OnTheMarket is not a threat to the established property portals Rightmove and Zoopla, at least not in the near future.
That’s the view of analyst Peel Hunt, which has maintained a “buy” rating on Zoopla’s parent company ZPG following a “short but reassuring” trading update yesterday.
ZPG updated investors on its progress for the trading period 1 October 2017 to 31 December 2017 ahead of its AGM on Tuesday.
It said it was “comfortable” that it would meet financial year 2018 market expectations of £310m in revenue and £122m in earnings before interest, tax, depreciation and amortisation.
ZPG’s websites and mobile apps attracted 53 million average monthly visits during the period, while it has signed multiple new long-term portal listing and data services agreements with estate agents and mortgage lenders.
Alex Chesterman, founder and CEO of ZPG, said: “We have had a good start to the 2018 financial year with continued strong consumer traffic to our platforms and strong partner demand for our products.
“We are delighted to have signed further multi-year agreements with a number of leading estate agencies and mortgage lenders.
“And the addition of Money and Calcasa to our portfolio has materially strengthened both our consumer offering and partner proposition across the business.”
Analysts at Peel Hunt said ZPG’s update was “short but reassuring” and that it continued to perform well across both its property and comparison segments.
Peel Hunt maintained the “buy” rating it put on ZPG the day before, in which it said its investment case for the business remained “intact” ahead of OTM’s flotation on AIM on February 9.
OTM announced on Friday last week that it had conditionally raised £30m through a placing of ordinary shares, rather than the £50m it had originally aimed for.
Analysts at Peel Hunt said: “Even with the new money raised to fund marketing, we do not view OTM as a threat to the leading portals in the near future.”
They added: “OTM is aiming to spend £25m per annum in the first two years to raise the company’s brand profile.
“This compares with Rightmove, which spends less than £10m per year, and ZPG, which spends around £15m-£20m on marketing for its portal.
“Although OTM’s annual spend is higher when compared to Rightmove and ZPG, it is important to note that ZPG has spent multiples of this amount in marketing since its launch, to reach its current level of brand awareness, and is still the number two player in the UK.”