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ZPG - ZPG News Story

490.4p 0.0  0.0%

Last Trade - 10/07/18

Sector
Technology
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £105.9m
Position in Universe th / 1827

Zoopla Property Grp - Full year results - Part 2

Wed 2nd December, 2015 7:01am
- Part 2: For the preceding part double click  ID:nRSB6823Ha 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 flexibility, allowing fast responses to new business opportunities or threats .• Monitoring and regular review of search engine                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              optimisation                                                                                                                                                     
 Retention and recruitmentSuccess depends on the continued service and performance of the Group's Senior Leadership Team and other key employees. Skilled development, technical, operating, sales and marketing personnel are also essential for the business to meet its strategic goals.                                                                                                                                                                                    Competition for qualified employees is intense and the loss of a number of qualified employees, or an inability to attract, retain and motivate highly skilled employees could adversely impact the Group's operations, financial condition or prospects. There is also a risk of an increase in staff churn as a result of the uSwitch acquisition due to a failure to integrate the uSwitch business at a cultural and operational level.                                                                                                                                                                                                                                                                                                                                                                                                                                    .• Investing in succession planning and improving learning and development, giving opportunities for employees to upgrade skills No change                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              .• Implementation of a new HR system in 2015 which assists in supporting employees .• Providing competitive compensation                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              packages to all staff, including a blend of short and long-term incentives for managers, including the introduction of the                                       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              "Value Creation Plan" for the CEO .• Maintaining the culture of the Group to generate significant staff loyalty  .• Operating a                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              structured approach to recruitment using specialist teams to ensure the recruitment of high-quality employees quickly                                            
 IT systems and cyber-securityA number of the Group's IT systems are interdependent and a failure in one system or a security breach may disrupt the efficiency and functioning of the Group's operations. The Group may also be subjected to cyber-attacks.                                                                                                                                                                                                                   Any failure of the Group's IT infrastructure through error or attack could impair the operation of the Group's websites, the processing and storage of data and the day-to-day management of the Group's business. In addition, any theft or misuse of data held within the Group's databases could have both reputational and financial implications for the Group.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           .• Operating extensive disaster recovery and business continuity contingency plans .• Regularly testing the security of the IT  Up                               
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              systems and platforms including penetration testing and testing of DDOS attack procedures  Maintaining separate platforms for                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              the Property Services and Comparison Services businesses .• Restricting access to data, systems and code and ensuring all                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              systems are secure and up to date .• Providing training for staff on data protection and compliance and the development of a                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Group-wide data policy                                                                                                                                           
 Reputational and Brand damageThe Group operates a number of identifiable and respected brands which could be damaged by factors such as unethical or unlawful activity, poor customer service or negative press.                                                                                                                                                                                                                                                              Damage to any of the Group's brands could lead to a fall in consumer confidence in the Group, reducing traffic and leads for the Group's partners and in turn impacting the Group's revenue. In particular, the uSwitch brand has developed a creditable reputation as a consumer champion which increases the potential impact of any reputational damage. There is also a risk that the Group's partners may choose to terminate their existing relationship with the Group as a result of any reputational damage which would directly impact the Group's revenues.                                                                                                                                                                                                                                                                                                         .• Continually investing in the Group's brands .• Embedding a culture of transparency, social awareness and ethical behaviour   Up                               
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              throughout the Group .• Regularly reviewing the Group's risks and reviewing and developing internal controls to mitigate the                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              risk of error or fraud .• Executing the Group's strategy which has both consumers and the Group's partners at its core .•                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Employment of a dedicated public relations team                                                                                                                  
 Regulatory environmentThe Group operates in a number of regulated environments.  Certain revenue streams within the Comparison Services businesses are regulated by the FCA.  The Comparison Services business also complies with the OFGEM confidence code and is continuing to work with OFGEM in relation to its inquiries.  The Group is also involved in regular communication with OFCOM, the CMA and other regulatory bodies which impact the Group and its partners.  There is a risk that changes to the regulatory environment force the Group to revise its strategy, operations or business model.  Changes in regulation may also impact the Group's profitability via increased compliance costs or a fall in revenues as a result of changes in consumer behaviour. Non-compliance with regulations set by a regulatory body may also have both reputational and financial implications.                                                                                                                                                                                                                                                                                                                                                                                                                                                      .• Maintaining regular contact with all significant regulatory bodies .• Operating a culture of co-operation and transparency   New                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              with regulators  .• Implementing processes to ensure compliance with all mandatory reporting obligations .• Employment of a                                      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              dedicated Regulation and Compliance manager within the Group .• Regular monitoring of regulatory risks by the Board, Audit                                       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Committee, legal function and throughout the business                                                                                                            
 Debt covenants and fundingThe Group holds external debt and therefore must ensure compliance with its debt covenant ratios.  The Group also needs to ensure that it has the funding required to deliver on its strategy and future growth plans and that it manages its debt and cash balances effectively.                                                                                                                                                                   Failure of the Group to comply with its existing debt covenants may lead to a default on the Group's borrowings and require the Group to repay any amounts outstanding. The level of debt within the business and the covenants in place may also restrict the amount of funds available for future growth including future M&A activity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      .• Negotiating sufficient headroom within the Group's existing facility .• Consideration of current debt covenants embedded into New                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              budgeting and forecasting processes  .• Regularly monitoring compliance with current debt covenants and available headroom .•                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Pro-active cash management .• Consideration of additional or alternative funding should significant opportunities for growth be                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              identified                                                                                                                                                       
 uSwitch integrationThe acquisition of uSwitch was a significant transaction and the Group needs to ensure that the business integrates successfully in terms of strategy, operations and culture.                                                                                                                                                                                                                                                                             Failure to realise the Group's strategy to become the "consumer champion at the heart of the home" and build an integrated and optimised consumer product offering may impact the Group's future revenues and have an adverse effect on both the consumer experience and the value generated for the Group's advertising partners. Failure to integrate the business at a cultural and operational level may also increase staff churn within the business.                                                                                                                                                                                                                                                                                                                                                                                                                    .• Executing the integration strategy and plan developed on acquisition .• Oversight of the enlarged Group by the Executive and New                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Senior Leadership teams to ensure harmonisation of strategy and objectives across the Group .• Designing and developing                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              integrated product and service offerings .• Communicating the benefits to both partners and consumers of the uSwitch acquisition                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              and the Group's strategy to become the "consumer champion at the heart of the home" .• Harmonisation of benefits, working                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              environments and practices and culture across the Group                                                                                                          
 
 
.• 
 
Diversification of risk through the acquisition of uSwitch 
 
.• 
 
Regularly reviewing search engine optimisation and pay per click cost and
effectiveness 
 
No change 
 
Changing online landscape and consumer trendsThe Group participates in a
fast-moving marketplace which is subject to rapid technological development
and changes in consumer trends which may impact the Group's ability to offer
the best products and services to its partners and consumers. 
 
The way in which consumers interact with businesses is evolving rapidly. 
There is a risk that consumer engagement and traffic may decline if the Group
does not keep up with evolving consumer trends.  Furthermore, the Group's
partners are constantly developing their business models and the way in which
they interact with consumers directly.  Failure of the Group to adapt to meet
the advertising needs of its partners could lead to a fall in the number of
advertising partners and revenues.   The Group is also subject to changes in
policies set by search engine providers. Failure to keep pace with these
changes may lead to the Group's websites receiving less exposure to consumers
and result in a fall in visitor numbers. 
 
 .•  Increasing user engagement levels by continuing a consumer-centric approach to product development, improving value for the Group's advertising partners  
 .•  Ensuring mobile optimisation in all new products and features                                                                                             
 .•  Maintaining organisational flexibility, allowing fast responses to new business opportunities or threats                                                  
 .•  Monitoring and regular review of search engine optimisation                                                                                               
                                                                                                                                                               
 
 
No change 
 
Retention and recruitmentSuccess depends on the continued service and
performance of the Group's Senior Leadership Team and other key employees.
Skilled development, technical, operating, sales and marketing personnel are
also essential for the business to meet its strategic goals. 
 
Competition for qualified employees is intense and the loss of a number of
qualified employees, or an inability to attract, retain and motivate highly
skilled employees could adversely impact the Group's operations, financial
condition or prospects. There is also a risk of an increase in staff churn as
a result of the uSwitch acquisition due to a failure to integrate the uSwitch
business at a cultural and operational level. 
 
 .•  Investing in succession planning and improving learning and development, giving opportunities for employees to upgrade skills                                                                    
 .•  Implementation of a new HR system in 2015 which assists in supporting employees                                                                                                                  
 .•  Providing competitive compensation packages to all staff, including a blend of short and long-term incentives for managers, including the introduction of the "Value Creation Plan" for the CEO  
 .•  Maintaining the culture of the Group to generate significant staff loyalty                                                                                                                       
 .•  Operating a structured approach to recruitment using specialist teams to ensure the recruitment of high-quality employees quickly                                                                
 
 
No change 
 
IT systems and cyber-securityA number of the Group's IT systems are
interdependent and a failure in one system or a security breach may disrupt
the efficiency and functioning of the Group's operations. The Group may also
be subjected to cyber-attacks. 
 
Any failure of the Group's IT infrastructure through error or attack could
impair the operation of the Group's websites, the processing and storage of
data and the day-to-day management of the Group's business. In addition, any
theft or misuse of data held within the Group's databases could have both
reputational and financial implications for the Group. 
 
 .•  Operating extensive disaster recovery and business continuity contingency plans                                                     
 .•  Regularly testing the security of the IT systems and platforms including penetration testing and testing of DDOS attack procedures  
     Maintaining separate platforms for the Property Services and Comparison Services businesses                                         
 .•  Restricting access to data, systems and code and ensuring all systems are secure and up to date                                     
 .•  Providing training for staff on data protection and compliance and the development of a Group-wide data policy                      
 
 
Up 
 
Reputational and Brand damageThe Group operates a number of identifiable and
respected brands which could be damaged by factors such as unethical or
unlawful activity, poor customer service or negative press. 
 
Damage to any of the Group's brands could lead to a fall in consumer
confidence in the Group, reducing traffic and leads for the Group's partners
and in turn impacting the Group's revenue. In particular, the uSwitch brand
has developed a creditable reputation as a consumer champion which increases
the potential impact of any reputational damage. There is also a risk that the
Group's partners may choose to terminate their existing relationship with the
Group as a result of any reputational damage which would directly impact the
Group's revenues. 
 
 .•  Continually investing in the Group's brands                                                                                  
 .•  Embedding a culture of transparency, social awareness and ethical behaviour throughout the Group                             
 .•  Regularly reviewing the Group's risks and reviewing and developing internal controls to mitigate the risk of error or fraud  
 .•  Executing the Group's strategy which has both consumers and the Group's partners at its core                                 
 .•  Employment of a dedicated public relations team                                                                              
                                                                                                                                  
 
 
Up 
 
Regulatory environmentThe Group operates in a number of regulated
environments.  Certain revenue streams within the Comparison Services
businesses are regulated by the FCA.  The Comparison Services business also
complies with the OFGEM confidence code and is continuing to work with OFGEM
in relation to its inquiries.  The Group is also involved in regular
communication with OFCOM, the CMA and other regulatory bodies which impact the
Group and its partners. 
 
There is a risk that changes to the regulatory environment force the Group to
revise its strategy, operations or business model.  Changes in regulation may
also impact the Group's profitability via increased compliance costs or a fall
in revenues as a result of changes in consumer behaviour. Non-compliance with
regulations set by a regulatory body may also have both reputational and
financial implications. 
 
 .•  Maintaining regular contact with all significant regulatory bodies                                                
 .•  Operating a culture of co-operation and transparency with regulators                                              
 .•  Implementing processes to ensure compliance with all mandatory reporting obligations                              
 .•  Employment of a dedicated Regulation and Compliance manager within the Group                                      
 .•  Regular monitoring of regulatory risks by the Board, Audit Committee, legal function and throughout the business  
 
 
New 
 
Debt covenants and fundingThe Group holds external debt and therefore must
ensure compliance with its debt covenant ratios.  The Group also needs to
ensure that it has the funding required to deliver on its strategy and future
growth plans and that it manages its debt and cash balances effectively. 
 
Failure of the Group to comply with its existing debt covenants may lead to a
default on the Group's borrowings and require the Group to repay any amounts
outstanding. The level of debt within the business and the covenants in place
may also restrict the amount of funds available for future growth including
future M&A activity. 
 
 .•  Negotiating sufficient headroom within the Group's existing facility                                          
 .•  Consideration of current debt covenants embedded into budgeting and forecasting processes                     
 .•  Regularly monitoring compliance with current debt covenants and available headroom                            
 .•  Pro-active cash management                                                                                    
 .•  Consideration of additional or alternative funding should significant opportunities for growth be identified  
 
 
New 
 
uSwitch integrationThe acquisition of uSwitch was a significant transaction
and the Group needs to ensure that the business integrates successfully in
terms of strategy, operations and culture. 
 
Failure to realise the Group's strategy to become the "consumer champion at
the heart of the home" and build an integrated and optimised consumer product
offering may impact the Group's future revenues and have an adverse effect on
both the consumer experience and the value generated for the Group's
advertising partners. Failure to integrate the business at a cultural and
operational level may also increase staff churn within the business. 
 
 .•  Executing the integration strategy and plan developed on acquisition                                                                                                      
 .•  Oversight of the enlarged Group by the Executive and Senior Leadership teams to ensure harmonisation of strategy and objectives across the Group                          
 .•  Designing and developing integrated product and service offerings                                                                                                         
 .•  Communicating the benefits to both partners and consumers of the uSwitch acquisition and the Group's strategy to become the "consumer champion at the heart of the home"  
 .•  Harmonisation of benefits, working environments and practices and culture across the Group                                                                                
 
 
New 
 
Full year results 
 
The financial information set out below has been taken from the consolidated
financial statements of Zoopla Property Group Plc for the year ended 30
September 2015 which were approved by the Board of Directors on 1 December
2015. The financial information does not constitute statutory accounts within
the meaning of sections 435(1) and (2) of the Companies Act 2006.  An
unqualified report on the consolidated financial statements for the year ended
30 September 2015 has been given by the auditors Deloitte LLP. It did not
include reference to any matters to which the auditors drew attention by way
of emphasis without qualifying their report and did not contain any statement
under section 498 (2) or (3) of the Companies Act 2006. The consolidated
financial statements will be filed with the Registrar of Companies, subject to
their approval by the Company's shareholders at the Company's Annual General
Meeting on 25 February 2015. The Company's Annual Report for the year ended 30
September 2015 will be posted to shareholders, and will be made available on
the Company's website, in December 2015. 
 
Statement of Directors' responsibilities 
 
The responsibility statement below has been prepared in connection with the
Company's full Annual Report for the year ended 30 September 2015. Certain
parts thereof are not included within this Announcement. 
 
The Directors confirm to the best of their knowledge that: 
 
a)    the Group consolidated financial statements from which the financial
information within these preliminary consolidated financial results have been
extracted, are prepared in accordance with IFRSs as adopted by the European
Union and give a true and fair view of the assets, liabilities, financial
position and profit of the Group and the undertakings included in the
consolidation taken as a whole; and 
 
b)    the Annual Report and the Operating and Financial Review include a fair
review of the development and performance of the business and the position of
the Group and the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties faced by
the Group. 
 
The Directors of Zoopla Property Group Plc and their respective
responsibilities are listed in the Annual Report for 2015. This responsibility
statement was approved by the Board of Directors and is signed on its behalf
by: 
 
Alex Chesterman 
 
Director 
 
1 December 2015 
 
Consolidated statement of comprehensive income 
 
For the year ended 30 September 2015 from continuing operations 
 
 Notes                                                 2015£000  2014£000  
 Revenue                                               107,556   80,230    
 Administrative expenses                               (72,994)  (51,763)  
 Adjusted EBITDA                                       3         48,694    39,614   
 Share-based payments                                  23        (1,873)   (3,910)  
 Depreciation and amortisation                         (4,072)   (1,658)   
 Exceptional items                                     3         (8,187)   (5,579)  
 Operating profit                                      4         34,562    28,467   
 Finance income                                        184       202       
 Finance costs                                         (1,163)   -         
 Profit before tax                                     33,583    28,669    
 Income tax expense                                    9         (8,200)   (7,592)  
 Profit for the year being total comprehensive income  25,383    21,077    
 Attributable to:                                      
 Owners of the parent                                  25,383    21,077    
 Earnings per share                                    
 Basic (pence per share)                               11        6.2       5.1      
 Diluted (pence per share)                             11        6.0       5.1      
 
 
Consolidated statement of financial position 
 
As at 30 September 2015 
 
 Notes                                        2015£000  2014£000  
 Assets                                       
 Non-current assets                           
 Property, plant and equipment                12        1,930     1,457   
 Intangible assets                            15        253,674   75,194  
 Trade and other receivables                  16        7,446     -       
 Deferred tax assets                          21        -         437     
 263,050                                      77,088    
 Current assets                               
 Trade and other receivables                  16        22,780    5,887   
 Cash and cash equivalents                    19,199    31,025    
 41,979                                       36,912    
 Total assets                                 305,029   114,000   
 Liabilities                                  
 Current liabilities                          
 Trade and other payables                     17        22,251    11,418  
 Current tax liabilities                      4,990     3,777     
 Deferred and contingent consideration        18        35,393    -       
 Provisions                                   19        190       -       
 Non-current liabilities                      
 Loans and borrowings                         20        112,432   -       
 Deferred and contingent consideration        18        2,739     -       
 Provisions                                   19        609       634     
 Deferred tax liabilities                     21        9,185     -       
 Total liabilities                            187,789   15,829    
 Net assets                                   117,240   98,171    
 Equity attributable to owners of the parent  
 Share capital                                22        418       418     
 Share premium reserve                        50        50        
 Other reserves                               22        87,101    87,537  
 Retained earnings                            29,671    10,166    
 Total equity                                 117,240   98,171    
 
 
The consolidated financial statements of Zoopla Property Group Plc were
approved by the Board of Directors and were signed on its behalf by: 
 
 A Chesterman     S Morana         
 Director         Director         
 1 December 2015  1 December 2015  
 
 
Consolidated statement of cash flows 
 
For the year ended 30 September 2015 
 
 2015£000                                                                       2014£000   
 Cash flows from operating activities                                           
 Profit before tax                                                              

- More to follow, for following part double click  ID:nRSB6823Hc
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