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ZPG gains ground on all fronts

Interest in ZPG's expanding digital platform base has boosted traffic to record levels
May 24, 2017

ZPG (ZPG), formerly known as Zoopla, has been busy in the six months to March 2017 building on its customer offering through its digital platforms, which include Zoopla, uSwitch, PrimeLocation and recent acquisitions Hometrack and Expert Agent.

IC TIP: Hold at 375.1p

The sum total of all this meant that traffic to the company's websites rose to a record of over 314m visitors, of which two-thirds came via mobile applications. Adjusted cash profits were ahead by 11 per cent at £45m, while headline profits were lower, reflecting a 30 per cent jump in operating costs to £72.9m - mainly exceptional expenses and amortisation of intangible assets arising on acquisitions.

Even so, the cash conversion ratio remained extremely strong at 90 per cent, and average revenue per property partner grew by 5 per cent. Unique property partner numbers rose by 4 per cent on a like-for-like basis and, within this, UK agency portal partners grew by 6 per cent to 14,271, including 750 portal branches won back.

On the comparison website side, higher levels of switching between utility suppliers helped consumers save an estimated £137m and, against a strong comparative, revenue grew by 8 per cent. Revenue in the property division increased by 44 per cent to £55.8m, helped by the inclusion of a full six months trading from Property Software Group.

Analysts at Panmure Gordon are forecasting adjusted pre-tax profits for the year to September 2017 of £78.9m and EPS of 14.6p (from £65.1m and 12.5p in 2016).

ZPG (ZPG)
ORD PRICE:375.1pMARKET VALUE:£1.65bn
TOUCH:375-375.9p12-MONTH HIGH:401pLOW: 226p
DIVIDEND YIELD:1.5%PE RATIO:51
NET ASSET VALUE:51p*NET DEBT:94%

Half-year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20169628.15.51.5
201711822.54.01.9
% change+22-20-27+27

Ex-div: 1 Jun

Payment: 23 Jun

*Includes intangible assets of £492m, or 112p a share