ZPG (ZPG), owner of real estate website Zoopla, has been in acquisitive mode in the period under review. Four purchases helped diversify revenue streams and enhance cross-selling opportunities across its price comparison and property website stable. This is evidenced by Zoopla delivering more than a quarter of mortgage traffic to the group’s uSwitch platform. Even so, acquisition-related costs meant the strong sales momentum didn't automatically translate into enhanced earnings, although adjusted cash profits increased by 25 per cent to £96.4m – a solid result.
Acquisitions continued after the period end. Money.co.uk, a finance comparison website, cost the group £80m – possibly rising to £140m depending on performance. And to coincide with these results ZPG announced the purchase of Netherlands-based Calcasa for €30m (£26.5m), again with a contingent element that could take the final commitment to €80m. This creates the largest residential property valuation database in Europe, while building on recently acquired Hometrack’s success in the UK and Australia.
Trading was strong across both divisions. Property revenues rose by 41 per cent to £122m. Product cross-selling drove annual revenue per property partner up 5 per cent to £358. Meanwhile, the comparison segment saved customers more than £400m in household bills, thanks to heightened switching activity. Sales here rose by 10 per cent.
Prior to the two recent acquisitions, analysts at Numis had forecast pre-tax profits of £95.1m and EPS of 17.3p for the year to September 2018 (up from £79.9m and 14.5p in FY2017).
| ZPG (ZPG) | ||||
| ORD PRICE: | 320p | MARKET VALUE: | £1.41bn | |
| TOUCH: | 319-320p | 12-MONTH HIGH: | 401p | LOW: 306p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 36 | |
| NET ASSET VALUE: | 55p* | NET DEBT: | 80% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 64.5 | 28.3 | 5.4 | nil |
| 2014 | 80.2 | 28.7 | 5.1 | 1.1 |
| 2015 | 108 | 33.6 | 6.2 | 3.5 |
| 2016 | 198 | 46.2 | 8.9 | 5.2 |
| 2017** | 245 | 48.1 | 8.8 | 5.7 |
| % change | +24 | +4 | -1 | +10 |
| Ex-div: | 07 Dec | |||
| Payment: | 08 Feb | |||
| *Includes intangible assets of £491m, or 112p a share **ZPG changed its name from Zoopla in Feb 2017 | ||||
