12 August 2015 ZOOPLA PROPERTY GROUP PLC - TRADING UPDATE UK Agency membership returns to growth, with a net increase of 213 branches Listings inventory continues to grow, up 7% from 828,000 to 882,000 properties business (uswitch) is trading well, following acquisition Management remains confident of delivering Group full year results in line with expectations Alex Chesterman, Founder & CEO, commits to continue leading the Group and its growth strategy Zoopla Property Group Plc (LSE:ZPLA) (the Group ) announces a trading update for the period 1 April 2015 to 31 July 2015 (the Period ). UK Agency membership returned to growth, with the Group adding 213 net new branches since we last provided an update on our member number for April, taking total UK Agency members to 12,556 as at the end of the Period. Management is encouraged by the reduction in churn and return to growth of the UK Agency business, combined with the strong performance of its members who continue to grow their listings. The Group had 2,672 new home development members, 684 overseas members and 219 commercial members taking the total number of members at the end of the Period to 16,131. Listings inventory continued to grow over the Period, up 7% from 828,000 to 882,000 as at 31 July 2015. Traffic to the platform remained strong with 45.6m average monthly visits during the Period and with Zoopla remaining one of the UK s most visited websites. Mobile devices accounted for over 60% of visits during the Period, up 11% over last year, as we continue to expand and optimise our mobile content. The Group has continued to innovate and develop further tools and services to help consumers in the property market and drive greater value to our members. Improvements to our unique appraisal leads tool resulted in the Group sending record numbers of appraisal leads to members, up 103% over the same period last year and helping our members win more business. Additionally, the recent launch of our Find a Pro tool will help consumers find relevant professionals and local tradesmen for their property projects and further increase user engagement with our platform. The Group completed the acquisition of uswitch on 1 June 2015 and the business is trading well. As the #1 price comparison website ( PCW ) in the UK for home services switching (energy and communications), uswitch continues its mission to help consumers find the best deals and save money on their household bills. During the Period, uswitch exclusively launched a collective switch, with the cheapest dual fuel deal available on the market in over four years, empowering consumers to save an average of 419 off their annual energy bills. Energy continues to benefit from uswitch s market-leading position, structural growth in the switching market and the supportive regulatory environment. In July the CMA presented the provisional findings of its investigation into the UK energy market concluding that significant gains from switching continue to go unexploited by consumers and that PCWs can significantly reduce search and switching costs. The Government has also pledged to speed up the time it takes for consumers to switch by introducing 24-hour energy switching in the next three years. Communications has performed particularly well driven by highly competitive consumer deals in broadband and mobile. The business continues to build-out and develop further products in its nascent financial services vertical.
Founder & CEO The Board is pleased to announce that it has secured the long term commitment of Alex Chesterman, Founder & CEO, to continue to lead the business over the next few years, working to achieve the significant long-term growth potential of the Group. The Board is proposing some changes to Alex s remuneration, principally the introduction of a Value Creation Plan ( VCP ) in order to appropriately incentivise and reward his continued substantial contribution to the performance of the Group and to deliver the Group s ongoing growth strategy. The key terms of the proposed VCP can be found in the Appendix below. The Board has commenced a consultation process with regard to the proposed changes with key shareholders and has already received indications of support from a majority of the Group s shareholders. A notice will be sent to all shareholders convening a General Meeting of the Company to approve the proposed VCP in the comings weeks. Alex has further been granted authority by the Chairman to sell up to a maximum of 4.25 million shares, representing c.1% of the Group s issued share capital, over the coming months to settle personal tax and other liabilities. The balance of Alex s holding will be subject to a further lock-up which will be released after the close of trading on the second anniversary of the Group s admission to trading on the London Stock Exchange (23 June 2016). Group KPIs The Group s key performance indicators ( KPIs ) have been updated to incorporate the successful acquisition of uswitch. Full details of the historic pro forma financials and KPIs for the Group can be found in the Appendix. The figures in the Appendix are for the 18 month period from 1 October 2013 to 31 March 2015. They do not cover the current Period. Current trading and outlook Since the end of the Period, the Group continues to see UK Agency churn returning towards more normal historic levels and an increase in the number of new and returning member enquiries. Management remains confident of delivering full-year results in line with the Board s expectations. Our next trading statement will be a post-close update on 22 October 2015 ahead of our full year 2015 results on 2 December 2015. Alex Chesterman, Founder & CEO of Zoopla Property Group Plc said, We are very pleased that over the past few months of trading we have returned to growth in our number of UK Agency members. Our huge audience of property-interested consumers remains loyal and engaged and our members are enjoying strong performance and a competitive advantage in terms of both brand exposure and leads generated via our platform. With the acquisition of uswitch now complete and the business performing well, we are focused on developing our combined services to provide consumers with a single resource for all their property needs which will serve to further enhance our user engagement and create a greater competitive advantage for our advertisers. We have come a long way since our launch just 7 years ago, but there still remains so much more to do that I am incredibly excited about. I am delighted to be able to fully commit to ZPG for the long-term and deliver the growth strategy of the Group." Mike Evans, Chairman of Zoopla Property Group Plc commented We are delighted that Alex has committed to the business for the foreseeable future. His entrepreneurial and creative approach has been the driving force behind the growth of the business over the last few years and we believe will be instrumental in delivering enhanced shareholder value over the long-term. Analyst conference call at 8.30am. Dial-in details as follows: UK Toll Number: 020 3139 4830 UK Toll-Free Number: 0808 237 0030 PIN: 66819699 For further information, please contact: Zoopla Property Group Plc Lawrence Hall, Head of Communications lawrence.hall@zpg.co.uk / 07890 078 945 Rachael Malcolm, Head of Investor Relations rachael.malcolm@zpg.co.uk / 07774 671 082 Maitland James Isola 020 7379 5151
Appendix 1 - Unaudited Historical Pro Forma Principal Financial Metrics and KPIs for the Enlarged Group The following unaudited historical pro forma financials have been prepared to show the consolidated position of the Enlarged Group as if the acquisition of uswitch had taken place on 30 September 2013. The figures below are for the 18 month period from 1 October 2013 to 31 March 2015. They do not cover the current Period. As the business continues to evolve and the earn-out period ends we will assess the relevance of splitting out Adjusted EBITDA for and. Pro Forma Financials m Six months to 31 March 2015 Six months to YoY Six months to 31 March 2014 1 30 Sept 2014 Twelve months to 30 Sept 2014 Agency 31.2 30.0 4% 33.0 63.0 Developer 5.5 4.0 38% 4.5 8.5 Other 2 5.3 4.3 23% 4.4 8.7 Total Revenue 42.0 38.3 10% 41.9 80.2 Energy 3 18.5 22.7 (19%) 12.9 35.6 Communications 4 16.6 13.5 23% 13.7 27.2 Other 5 4.4 2.2 100% 3.3 5.5 Total Revenue 39.5 38.4 3% 29.9 68.3 Total Group Revenue 81.5 76.7 6% 71.8 148.5 Staff Costs 7.6 5.8 31% 6.9 12.8 Other Costs 6 13.0 13.8 (6%) 14.2 27.9 Total Operating Costs 20.6 19.6 5% 21.1 40.6 Total Adj EBITDA 21.4 18.7 14% 20.8 39.6 Staff Costs 5.4 4.9 10% 4.5 9.4 Other Costs 6 23.6 20.7 14% 17.3 38.0 Total Operating Costs 29.0 25.6 13% 21.7 47.3 Adj EBITDA 10.5 12.8 (18%) 8.2 21.0 Adj Group EBITDA 31.9 31.5 1% 29.0 60.6 As a result of the successful acquisition of uswitch, the Group s KPIs have been updated. In addition to the existing Property Services KPIs, the Group will report Total Number of Transactions and ARPT (Average Revenue per Transaction) to measure the performance of the business. We will also give an overview of the total volume of switching and market share across the business. Six months to 31 Six months to YoY Six months to Twelve months to KPIs March 2015 March 2014 1 30 Sept 2014 30 Sept 2014 Group visits (m) 292.4 273.3 8% 296.5 569.8 Leads (m) - - - - 29.2 Listings (m) - - - - 1.1 Property Advertisers Agency 12,449 16,261 (23%) 16,373 16,373 Developer 2,781 2,626 6% 2,715 2,715 Overseas 664 352 89% 575 575 Commercial 182 - - - - Total number of Property Advertisers 16,076 19,239 (16%) 19,663 19,663 ARPA (Average Revenue Per Advertiser) Agency 353 311 13% 334 323 Developer 332 253 31% 286 270 Overseas 148 143 4% 135 139 Commercial 93 - - - - Total number of Transactions 7 (000's) 11,829 9,264 28% 9,064 18,328 ARPT 8 (Average Revenue Per Transaction) 3.34 4.13 (19%) 3.31 3.72 1 The business benefited from the impact of energy supplier price rises in September 2013. This equated to a c. 9m increase in Energy Revenue and a c. 5m increase in Adjusted EBITDA during the six months to March 2014. 2 Other includes revenue from advertising, marketing services, data sales, overseas and commercial property 3 Energy includes revenue from gas & electricity switching 4 Communications includes revenue from mobile, broadband, pay TV & home phone switching 5 Other includes revenue from financial services switching, boiler cover, business energy and data insight 6 Other Costs includes marketing, technology, property and administrative costs 7 Total Number of Transactions The Group measures transactions at the point when a consumer completes an application form hosted on the Group's website or at the point in time when the customer leaves the Group's website having clicked through to a third party website. 8 ARPT (Average Revenue per Transaction) Average Revenue per Transaction is the revenue from energy switching, communications switching, financial services switching, boiler cover, business energy and data insight divided by the total number of transactions during the month, measured as a monthly average over the period
Appendix 2 Proposed Value Creation Plan ( VCP ) The key terms of the proposed VCP are as follows: 8% minimum total shareholder return p.a. before any benefit accrues to the CEO; Value of shares earned for achieving 8% p.a. capped at 5 million until the total shareholder return exceeds 9.4% p.a.; The CEO will be able to earn nil cost options equal to 3% of the value of the total shareholder returns above the minimum 8% p.a. total shareholder return; Maximum number of shares that can be earned under the VCP is capped at 7.5 million; Value banked annually in the form of nil cost options; 50% of the cumulative balance of options can be exercised at the end of 3 years with 100% of the cumulative balance exercisable at the end of 4 years (provided that at each vesting date the minimum 8% return p.a. has been achieved); The minimum return of 8% p.a. has to be maintained over the VCP period or earned nil cost options will lapse; Market standard malus and clawback, cessation of employment and change of control terms and conditions will apply; The Value Creation Plan will replace the CEO s existing LTIP scheme. Full details of the terms and conditions of the VCP will be published in the General Meeting notice to approve the proposed plan which will be sent to shareholders in the coming weeks.
About Zoopla Property Group (www.zpg.co.uk) Zoopla Property Group Plc (LSE:ZPLA) is a digital media business that owns and operates some of the UK's most widely recognised and trusted online brands including Zoopla, uswitch, PrimeLocation, SmartNewHomes and HomesOverseas. Our mission is to provide the most useful resources for consumers and be the most effective marketing partner and lead generation engine for professionals in the property space. We help our users to research, find and manage their home. Each of our brands has a distinct market position attracting a unique audience and allowing us to deliver unrivalled exposure and leads for our partners. Our websites and mobile apps attract over 50 million visits per month, generating over 2 million leads per month for our partners. Zoopla is the UK's most comprehensive property website, empowering consumers to make smarter property decisions, by helping them to research the market and find their next home by combining hundreds of thousands of property listings with market data and local information. uswitch is the UK s leading comparison website and lead generation engine for home services switching, helping consumers to find the best deal and save money on their gas, electricity, broadband, TV, phone and personal finance products. In 2014, uswitch saved UK consumers over 112m on their energy bills alone. PrimeLocation is one of the UK's leading property websites, helping house-hunters in the middle and upper tiers of the market explore and find their dream home from the top estate and letting agents. SmartNewHomes is the UK's leading website exclusively for new build properties and lists new developments available for sale from all the leading UK housebuilders. Zoopla Property Group Plc was founded in 2007 and has a highly-experienced management team, led by Founder & CEO, Alex Chesterman.