Zoopla published its share prospectus yesterday afternoon – and it specifically acknowledges Agents’ Mutual as a possible threat.
It warns prospective shareholders that Agents’ Mutual members could terminate their Zoopla subscriptions.
Zoopla confirmed that its ‘member offer’ is open to agents that list on the site, offering them a 20% discount per office.
Agents will have to act quickly. Application forms will go out to them within the next few days and have to be returned by next Friday, June 13, if they want to take up the offer.
Official dealing on the stock market is expected to start on June 24.
Each Zoopla member will be able to buy up to £2,500 shares per branch now, and the same again next year if they continue to advertise on Zoopla.
Zoopla CEO Alex Chesterman said: “This offer equates to a £20m discount and is a great way of thanking our members for their loyalty and support.”
In the prospectus inviting institutional investment, Zoopla had to fill in a section disclosing risks.
It says: “If property professionals do not continue to subscribe to the Group’s services or the Group is unable to attract new members, the Group’s subscription revenues would decrease.”
It goes on: “The Group participates in a competitive market and may be unable to compete successfully against existing or future competitors such as Agents’ Mutual . . .”
Later in the prospectus it elaborates on this, explaining the “one other portal advertising rule” employed by Agents’ Mutual.
The Zoopla prospectus says: “Since Agents’ Mutual has yet to launch, it is not possible to assess its potential impact on the Group’s business; however, if it successfully launches with its proposed restrictive advertising provision, a portion of the Group’s existing members may terminate their subscriptions with the Group, which could materially adversely impact the Group’s business, results of operations, financial condition or prospects.”
By comparison, the prospectus makes very little mention of Rightmove, although it does acknowledge Rightmove as its “primary competitor”.
No mention is made in the prospectus of any plans to list private for sale or rent properties.
However, according to the prospectus, Zoopla attracts “a largely unique and distinct audience from Rightmove”.
The prospectus also notes that if agents do not take up their shares, it is expected that these would be sold to institutional investors.
The prospectus lists the existing shareholders, their current holdings, and the shares they would sell and the stakes they would retain.
Chesterman would cut his stake from 8.1% to 4.5%; DMG Media (the Daily Mail) would cut its stake from 52.1% to 28.6% – possibly not a large enough reduction to satisfy some City analysts; Countrywide would cut its stake from 6.2% to 3.4%; Connells would reduce its holding from 5% to 2.7%; and LSL would cut its 5% holding to 2.8%.
According to the prospectus, the large majority of agents in the UK are independents.
It estimates that, as of last year, there are 18,500 estate and letting agents in the UK, with the top ten chains accounting for only 14% of all agency branches. Of the 18,500 agency branches, Zoopla said it has 16,261 as at the end of March.
Shares are expected to start trading at between 200p and 250p, implying a valuation of between £835m and £1.04bn. By comparison, Rightmove is worth around double, at £2bn.
The full pricing and prospectus can be seen here:
Comments (63)
'White Knight' – two posts; two quotes
"Let's hope the independent agents nationwide have finally woken up to the fact that the portal sector truly is no more than 'the emperor's new clothes'."
"Dear Fellow Agents
I hope like me you will galvanize behind AM."
Reads to me like you haven't completely woken up to your own theory…
……..Or been persuaded by pro AM comments to the point where he/she has realised it is the way forward for proffessional agents?
Hi wilko
"……..Or been persuaded by pro AM comments to the point where he/she has realised it is the way forward for proffessional agents?"
Quote 1 – 6 June @ 7.51am
Quote 2 – 6 June @ 8.49am
I SERIOUSLY doubt, therefore, your optimism that in a mere 58 minutes you converted another to your cause… 😉
And back at their desk 6am Sunday to start the working week? I have always been the same and get in terrible strife from the CHO //} but that is what happens, as many of you will know, when starting or running a business without the luxury of salaried wage packet.
I know Ros Renshaw was working late Friday, early Saturday and very possibly a fair chunk of today to get stories ready for 0630 Monday so If I can keep up with her commitment to the industry I will be doing well.
George, an Estate Agent in Devon got a call from the DWP, someone had claimed he was not paying proper wages to his negs and it had to be investigated.
'I need a list of your employees and how much you pay them' demanded the official.
'Well,' replied George, 'There's my senior neg who's been with me for 3 years. I pay him £400 a week plus a company car and I pay to have his shoes re–heeled every 6 weeks. (have you noticed how many pairs of shoes you wear out as an agent). The secretary has been here for 18 months, I pay her £250 a week and turn a blind eye to her Facebooking and texting her mates when we are not busy. Then there's the half-wit who I make work 18 hours every day and who does 90% of all the work. He makes about £10 a week, pays for everything but I do buy him a bottle of whiskey every week.'
'That's the guy I want to talk to, the half-wit,' says the official.
'That would be me,' replied George.
Is there an orchestrated campaign of fear going on here? I have to say and I am sure you will correct me if I am wrong but all of a sudden the Agents Mutual campaign has been stepped up a notch or so too far.
If this is an concerted attempt to frighten Agents into joining? I will say that it one of the most un-subtle sales campaigns I have ever encountered. Whether or not some of the posts on here today are authorised or simply over enthusiastic mavericks, it is headed towards bullying. Surely as agents who have endured 7 years of such unfair treatment you would understand the alienation you are likely to engender.
No hidden agendas here…..if you look at the posts going back months and months about this subject you will see how the tide of opinion has really changed and many who thought AM wouldn't work have changed their minds. No one is saying that anyone has to join…..in fact I'm looking forward to having a competitive edge against the main portal duopolist agents in my areas…..before they choose to come on board. Most people who have backed AM are very enthusiastic….but mavericks? or bullies?
…..you really are barking up the wrong tree.
I don't think I am, as a result of that last post I have been sent the Agent Mutual presentation with a simple note saying Spot on! we felt we were being intimidated into joining , the pricing structure is weighted in favour of multiple branch offices, those who can invest and commit for 5 years, as a small independent we can't , the price is much the same as the cost of Zoopla there is no saving in costs.
By Mavericks I am referring to people who are over zealous in their enthusiasm and might not be posting with the same degree of restraint as other have up till now. Iif you read that post from JWVW without rose coloured specs it is designed to spread fear, even if it is just by capitalising one word.
Wilko I am on your side whether I am wanted or not, I am concerned that your loose canon posters might actually do more harm than good with a target audience that might not appreciate a disturbance sell.
I am quite happy to work with the agents in affinity groups; Team, Property sharing experts, INEA and other small multi listing groups that join together to stave off competition from corporate agency. I am happy to work with the franchise groups and I am happy provide the small independents who won’t quite be as equal as they had hoped. In fact I am happy to work with anyone who likes the idea of Agent Mutual but can’t for whatever reason come to terms with the commitment or restrictions of membership.
"In fact I am happy to work with anyone who likes the idea of Agent Mutual but can’t for whatever reason come to terms with the commitment or restrictions of membership."
This comment is a complete oxymoron as one of the main reasons everyone has signed up and put their money in is because of the restrictions in the membership.
Sorry Wilko , my fault for clarity I should have said like the ideas of Agents Mutual, controlling portal subscriptions. In my head the sentence is clear but I can see how you would believe everyone thinks restricting the number of portals is the main aim.
Actually this lunchtime I was talking to an Agent who will not join Agents mutual because of the portal restriction and for some reason he is required to pay 25% more than his near neighbour because of the economies of scale savings built into the pricing model.
"Is there an orchestrated campaign of fear going on here?"
No just people who believe in Agents Mutual, are 100% behind it and WILL make this venture work. We have all (mostly) had enough with Zoopla and Rightmove. The reason for the "enthusiasm" is that this thread is about Zoopla trying to counter AM with a ridiculous share offer to try and nullify the threat and impending disaster looing in January. People are not stupid and can see what's going on, hence why 1000's can't wait to jump ship in January and join an agent owned portal that will not adhere to it's ever demanding share holders.
see above Paul. It will be real easy to have all 2000+ members chiming in on here but with every respect it has to be done with considered restraint other wise the enthusiasm gets a bit too much.
Without a doubt Mr Chesterman and A&N media are trying to buy an inflated valuation but instead of ripping that to shreds the posts have been strong off topic AM promotion. You guys have got the momentum, you really don't need to be pushing quite so hard.
Hurrah. Well said Paul H. Anyway, sod work. Its sunny, its Friday and its beer o'clock.
"Anyway, sod work. Its sunny, its Friday and its beer o'clock."
JWVW gets my vote for comment of the week with this.
I wonder how many others were still working 6 hours after beer o'clock just to make sure they didn't miss the targets they set themselves?
Just been informed AM will be charging us £500 pcm for our single office. Seems a bit steep to me.
I think you will find that the aim is to get the cost DOWN to around £250-£300 pcm per branch once the site is established and all the pro agents are on board we all have to pay a bit extra to get the marketing out there early doors.
Hi wilko
" think you will find that the aim is to get the cost DOWN to around £250-£300 pcm per branch…"
I think the word you should have caps locked there is "AIM", matey.
Marketing? I'm sorry – I thought that AM was simply going to appear and "there – job's a good'un".
Did RM charge more in the early days to get started then settle down. Is that what they told their new business prospects was their 'AIM'?
The running cost of a portal such as Rightzoop can be around £30m per year.
Only 10,000 agents paying £250 per month (on average) will cover that cost.
Rightmove now have share holders to adhere to, the whole AM proposal is built around not letting another Rightzoop take control of the industry.
"The running cost of a portal such as Rightzoop can be around £30m per year.
Only 10,000 agents paying £250 per month (on average) will cover that cost."
And, say, 3000 would be how much…?
Or what if you top out at around the current take up – how much THEN per branch?
And, mores to the point – FOR WHAT?
Agents – wake up and smell the roses (variety Portalis Quidus Inus). The game is over. The two main portals will now be plc's. The entrepreneurs have filled their boots, and now the shareholders will want better returns every year. YOU will pay them. Why not pay and own your own portal where all the profit will benefit you. AM hopes to do that. There are risks in business, and AM is worth a punt in my opinion.
We are already AM members,the model is very different from Primelocation and is one agent one vote regardless of size.The move for us is not purely about AM or support for Ian Springett.
The Independent Estate Agents nationwide control the inventory that sits on the major portals,in reality we create their value.Without us and the millions of pounds we risk each year ( no sale no fee ) neither Rightmove or Zoopla would exist.We as a company do not feel dependent on either of the big two and as we look more closely at where our leads really come from and why people invite us to value their homes our confidence grows and we look forward to moving away from the annual RM meetings!!
Finally with regards to Ian Springett's pedigree, we would certainly vote him 'best of breed ' !
White Knight
Surely there is just one winner here, and that is Mr Springett? Agents up and down the country are chucking money at a tech, who currently has no product. I'm all for an alternative, but I still can't see any substance.
You won't see any substance yet – it hasn't launched!
You will be welcome on board after the launch as you ,and the remaining duopolists, dessert the sinking Z/RM ship.
El Conto….Wilko and other posters have shown you how there are already "winners". They have managed to negotiate fees with the duopoly and in particular Rightmove, something not achieved for years.
Paul H – Agreed, although the level of 'winning' in GBP is rather different!
Isn't that of any concern to anyone then Wilko, or am I missing the point? I guess it's a little like crowdfunding by agents for a portal that may work, but nobody has seen a product spec and I am not aware of what guarantees have been made by AM for the quality of experience for the end user. I compare this to the £50 I spent on Kickstarter for the new Elite; have just seen the beta, and it's rather good, but I was putting faith in the developer who had the pedigree. Does Mr Springett have the pedigree? I'm not sure what I think of Primelocation, it had no impact where I'm from, but I know that it was a must of you were based inside the M25. Who know hey?!
Dear Wilko
Very sensible strategy. We are talking to several substantial agents, like ourselves who are contemplating a more radical approach. I think the realisation is beginning to dawn on all our contemporaries that neither RM or Zoopla respect the fact that we control their inventory. For which our reward has just to have been charged more money year on year on year!
This market place has to change and is in our hands to reverse the tide.
White Knight
The exciting thing for me is how the project has moved so quickly. Also how, on it's journey, it has not only become a vehicle to keep portal fees down, but also the site of the "professional agent" bearing in mind they have categorically refused to accept "online listers" and "personal,private listings"….The public will appreciate the site as it will have "exclusive" listings that are not on both the other sites and that the listings will be of a high standard from professional agents.
Wilko – a very good point!
RM and Z offer great value for money, high-quality leads, and excellent customer support.
The smart money will wait to see whether AM can rival the level of service offered by RM and Z.
I was disappointed to learn that an ARLA backed portal will continue to allow non-members to list their property on a site they're helping promote.
Sorry Ed, this is the sort of comment that was being posted months and months ago-all the smart agents have moved on….just take a look at the posts on this subject over the past months. Smart money is ALREADY on AM ….over £6million. FACT is that next year over 500,000 houses will come onto the market and NOT be on Zoopla and Rightmove. Good luck if you choose to stay with the current duopoly….most professional agents are moving on to AM to get the next competitive edge.
It's a valid point. To date there's no branding, no domain, no marketing literature, and no details other than weak sales pitches and hot air being blown at us by Savills & co. We're talking about a seismic shift in agents' route to market, which will need to mobilise just about every sale and rental applicant in the country to have any real effect. Are AM going to change the industry overnight? The smart money is definitely, definitely on playing the waiting game, and my firms aren't ready to throw £2k each into a deep hole quite yet. If AM are right, and they DO become influential; we'll review our position.
I did learn that we'd all be able to retain our gumtree ads though; which is fantastic news, although it did come with a weird caveat suggesting that AM might reserve the right to restrict our campaigns across local portals in the event that they became a direct competitive threat to AM.
Anybody know how many offices they need on board before Jan 2015? And also how many they've signed up so far?
Got enough offices so far, circa 2,200 and rising.If a company hasn't launched it's not unusual to have not seen branding/domain and marketing The list of agents committed does tend to have quite strong firms in their local areas and without having done the exact maths it is a definate fact that around half a million properties will be advertised by AM agents on the new site in 2015 thats around 500,000 properties that WONT be on both Z and RM in the first year …..I would call that seismic….if you were looking for a house next year you would definately look on the site for fear that your dream property may be one of the 500,000…wouldn't you?. It is not a "hot air" situation any more ….it's real. I fully appreciate that some will want to hold back and "see" the product., after which I'm sure the balance of professional agents will want to sign up.
Alex Chesterman's figures seems flexible. A "£30m" discount to member agents is an increase on the £20m he quoted just the other day. It also means Zoopla have 60,000 offices feeding them data. Really? Not what the prospectus says.
Dear Fellow Agents
I hope like me you will galvanize behind AM. Assuming you have already or indeed intend to do so, which of Rightmove or Zoopla will you drop ?
Perhaps we should all consider being courageous enough to walk away from both !?
White Knight
Yep we are all getting behind AM now…those agents that remain on the main portals will be left behind.
RM have offered a reduction of approx 40% on my monthly branch fees so, even though they are slightly more expensive than Zoopla, I will stay with them (and AM) for 12 months after the launch of AM. I will plaster all my branches/vehicles/literature/details/cards/letterheads with the AM site logos and will not show ANY main portal logos on anything. It will be only mentioned (if needed) on valuations.
If all agents only actively promote AM site after the launch then I hope that after a year or 2 my branches will come off both.
Hi Wilko,
Can I ask how you got the 40% reduction from RM. Did you advise them that you are planning to drop them and ask for them to revise their fees?
Yes, I said to both that I was ditching them at year end and Zoopla said they couldn't shift any more from £235 per month per branch.
Rightmove came back with a much more competitive 12 month rate-from Jan 1st (approx 40% off per month per branch). As I have done the 12 month deal with them I don't think it is appropriate to post their fees here although, as I've said, it is slightly higher than the Zoopla quote.
I guess it depends on numbers of properties/branches etc as to what, if anything, they want to reduce but I would recommend wether you have 1 or 100s of offices you formally write to both giving notice that you want to quit from 31st December. See what responses you get. You have to appear be prepared to see the notice through with both but their response / offer for you to stay may help you choose which one you drop. I think, originally most AM were going to drop Zoopla and stay with RM, but things have moved on now and I would easily have dropped RM if they hadn't significantly reduced their fees.You need to explore this now as you don't want to be making up your mind in a hurry come November/December
Ta Wilko, some sound advise!
Hey Wilko, could you share how many branches you have and perhaps the letter from Rightmove?
Please can I request the opportunity of posting under my proper name for the benefit of open discussion rather than through the understandable cries of 'offside Ref' force me to use some anonymous moniker to make the same point?
I have an experienced opinion on this subject which I think will provide a balance between the thoughts on the Duopoly (Booo, Hiss/ Hoorah) and Agent’s Mutual (Hoorah). Obviously I have a commercial agenda. I have had the same agenda for the past 5 years, but it seems only fair that instead of the discussion just being about the commercial interests of Rightmove, Zoopla and Agents Mutual the interests of all stakeholders in the industry are given consideration.
If the feeling is I should refrain from posting I will respect that but I have to say the Agent audience of Property Industry Eye will be missing the opportunity of open discussion and challenge with one of those responsible for what is only a service industry to the property Industry.
My opening viewpoint is that it is fee erosion bought about by the use of the portals rather than the cost of the portals that should be the main subject of discussion. Without the requirement of restrictive commercial practice or onerous long term financial commitment I believe it is possible to provide agents with price control over what the EAT poster Trafford Mallory first highlighted as the Duopoly but moreover reverse what the @chap first outlined as a race to the bottom on fees.
"My opening viewpoint is that it is fee erosion bought about by the use of the portals rather than the cost of the portals that should be the main subject of discussion."
With respect, fee erosion (bought about by the portals) is established as fact. I'm not sure how/why that should be further discussed?
Due to computer technology – The printing industry now charges approx a third of what it charged 25 years ago, the music / recording industry is on it's knees as people pay peanuts or nothing for recorded music, 75% of book/magazine readers read online (often for free) killing publishers and printers and newspapers are becoming a thing of the past….I could go on. It is accepted that our fees will adjust downwards in the coming years, that is why the discussion has moved onto cost control of the portals and AM.
Can I take it from your reply I am OK to post Wilko?
Sorry, you've lost me on that one? This is a forum where people post viewpoints…..unless I'm missing something/have missed something?
Sorry Wilko some people might not want me posting and I wanted to check that my opinions, which might not be to everyone's liking are acceptable.
From the outset it needs to be clear that I am posting my opinion and not promoting my product. Although I do admit you might end up thinking I have a point and become interested to know more.
This established fact of life; fee erosion are you saying that because it has happened you are not interested in understanding the cause and aren't interested in reversing the trend? Without details of your company I can’t be specific but with a working knowledge of agents from Wick in the North to St Hellier in the South, Lowestoft in the East and St Mary’s in the West I can pretty much identify how much agents are giving away unnecessarily each year and the causes.
On another thread Hound posted some interesting details of his hybrid model and I really do think he is right to offer both traditional and online pricing models but from the figures he posted can see he is chopping about £300 off every deal he doesn’t need to.
You might be right that this isn’t a discussion for you but with a Portal fee of probably £1200 per month I am fairly sure Hound would like why I think the big two portals should be preserved to slug themselves into a frenzy in order to allow the Agency Mutual Affinity group to decide what is a fair pricing structure. The discussion really ought not to be about the £15,000 per annum total spend on internet advertising but about the £30,000 they have on average allowed to haemorrhage off their bottom line.
I'm not sure that we can blame "fee erosion" purely on the portals. Low fees and high valuations has been part and parcel of the weaker agents arsenal for as long as I can remember. Unfortunately, in a free market, we all have to fight for our place within it. Proposition, marketing and being able to passionately defend your firms fee strategy is all part of the cut and thrust of agency however some clients will always simply go for the cheapest in town. I for one do not set out my stall to compete with the bargain basement agents.
Well said. Its not which portal charges what amount. More to the point they encourage many agents to drop their fees.
"Its not which portal charges what amount. More to the point they encourage many agents to drop their fees"
Sorry, you have that one wrong in my view.
No portal has ever encouraged, told or suggested to me to reduce my fees.
The clients decide that-and only the clients.
To Robert May. "This established fact of life; fee erosion are you saying that because it has happened you are not interested in understanding the cause and aren't interested in reversing the trend?"
Sorry, but I didn't fully understand your post (perhaps, as I said before, I missed something previously) I have to say that unless someone is King Kanute there is NO way of reversing the trend that 80-90% of purchasers/vendors are now making their property decisions online.
Does that mean that fees are automatically reduced or eroded? depends what someone charged a few years back and what they are charging now. If you can reverse trends then you would be the next Bill Gates.
Sorry Wilko, with new posts at the bottom and replies posted anywhere it is easy to miss a post that needs a reply.
Can you please point to the evidence that supports your statement? Please bear in mind that I have actually worked in positions where I have had access to the marketing department’s two sets of stats. The internet is a great place to publish unchallengeable statistics that get virally used to support a common argument. It has suited both Rightmove and Zoopla to publish duplicate stats that supports the Duopoly’s position. How ironic that you are now quoting their propaganda at me.
I am neither King Canute nor Bill gates, but I am a chap who can both Sell property and who understands the technology that powers it, that almost unique combination of experience means I know where the lost revenue is being lost and how to stop it.
Yes Robert, my branch returns and registration to completion stats from our own office software have indicated that an average (to date this year) of just over 83% of all property enquiries (Vals and viewings) came from online portals/sources. Unless the buyers and sellers are lying, that is the evidence I have.
With respect 1/18000th of the possible sample does not mean the average is 80-90% so when ever a statistic is quoted it really ought to be qualified in terms of the data set. My sales director role, up against 50 or so totally unregulated competitors in a market of no more than 10,000 customers meant I had to keep a close eye on spurious facts and figures. If these are your figures that is fine but I have had my hands on data that shows the hits and time on site stats bear very little relationship to the number of people looking for property.
"No portal has ever encouraged, told or suggested to me to reduce my fees.
The clients decide that-and only the clients."
Sorry, wilko – bounce that one past me again, please…
Zoopla doesn't recognise Rightmove – Rightmove predicted to be a potential victim of dotcom bust. Yet both appear to be attempting a last ditch profiteering exercise by selling shares in advance of AM launch. Running scared? ?
" Yet both appear to be attempting a last ditch profiteering exercise by selling shares in advance of AM launch"
Great comment, very very acurate.
Let's hope the independent agents nationwide have finally woken up to the fact that the portal sector truly is no more than 'the emperor's new clothes'.
How has it even got to a stage where the duopoly have built businesses on inventory they have no control or commitment to and we the Estate Agents of the UK work 7 days a week from dawn and often till dusk to dutifully upload our stock! In return the portals that we effectively helped build charge us year on year more money with no justification, no thanks and no real incentive to us the members.
Without the rank and file of independent residential Estate Agents throughout the country both Rightmove and Zoopla will be standing naked. Not before time some will say !?
Probably because we are very competitive muppets. But totally agree.
Why would you want to leave Zoopla anyway? There fees are low, its Rightmove we need to ditch, they are ripping us off, stick with AM and Zoopla.
Could not agree more with this comment it is RM agents need to ditch. RM will get the message if enough agents choose them to ditch RM and not Zoopla.
Absolutely, Rightmove are the ones who have gone out of their way to rip us off. If there was a way all AM supporters could rally together to make the stand it would start to make a difference immediately over the greedy sods.
But there probably IS a way. I know a group of agents have formed an informal "marketing group" with a view to deciding which portal to ditch en-masse. It's a fact that we're stronger together to try negotiating a block rate from Zoopla or Rightmove and oppose the "divide and conquer" attitutude. My understanding is that RM have refused to negotiate with a group – which I think says a lot about RM and just alienates them even more. There is no reason why agents can't form a "Cornish Marketing Group" or a "Devon Marketing Group" etc etc. It will take someone to organise but we're lucky because we've got one.
Taff – what a pity that your 'Informal "marketing group"' couldn't agree on more pressing and worthwhile matters – like ditching Fee competition or overvaluing to get the instruction…
BOTH of these issues would have been of far greater benefit to both Agent AND your clients than chopping and changing where you advertise your stock, which may well DISADVANTAGE all parties…
18,500 has to be the target for AM then. If Zoopla has 16,261 of these independents advertising with them, and then half leave to join AM, that will have a real impact. The trick then will be for AM NOT to become authoritarian like RM and Z.