Shares in Rightmove didn’t follow its ‘gravity-defying’ results yesterday, as analysts sounded a note of caution over a weakening housing market.
Though the online property portal saw its profit soar by 12 per cent over the first half of the year to £98.2million, shares slipped by 3.1 per cent, or 158p, to 4934p.
Rightmove said it had 1.2million properties advertised on its portal, significantly more than any other, while house-hunters spent a total of 1.1billion minutes per month on the website.
Share price fall: Rightmove fell today despite posting 12% rise in profits
Jefferies analyst Anthony Codling said the results ‘defy gravity again’, at a time when estate agents are facing challenging markets and tightening their belts.
But Hargreaves Lansdown’s Nicholas Hyett warned the company needed to beware of placing too much pressure on the estate agents it relies on.
All adverts on Rightmove’s site have to come from an agency, rather than individuals. Rightmove charges those agents on a per-office basis, so Hyett pointed out that office closures could be a particular concern.
He said: ‘Rightmove simply is the UK property market. If you’re buying a property it’s the first place you go.
‘It’s all very well arguing that estate agents have no choice but to pay, but if conditions don’t improve some will find they still can’t. Rightmove may have found the goose that lays the golden egg, but it needs to make sure it doesn’t squeeze it too hard.’
Despite Rightmove’s fall, the FTSE 100 ended up 0.50 per cent, or 38.14 points, at 7701.31, as sizeable gains for Reckitt Benckiser and BT Group propped up the index. At the close of a busy reporting week for blue-chip companies, the index failed to climb back to Tuesday’s peak and lost 3.5 per cent of its value over the week.
Fund manager Jupiter continued the disappointing trend for UK investment firms, as it had 3.1 per cent, or 13.5p, shaved off its share price to end the day at 429.3p.
It announced a hefty £2.3billion flowed out in the first half of the year, as investors withdrew cash.
Nearly all of these outflows were from one product, the dynamic bond fund, as a reversal in the popularity of bonds saw customers pull out more than a quarter of its current £7billion value.
Earlier this week, Schroders’ shares fell 4 per cent as it reported slower growth and though Rathbones climbed marginally when it reported its half-year results on Wednesday, its shares are now 5.7 per cent lower than last Friday.
Over at housebuilder Bellway, long-serving chief executive Ted Ayres was forced to stand down after a bout of ill health.
The 55-year-old, who had been at the business for 16 years, five as the boss, had been on a leave of absence for almost a year.
Bellway decided to bump up its chief operating officer Jason Honeyman to fill the post. Shares stayed relatively flat as they lost a marginal 0.1 per cent, or 2p, to 2905p.
Posh chocolate shop Hotel Chocolat was enticing investors, as it hinted that its treats were going down well in Scandinavia.
The business said it was selling its three shops in Denmark to franchisee Retail Brands, which would roll out the brand across Denmark, Sweden, Norway and Finland.
Hotel Chocolat retained the option to buy the business back after five years, but the price will be dependent on how well the franchise performs. Shares climbed 5.3 per cent, or 17.5p, to 347.5p.
The largest UK-based musical instrument retailer, Gear4Music, struck a chord with investors as it climbed 2.7 per cent, or 18p, to 676p.
Chief executive Andrew Wass said that ‘revenue growth continues to be strong into what is a highly competitive market’.
Stock watch: Great Western
Precious metals miner Great Western, which operates in Nevada in the US, shone as it increased the amount of land it held in the area.
So far, the company has only carried out exploratory drills and has not completed any substantive mining.
But yesterday it hinted that a mine could soon follow, since the land extension would create a suitable space.
Shares climbed 4.7 per cent, or 0.06p, to 1.22p, after boss David Fraser said drilling result updates would follow shortly.