Acquisitions boost ZPG to solid full-year numbers

Home-related digital platforms operator ZPG posted a 24% improvement in revenue in its full-year results on Wednesday, as it recorded record traffic of 648 million visits to its platform, generating another record of more than 56 million partner leads.

The FTSE 250 company said its adjusted EBITDA was ahead 25% at £96,4m, while adjusted basic earnings per share were 15.2p for the year to 30 September - a 20% rise year-on-year.

Statutory profit for the year stood at £37.4m, up 2% on the prior year, while basic earnings per share slipped 1% to 8.8p.

The board confirmed a full-year dividend of 5.7p, 10% higher that the 2016 financial year.

“We are delighted to have delivered another year of record performance across the business as we continued to provide increased transparency to our consumers and efficiency to our partners,” said founder and CEO of ZPG, Alex Chesterman.

On the operational front, ZPG said it saw “materially enhanced” revenue diversification and cross-sell opportunities as a result of its acquisitions during the period.

It said its new ‘Zoopla MovePlanner’ tool generated more than 10,000 leads per month for comparison partners, while its continued marketing investment in new national campaigns resulted in record brand awareness.

Net debt increased to £191.5m from £146.5m at the end of the prior year, as a result of further strategic acquisitions in the period, although the company said it continued to be “highly cash generative” with a strong cash conversion ratio of over 88%, compared to 81% a year earlier.

In its property division, revenue was up 41% to £122.3m, which the board said was driven by “strong” underlying performance and acquisitions.

Its total number of unique partners - including acquisitions - was up 12% to 24,9628 as at the end of the period.

UK agency partners and inventory was up 6% and 5% respectively to 14,775 branches and 969,000 listings for the year.

Average revenue per partner - including acquisitions - was up by 5% to £358, due to the success of additional product cross-sell, the board explained, while the average number of products per partner now stood at 1.4, up 27% from the same time last period.

The board also reported more than £1m in additional referral fees generated for its partners so far, through the MoveIT platform.

“Our property division performed very well driven by strong demand for our additional products, further migration of our software partners to cloud-based products and a continuation of returning portal partners,” said Alex Chesterman.

“We significantly enhanced the partner cross-sell opportunity with the successful integration of our acquisitions in website, software, data and print products and saw the average number of products per partner increase by 27% over the period.”

In the comparison unit, the board reported “strong” switching levels across all verticals with revenue up 10% to £122.2m over the period.

The firm said it generated 34.3 million leads in the year, reportedly helping consumers save more than £400m off their household bills.

Account sign-ups were up 60% to 1.9 million, with average leads per consumer account rising 6% to 1.3.

Traffic to the uSwitch brand was ahead 14% year-on-year, with unpaid traffic now accounting for the majority of site visits.

Zoopla delivered more than 25% of mortgage traffic to uSwitch, which the board said demonstrated the cross-sell opportunity.

The company’s board added that its proposition was “significantly enhanced” with the acquisition of Money following the end of the period.

“Our comparison division experienced strong levels of switching across all verticals, helping consumers save over £400m off their household bills during the period,” Alex Chesterman explained.

“Energy continued to benefit from returning switchers on fixed term deals and supplier price rises, resulting in a record of over a million energy switches over a 12-month period.

“Our acquisition of Money, following the end of the period, has further diversified our revenues and enhanced the consumer cross-sell opportunity with market-leading products now in energy, communications and finance.”

Chesterman said that looking ahead, the board was “very excited” by both the underlying growth opportunities in each division and the “unique and unrivalled” cross-sell opportunities ZPG had created as it continued on its mission to be the platform of choice for consumers and partners engaged in property and household decisions.

“We are also pleased to announce today the acquisition of Calcasa, the leading provider of automated property valuations and statistical market analysis in the Netherlands, which further enhances our data capabilities, product portfolio and partner relationships,” commented Alex Chesterman, referring to the company’s separately-announced acquisition on Wednesday.