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ZPG first-half earnings up 41% ahead of takeover
Zoopla, USwitch and PrimeLocation owner ZPG, which recently agreed to a £2.2bn takeover by US private equity firm Silver Lake, reported a 41% rise in adjusted first-half earnings on Wednesday.
In the six months to the end of March, adjusted earnings before interest, taxes, depreciation and amortisation increased to £63.4m from £45m as revenue grew 33% to £156.9m.
Revenue from the property business was up 34% to £74.9m thanks to acquisitions and a strong performance across all verticals, while revenue in the comparison business was 32% higher at £82m. During the half, the number of UK agents advertising across ZPG's property platform increased by 7% to 15,264, including around 1,350 win-backs to date, and its inventory grew by 6% to over 982,000 listings.
The company said it has decided not to declare an interim dividend due to the Silver Lake offer.
Founder and chief executive Alex Chesterman said: "We continue to grow our consumer engagement and to lead innovation with the launch of new tools across our platforms, helping our consumers to make smarter property and household-related decisions and our partners to operate more effectively.
"Our property division performed well across each vertical, helped by demand for additional products, cross-sell and new contract wins, including the continued return of agents to our portals. Our comparison division also performed well with leads up across each vertical. Energy had an exceptionally strong first half as a result of ongoing optimisation of the consumer journey and extreme weather during the period prompting increased switching levels."
Chesterman added that he was excited about the prospect of working with Silver Lake and the opportunity this offers to ZPG's employees, consumers and partners.
ZPG said it had enjoyed a good start to the second half of the year across both divisions, with a strong cross-sell pipeline for its products in the property business, while the comparison division continues to trade well despite seasonally lower switching volumes in the energy vertical during the warmer months.
Shore Capital said it remains positive on ZPG's potential as a beneficiary of growth in both switching activity and digital property advertising and sees strong earnings per share upside potential as it links these operations to drive cross-selling, competitive advantage, and deliver a comprehensive offering to consumers.
"That said, the company's trading performance and prospects have been eclipsed in valuation terms by this month's 490p per share offer from the US-based private equity house Silver Lake Management (total value circa £2.2bn)."
"We regard this as an attractive offer for equity holders," it added.
At 0920 BST, the shares were up 0.1% to 489.27p.