Yahoo Finance Zoopla reports record revenues but acquisitions spree hurts profits
Despite a slowing housing market, property portal Zoopla's parent company has reported record revenues and hits on its website, but profits fell as a result of the series of acquisitions it has made in the last year.
ZPG said its revenue increased 22pc to £117.9m in the six months to March 31 from £96.4m during the same period last year, while its pre-tax profits slumped by 20pc to £22.5m from £28.1m.
The company, which has styled itself as a "consumer champion" helping customers at every stage of the home-buying process, snapped up analytics firm Hometrack, which sells data to mortgage lenders, earlier this year.
It also splurged on a series of "proptech" companies, including Landbay, which offers peer-to-peer lending, and Trussle, an online mortgage broker. It also owns the PrimeLocation portal and uSwitch, a comparison site.
ZPG's Ebitda (earnings before interest, tax, depreciation and amortisation) rose 11pc to £45m from £40.5m.
While estate agents are suffering due to lower levels of sales and buyer inquiries, portals such as Zoopla are growing, partly due to increasing demand from renters.
Alex Chesterman, chief executive of ZPG, said: "The housing market is going through a short-term period of sluggishness; I don't see this as a long-term issue. The last half of last year was difficult, the first half was too and I expect to move out of that, with greater supply and demand as the year goes on."
He added: "We are hedged across the property market - we aren't affected by house prices - we are across sales and rentals, and diversified across marketing, data, software, energy switching. As a business we are quite well insulated from a short term blip".
It has recently invested in Zero Deposit, a start-up to help "alleviate the burden" of saving for a rental deposit. He added: "I believe we are moving into a market in five years where tenants' deposits will be a thing of the past."
Zoopla also reported a record number of site visits, and has seen a 6pc increase in the number of estate agents paying for its services and a 9pc increase in listings, as customers are returning to it from rival On The Market. Anthony Codling, an analyst at Jefferies, said that it was also benefitting from Rightmove's decision to increase listing prices for customers.
He added: "We admire ZPG's ability to remain fresh, driven and energized. Others may win prizes for innovation, but Zoopla continues to invest in new businesses thereby developing talent and extending its own appeal."
