Rightmove is warning of an additional £17 to £20 million that could contribute to its revenue due to COVID-19.
The online real estate company announces discounts for agency customers for August and September.
Rightmove is refraining from making a forecast of future profitability due to the uncertainty of Coronavirus.
As the Coronavirus pandemic continues to wreak havoc in the UK housing market, Rightmove Plc (LON: RMV) announced expanded discounts to help brokers address the new financial challenges posed by the health crisis. As a result, Britain’s largest real estate website said on Tuesday that the company’s revenues will fall by a further £17 to £20 million.
The company’s shares had fallen 2.2% in pre-trade trading on Tuesday. At 570 pence per share, Rightmove is currently more than 10% below the previous year’s decline in the stock market, after recovering from a low of 400 pence per share in March. Learn more about swing trading.
Rightmove reports a 10% increase in completed sales compared to the previous year
However, Rightmove said that signs of recovery in the UK housing market are becoming increasingly clear after months of slower activity due to COVID-19. The company stated that completed sales had increased by more than 10% year on year. Rightmove recently reported an increase in demand for bungalows.
The online real estate portal had taken some of its staff on leave in recent months to secure finances in the midst of the pandemic. On Tuesday, Rightmove expressed plans to send all of its employees back to work by July 31st.
However, the uncertainty of the corona virus continues to make it difficult for the London-based company to make a forecast of future profitability.
The property market withdrew from the nationwide blockade in England on May 13. Wales also reopened its housing market on 22 June, and Scotland is expected to follow in the footsteps of this opening on 29 June.
For its UK-based agency clients, Rightmove announced discounts of 60% and 40% in August and September respectively. Its agency customers in Wales and Scotland will enjoy 75% and 60% off in both months.
Rightmove reduced its customers’ invoices by 75% in March.
In March, the real estate company reduced its clients’ invoices for the period from April to July by 75%. This move had resulted in a £75 million loss of revenue for Rightmove this year.
According to Rightmove, its member base has shrunk by 2020. The company attributed the decline to customers with lower inventory levels who are facing increasing cash flow problems due to the pandemic. Traditional agents have continued to prove resilient over the past six months, according to the online assessment firm.
At the time of writing this article, the £4.98 billion company has a price-earnings ratio of 29.24.