UPDATE: Zoopla Shrugs Off OnTheMarket, But Listings Fall

on Feb 12, 2015
Updated: Oct 16, 2019

**UPDATE: Zoopla Shrugs Off OnTheMarket, But Listings Fall**

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LONDON (Alliance News) – Shares in online property portal Zoopla Property Group PLC dropped on Thursday after the company reported a drop in listings in the first four months of its financial year, despite it shrugging off the threat posted by start-up rival OnTheMarket.

FTSE 250-listed Zoopla said it is trading in line with expectations for its financial year to the end of September so far and is on track to achieve its long-term growth targets.
Zoopla added it had 42.3 million average monthly visits between October 1 and the end of January and a record 50.5 million visits in January. Mobile users now account for more than 60% of the monthly visits, the company said, with online customer numbers up 42% year-on-year.

The company said it does expect some limited further agency churn, but says this will be offset by the return of some members who consider the ‘one-other portal rule’ put in place by OnTheMarket to be “damaging to their business”.
OnTheMarket is a start-up property portal founded by Agents Mutual, a cooperative formed by a group of estate agents. Under the rules for signing up to the new site, members must withdraw their membership from either Rightmove PLC or Zoopla.

But the group said its agency numbers have been dragged down by the launch of OnTheMarket, with total advertising members down 11% to 16,967 at the end of January from 18,999 a year earlier.
The brunt of the fall was borne by its UK agency branches membership, which fell to 13,402 at the end of January from 16,059 a year earlier. New home developments listings rose to 2,793 from 2,644 last year, while overseas branches rose to 635 from 296.
“We believe that Agents’ Mutual remains a short-term event and that its success will be determined by whether consumers engage with it. So far it appears to have got off to a very slow start with consumers. We continue to enhance the services we provide to our users and the value we offer to our members and our record traffic highlights the success of this approach,” said Zoopla Chief Executive Officer Alex Chesterman.
Zoopla shares were down 4.0% to 178.60 pence on Thursday, one of the worst performers in the FTSE 250.
Analysts have forecast that Zoopla will bear the brunt of the agency churn from OnTheMarket’s entry into the property portal space. Nomura earlier this week predicted Zoopla would take a bigger hit than its larger rival, Rightmove PLC, as OnTheMarket looks to dislodge Zoopla from the number two position in the market.
“This has led to 80% of the OnTheMarket agents leaving Zoopla and only 20% leaving Rightmove,” said Nomura analyst Matthew Walker.
“This means we now assume an additional 1,200 agents leaving Zoopla for a total of 3,600, while for Rightmove we increase agent numbers by 400 and now assume a loss of 1,000,” Walker added.
According to Zoopla’s trading statement on Thursday, it has so far lost 2,032 listings, slightly less than Nomura’s estimate for this point.
Despite that, the broker cited statistics from Hitwise, a division of FTSE 100-listed Experian PLC which measures website traffic, showing OnTheMarket attracted only 58,000 visits in its first week in operation at the end of January. That compares to an average of around 22 million per week for Rightmove and 11 million for Zoopla.
Prior to the launch of OnTheMarket, Jefferies had suggested the new portal may struggle to dent Zoopla and Rightmove in the long-term owing to its focus on chasing estate agents rather than home sellers, which brings into question, in the broker’s view, the consumer potential of the site.
On Thursday, Numis said Zoopla’s trading was in line with its estimates and made no material changes to its forecasts.
It also said the impact of OnTheMarket was in line with its estimates.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.

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