Rightmoveโs โUnthinkable Eventโ
The #Rightmove CEO came out swinging on Friday when his companyโs latest set of annual results, for 2025, showed that they continue to harvest even more precious cash from its captive estate agent customers. Revenues were up 9%, average revenue per agent rose again to ยฃ1,631 and Svanstrom was bullish about the websiteโs future prospects, telling The #Times later that it was โunthinkableโ that AI would replace it.
He also signalled that he intended to raise agent prices by another ยฃ120 per branch per month in 2026, in line with his target to get this to ยฃ2,000 average by 2028. Mortgage revenue also climbed significantly โ up 46% to ยฃ6.8m โ as Rightmove executed on Svanstromโs plan to achieve ยฃ25m here by 2028. This pincer squeeze on agents โ increasing costs whilst also taking revenue opportunities away โ is having an outsize impact on smaller agents, who donโt have the sweetheart 70% RM discount deals that the corporates have nor the heft to generate mortgage deals at the same rate.
Rightmoveโs shares bounced a little yesterday, up 4% in the day โ mostly due to an unexpected extra ยฃ90m share buyback scheme, that cynics might position as more a market โbribeโ than anything strategically significant. But this doesnโt hide the fact that theyโre still -46% down in the last six months. If it doesnโt increase a further 15% by Tuesday night, Rightmove will fall out of the FTSE 100 share index of the biggest companies in the UK, a huge blow to its prestige โ and to the reputation of Svanstrom and his Board.
The market cap of Rightmove sunk as low as ยฃ3.15Bn this week, around half the amount that REA Group โ owner of the โRightmove of Australiaโ, realestate.com.au โ bid for the business in September 2024, just 18 months ago. At that point, RMโs Board said that the offer of 775p per share (now 447p) โmaterially undervalued Rightmove and its future prospectsโ.
And itโs these โfuture prospectsโ that lie at the heart of Svanstromโs problems. Markets โ and investors โ value businesses based on a โmultipleโ of its current profits (and/or revenues) according to what they think the company can realistically look forward to generating in the future. High multiples indicate significant confidence โ and REAโs offer valued RM at 22.5x its profit. Now? Itโs 10.5x.
For context, the multiple that Svanstrom and co turned down valued Rightmove as if it was (#Googleโs parent company) Alphabet โ now itโs more in the Biffa waste management category. A crappy outcome indeed (sorry, had to), but one that he is desperate to distract from.
Thatโs why he uses phrases like โunthinkableโ โ because he doesnโt want you to think AI will replace Rightmove, he doesnโt want investors to think anything like this either and he almost certainly shies away from thinking about it himself. Yet that is precisely what markets are starting to price in.
When Svanstrom arrived with much fanfare on 6th March 2023 he would have been confident that his inherited share price of 440p would be a distant lowlight when his third anniversary came around. As it opened at 415p on Thursday the relentless pressure of maintaining the FTSE 100โs most-profitable company (70% margin v London Stock Exchange at 50% and InterContinental Hotels at 35% at second and third) must have been taking its toll.
Andrew Stanton CEO Proptech-PR
RO Real estate secure new lease with PKF Francis Clark
RO Real Estate has secured a significant long-term commitment at 90 Victoria Street Bristol, completing a deal with existing occupier PKF Francis Clark. The transaction reinforces the buildingโs prime location on Victoria Street and ROโs vision for modernising the asset.
The agreement will see PKF Francis Clark expand within the building, relocating from the ground floor and securing a total of 12,960 sq. ft. across the second and third floors.
PKF Francis Clark is one of the South Westโs leading independent accountancy and advisory firms, providing audit, tax and corporate finance expertise from its Bristol office and a wider regional network, supported by the global PKF International organisation.
They are expected to vacate the ground floor by the end of March, enabling RO Real Estate to commence a comprehensive refurbishment programme including the entrance and reception remodelling, upgraded and expanded end of journey facilities and a refurbishment of the ground floor to provide high specification, fully fitted, occupier ready office space. Installation of new PV Panels will also elevate the building to an EPC A with a target BREEAM rating of Excellent. The works are due to complete in September 2026.
RO Real Estate were represented by Knight Frank and Cushman & Wakefield. PKF Francis Clark were represented by Morton Property Consultants. Ed Davidson, Asset Management Director at RO Real Estate, commented:
โSecuring this new lease with PKF Francis Clark is a strong endorsement of both the location and the building, alongside our vision for it.โ
โWe look forward to delivering best in class facilities for Francis Clark in their long-term Bristol home.โ
90 Victoria Street comprises a detached office building built over four storeys and is prominently positioned on the main road just a few minutesโ walk from Bristol Temple Meads Station. The building is let to a group of well-known international occupiers including Tetra Tech Group Ltd, PKF Francis Clark LLP; and CGI IT Limited.
The RO is a family-owned group of companies established in 1932. The RO has always invested in a diverse range of interests which today embraces commercial property, housebuilding, and venture capital.
RO Real Estate, the commercial property division, has built over 1.1 million sq. ft. to date and currently manages over 300,000 sq. ft. of office, industrial, and roadside retail as well as its growing land bank of development sites. All acquisitions are funded through existing cash resources, meaning that the RO is able to move quickly if the appropriate investment criteria are met.
Its award winning Hampshire based housebuilder, Metis Homes, builds modern homes with traditional values and has created a diverse portfolio of bespoke, high-quality homes in prime locations โ from traditional properties in rural settings to contemporary town centre schemes.
Andrew Stanton CEO Proptech-PR
EBITDA is driving failed deals as Sellers and Buyers clash on valuations
A leading UK construction sector investor has warned that widespread reliance on EBITDA-based valuations is contributing to failed transactions and repriced deals across the market. This comes as higher borrowing costs force buyers to focus on real profitability and real cash flow. Bradley Lay, mergers and acquisitions specialist and co-founder of Peak Capital Group, said the gap between how sellers value their businesses and how buyers assess risk has widened significantly over the past 18 months.
Bradley said: โEBITDA ( Earnings Before Interest, Taxes, Depreciation, and Amortization, a financial metric used to evaluate a companyโs core operating profitability and cash flow generation potential by excluding financing decisions, tax environments, and non-cash accounting items) is still being used as the headline valuation metric in construction.
But buyers are underwriting deals on net profit before tax and cash. That disconnect is now one of the most common reasons deals fall over.โ
Mr Lay said EBITDA routinely strips out costs that directly affect a businessโs ability to survive, particularly in capital-intensive sectors such as construction.
He added: โTax, debt servicing, capital expenditure, asset replacement and working capital requirements are not optional. They are structural. Removing them may make a business look more attractive on paper, but it does not change economic reality.โ
He goes on to say these expectations are proving increasingly untenable as the cost of capital remains elevated and lenders tighten credit criteria. He said: โWith debt more expensive and less readily available, buyers cannot afford to rely on adjusted metrics. Acquisition debt has to be serviced from real earnings, not theoretical numbers.
โThis is resulting in a growing number of late-stage valuation resets during due diligence, often after sellers have anchored emotionally to an initial headline price.
โPersonal expenses, one-off add-backs and aggressive normalisations are routinely challenged or removed. When that happens late in a process, trust erodes and transactions stall.โ
Bradley notes that scepticism toward EBITDA is well established among long-term investors, including Charlie Munger, who famously criticised the metric, and Warren Buffet who has repeatedly warned against relying on it as a measure of value.
He said: โIn institutional investment, this debate was settled years ago. Sustainable profit and cash flow determine value.โ
Andrew Stanton CEO Proptech-PR
