTSE 100-listed Rightmove, but that figure will be slashed.
The decision has been taken as the number of property sales failing to complete has risen substantially since the outbreak of coronavirus .
One broker said: “Let’s face it, no one will be moving house any time soon. Estate agents have been struggling for some time and Rightmove is clearly worried.
“It has taken the decision to sacrifice profits in the short term to help customers keep their heads above water. That’s sensible.”
The majority of Rightmove’s listings are in London. It saw its shares dive 10p to 464p.
But that fall didn’t drag down the wider FTSE 100, which added 174.34 points to 5325.95 as a wave of global fiscal and monetary stimulus tempted investors back into the equity markets.
Oilers Shell and BP gave the biggest boosts to the premier index as oil prices jumped 7% after US President Donald Trump hinted he may intervene in the price war between Saudi Arabia and Russia at an “appropriate time”.
Shell put on 94p, or 9%, to 1115.20p and BP gushed 16.35p, or 7%, to 257.10p.
CRH was another notable riser, 100p to 1695p. The cement maker has a large US arm and its earnings are in dollars, meaning it will benefit from the recent sharp fall in the pound.
But further down the league table cancelled dividends remained the number one concern for investors as a host of companies canned payouts.
DIY equipment seller Travis Perkins suspended its dividend and pressed the pause button on the Wickes demerger, citing market volatility and the disruption to trading caused by the impact of coronavirus. However, the shares gained 54p to 749p as analysts said the right decision had been taken.
Car dealer Inchcape also U-turned on giving money back to shareholders as it halted its £150 million share buyback programme launched last month as earnings have been hit by the virus. Inchcape shares lost 0.2p to 485p.
Upmarket chocolate seller Hotel Chocolat moved to reassure investors about its survival after it said it wanted to raise £20 million. The firm faces having to close cafes and stores due to lockdown. Hotel Chocolat will issue just under 8.9 million new shares at 225p a share. The shares were up 2p to 234p.