In its first set of results delivered to the stock exchange, Zoopla this morning shrugged off any possible threat posed by OnTheMarket.
Zoopla said the launch of Agents’ Mutual’s portal in January “may have some short-term impact on our agency membership numbers but we have seen numerous launches into our market before and taken effective action to compete with them.
“Longer term we remain very confident in the value proposition we provide to both our members and consumers, which underpins our long term growth.”
Zoopla also said it did not expect political and economic challenges within the overall housing market to have a material impact on its business.
Expanding on the subject of OnTheMarket in a section on principal risks and uncertainties, Zoopla said: “If Agents’ Mutual successfully launches in 2015 with its proposed restrictive advertising provision, a portion of the Group’s existing members may terminate their subscriptions with the Group.
“The launch of Agents’ Mutual may also result in fewer consumers using the Company’s websites, a loss of advertisers and a loss of market share for the Group.”
Zoopla outlined how it would mitigate these risks, including increasing revenue from online agents.
Zoopla also said that another risk was the possibility of losing a “number of qualified employees to competitors, new entrants or otherwise”. It said it would mitigate this risk by offering good pay and career prospects.
An upbeat Zoopla told the City it had grown its audience to record levels.
Reporting for the year to the end of September 30, Zoopla said it now has 19,663 members listed with it, up 5% on a year ago, including 16,373 UK estate and lettings agency branches and 2,715 new home developers. Zoopla said the numbers represent “close to 90% of the total number of property professionals in the UK”.
The number of visits to its site was up 33% year on year, and the number of leads to its advertisers was up 12%. It also earned 18% more from its advertisers. Revenue was £80.2m, up 24% from the previous year’s £64.5m.
The business made an adjusted profit of nearly £26.7m. June’s flotation on the stock market cost £5.6m.
CEO Alex Chesterman said: “I am pleased to present such a strong set of full year results following our successful IPO in June.
“2014 has been a landmark year for Zoopla Property Group with record audience levels and strong revenue growth across all areas of the business as consumers continue to recognise the importance of the Group’s services for searching and researching the property market at work, at home and on the move.
“We continue to deliver enhanced transparency and efficiency to the market and to develop a world-class consumer proposition designed to aid our users with their property search, increase engagement and drive value for our members.
“We enjoyed record levels of traffic to our websites and mobile applications with 42.8m average monthly visitors generating over 29m leads during the year providing an excellent value proposition for our members and resulting in increased take-up of our additional premium products.
“We remain committed to our mission of building our brands and business to provide the most useful property resources to consumers along with being the most effective partner for property professionals across the UK.”
Comments (52)
Searching for an agency comment on why coming off Zoopa/RM and onto OTM is great news for the consumer…. Nop! Still can't find it….
High street agents saving money CHECK, Reducing consumer fees, FAIL, focus on increasing agent profit, CHECK… consumer loose out, CHECK, consumer looses exposure on at least one of the most visited portals in the UK, CHECK
'1stTimeBuyer' – in response to your checklist – "High street agents saving money CHECK" – not necessarily. For some the spend will potentially INCREASE. "Reducing consumer fees, FAIL" – okay, tell me – just HOW MUCH do you think this presumed "saving" is going to be – and just how much do you think this could make to the average Sale Fee?
"focus on increasing agent profit, CHECK…" – I don't think so. In many cases it will simply mean (slightly) less expenditure. "consumer loose out, CHECK" How do you arrive at this conclusion? "consumer looses exposure on at least one of the most visited portals in the UK, CHECK" Potentially – but those Agents who believe firmly that AM will become THE most visited property portal in the UK would simply state that they are steering "the consumer" in the right direction in that respect.
With regard to the earlier point about "reducing consumer fees" – well, if the main portals continue to hike their fees by upwards of 10% per annum, that has GOT to have an upward effect on the fees that the Agent charges their paying customer – in exactly the same way as rising fuel and transportation costs hiked the cost of pretty much everything in the supermarkets when oil was selling at liquid platinum prices. By cutting their expenditure, there is more than the possibility that Agents' customers will benefit from more stable fees as a result.
And before you jump to conclusions, I am NOT the greatest supporter of the AM model.
I'm tipping my hat PeeBee…..;-)
I'm really hoping to get some feedback from 1TB, Paul H – as I am sure you will be also.
ESPECIALLY how much cheaper he/she reckons a Fee can be made by the Agent dropping a portal… ;o)
You've got more chance of getting a reply from easy Chris mate 😉
Oh… I don't know about that – 1TB so far hasn't shown him/herself to be the 'chuck a lit firework into the room and run away giggling to themselves' kind of person that certain other posters seemingly enjoy being. Of course in reality they are simply showcasing their inability to handle reasoned debate… however SOME of those reading such f@rt-and-scarper tactics could come to the conclusion that this type of poster is simply slinging nitrogenous waste at a mechanical ventilation device in the hope that some of it sticks. Of course I'm sure that is not the case with anyone posting here on EYE – as they usually say, they are simply far too busy to respond…
You're not looking very hard, then, are you? I, for one, gave you a response to your naive question on November 20th. I'm afraid it doesn't do your credibility any good if you can't be bothered to read what other people have to say and then debate it in a balanced way.
Sorry, 'Robin' – to WHO is the above comment aimed?
Ahhh… dug a bit and answered my own question – http://www.propertyindustryeye.com/agents-mutual-lost-momentum-claim-city-analysts-blasted/
Fair response. 1TB clearly has a short – or selective – memory.
No doubt PIE will tell us that yesterday RM shares have fell by a huge amount to try and sensationalise AM. What they won't say is that they have climbed a huge amount in the last week!
Zoopla WILL be " increasing revenue from online agents."……And there was me thinking that Russell Quirk really did have the consumers interests at heart!!! I think Rightmove will give them a squeeze as well!
it's truly astounding that agents who remain with the Duopoly won't print off the Duopolys own annual reports, highlighting the section that goes slong the lines of "we'll squeeze those that are left to maintain/increase our revenues!"…. then wave it in the face of their Duopoly Rep and refuse to get sh*fted for any shortfall! A monumental disregard for their customers!…. the Duopoly should hang their heads in shame at such blatant statements which clearly demonstrate how they will treat their customers in future!
Couldn't agree more… I wonder why agents don't drop one even if they aren't going on OTM. They wouldn't lose any business as long as they were a good agent that didn't totally rely on portals.
Maybe in your city, town / patch wilko but very blinkered if you feel that will be the case across the whole of the UK. I know for a fact in my area if we were not on RM we would be out of business in 6 months the other agents will have a field day. Z not so much a problem if on OTM. As I said in previous posts most my competition are leaving Z for OTM I see no point so will stay on Z – However if they all said they would drop RM I would happily drop Z as well. Agents markets and competition differ around the country and whereby agents should not rely on portals alone in some areas because of how much the portals have been fed they are actually bigger than the agents.
How many of us would like to make a 33% profit on revenues? And they plan to recoup lost revenues post-OTM by going after the online agents….well,well
Try some simple math, Average marketing spend on RM, Average marketing spend on Zoopla. Make one, or if you prefer two sale/s alone through one of there leads @ 1.5% fee. That alone for most pays for a whole years marketing on one of the portals.
Erm… on WHICH planet, '1stTimeBuyer'? Certainly not the one I inhabit – nor would I suggest that where the majority of UK Estate Agents ply our trade…
Oh please…… the old "if you sell just one house from a lead from us, it will pay for itself" (I know you don't really fall for that one do you)……..
"£80.2m, up 24% from the previous year’s £64.5m". Pretty good reading considering in the main the products they are advertising belong to other companies! Now wouldn't OTM be happy with that income, who are those other companies.
I don't get the line of argument which slams a portal for charging a business to advertise…after all, should a newspaper or TV station then pay John Lewis to advertise in their publication/on their channel as they 'supply the product?' Of course not, the portal, or newspaper, or TV channel provides the vehicle or route to market which entails huge, ongoing investment.
And that's the point…. quite simply we may as well have our own John Lewis esque' website… and pay into that… as it promotes our stock/clients property without being punished financially by the Duopolys need for spiralling profits for themselves and shareholders! That the amazing thing!… we are simply moving our Online Shop Window…. or really, it's NOT that amazing… it's just thst we have sat on our ars*s for so long, getting squeezed by the Duopoly.
Playing Devils advocate ….. Why would you pay as much to AM as Z to advertise your properties when they have made vast profits in the last 12 months and AM has no track record of delivering …….
Do you know SP, I would. It was never about the money really, its about what happens to it. With OTM it goes into creating the marketing budget and probably some high salaries as well, but we all live in the real world so I can get over that. The important thing is that every agent on it, may well be in competition with others, but all have a vested interest in ensuring that the estate agents themselves are the sites primary long term focus.
Have you seen the business plan? if it was buttons a month how would you get a business to take on RM off the ground?They will fall as the membership grows. You hit the nail on the head – Z made VAST profits. Once AM reaches full speed, there are no profits so the rates drop. The only way the rates go with RM/Z is up up up up
I like your optimism, next 12 months things should be a lot clear although not a definitive end result – I hope for all our sakes you are right with your expected out comes, unfortunately I just cannot see it, Just hope I am the one with egg on my face not the number of optimistic pro AM members that are on here.
ZOOPLA EARNT 18% MORE FROM IT'S ADVERTISERS AND YET THE NUMBER OF ADVERTISERS GREW BY 5%…..Estate agents are clearly the gift that just keeps on giving!!Well not anymore.
Property A goes up by 10% in value over a period. Agent charges same 1.5% fee (for no addition work due to increase). Agent increases revenue. Agent complains when he has competition. Agent expects to pay the same marketing fees every year… even if getting more exposure and revenue from sales. Explain?
I will try FTB in your language!……………Agent only gets fee once job done and completed!……………..Agents can be as low as 0.75% and not all 1.5%………………Market crashes beyond imagination 2008!…………………Agent continues to market and advertise property in a market where there was no or little money available to borrow…………………………client happily continues to market with agent as no cost risk to them………………Online agent struggles to convince owners they are the right choice in hard market (just thought I would throw that one in)…………………… agent does not call client to say once we've sold it your fee will be increased to 2% to claw back the loss from your 20% lower house value……………………….. agent accepts the market has dropped and so does the amount his/her % will eventually be worth to them in pound notes………………………….. agent still tries to negotiate best deal with buyers for client……………………. agent tries to keep staff members in job during this tough time……………………..agents continue to pay bills……………..agent however gets TWO companies saying "we don't care houses are no longer selling, we are putting your fee up and will advertise to the world that your agent should be on RM or Z whilst doing so, with an air of it is RM and Z who do the hard work and never saying THANK YOU by the way for your continued custom" (I've never once heard a thank you from them!)…………………….so agent gets increased RM/Z fee in 2008, 2009, 2010, 2011 & 2012………………agent asks if RM can help at this tough time and agent gets told no and not a single freeze………You can talk about increasing markets mean increasing income for agents, BUT you have done what many people do in a good market, you point out the obvious (a bit cowardly really, without the balance of agents do also ride a downward market)……so what about the downward market FTB………………….. do/did agents increase fees when the market dropped? NO they roll(ed) with it and the clients pays proportionately less, the beauty of a % and further more they continued to benefit from NSNF…… but the Agents did expect some support from whom they have been loyal too……or eventually they would fight back…… Look at Sky TV, TalkTalk O2 and many others like them who will hold your fees and even reduce them a bit or do something to keep you as a client! The simple reason for this is: they have to! as there is competition in each of their fields for your custom YET until now RM have taken advantage of the position that the agents have put them in……….so to conclude……………….Agent forms Agents Mutual and Agent creates competition and agent has extra choice……..can agent really be blamed for wanting to do this?
Ric, matey – we may not see eye-to-eye on the AM front… but I 'Hear, hear' your superb response to 1TB all the way to the finish line, mon ami! ;o)
I am really looking forward to OTM launch. I suspect the true effect will be to actually drive more traffic to Z & RM – that said competition can only be a good thing for agents.
"I suspect the true effect will be to actually drive more traffic to Z & RM"…Or it could just drive the Z/RM rep to your door (as well as the online agents door) asking for more money to cover the £m's of losses that they are about suffer.
Each of the Duopoly report statistics, performance, growth etc as part of their annual report. They should include that fact that most of their housing stock comes from estate agents. Quite simply without it their business can pack up and take a wheelbarrow to a street corner to display their goods. Likewise RM. Clearly I am pro AM however why we don't keep slapping ourselves in the face I don't know. The Duopoly function because of the stock we give them. If your tap was dripping in your sink you would turn it off, end of!
In fairness I think this is the most balanced Zoopla statement to date. They've acknowledged they are going to lose fairly big initially but hope to win back custom over the longer term. Now as long as they mean winning custom back from Rightmove and not OTM then I believe they are on the right track because this was always going to be the sensible approach. They already have the likeability factor, a few posters on here aside, and should in my opinion concentrate on making themselves "the second portal of choice". I also note the comment amount fees for online only agents. By charging per postcode listed in as opposed to blocks of 50 instructions, they could at a stroke, appease their largest client base (the high street agents) and improve the quality of offering to sellers by stopping it being cost affective to list anywhere in the country from a single location. They do those things and I think they could well take a huge chunk of business away from RM in the long term.
Nice balanced comment RealAgent – agree in the majority what you say but I still feel if you read between the lines they will not make a play for RM or OTM I think they will squeeze revenue from existing members, introduce direct to market for vendors, push the new build market / developers. The problem Z now have is they are listed. They need to show continued growth they need to not only make up the lose from the previous year but add revenue to it. This is the real challenge, I think you will see a lot of innovative ideas over the coming 12 – 18 months from Z not all will be good but none will be friendly to high street agents …… Pandora's box is well and truly open now!
Well Ive added a comment to yours above SP, and I am sure that Z will try and squeeze the fees of those that stay with them but they are still half of what RM charge in most areas and personally I would have preferred to have stayed with them. They are just not strong enough in my area. Z were always a longer term business I think, yes they nearly saw their ambitions reached and I think they know they are about to take a step back but like us, their destiny is also in their hands and in the decisions they could make should they choose to.
Real Agent – you opened with " I think this is the most balanced Zoopla statement to date"….couldn't disagree more. Lines like …."a portion of the Group’s existing members may terminate their subscriptions with the Group" ….and……."may also result in fewer consumers using the Company’s websites, a loss of advertisers and a loss of market share for the Group.”……..The key word here is MAY. If it were a truly balanced statement it would say WILL(be leaving) instead of MAY(be leaving) !….Lucky they are reporting now rather than 4/5 weeks. At the moment all our branches are active on Zoopla, but we gave them notice months ago that we WILL be leaving……NOT "MAY" be leaving. Note the membership quoted now 19,633……I reckon, in my opinion, that will come down to around 15,000 in 2015 meaning a loss of annual income c£15-16 million p/a.
I think it is balanced, they have indicated their may very well be a loss of agents. You also have to remember they are listed and they need to be careful with wording for the market. If they said "We fully expect to lose 25% of our partners" you will see their share price collapse over night. You and I would not go out and say to the public the seasonal down turn is here lots of people are waiting to the new year. We would say now is a great time to sell less property on the market and applicants that are looking are motivated. Its all about selling yourself and that's what Z are doing and limiting damage. We all know it will hit them hard and so do they but they need to still make their company viable and not concede defeat and close up shop.
"You also have to remember they are listed and they need to be careful with wording for the market"…..As of 8.15am shares of Zoopla were up 3.6% to £196.
As of 11.50am shares of Zoopla were down on the day by 2.63% and at £185.
It appears that no one in the city is buying the bluff and blunder coming out of this report.
Just imagine if they did say they did come out with more negative wording 😉
As SP said I can see why the word "may" was used, but nonetheless their press release is the frankest acceptance of the fact that they know they are going to be hit hard. This was also obvious at one or two conferences recently, where the normally upbeat reps looked stressed. I don't know about the numbers Wilko, but I do know there are a number of agents like myself who have committed to OTM and are still waiting to put in notice in, so in other words Zoopla don't know yet. I think given the start date of OTM, I suspect that many will post the 30 day notice at the end of Dec and just remove the properties from the 26th of Jan. As I have said though, I genuinely would prefer to use them to RM and I hope that I can make that decision at some point, for now though, I really do hope that Z think about how they can make theirs the platform of choice for the second portal.
Zoopla should never have allowed budget agents in or developers and instead made all advertising go through proper agents. Alex Chestman also invested in Uniplaces which allowed student let landlords to advertise from £free……………. Bite the hand that feeds – and eventually it will go away
Question, why should a business not allow this? To many agents are afraid of competition, and want an easier. Business is business. Put in the hours, and strive to be the best agent in your area by using all the tools available the industry has to offer, and stop worrying about competition. Be the best, and competition isn't an issue.
Now pray tell me, all you fence sitters (most of which openly complain about the onliners, are you really happy that Zoopla have now openly admitted that they intend to improve revenues from this area to combat the #onthemarket threat? Get off the fence and vote with your pockets. The revolution is coming!
Maybe zoopla will eventually be the place for budget agents. Developer listings and FSBO via passive marketeers.
Hi Andrew, I think I fall into the category you speak of. This is exactly why one reason I am not going to be joining OTM from day one. I feel the direct to sale website for the seller is a bigger damage to the industry than saving a few quid per month / annum. Potential this could kill the high street agent. obviously if Z did go down this route I would pull my stock the very same day but the whole time they do not I will stay with them until OTM becomes a market leader and I can walk away from RM as well. The revolution is not coming the end of the market place *** we see it could be. This is just one reason I urge fence sitters to wait a little longer and see what happens….
They already have that SP in easyP or anyone or half a dozen other websites you could mention. You are entitled to your position but my own view is that proactive businesses strive to change things, they innovate and take risks. OTM won't let anymore self sellers in, but even if they did, are they really your biggest competitors? I would say you should be more worried about the corporate estate agents that you are helping to keep going. At present you are lining the pockets of your corporate competitors who pay half of what you do for RM and Z, benefit from their share options and use all of that to subsidise their low fee business models in your area. By all means sit of the fence, but know what the real implication of doing so is and its still not too late to have your destiny in your own hands.
I think this is the crucial question back now and make AM a success and hope for the best with other market forces or sit back and see what happens. For now and other issues I have with AM I will sit back but happy to be persuaded at any point be it before 26.1.15 or after. In regards to Corporates I am lucky in my town they do not have a foothold and this I cannot see changing they also have the right to market OTM if they see fit. yes outcome will on portals will treble per office but they have more than enough resources to cover this and more.
Andrew, you clearly have very limited vision on ways portals such as Zoopla can increase revenues. It is not all about estate agents. Money can be and are made from other areas of business, the most obvious being 3rd party adverts. Increase these alone, that increases rev.
Right, not bothered about http://www.onthemarket.com but will name them in their annual statement. Then again he's hardly going to say he knows he had a problem flog your shares now. – Jonnie
My son asked me this morning "How long until Christmas Dad?" JUST 63 days son, JUST 63 days! #otm26.1.2015 – Santa's coming!!
And only 63 days till Z really feel the heat. I'm sorry they will go but can't wait to see the end of RM.
I don't agree, but that is a funny comment. 🙂