Rightmove shares have slumped after the company announced that its contract with online letting agent Openrent would soon end after both parties failed to agree on the conditions of the deal.
Rightmove said that resale listings on its platform would not be affected by this change but the news clearly disappointed the market as the London-listed stock slumped as much as six per cent on Tuesday morning.
“In this environment, while not unsurprised by this outcome, we see it as understandable,” said analysts at Panmure Liberum.
“Openrent do not currently list on Onthemarket and we therefore see this as unlikely to indicate a broader competition-related weakening in the pricing environment for Rightmove.”
Openrent, which allows private landlords to manage their own tenancies, accounted for under eight per cent of Rightmove’s lettings listings in July 2024.
Despite the termination, which is effective from 1 September 2024, Rightmove has reiterated its full-year 2024 revenue and margin guidance.
The company expects revenue growth of between seven and nine per cent and an underlying operating margin of 70 per cent, excluding one-off acquisition costs, in line with market expectations.
“While we remain confident of delivering revenue and margin in line with the guidance above, the precise mix of membership and [average revenue per advertiser] ARPA may vary,” said Rightmove.
It anticipates a potential membership decline of up to three per cent year-on-year, with an ARPA increase of £90-£100.
“We trim FY24E revenues by c£1m and FY25E by c£4m due to this update but do not change our valuation,” Panmure Liberum added.