Rightmove has increased expectations for its average revenue per advertiser (ARPA) in its first trading update of the current financial year.

The property portal said that on reflection of "successful sales and migration to the optimiser edge top-end package for estate agents", as well as product uptake across both its estate agent and new homes partners, it now expects ARPA growth of between £85 to £95 on 2023’s result of £1,431.

This is an increase from previous guidance of £75 to £85, after the firm’s sponsorship of ITV’s The Voice reached over 14 million people, and it ahead to the next phase of its brand campaign across social, video, out-of-home and platform advertising, which is expected to reach 95% of UK adults.

The update is the first after Rightmove was approached by Rupert Murdoch’s REA Group, which was looking to acquire the firm.

However, Rightmove turned down the offers, the latest being valued at £6.2bn, stating that it was "unattractive and materially undervalued the company and its future prospects".

As a result of subdued house price growth, the platform has tightened its 2024 guidance, and is estimating revenue of approximately £390m, which is in line with its previous growth guidance of between 7% to 9%.

It also reiterated an underlying operating margin of 70%, before one-off costs of approximately £10m, while also expecting membership numbers to grow by 1% on 2023.

This is within the previous guidance range of up to 2%, reflecting a "slower than expected recovery in new homes developments".

Chief executive officer at Rightmove, Jovan Svanstrom, said it had been "another period of strong progress" for the firm, adding that it was "pleasing" to see its product development and sales delivery "generating increased uptake from consumer and partners".

He stated: "We remain confident in achieving meaningful strategic and financial growth in 2024. We see continued momentum building product depth across our platform - driving revenue growth in the core business and within our strategic growth areas.

"We are excited to be the place consumers turn to first and return to most when looking to buy, sell or rent a property in the UK. We see a long runway of opportunities, leveraging our superior platform and data scale to generate increased value for all stakeholders."

Investment director at AJ Bell, Russ Mould, added that the results don’t "blow out the lights" but they do contain "enough pockets of good news for investors" to be happy about.

He concluded: "The big news is better than expected growth in ARPA. Unlike a traditional real estate company which relies on commission from home sales, Rightmove’s model is about estate agents spending big to promote their property listings. Beating forecasts for the amount of money it is getting per advertiser is confirmation that its business model is ticking along nicely.

"The Government’s Budget last week has somewhat scuppered the outlook for the property market, which isn’t necessarily a bad thing for Rightmove, although it is still unhelpful."

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