Rightmove plc (RMV) Earnings Call Transcript

My name is Johan Svanstrom. And the CEO right move, as you probably know, since about 5 months. It's a pleasure to be here for my first results presentation of Rightmove and doing that together with Allison, CFO. And we also have Rory from the Rightmove team. I was going to start with a bit of introduction. Not going to go through the entire presentation, but cover a couple of big the key pieces for myself, and then we'll move into Q&A as soon as possible. So just wanted to also verbally overlay a little bit of the introduction of myself. I've been in general management positions in tech companies for a good part of the 25 years. Vast majority of that on the operating side, in small companies, medium-sized tech companies and pretty large corporations, spanning the entire world. Also been on the investor side and board side of technology. And I have been with companies, many of them that are in sort of -- in the space of running commercial subscription models. Quite like Rightmove, obviously, but generally speaking, within marketplaces and B2B2C operating environment. So the first period here that I've really spent a lot of time digging into the operations, meeting teams. I think I got calendared 62 introduction meetings or something like that, which has been a true pleasure. I'm truly impressed over what Rightmove does and the teams, the delivery. Obviously, it's pretty clear from the outside in and before I joined. But I'm also very pleased to have that confirm for myself actually joining the company. Having that said, I think there's opportunity, as always, to do more and to do certain things faster, and we'll get back to that later in the conversation, in terms of future opportunity. I think the -- if we cover just a couple of the highlights here, just to make sure everyone's remembering them, we came in with a very solid 10% year-to-year growth on revenue. It really, I think, goes to show again particularly maybe against the more backdrop that, this business is very consistent, it's got a lot of resiliency. And the foundation for that really is a strong network effect that has been built up in the platform. We've seen ARPA growth come very strong, GBP 121 growth year-over-year versus June last year. A lot of that is driven by the ARPA growth on the new home side, and we'll get back to more details on that. Membership also very stable. I think it also speaks to both the resiliency actually of the agency market, but certainly also the products and services that we provide to customers. Underlying profit then came in at 9% year-on-year. And again, that's driven by, not just things that we did this last quarter or last half year, but things that we've been working on and continue to work on for quite a while. We do already invest in building out particularly the product and tech and data teams. And again, we'll talk a little bit more about that from a go-forward perspective. We're happy that we can continue our established progressive dividend policy and raise the interim dividend to GBP 0.036 up from GBP 0.033 last year. So my final remarks then, and I'm sure we'll get back to it a little bit, but I wanted to be clear and outline at a high level a little bit of how I see the business going forward. And the first thing to say, again, underscore, the performance is awesome as it is. We're coming from a real position of strength. So I coin this an accelerated evolution rather than a revolution. We will focus on the U.K. property market. It's quite massive when you think about it in all its vectors and areas. So we're not going after something abroad. There's no imminent need for that whatsoever. Today, we basically are in, to a large extent, in the leads and advertising side of the business, which is very healthy. We've built a strong position and so forth from that. But it also means that there are quite a few vectors of opportunity that we can go after. And I'm going to touch on a few of those. And again, pointing also to the Investor Day that we're going to have in November. I think November 27 is the exact date. So please pencil that in. We're very excited to tell you more details about this. Now the sort of approach to the business going forward and from my perspective, is to do this in a very balanced way. We simply want to make sure that we go after and consistently can deliver a double-digit both revenue and profit growth. At the end of the day, there is quite a lot of opportunity out there. It can come at very healthy margins. We have good line of sight on them, and I think we have an opportunity to now execute on them. It will take a modest investment compared to the margins that we're running right now, and we've also announced that. The areas are probably the ones that you would suspect, and I think the underscore here is that, all of this we essentially already do to one or the other extent today. We're not standing all of a sudden in a greenfield and saying, hey, let's lay down a new road over here. We are in these roads already. We want to make sure that we continue to widen those roads and make sure that they become longer and longer. There's going to be a continued very strong focus on the core business, no doubt about that. But we have things to do in terms of deepening our relationship and provide even more services to consumers. The consumer experience of particularly -- well, actually both renting and certainly also buying a home today, it's not exactly a great experience, right? It could take up to 6 months to actually get a house closed and lots of fall-throughs and so forth. And to be honest, the U.K. sticks out in the world for not being particularly efficient. But again, where there is pain, there's business opportunity and I think technology can play a big part in that. We're also in a number of smaller business units today, commercial real estate is one. So we have insights into the market. We're operating it. We have good reception, but we can absolutely put more effort behind it, big sector, and again, can come with very healthy profit margins. I think overarching -- the data that we have is a great asset. And our investments is a lot around just leveraging more and even better the assets that we already have. Again, evolution, not revolution. But we then can really start -- and we will explain a little bit more about what we mean with data and what we mean with platform and how we will evolve that. But we can build ourselves much deeper into the ecosystem and support that ecosystem as it goes through a digital and technology transformation. There are quite a few areas that are much further behind than consumer behavior today. And finally, the green transition. We called that out. We've also launched our 2023 edition of the Greener Homes report today. Don't know if you have had time to read that one as much as you read our first half results, but I encourage you to take a look. We all know why this is important, but it's quite stark how consumers take an even greater interest in it. They are, at the same time, challenged by the costs and just understanding what to do in this report. There's plenty of examples of how that interest is growing. What we're trying to do is not to tell anyone exactly how to action this. We're simply saying, we have lots of data. We have lots of insights. We can put together a great analysis, this report is one example. We want to provide that to anyone, any stakeholders, including consumers in the industry, so that they're more informed and hopefully, they can move and take action on that green transition. That's the role that we want to play, and I want us to play an active role in that. And it's quite exciting to be honest, regardless of how big a problem it is and how long we will take to fix it. So with that intro, done, and let's move over to Q&A.

We'll start with questions on the floor, and then we'll move to those online. Anyone online who wants to submit a question, please do. Adam from UBS, do you want to start?

It's Adam Berlin from UBS. If I can, 3 questions. So the first question is you've scheduled this Investor Day for November to talk about some of these new initiatives. Can you give us an idea of what kind of information you'll be providing at that Investor Day that you couldn't just provide today? Kind of what are we waiting for in terms of underpinning the double-digit revenue growth? The second question, again about the strategy days. I noticed when I read this morning that you focused on commercial, product and data and mortgages, but you didn't talk about tenancy, which was obviously a focus around [indiscernible]. Why is that not one of the key areas? And the third question I want to ask is just more of a short-term question, you did GBP 121 of ARPA in the first half, and you're guiding for GBP 100 plus for the full year. Can you just explain why there's that slowdown in the second half of the year on ARPA growth?

Sure. Why don't I do 1 and 3. So on the Strategy Day, what we will take you through is the opportunities that we see that we're investing behind. We've talked to you about what we see the addressable market being in each of those. What we see as the short and medium-term path for us into that addressable market, and specifically what it is that we will do in order to address those opportunities. We'll also talk to you a bit more about evolution and continued growth within the core business. So it will give you a really good overview of what our plans are. It will also give you a chance to meet some more of the management team and meet some of the people that are responsible for running these business units. I'm sure it won't surprise any of you to hear that a big part of this investment will be in product and in bespoking products and tailoring user journeys to meet some of these opportunities. So hearing from Tarah, our CTO and some of her key product people will also be part of that thing. On ARPA, on your third question, yes, you are absolutely right. H1 ARPA growth very, very strong. Part of the reason why we're walking it back a little bit for the full year is nothing to do with what we see as the growth across the second half, and it's got far more to do with what we saw happening in the second half of last year. So if you remember, we saw very strong ARPA growth in H2 last year, particularly in new homes. So we added GBP 67 of ARPA in H2 last year within new homes, GBP 24 in total, which is almost double what we would typically see in the second half, and we just think that, that's unlikely to continue in the second half. So it's more about the year-on-year comp than what we think will happen in the second half. And what we're seeing and what we think we will continue to see is ongoing marketing from the new home developers. So we'll probably see full year-on-year ARPA of about 2/3 of the GBP 330 that we've seen in the first half and probably reasonably flat in agency.

And Adam, on your questions about lettings, I think specifically as a potential growth area. It absolutely is -- this was mentioned in the presentation, but it's interesting, if you think about the residential moving market in terms of just units -- there's roughly 1 million this year on the sales side. And there's roughly 1 million, probably a little bit more on the letting side. That obviously just comes in a different nature in the commercial model in the most stakeholders, so slightly different, right? But there's 4 million or so renters or rental dwellings in the market. They turn over roughly every 4 years. So there you have the rough number of events every year. But it's quite fragmented. It is, to some extent, even less digitized than what has been achieved on the sales side. And what we're doing on the back of the acquisition of the Van Mildert company doing references for agents, we have now built products that really put together sort of a digital end-to-end solution. Absolutely, our customer here are agents, right? That's our core customers. But it involves a more digitized, more effective way for both the landlord and the consumers as part of that agency relationship. And we go into a couple of examples of that with -- in the presentation in terms of adding now one of those modules. I think what's interesting are a couple of things, A, if you look at the market today, sales agents that are seeing slowing transactions, particularly in the last 2 months, many of them who are dual agents, actually see a pretty healthy business on the letting side, right? Rent levels have gone up 36% since 2019 and 10%, 11%, 12% since last year. And it's a back book business that is pretty solid. The demand vastly outstrips the supply, right? So there's a challenge structurally in the market. We think we are sort of underpenetrated in actually helping that market to become a more effective market. I think it's also interesting that there are about 2,000 or so lettings only agents that we don't have on as customers today, because they're typically quite small. Again, it's a very fragmented sort of market. But again, putting a real digital solution in their hands is exactly what we're building on. So we're soft launching this lead to keys during the fall, and we see a real opportunity to grow that business over the next coming years. Now the other piece apart from those 2,000 agents that we don't work with today, which is a growth opportunity in itself, of course. Is that a lot of our existing sales agents also have lettings arms. So about 80% of all sales agents also have letting's arms. And that's an opportunity also for our business, obviously, to continue to grow product and sell services to them on the letting side. So a little bit more on that as we come, but I appreciate the question because it's definitely an opportunity.

Andrew, Barclays?

I wanted to ask about the investment in more detail. So on the top line to kind of dive into a bit as to when we see the acceleration to double-digit growth. If you could be more specific as to how to think about kind of '24, '25, '26 with first builds? And on the margin, are we talking about a reset in '24 to 70% to 72% and then kind of flat margins thereafter? Are we talking about it going to the low end of that range and then margins kind of starting to pick up once the one-off investment is in the numbers. Just help us how to think about this in a bit more detail over the next couple of years.

Okay. Sure. So when -- and look, Andrew, we will share more detail on all of this in November. And so there are areas in which, particularly we want to get drawn today. But I mean, in broad terms, what we're talking about, is an acceleration of investment of about GBP 20 million in total, over a 3-year timeframe starting in 2024. So as things stand, 2023, all of the guidance we've given you for '23 remains. So 70%, 73% margin, et cetera. So the investment, as I say, about GBP 20 million in total, starting in '24, the majority of it is front-loaded into '24. So GBP 8 million to GBP 10 million of the GBP 20 million will be invested in '24. The areas that we are calling out, so commercial real estate, data services and mortgages are the 3. But I mean this is investment on top of BAU investment in the core business, which we have always done and which, of course, we will continue to investment in the consumer journey and making sure that it is as enjoyable and effective as it currently is, all of the thousands of innovations that Johan called out in the presentation, all of that will continue. But with the 3 areas, as you know, they're all at different stages of maturity. And so the majority of the revenue and profit growth that I've talked about, some of it will start to come through in '25, more material revenue and profit acceleration from 2026. And part of what we will talk you through in November, is showing you the financial profile of that investment and what it does to the shape of the business going forward and exactly what sort of acceleration we're talking about by '25 and '26 and beyond. But for now, that's the view over the next 3 years. And then sorry, on your question on a reset. So look, it's a really good question. I think we've always been quite specific with our guidance on margin. I mean almost, I would say, too specific, we've pointed you for the most part, every year as a single or a single percentage range. What we're now saying is that for the next 3 years, we are in the face of this investment. We're committing to maintaining the margin at 70% and beyond. That's a more likely normal range for us going forward. If you take 2026 onwards and what would be a slightly differently shaped Rightmove, at that point, you will have 6 or 7 revenue lines, which are all more material than they are today. Nurturing those journeys, continuing to innovate in product and in the consumer experience on the site, I think will inevitably require more investment than we have done to date. So I think 70% to 72% is just a more realistic run rate of margin going forward.

Will?

It's Will Packer from BNP Paribas Exane. 3 for me, please. Firstly, could you update us on agent health and your expectations for H2? It seems that there's quite a lot of noise in your numbers with hybrid agents. What's the underlying change? What are you seeing currently, and where do you think we get to the end of the year for the estate agent specifically? Secondly, I suppose implicit in your margin assumptions or revenue assumptions, could you talk us through how you see the property market for fiscal year '24, is consensus revenue growth of 8% realistic in the context of some of the cyclical challenges than the end market is facing. And then finally, could you just talk for a little -- some initial perspectives on how you're going to spend the GBP 20 million? Is it primarily people? And specifically, a lot of your peers have gone and made some quite expensive bolt-on acquisitions. How do you see the sort of landscape there? Is that something you'd consider or do you think that organic investment is the only needed requirement?

Let me take the last one.

Yes. I can start with the agent health, and then we can talk a little bit about the particular swings between the first half and second half on the stock count -- thank you, Allison, and so forth. So overall, agents are healthy. You've got to remember that they came off -- have come off some very strong years. Generally speaking, they are in much better shape, let's say, compared to when there's been crisis in the past. And I think we've been reporting on that before. I think what I and the team have heard in the market is, of course, nobody is happy if transactions are slowing down, right? And that's obviously due to some of the financing cost issues going on out there. But they see a lot of activity. You can see that in our numbers as well. Traffic is healthy, Lead generation is healthy, basically sitting on -- slightly up versus 2019, but down versus '22. More listings are coming into the market, which is good to see. This is quite strongly -- we're still below actually 2019 levels, but it's strongly up versus 2022. That means that there are a lot of people are interested in selling. And of course, the interest in selling comes on the back of buying or vice versa, right? So the listings growth is healthy. Where the challenge sits in that -- actually buyer-seller meeting around the price point, that's where we have, I think, a little bit of mismatch at the moment. And I think that's back to the -- either the cost or maybe more the uncertainty of the curve right. And look, if you're sitting there trying to figure out what more you should take. It's a complex process elsewhere and now things are moving up and down. I mean by in the last 2 days, 4 of the biggest lenders started dropping their rates, right? Some of them are advertising 0.3% or even 0.5% which is big. So that hesitation is a little bit there. But I think that the clarity of that would obviously increase during the fall, but it will still be there for a while. But agents know that. And I think they -- what they are doing as well is obviously pushing for valuation, the right valuation expectations, right? So there might be further price adjustments. We think there's going to be another -- or we're going to be about minus 2% by the end of the year. And I think those price adjustments will certainly also help the transaction volume. And then I'd call out, generally speaking, everyone's had a much better spring than they anticipated, and then it got a little bit tougher. But again, also worth remembering that 80% of the sales agents also have lettings arms, and that business is doing well. Foxtons reported just very recently, and you can see that as one example of how their business is going, leading to overall good results, right? So I think there's no particularly big concern. Everyone is keen to move away from the uncertainty. But there's nothing that says we're in a -- for sale or stop a credit or any particular slowdown. Again, engagement from buyers and sellers is remarkably high. Do you want to maybe comment on the H1 and H2 and a bit of the...

Yes, yes. So I mean, I think when we spoke in March, we said that for the full year, we did expect agent numbers to be down a couple of hundred, which would mirror what happened last year. So nothing terribly material, but a couple of things are worth pointing out. I'll probably start with just the agent retention number, which we published this morning. So it's almost the highest level of agent retention that we've seen at 95%. So agents are not leaving Rightmove, but there are always agents that leave the market, and that is probably the 5% or so. And really, what we're not seeing is agent formation, new agent formation. There's some we're capturing it right now with the new agent accelerator package that we talked about. Happy to talk a bit more about that. But there are -- it's not there in significant numbers. So the agents leaving the market are not typically being replenished in full, that's the first thing. And then we did see a growth in the branch equivalent of hybrid agents, which is a stock-based recalculation that we do couple of times a year, which added to the numbers. But you're right, that is noise and that will probably unwind in the second half. Structurally, if you look at what's happening, I think we will see agent numbers down a few hundred year-on-year by the end of the year, but nothing really to worry about, and nothing that reflects on agent sentiment relative to Rightmove.

And that few hundred is your reported number or the underlying number?

So Will, maybe on your second question, I think, around -- excuse me, the margin assumptions and what to spend that, as we call it, modest additional investment. It's largely people resources. Rightmove is a very well-run ship, but a little bit tight, at least vis-a-vis its opportunity, right, that's my assessment. We will continue to run it tight -- cost discipline is a virtue, I'm fully a believer in that. But it basically comes down to resources to be able to execute on, again, literally a lot of things that we are already in and have very good ideas and pretty quantified ideas about what to do with. There's, of course, a bit of technology and tooling and so forth, along with that. Most of that is BAU. It might be that some of it also gets a little bit accelerated, because -- or against an opportunity. But again, very well business case. You know that we are in transition from being on-prem data centers into the cloud that's tracking really well. And we have -- I mean one of my observations is, the richness of data that we have in this company, great, and we do use it, but also that we can do a lot more with it, right? And some of that again comes back to people who can work with it and some of the tooling that you put in place. But it's all, again, coming from a -- really leveraging the assets that we already have in a much better way. Balanced growth.

And there would be a bit of house marketing. I think one of the things at the moment that we see is, we're heavily associated with the residential property market. And some of the challenges we look to grow areas like commercial real estate, for example, will be stretching the brand to increase the association of Rightmove specifically with some of these other areas of activity. So I mean, Johan is right, it's primarily people and within that, it's primarily product and tech people.

I was -- I have to say on that one, I was amazed of the actual awareness and also penetration in the commercial market, with having a link in the header of the website. But of course, we've been at it for quite a while. And again, we have a team up and running and lots of happy customers. But obviously, we think there's opportunity to package that further and do more education and do more penetration. It's pretty obvious from the team that on, for example, a geographical basis. We're well penetrated on making this up. Manchester, Birmingham, some reason, we're not -- we haven't had a time. But we know we have the product to sell. So it's a matter of doing that in that particular example.

And then just to follow up on the '24 revenue assumptions and whether bolt-on M&A is on the cards?

Yes. Well, look, so we have -- we've talked about a 73% margin, 8% growth in the core business this year, absent the investment, that is what we would continue to expect next year. Part of what we will talk about is our growth assumptions for '24, which again, we're maintaining the range of 95% to 105% and again, guiding towards the middle and upper end of that range for '24, which typically will deliver 7% to 8% growth in the core business. And then beyond that, you'll start to see the impact of some of the accelerated investments.

And default basically is organic growth. Again, executing on opportunities. M&A, of course -- M&A or partnerships, of course, can play a role, but it's exactly the same as the approach as before, as part of the toolbox. And we constantly monitor the market and monitor the market and have conversations, out of that comes good intel, if nothing else. But we're not stepping that up vis-a-vis before in any particular direction, let's say. But of course, it remains an opportunity.

I mean, for us, it has always been a means of achieving part of the strategy. It's not a growth driver in itself, and that element of the strategy is completely unchanged.

Rahul, HSBC.

I have a couple of questions. In terms of your new product launch in Q4, could you give us a sense of what is your penciling in terms of product adoption and pricing uplift for next year? And the second question around agent commission pool, basically, just wanted to understand what is the current agent commission pool in your market share on the basis, please?

I can take the first one, if you go for the second. So yes, the Opti Edge new top package that we're launching and that we described, it's very exciting. It's also just a good example of what we've done several times in the past. I described we have tested it in a market. We have soft launched it. We've started to get sign-ups for it beyond our expectations, to be honest, although it's early days, but very positive reception. I don't think you asked specifically the components of what goes into the package, so I will refrain from that, but that also is exciting. In terms of adoption, full launch really happens during the fall. So of course, it's a big focus for our sales and account management teams. I think in the past, if you look at our Opti 15 and Opti 20 packages, they have come to around 1,000 subscriptions over the first 12 months or so. And then over somewhere between 3 and 4 years, they get to full penetration. And that's sort of the plan this time around as well. And again, off to a very good start, so we feel quite positive about it.

GBP 250 beyond the current optimizer level, which is it's not too similar to the uplift as we go from Essential to Enhance and Enhance to Optimizer. And then on the commission pool Rahul, so if you think about the components of the commission pool transaction numbers is by far the single most important driver of that pool. And as you will know, those are slightly down year-on-year. So GBP 1.2 million for '21-'22, looking closer to GBP 1 million to GBP 1.1 million this year, so a slight dip in the commission pool. Against that, house prices are up a little bit and agent commission levels are largely unchanged at somewhere between 1.5% and 2%. So those are the 3 drivers of the pool overall. Over the course of '21 and '22, as you're aware, we've spoken about this. We saw our share of agents revenues dropping a little bit as their businesses were accelerating with increased transaction numbers and elevated house prices. So we had gone from, I think, about 7.5%, we lost about a percentage share of agents' commission pool. In the past, we've been as high as 8%. And so now with some of the price increases, for example, that we put through this year, we are returning back towards that 8%, but we're still lower than that. So back to where we had been probably about 7.5%.

Catherine, Citi?

I just wanted to ask about some of the other plans you have at the other end, Essential Extra, if you could talk in a bit more detail about those and how you think about penetration and again, sort of pricing differential. And the other thing is on commercial, could you maybe just give a bit more detail about how that revenue model works at the moment, how you think about the current penetration? I know you'll give more detail at the Investor Day about how you're expecting it to evolve, but it would be good to understand the starting point?

Sure. So with Agent Accelerator and Essential Extra, you would have heard us talk in the past about how at 50% or so it varies by 2% or 3% either side, but about 50% of independent agents are on our most basic pack, the essential pack, which means that for them, it's all about just getting their listings live on the site. They don't use any of our products, so they don't experience how effective those products can be at helping them to build their businesses. And the conversation with those agents tend to focus disproportionately on price. It is a cost for them, and that is how they see it, whereas it's an entirely different conversation with agents and on some of the higher package levels, where the conversation is all about the effectiveness of products and which products they use and how to substitute different products depending on what it is that they're trying to achieve. So the challenge that we set ourselves really was to find a way of facilitating some of those agents. Being able to trial different products and to experiment with them, which is what has led to the creation of the Essential Extra pack, which sits between essential and enhanced for the agents that are using it, and there are about 250 of them right now. So it's small, and I think it will always be small, because ideally, it's a stepping stone out of essential and into the enhanced pack. It's not much of an incremental financial commitment. It's about an extra GBP 150 a month or so. But what we find is that it's a really good way of changing the conversation with agents away from price and on to products and the effectiveness of products. And there, what we see and you have heard us, again, talk about this in the past, is that when agents use our products and find how well they work for them, they tend to upgrade themselves and take themselves up the package later. And so that's the driver behind the thinking for Essential Extra. Meanwhile, and again, you'll have heard us talk about new agent formation and, A, how it is depressed on what it had been prepandemic, as some of the market conditions have worked against the formation of new agents, but also the challenge of start-up businesses and the 50% or so of them that go out of business within 6 months or so of launch. And so here, the challenge that we've set ourselves, was to create a business model for small new agents, who can't quite manage the financial commitment of the Essential pack, primarily because they are just setting out on the journey of winning mandates. So typically, they have very low stock. So the profile of an agent on the Agent Accelerator pack is that they've been in business for 6 months or less and they have fewer than 5 properties to sell. And it is just a way of giving them a bit of a leg up as they get going, try to avoid them going out of business within that first 6-month period. For us, we see it as an investment in the agent of the future and moving them off agent accelerator and into the Essential pack. And the way that we've structured it, is that they pay per listing. And so by the time they've got 5 or 6 properties, financially, it's actually -- it makes more sense for them to become an essential customer rather than to stay on agent accelerator. So that's the driver there. And again, the agent numbers are small for us. It's an investment in the customer of the future.

I can go on to -- just to really -- on the commercial real estate side, because that was the second question. So a couple of just structural things. And again, we will get back to more of this. But there are essentially 3 main buckets of the market, office market, retail market and industrial or warehouse market. Within office, you have regular and big offices. And then, of course, you also have flex offices, which is quite a strong trend. We actually play in both of those parts of the market. The other sort of important distinction is between leasehold and freehold. They're quite different. They're both sizable, but they're a little bit different in terms of how the commission structure works and will get shared by whom. You typically though have the same type of players involved. We think just back to that sort of where we're starting -- sorry, starting point, we think we're somewhere around 20% penetration in terms of listings. So really early days. And the further growth here will be underpinned by a continuous natural path towards digitalization going online, et cetera. And of course, we're there to fuel it and build an even better product. Again, our product today is essentially an extension of our residential platform. So we think there's opportunity to obviously optimize that and go much deeper on the particular needs in the market. And the second piece is around data. So it's not just a -- sorry, a different type of data in terms of the listings information, et cetera. But data, particularly on the transactional side, is paramount, right? So there's a lot around yield, how the geography is doing, what kind of floorplates you have, [ dilapidation ], blah, blah, blah, all these different things, right? What kind of improvements you can do and what kind of yields you can get out of that. And again, we are a data-rich business. So over time, building out that -- those data sets also for the commercial sector is absolutely an opportunity. Of course, in the commercial sector, you also have a lot of the green transition, perhaps even a little bit ahead of the consumer market. Why? Well, it's a leverage industry. Follow the money as usual is a good tip. And there is a distinction now in terms of financing costs, whether you have the right credentials or not. That's just going to accelerate. So I think also that is an opportunity to play for us, and we already do produce and sell data services towards the interest in the commercial market, but a pretty small scale right now. So a little bit of flavor, hopefully, on that one and more to come.

On the revenue model, is it per listing at the moment or subscription base like residential?

It's almost identical to residential. So again, subscription-based, package based. The ARPAs are not hugely dissimilar, a bit lower right now in commercial. ARPA is about GBP 800 to GBP 900 or so across roughly 800 or so customers. Clearly, as we create better, more effective, more bespoke products, our ability not just to increase our penetration across the agent base, but to charge more for those products as well.

Giles, Jefferies.