Joy for home buyers, gloom for Rightmove
The sense of joy felt by some in the housing market at the Government’s decision to pare back the legal requirements of Home Information Packs (HIPs) was not shared by online estate agent Rightmove which revealed the decision would have a detrimental impact on revenues.The announcement by the Milton Keynes company, made in response to the government’s decision to make HIPs – home information packs designed to protect buyers – a voluntary and not compulsory document, sliced a massive 22 per cent off its share price, which fell 77 pence to 275 pence a share.
In a statement issued to the Stock Exchange, Rightmove said it believed to have put in place the systems, people and capabilities to be able to implement HIPs in line with the original timetable and specification.
Rightmove said: “The implication is that the overall value of each HIP will be lower than previously expected. Accordingly, revenues and potential earnings from Rightmove’s HIPs product are likely to be significantly lower than current market expectations.
“Future expenditure on the HIPs product will be reviewed in the light of the development of the HIPs market and the company’s place within it.”
Despite the HIP announcement, Rightmove reaffirmed its early July trading statement, which confirmed that revenue and profit before tax for the full year 2006 will exceed the range of analysts’ estimates as at that date.
“In addition as a leading provider of technology delivered services to the real estate industry, Rightmove believes it is well placed to continue building its web based advertising business and develop additional services.”