Canaccord downplays threat from new rivals at Rightmove

9th Jun 2014 12:16

Canaccord Genuity has kept a 'buy' recommendation and 2,600p target price for online estate agent portal Rightmove, downplaying the potential impact from newcomer to the market Agents' Mutual (AM).In an interview with The Telegraph, AM's Chief Executive Ian Springett said that the company has signed up 2,350 estate agent offices so far and expects to reach 5,000 by the end of the year. Canaccord said this means that AM has only added 350 branches since February. "To reach 5,000 by December 31st 2014 it will have to sign up over 400 per month. We continue to expect Rightmove to be able to maintain membership at current levels," said analysts Robin Savage and Arun Melmane.If the 5,000 target is reached, AM will generate £20m of revenue per annum, Springett said. Canaccord said that equates to an average revenue per advertiser (ARPA) per month of just £333m, compared with Rightmove's ARPA of £607 per month in 2013.Meanwhile, AM's desire to deprive the biggest of the UK portals of £60m per annum if it signs up 5,000 branches equates to £1,000 ARPA per month. Savage and Melmane said."This suggests a top-end product being delivered at bottom-end prices. This, like pricing a mews house on new build price-per-square-metre, is unrealistic."Canaccord also said that given that AM's portal is still under construction the company will struggle to succeed in doubling its membership over the next six months.Rightmove's shares were up 0.1% at 2,223p by 12:49.BC