Rightmove shares were trading in the red on Friday after the property portal reported full-year results.
Revenue grew 10% to £364m and operating profit increased 7% to £258m.
A recovery in UK housing activity supported higher earnings, and the board increased the full-year dividend by 9% to 9.3p.
However, stronger earnings and a recovering housing market were not enough to support shares. Rightmove has dominated its competitors in recent years, and maintaining this position is proving to be a challenge.
Being so dominant makes it difficult to increase market share, and cracks have begun to appear in agent membership numbers, which declined by 1%.
Investors want to see growth. The problem for Rightmove is there isn’t tremendous scope to grow with a market share of 86%.
“Despite a strong year in terms of profit, and signs of recovery in the housing market, there are some nagging worries for property listing site Rightmove.
“Being the market leader creates a virtuous circle for the company. It has the most listings and is therefore the site which prospective property buyers are mostly likely to visit when looking for their next home.
“This reinforces its position as a must-have product for estate agencies and provides significant pricing power when it comes to securing subscriptions from agencies. That’s why the threat from OnTheMarket – now backed by a big US operator in CoStar – is such a concern for investors.”
Rightmove shares were down 1.5% at the time of writing.
