Zoopla Property Group Plc Zoopla Property Group Plc Annual Report 2014 Annual Report 2014 Innovative
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Zoopla Property Group Plc Group Zoopla Property Annual Report 2014 Zoopla Property Group Plc Annual Report 2014 Innovative. Entrepreneurial. Growing. Zoopla Property Group is a digital media business that owns and operates some of the UK’s leading online property brands including Zoopla, PrimeLocation, SmartNewHomes and HomesOverseas. Our goal is to provide the most useful resources for UK property consumers and to be the most effective partner for property professionals in the UK. We help consumers to find their next home and to research the market by combining hundreds of thousands of property listings with market data, local information and community tools. Each of our brands has a distinct market position and attracts a unique audience, delivering increased exposure and enquiries for our members. Our members consist of over 19,600 estate agents, lettings agents and new homes developers who now advertise on our websites. Throughout the 2014 financial year our websites and mobile apps attracted an average of 43 million visits per month and generated over 2.4 million enquiries per month for our estate agent, letting agent and new homes developer members. In addition to operating our own websites we exclusively power the property search facility on a number of the UK’s biggest websites which means that we provide our members with exposure to an unrivalled property audience in the UK. Read more about our business and strategy from page 8 Visit our corporate website for the latest investor news and announcements at www.zpg.co.uk In this report: Overview Overview Introduces Zoopla Property 02 Zoopla Property Group at a glance Group and presents the year’s 04 Chairman’s statement performance highlights and the Chairman’s statement. Strategic report Provides an overview of the 06 Chief Executive Officer’s statement Strategic report Company’s business model, 08 Our strategy and objectives strategy, performance and future prospects. 09 Our business model 10 What sets us apart 12 Our brands at a glance 13 Our exclusive partnerships 14 Our market 15 Our KPIs 16 Risk management and key risks 18 Financial review Corporate governance 22 Our people and corporate responsibility Corporate governance Includes reports from the 24 Chairman’s introduction to governance Directors and each of the 26 Board of Directors Board committees. 28 Corporate governance statement 32 Audit Committee report Financial statements 36 Nomination Committee report 38 Directors’ remuneration report 62 Directors’ report (other disclosures) 65 Statement of Directors’ responsibilities Financial statements Presents the financial 66 Independent auditor’s report statements with their 69 Consolidated statement of comprehensive income accompanying notes. 70 Consolidated statement of financial position 71 Consolidated statement of cash flows 72 Consolidated statement of changes in equity 73 Notes to the financial statements 92 Company statement of financial position 93 Company statement of cash flows 94 Company statement of changes in equity 95 Notes to the Company financial statements 97 Shareholder information 97 Note on forward-looking statements Zoopla Property Group Plc zpg.co.uk 01 Zoopla Property Group at a glance In the year of our successful IPO the Group has experienced strong growth and record levels of traffic. Operational highlights f Traffic up 33% to 513.5 million (2013: 386.4 million) 29.2m f Number of members increased 5% to 19,663 Total leads (2013: 26.1m) (2013: 18,676) f Number of leads increased by 12% to 29.2 million 513.5m (2013: 26.1 million) Total site visits (2013: 386.4m) f Successful IPO in June of this year f Continued focus on mobile, which now drives 19,663 57% of the Group’s traffic Members at 30 September f Up-sell of depth products to members driving ARPA (2013: 18,676) f SmartNewHomes acquisition fully embedded with 49% increase in developer revenue Our journey so 2008 2009 2010 far: a story of f Zoopla.co.uk launched f Acquired: f Acquired: f Launch of Automated Value PropertyFinder.com BytePlay innovation and Model (AVM) HotProperty.co.uk f Winner of 100 Most Innovative ThinkProperty.com differentiation. f Winner of UK’s Most UK Businesses (Smarta) Promising Internet Company f #2 property portal by unique f Launch of ZooplaPro visitors in under two years (First Tuesday) f Listed as one of the Top UK f Winner of UK’s Best Property f Launch of property listings Tech Companies (Guardian) Website (Web User) f Winner of Best UK Property Portal (Daily Mail Awards) f Winner of Best Real 2007 Estate Website (Website f Zoopla Ltd founded of the Year Awards) 0.4m visits pm 2m visits pm 5m visits pm 0.3m leads pm 02 Zoopla Property Group Plc Annual Report 2014 Overview Financial highlights Membership evolution (number) Strategic report Revenue (£000) Adjusted EBITDA1,3 (£000) 2014 (19,663, +5%) £80,230 £39,614 Agency (16,373, +3%) +24% +35% Developer (2,715, +7%) Overseas (575, +106%) 80,230 39,614 64,498 29,433 2013 (18,676) Agency (15,858) Corporate governance Developer (2,539) Overseas (279) 13 14 13 14 Adjusted profit Operating profit (£000) for the year2,3 (£000) Average revenue per advertiser (ARPA) (£) £26,656 £28,467 +19% +2% 2014 (£312, +18%) 26,656 27,962 28,467 Agency (£323, +17%) 22,330 Financial statements Developer (£270, +31%) Overseas (£139, -2.8%) 2013 (£264) 13 14 13 14 Agency (£275) 1 Adjusted EBITDA is defined as operating profit after adding back depreciation Developer (£206) and amortisation, share-based payments and exceptional items. Overseas (£143) 2 Adjusted profit for the year excludes exceptional items. 3 The Directors believe that the adjusted figures give a more appropriate measure of the Group’s underlying financial performance. 2011 2012 2013 2014 f Acquired: f Acquired: f Acquired: f Successful IPO on the HousePrices.co.uk UpMyStreet.com SmartNewHomes.com London Stock Exchange f Winner of Best Property PrimeLocation.com HomesOverseas.co.uk f Rated an “Outstanding” place Portal: Western Europe FindaProperty.com f Winner of Best Brand (Sunday to work by Best Companies Globrix.com (Property Portal Awards) Times Tech Track 2013 Awards) f Launch of commercial f Winner of Innovative Business f Acquisition and integration f Winner of Company of property channel of the Year (Fast Growth of DPG created Zoopla the Year (Growing Business Awards) Property Group Ltd Business Awards 2013) f Listed as one of the Top f Winner of Europe’s Most 100 UK Tech Companies Exciting Investor Backed (Daily Telegraph) Company of the Year (Investor Allstars Awards 2013) 10m visits pm 16m visits pm 35m visits pm 43m visits pm 0.6m leads pm 1.0m leads pm 2.2m leads pm 2.4m leads pm Zoopla Property Group Plc zpg.co.uk 03 Chairman’s statement Mike Evans, Chairman We have evolved with the demands of the market to develop highly effective mobile and tablet platforms. Zoopla Property Group has experienced another strong year in 2014. Following our successful IPO in June, I am delighted to announce a positive set of results for the Group. Our revenue and profits continue to grow. Total income has increased by 24% to £80.2 million and adjusted EBITDA has increased by 35% to £39.6 million, while we “ Our brand strength and have continued to make significant long-term investment. The Group remains well funded reputation has grown and debt free. strongly, supported by This accomplishment is due to a variety of factors. We have continued to attract users to our sites because of the quality of marketing and a successful marketing products, providing a compelling user experience. We have evolved campaign in the past with the demands of the market to develop highly effective mobile and tablet platforms. Our sites, products and platforms have attracted year…” a record 513 million visits over the past 12 months, a substantial increase from 386 million in 2013. Finally, growth of the Group’s business partially depends on its strong brands and reputation to attract and retain users and, in turn, the members who choose to subscribe to and advertise on the Group’s sites. Our brand strength and reputation have grown strongly, supported by a successful marketing campaign in the past year. Dividend The Directors have proposed a final dividend of 1.1 pence per share to be paid in respect of the year ended 30 September 2014. This will be paid on 23 February 2015 to all shareholders on the register on 5 December 2014. Capital structure The Company was admitted to the London Stock Exchange on 23 June 2014. This was facilitated by a number of our larger shareholders reducing their holdings and accepting a lock-in of their remaining shares for a period of six months from Admission. Management agreed to lock-ins of 12 months. Daily Mail and General Trust Plc (DMGT) remains the largest single investor with a 31.8% holding. Alex Chesterman, Founder and Chief Executive Officer, continues to hold 4.1%. In addition, we continue to build up a register of well regarded institutional shareholders. 04 Zoopla Property Group Plc Annual Report 2014 Overview Strategic report Corporate governance Financial performance from Alex Chesterman and his team ensured the Group was able to Adjusted EBITDA was up 35% to £39.6 million (2013: £29.4 million) successfully complete the IPO whilst continuing to grow the business. and adjusted earnings per share (EPS), which excludes exceptional I am confident that the Zoopla Property Group team will execute the items, was up 20% to 6.5 pence per share (2013: 5.4 pence per Group’s strategy effectively, showing diligence throughout. Financial statements share). The Group continues to generate high levels of cash and The Board and I would like to thank all of our users, members and as at 30 September 2014 the cash position was £31.0 million employees for their commitment to the Group over the past 12 months.