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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 / 1826

Zoopla Property Grp - Full year results - Part 4

Wed 2nd December, 2015 7:01am
- Part 4: For the preceding part double click  ID:nRSB6823Hc 

2015   
 Active                               
 ZPG Limited                          Zoopla Property Group Plc        United Kingdom            100%                   
 Ulysses Enterprises Limited          Zoopla Property Group Plc        United Kingdom            100%                   
 uSwitch Digital Limited              Ulysses Enterprises Limited      United Kingdom            100%                   
 uSwitch Limited                      uSwitch Digital Limited          United Kingdom            100%                   
 uSwitch Communications Limited       uSwitch Digital Limited          United Kingdom            100%                   
 Dormant                              
 Propertyfinder Group Limited         ZPG Limited                      United Kingdom            100%                   
 Propertyfinder Publications Limited  Propertyfinder Group Limited     United Kingdom            100%                   
 Propertyfinder Holdings Limited      Propertyfinder Group Limited     United Kingdom            100%                   
 Sherlock Publications Limited        Propertyfinder Holdings Limited  United Kingdom            100%                   
 Propertyfinder.co.uk Limited         Propertyfinder Holdings Limited  United Kingdom            100%                   
 Internet Property Finder Limited     Propertyfinder.co.uk Limited     United Kingdom            100%                   
 Omio Limited                         uSwitch Limited                  United Kingdom            100%                   
 
 
14. Acquisitions 
 
On 1 June 2014 Zoopla Property Group Plc completed its acquisition of uSwitch
through the purchase of 100% of the issued share capital of Ulysses
Enterprises Limited for total consideration of £177.6 million as measured in
accordance with IFRS 3. 
 
Expenses incurred on the acquisition of £5.1 million are included within
administration expenses in the statement of comprehensive income. These costs
have been considered exceptional in arriving at Adjusted EBITDA for 2015 (Note
3). 
 
The purchase has been accounted for as a business combination under the
acquisition method in accordance with IFRS 3. In calculating the goodwill
arising on acquisition the fair value of net assets acquired of £6.7 million
was assessed and no material adjustments from book value were made. The Group
has recognised a number of separately identifiable intangibles as part of the
acquisition, details of which are set out in Note 14a. 
 
The fair value of the assets and liabilities acquired were as follows: 
 
 Fair value£000                                    
 Property, plant and equipment                     777       
 Intangible assets - computer software             86        
 Trade receivables                                 5,466     
 Accrued income                                    10,056    
 Prepayments and other receivables                 953       
 Deferred tax assets                               379       
 Trade payables                                    (3,079)   
 Accruals and other payables                       (6,708)   
 Provisions                                        (135)     
 Corporation tax payable                           (1,053)   
 Total net assets acquired                         6,742     
 Intangible assets recognised (Note 14a):          
 - Brand                                           48,770    
 - Website and technology platform                 2,890     
 - Database                                        900       
 Deferred tax liability arising on intangibles     (10,512)  
 Goodwill on acquisition (Note 14b)                128,782   
                                                   177,572   
 Satisfied by:                                     
 Cash consideration, net of cash acquired          61,907    
 Debt assumed and discharged (Note 14c)            79,675    
 Deferred and contingent consideration (Note 14d)  35,990    
 Total consideration                               177,572   
 
 
The fair value of the financial assets acquired includes trade and other
receivables with a fair value of £16.5 million and a gross contractual value
of £16.5 million. The best estimate at the acquisition date of the contractual
cash flows not to be collected is £nil. 
 
14a. Intangible assets recognised on consolidation 
 
Brand 
 
£48.8 million has been recognised in respect of the uSwitch brand name, domain
name, image and reputation. The brand has been valued using an excess earnings
valuation model using profit generated from organic sources over a useful
economic life of 10 years. Organic sources include direct visits to the
website and traffic achieved through unpaid search results. Management
believes profit generated from organic sources represents the best estimate of
the value brought to the Group by the uSwitch brand. A post-tax discount rate
of 12% and an average long-term growth rate of 6% have been used to determine
the net present value of future profits in excess of a reasonable return on
other contributory assets. 
 
Website and technology platform 
 
£2.9 million has been recognised with respect to the uSwitch website and
supporting technology platforms. The fair value has been obtained by
estimating the cost of independently building a similar website and supporting
platforms. The asset will be depreciated over a useful economic life of three
years. 
 
Database 
 
uSwitch's consumer database helps the business to drive traffic and revenue
through targeted email campaigns. The value of the database has been
determined at £0.9 million based on a discounted cash flow of profit from
email campaigns over the twelve months to 31 May 2015 extrapolated over a
useful economic life of three years. A 20% churn rate has been applied to the
forecast to account for natural churn in the information held. 
 
14b. Goodwill 
 
The acquisition of uSwitch provides a number of benefits to the Group. The
goodwill recognised on acquisition represents value arising from intangible
assets that are not separately identifiable under IAS 38 including the skills
and knowledge of uSwitch's workforce and expected revenue and cost synergies
as outlined below. 
 
The Board believes that the integration of the Comparison Services division
into the Group will help create a fully integrated consumer property journey
with an enhanced product and service offering which will increase consumer
engagement on the Group's platform and drive an increase in the quantity and
quality of leads provided to existing property professional partners and
advertisers. 
 
The Board also believes that comparison services are highly relevant to the
Group's consumer audience and that this will provide substantial cross-selling
opportunities. By offering additional products and services along the consumer
property journey the Board expects to drive increased demand for comparison
services, generating additional revenues as well as reducing the direct costs
associated with generating additional leads. 
 
Furthermore, the Board believes that there are further revenue opportunities
within uSwitch as the home services comparison market continues to grow and
there is additional scope for uSwitch to increase and expand its product
offering in the financial services comparison market. 
 
14c. Debt assumed and discharged 
 
Immediately prior to acquisition uSwitch had outstanding debt of £87.0
million. This amount was fully settled on acquisition. £79.7 million of the
outstanding debt was assumed and discharged by Zoopla Property Group Plc. 
 
The following table provides a reconciliation of the amounts included in the
consolidated statement of cash flows: 
 
 2015£000                                                 2014£000   
 Cash consideration, net of cash acquired on acquisition  (61,907)   -        
 Debt assumed and discharged                              (79,675)   -        
 Cash expenses incurred on acquisition                    (4,430)    -        
 Deferred consideration paid                              -          (1,497)  
 Cash outflow on acquisition of subsidiaries              (146,012)  (1,497)  
 
 
14d. Deferred and contingent consideration 
 
On acquisition the following deferred and contingent amounts were recognised
as consideration: 
 
 £000                                      
 Deferred consideration (i)                11,040  
 Contingent consideration - Earn-out (ii)  24,950  
 35,990                                    
 
 
i) Deferred consideration 
 
Deferred consideration of £11.0 million has been recognised at acquisition.
Deferred consideration is payable in cash and/or up to £10.0 million in shares
of Zoopla Property Group Plc at the discretion of the Group. The amount has
been classified as a financial liability on the Group's consolidated statement
of financial position at the acquisition date in accordance with IAS 39. 
 
ii) Contingent consideration - Earn-out 
 
Earn-out consideration of between £0.0 and £30.0 million is payable in cash or
up to 50% in shares of Zoopla Property Group Plc at the discretion of the
Group. The amount to be paid is contingent on the performance of uSwitch
against certain revenue and Adjusted EBITDA targets over a 16 month period to
30 April 2016. Up to £5.0 million of the earn-out is payable to Management
shareholders - the treatment for which is set out below. The remaining £0.0 to
£25.0 million has been recognised at fair value on the Group's consolidated
statement of financial position at the acquisition date. Management expects to
settle the earn-out in full and therefore a liability for the full £25.0
million has been recognised. Any subsequent movements in the fair value will
be recognised within the Group's consolidated statement of comprehensive
income as a fair value gain or loss. 
 
Consideration payable to Management shareholders 
 
A maximum of £11.4 million is payable to Management shareholders and is
conditional on the continued employment of Management up to and including the
date of payment. In accordance with IFRS 3, this consideration will be
recognised as a remuneration expense in the Group's consolidated statement of
comprehensive income over the deferral period. The Group is accruing the full
£11.4 million over the deferral period. 
 
The movement in the value of deferred and contingent consideration between the
date of acquisition and 30 September 2015 is set out in Note 18. 
 
15. Intangible assets 
 
 Goodwill£000              Brand£000  Customerrelationships£000  Domainnames£000  Websitesand computersoftware£000  Database£000  Total£000  
 Cost                      
 At 1 October 2014         70,793     -                          6,091            1,451                             162           229        78,726   
 On acquisition (Note 14)  128,782    48,770                     -                -                                 2,976         900        181,428  
 Additions                 -          -                          -                -                                 709           -          709      
 At 30 September 2015      199,575    48,770                     6,091            1,451                             3,847         1,129      260,863  
 Amortisation              
 At 1 October 2014         -          -                          2,478            847                               -             207        3,532    
 Charge for the year       -          1,626                      1,218            262                               440           111        3,657    
 At 30 September 2015      -          1,626                      3,696            1,109                             440           318        7,189    
 Net book value            
 At 30 September 2015      199,575    47,144                     2,395            342                               3,407         811        253,674  
 At 30 September 2014      70,793     -                          3,613            604                               162           22         75,194   
 
 
Goodwill and intangibles are tested for impairment by comparing the carrying
amount of the cash-generating unit with its recoverable amount, which
represents the higher of its estimated fair value and value in use. An
impairment loss is recognised when the carrying value of the asset exceeds its
recoverable amount. 
 
The recoverable amounts of intangible assets and goodwill are based on the
value in use, which is determined using cash flow projections derived from
financial plans approved by Management covering a three year period. They
reflect Management's expectations of revenue, EBITDA growth, capital
expenditure, working capital and operating cash flows, based on past
experience and future expectations of business performance. Cash flows beyond
the three year period have been extrapolated using perpetuity growth rates. 
 
A growth rate of 3% has been applied to extrapolate the cash flows into
perpetuity. Growth has been capped at 3% across both business units so as not
to exceed the long-term expected growth rate of the country and industry the
Group operates in, in accordance with IAS 36. 
 
The pre-tax discount rate used for both businesses is 12%. 
 
The Directors are comfortable that a reasonable change in the underlying
assumptions would not indicate an impairment. 
 
16. Trade and other receivables 
 
 2015£000                2014£000  
 Trade receivables       8,850     2,839  
 Accrued income          10,740    525    
 Prepayments             2,348     2,077  
 Amounts held in escrow  7,446     -      
 Other receivables       842       446    
 30,226                  5,887     
 Current                 22,780    5,887  
 Non-current             7,446     -      
 30,226                  5,887     
 
 
The Directors consider that the carrying value of trade and other receivables
is approximate to their fair value. The carrying value also represents the
maximum credit exposure. 
 
£7.4 million is held in escrow for the settlement of deferred consideration
payable in relation to the acquisition of uSwitch. 
 
Details of the Group's exposure to credit risk are given in Note 25. 
 
17. Trade and other payables 
 
 2015£000                                     2014£000  
 Trade payables                               5,507     4,676  
 Accruals                                     10,599    3,406  
 Other taxation and social security payments  5,512     2,900  
 Deferred income                              380       155    
 Other payables                               253       281    
 22,251                                       11,418    
 
 
The Directors consider that the carrying value of trade and other payables is
approximate to their fair value. 
 
Details of the Group's exposure to liquidity risk are given in Note 25. 
 
18. Deferred and contingent consideration 
 
The Group's liabilities in respect of deferred and contingent consideration
arising on the acquisition of uSwitch on 1 June 2015 are set out below: 
 
 Deferred consideration£000                                                              Contingentconsideration -earn-out£000  Total£000  
 At 1 October 2014                                                                       -                                      -          -       
 Recognised on acquisition                                                               11,040                                 24,950     35,990  
 Charge in the period for amounts conditional on the continued employment of Management  936                                    1,206      2,142   
 At 30 September 2015                                                                    11,976                                 26,156     38,132  
 Current                                                                                 10,000                                 25,393     35,393  
 Non-current                                                                             1,976                                  763        2,739   
 
 
19. Provisions 
 
The movement in provisions can be analysed as follows: 
 
 Dilapidationprovisions£000          Redundancyprovisions£000  Total£000  
 At 1 October 2014                   634                       -          634    
 Acquired on acquisition of uSwitch  135                       -          135    
 Charged in the period               30                        -          30     
 Utilised in the period              -                         -          -      
 At 30 September 2015                799                       -          799    
 Current                             190                       -          190    
 Non-current                         609                       -          609    
 At 1 October 2013                   201                       350        551    
 Charged in the period               575                       -          575    
 Utilised in the period              (142)                     (350)      (492)  
 At 30 September 2014                634                       -          634    
 Current                             -                         -          -      
 Non-current                         634                       -          634    
 
 
The dilapidation provisions relate to Management's best estimation of costs to
make good the Group's leasehold properties at the end of the lease term. The
charge in the period represents expected exit costs on completion of the
Group's property leases. 
 
20. Loans and borrowings 
 
On 30 April 2015 the Group entered into an agreement for the provision of a
five year, £150.0 million revolving credit facility. £125.0 million was drawn
down on 1 June 2015 as part of the uSwitch acquisition. At 30 September 2015
£11.0 million of the debt has been repaid leaving outstanding gross borrowings
of £114.0 million. 
 
The drawn portion of the facility incurs interest at UK Libor plus a margin.
The margin is variable based on the Group's Net Debt to Adjusted EBITDA ratio.
The effective interest rate for the period is set out in Note 25. 
 
 2015£000                                     
 Initial draw down on acquisition of uSwitch  125,000   
 Repayment of borrowings                      (11,000)  
 Gross borrowings                             114,000   
 Capitalised costs at 30 September 2015       (1,568)   
 Total loans and borrowings                   112,432   
 
 
The Group has no other loans or borrowings. 
 
21. Deferred tax 
 
 Property, plantand equipmentand computersoftware£000  Intangibleassets£000  Share-basedpayments£000  Other £000  Total£000  
 Deferred tax asset/(liability) at 1 October 2014      326                   (784)                    895         -          437       
 On acquisition of uSwitch                             -                     (10,512)                 -           379        (10,133)  
 (Charge)/credit to profit or loss                     (190)                 673                      209         57         749       
 Charge to equity                                      -                     -                        (238)       -          (238)     
 Deferred tax asset/(liability) at 30 September 2015   136                   (10,623)                 866         436        (9,185)   
 
 
Deferred tax assets and liabilities are offset where the Group has a legally
enforceable right to do so. 
 
The following is an analysis of the deferred tax balances (after offset) for
financial reporting purposes: 
 
 2015£000                  2014£000  
 Deferred tax liabilities  (10,623)  (784)  
 Deferred tax assets       1,438     1,221  
 (9,185)                   437       
 
 
22. Equity 
 
Share capital 
 
 2015£000                                                                       2014£000  
 Shares classified as capital                                                   
 Authorised                                                                     
 418,116,472 (2014: 418,092,702) shares of £0.001 (2014: £0.001) each           418       418  
 Called-up share capital - allotted and fully paid                              
 418,116,472 (2014: 418,092,702) Ordinary Shares of £0.001 (2014: £0.001) each  418       418  
 
 
Rights and restrictions attaching to shares 
 
Ordinary Shares 
 
The Ordinary Shares carry one vote per share and rights to dividends. 
 
Share transactions 
 
On 20 February 2015 the Group issued 23,770 Ordinary Shares with a nominal
value of £0.001 to settle the exercise of warrant instruments exercised. There
were no other share transactions during the year. The total number of shares
at 30 September 2015 was 418,116,472. 
 
Other reserves - Merger reserve 
 
The merger reserve was created in May 2012 from the premium on shares issued
for the acquisition of The Digital Property Group Limited. In 2014 the merger
reserve increased as a result of the Group's reorganisation prior to the IPO. 
 
Other reserves - EBT share reserve 
 
The EBT share reserve represents shares in issue that are held by the Employee
Benefit Trust for the purpose of settling the Group's obligations under the
Employee Share Option Scheme. 
 
23. Share-based payments 
 
The Group operates a number of share-based incentive schemes for both its
employees and certain estate agent partners. The Group recognised a total
share-based payments charge of £1.9 million for 2015 (2014: £3.9 million) as
set out below: 
 
 2015£000                                                                                          2014£000  
 Employee Share Option Scheme (i)                                                                  600       587    
 Long-Term Incentive Plan (ii)                                                                     600       86     
 Share Incentive Plan (iii)                                                                        231       105    
 Deferred Bonus Plan (iv)                                                                          175       -      
 One-off warrant charge on IPO (v)                                                                 -         2,985  
 Other warrant charges (v)                                                                         117       119    
 National Insurance Contributions payable in respect of eligible share-based payment schemes (vi)  150       28     
 Total share-based payments charge                                                                 1,873     3,910  
 
 
i) Employee Share Option Scheme 
 
The Group operates an equity-settled share-based incentive scheme for all
employees under an approved plan until 31 May 2012 and an unapproved plan
thereafter. The options vest in instalments over four years. Options are
forfeited if the employee leaves the Group before the options vest. The Group
recognised a charge of £0.6 million (2014: £0.6 million) in respect of options
under this scheme. 
 
Details of options under the scheme outstanding at 30 September 2015 are set
out below: 
 
                                                   2015                                     2014        
 Number'000                                        Weighted average exercise price £        Number'000  Weighted average exercise price £  
 Outstanding options at the beginning of the year  5,693                              0.26              5,198                              0.19  
 Granted during the year                           -                                  -                 2,550                              0.35  
 Exercised during the year                         (1,416)                            0.21              (1,338)                            0.13  
 Forfeited during the year                         (538)                              0.32              (717)                              0.32  
 Outstanding options at the end of the year        3,739                              0.27              5,693                              0.26  
 
 
The options outstanding at 30 September 2015 had a weighted average exercise
price of £0.27 (2014: £0.26) and a weighted average remaining contractual life
of 8.6 years (2014: 8.1 years). The range of exercise prices for outstanding
options was £0.06 to £0.35 (2014: £0.06 to £0.35). 
 
The number of options exercisable as at 30 September 2015 was 2,023,000 (2014:
1,458,000). 
 
The Employee Share Option Scheme will continue to operate until all shares
vest or lapse, or the scheme is otherwise cancelled. There will be no future
grants under this scheme. 
 
ii) Long-Term Incentive Plan 
 
The Group operates an equity-settled Long-Term Incentive Plan which grants
nil-cost options to eligible employees which vest at the end of a three year
vesting period. The vesting of the options is subject to both adjusted
Earnings per share ("EPS") and Total Shareholder Return ("TSR") performance
criteria. The Group recognised a charge of £0.6 million (2014: £0.1 million)
in respect of this scheme. 
 
A total of 1,400,935 options have been granted in respect of the 2015
financial year, the majority of which were granted on 1 August 2014 following
the Group's IPO. None of the options granted are exercisable as at 30
September 2015. The following information is relevant in the determination of
the fair value of the LTIP options granted on 1 August 2014. There were no
material grants in 2015: 
 
 1 August 2014grant          
 Valuation method - TSR      Monte-Carlo    
 Valuation method - EPS      Black-Scholes  
 Share price at grant date   £2.48          
 Exercise price              £nil           
 Expected volatility         28.3%          
 Expected life               3 years        
 Expected dividend yield     n/a            
 Risk-free interest rate     1.5%           
 Fair value per share - TSR  £1.44          
 Fair value per share - EPS  £2.48          
 
 
The volatility assumption, measured at the standard deviation of expected
share price returns, has been calculated using historical daily data of six
comparator companies over a term commensurate with the expected life of each
option. Dividend equivalent payments will be made in respect of vested options
in the form of additional shares. 
 
iii) Share Incentive Plan (SIP) 
 
The SIP is an all-employee share ownership plan which has been designed to
meet the requirements of Schedule 2 of the Income Tax (Earnings and Pensions)
Act 2003 so that shares can be provided to UK employees under the SIP in a
tax-efficient manner. Under the scheme employees may be awarded Free Shares
and/or offered the opportunity to purchase Partnership Shares with one Free
Matching Share for each Partnership Share purchased. During the period the
Group granted a total of 134,735 Matching Shares. 32,980 of these shares are
still subject to forfeiture should the employee leave the Group within 12
months of the grant date. The Group recognised a charge of £0.2 million (2014:
£0.1 million) in respect of shares under this scheme. 
 
iv) Deferred Bonus Plan 
 
From 1 October 2014 the Group has operated a Deferred Bonus Plan (DBP) which
defers a proportion of eligible employees' annual bonuses into nil-cost
options. The options vest over a period of between one and three years from
the end of the performance period. The performance period for the 2015 DBP
runs from 1 October 2014 until 30 September 2015. £0.2 million (2014: £nil)
has been accrued in respect of the 2015 DBP. No options have been granted
under this scheme. 
 
v) Warrants 
 
The Group has entered into agreements with a number of estate agent partners
whereby the partners agree to pay annual fees for advertising on the Group's
property websites over a five year period in exchange for a fixed number of
warrants over Ordinary Shares. The warrants are issued annually over the five
year term of the agreements at an exercise price equal to the nominal value of
each share (£0.001). Some or all of the warrants are forfeited if service
agreements are terminated before the end of the term. 
 
The total charge recognised for the year ended 30 September 2015 in respect of
warrants was £0.1 million (2014: £3.1 million). The 2014 warrant charge
included a one-off, accelerated charge of £3.0 million for warrants exercised
on the Group's Admission to the London Stock Exchange. 
 
                                                    2015                                   2014        
 Number'000                                         Weightedaverageexercise price£         Number'000  Weightedaverageexercise price£  
 Outstanding warrants at the beginning of the year  -                               -                  343                             0.001  
 Issued during the year                             137,779                         0.001              1,859                           0.001  
 Exercised during the year                          (23,770)                        0.001              (2,202)                         0.001  
 Outstanding warrants at the end of the year        114,009                         0.001              -                               -      
 
 
The number of warrants outstanding at 30 September 2015 was 114,009 (2014:
nil). The warrants had a weighted average exercise price of £0.001 and a
weighted average remaining contractual life of 4.4 years. 
 
The number of warrants issuable over shares in Zoopla Property Group Plc under
existing partner contracts is 1,198,300. The warrants will be issued with an
exercise price of £0.001 over the lives of the contracts. 
 
vi) National Insurance Contributions (NIC) 
 
National Insurance Contributions are payable in respect of certain share-based
payment schemes. These contributions are treated as cash-settled transactions
and are accrued at a rate of 13.8%. The total NIC charge relating to
share-based payment schemes was £150,000 (2014: £28,000). 
 
vii) The Employee Benefit Trust (EBT) and Share Incentive Plan Trust (SIP
Trust) 
 
Employee Benefit Trust (EBT) 
 
The Group has established an Employee Benefit Trust which is constituted by a
trust deed entered into between the Company and Appleby Trust (Jersey)
Limited. The Trust held 4,491,861 Ordinary Shares in Zoopla Property Group Plc
at 30 September 2015 (2014: 5,908,116). These shares are held to satisfy
future exercises under the Group's share-based payment schemes. Shares are
allocated by the Trust when the awards are exercised. The Trust waives its
right to any dividends. The market value of the shares held in the Trust at 30
September 2015 was £9.4 million (2014: £14.0 million). The cost of the shares
has been deducted from equity. 
 
Share Incentive Plan Trust (SIP Trust) 
 
The Group has established a Share Incentive Plan Trust which is constituted by
a trust deed which was entered into between Zoopla Property Group Plc and
Yorkshire Building Society. The Trust held 427,515 Ordinary Shares in Zoopla
Property Group Plc at 30 September 2015 (2014: 427,515). These shares are held
to satisfy future Free Share and Partnership Share exercises. Shares are
allocated by the Trust when the awards are exercised. Dividends paid on shares
held in the Trust are passed to the employees when the shares are allocated.
The market value of the shares held in the Trust at 30 September 2015 was £0.9
million (2014: £1.0 million). The cost of the shares has been deducted from
equity. 
 
24. Related party transactions 
 
a) Key Management Personnel 
 
The Chairman and the Directors are considered to be the Key Management
Personnel of the Group along with the Group's Chief Commercial Officer and the
CEO of uSwitch. Details of remuneration for Key Management Personnel are shown
in Note 7. 
 
No share options were exercised by Key Management Personnel in the period. 
 
Further information on the remuneration of the Chairman and the Directors can
be found in the Directors' remuneration report. 
 
b) Other Group companies 
 
Details of transactions with subsidiaries are outlined in the Company's
financial statements. Transactions with other Group companies have been
eliminated on consolidation. 
 
c) Other related parties 
 
Other related party transactions are as follows: 
 
At 30 September 2015 Daily Mail and General Trust plc (DMGT) owned 31.3% of
the share capital of Zoopla Property Group Plc (2014: 31.8%). 
 
A&N Media Finance Services Limited (ANMFS), a subsidiary of DMGT, supplied
various shared services to ZPG Limited for which the fee was £43,000 for the
year (2014: £89,000). The balance outstanding at 30 September 2015 was £nil
(2014: £nil). 
 
25. Financial instruments 
 
Carrying amount and fair value of financial assets and liabilities 
 
All financial assets, including cash and cash equivalents, are designated as
'Loans and receivables' and are held at amortised cost. All financial
liabilities are classified as 'Other liabilities measured at amortised cost'.
The Directors consider that the carrying amounts of financial assets and
liabilities recorded at amortised cost in the financial statements are
approximate to their fair values. 
 
Financial risk management 
 
The Group is exposed to the following risks from financial instruments: 
 
 •  credit risk;      
 •  market risk; and  
 •  liquidity risk.   
 
 
Credit risk 
 
Credit risk is the risk of financial loss to the Group if a customer or bank
("counterparty") fails to meet its contractual obligations resulting in
financial loss to the Group. The Group's maximum exposure to credit risk at
the end of each period was equal to the carrying amount of financial assets
recorded in the financial statements. The exposure to credit risk is
influenced by the individual characteristics of each counterparty. 
 
The potential for customer default varies between the Group's two revenue
divisions. The customer base of the Group's Property Services division is
large, so there is no significant concentration of credit risk. The Comparison
Services division operates in a market with a small number of customers which
creates a concentration of debtor balances and from time to time the amounts
due from one or a number of suppliers may be material. However, customers
within this market are often large energy and telecommunications organisations
with high credit ratings and access to significant funds. The Group's largest
customer contributed to 19% of the Group's trade receivables balance. 
 
The Group manages counterparty risk on its trade receivables through strict
credit control quality measures and regular aged debt monitoring procedures.
The Group reserves the right to charge interest on overdue receivables,
although it does not hold collateral over any trade receivable balances.
Overdue amounts are regularly reviewed and impairment provisions are created
where necessary. This provision is reviewed regularly in conjunction with a
detailed analysis of ageing profile, historical payment profiles and past
default experience. The Group has long-standing relationships with its key
customers and extremely low historical levels of customer credit defaults. 
 
The ageing of trade receivables at the period end is as follows: 
 
             2015                  2014       
 Gross£000   Provision£000         Gross£000  Provision£000  
 0-30 days   7,205          -                 2,033          -      
 31-60 days  1,234          -                 927            (191)  
 61-90 days  400            (38)              125            (104)  
 91+ days    680            (631)             299            (250)  
 Total       9,519          (669)             3,384          (545)  
 
 
In determining the recoverability of a trade receivable, the Group considers
any change in the credit quality of the trade receivable from the date credit
was granted up to the period end date. 
 
The credit risk associated with bank and deposit balances is mitigated by the
use of banks with good credit ratings. 
 
Market risk 
 
Market risk, is the risk that changes in foreign exchange and interest rates
will affect the income and financial management of the Group. The Group is not
exposed to any significant currency risk and there is a minimal interest rate
risk on cash and bank balances. However, the Group has borrowings subject to
an interest rate calculated with reference to Libor. Changes in interest rates
therefore impact the financial results of the Group. The Directors actively
monitor interest rate risk and note that interest rates remain at a historical
low. The Directors believe that any reasonable increase in the Libor rate
would not significantly impact the Group. Therefore, the Group does not hedge
its interest rate risk at this time. At 30 September 2015 borrowings of £114.0
million were subject to floating interest rates (2014: £nil). 
 
At 30 September 2015 if Libor were to have increased by 1% throughout the year
with all other variables held constant profit before tax would decrease by
£0.4 million (2014: £nil) as a result of additional interest incurred.
Therefore, the Directors are comfortable that any sensitivity to fluctuations
in interest or exchange rates would not have a material impact on the results
of the Group. 
 
Liquidity risk 
 
Liquidity risk refers to the ability of the Group to meet the obligations
associated with its financial liabilities that are settled in cash as they
fall due. Management regularly review performance against budgets and
forecasts to ensure sufficient cash funds are available to meet its
contractual obligations. 
 
The Group's activities are highly cash generative allowing it to effectively
service working capital requirements. At 30 September 2015 the Group held
total cash and cash equivalents of £19.2 million (2014: £30.1 million) and Net
debt of £93.2 million. 
 
The Group has access to a £150.0 million revolving credit facility ("RCF"), of
which £114.0 million was drawn-down at 30 September 2015. The remaining £36.0
million undrawn facility allows the Group to secure additional external
financing should it be required. The total facility requires the Group to meet
certain covenants based on the Group's interest cover and Net Debt to Adjusted
EBITDA ratio. Exceeding the covenants would result in the Group being in
breach of the facility which may lead to the facility being withdrawn.
Management regularly monitors and models covenant compliance and prepares
detailed forecasts to ensure that sufficient headroom is available. The
Directors are satisfied that there is reasonable headroom on each of the
Group's debt covenant ratios. 
 
The following tables detail the Group's remaining contractual maturities for
undiscounted financial liabilities, including interest. The contractual
maturity is based on the earliest date on which the Group may be required to
settle. Where interest rates are variable the undiscounted amount is derived
from interest rate curves at 30 September 2015. The contractual maturity is
based on the earliest date on which the Group may be required to settle. 
 
 Effectiveinterest rate  Within 1 year£000  1 to 2 years£000  2 to 5 years£000  More than5 years£000  Totalcontractualamount£000  
 2015                    
 Trade payables          5,256              -                 -                 -                     5,256                       
 Borrowings1             3.0%               2,920             3,222             123,513               -                           129,655  
 Total                   8,176              3,222             123,513           -                     134,911                     
 2014                    
 Trade payables          4,676              -                 -                 -                     4,676                       
 Borrowings              -                  -                 -                 -                     -                           
 Total                   4,676              -                 -                 -                     4,676                       
                                                                                                                                           
 
 
1 - Interest on the Group's borrowings assumes that the Group makes no further
capital repayments until maturity of the RCF in 2020. 
 
Treasury and capital risk management 
 
The Group's policy is to actively manage its cash and capital structure to
ensure that it complies with its current debt covenant ratios, maintains its
current dividend policy and minimises the Group's interest payments by paying
down its debt where possible. 
 
Management will consider the use of excess cash, including the payment of
special dividends to shareholders and M&A activity, based on the risks and
opportunities of the Group at that time. 
 
The Directors can manage the Group's capital structure through the issue or
redemption of either debt or equity instruments and by adjustment to the
Group's dividend paid to equity holders. The Directors believe that the
current debt to equity ratio remains appropriate but continue to monitor the
efficiency of the capital structure on an on-going basis. 
 
26. Operating lease commitments 
 
At the statement of financial position date, the Group had outstanding
commitments for future minimum lease payments under non-cancellable operating
leases, which fall due as follows: 
 
 2015£000                               2014£000  
 Within one year                        1,139     258    
 In the second to fifth year inclusive  3,565     2,757  
 After five years                       2,306     3,059  
 7,010                                  6,074     
 
 
27. Subsequent events 
 
There have been no reportable subsequent events between 30 September 2015 and
the date of signing of this report. 
 
28. Ultimate controlling party 
 
The Directors are of the opinion that there was no ultimate controlling party
in either period presented. 
 
Company statement of financial position 
 
As at 30 September 2015 
 
 Notes                                  2015£000  2014£000  
 Assets                                 
 Non-current assets                     
 Investment in subsidiaries             4         200,478   91,332  
 Trade and other receivables            5         77,446    -       
 Deferred tax assets                    183       -         
 Current assets                         
 Prepayments                            63        12        
 Other receivables                      101       55        
 Cash and cash equivalents              4,668     100       
 4,832                                  167       
 Total assets                           282,939   91,499    
 Liabilities                            
 Current liabilities                    
 Trade and other payables               6         21,905    385     
 Deferred and contingent consideration  7         35,393    -       
 Non-current liabilities                
 Loans and borrowings                   8         112,432   -       
 Deferred and contingent consideration  7         2,739     -       
 Total liabilities                      172,469   385       
 Net assets                             110,470   91,114    
 Equity                                 
 Share capital                          9         418       418     
 Share premium reserve                  50        50        
 Merger reserve                         9         90,495    90,495  
 Retained earnings                      19,507    151       
 Total equity                           110,470   91,114    
                                                                      
 
 
The financial statements of Zoopla Property Group Plc (company number
09005884) were approved and authorised for issue by the Board of Directors and
were signed on its behalf by: 
 
 A Chesterman     S Morana        
 Director         Director        
 1 December 2015  1December 2015  
 
 
Company statement of cash flows 
 
For the year ended 30 September 2015 
 
 2015£000                                                                       2014£000   
 Cash flows from operating activities                                           
 Profit before tax                                                              26,119     (318)  
 Adjustments for:                                                               
 Finance income                                                                 (618)      -      
 Finance costs                                                                  1,162      -      
 Dividend income received                                                       (35,000)   -      
 Transaction costs on acquisition of uSwitch                                    5,130      -      
 Movement in contingent and deferred consideration                              2,142      -      
 Operating cash flow before changes in working capital                          (1,065)    (318)  
 Decrease/(Increase) in trade and other receivables                             9,669      (67)   
 Increase in trade and other payables                                           20,477     385    
 Net cash inflows from operating activities                                     29,081     -      
 Cash flows (used in)/from investing activities                                 
 Acquisition of subsidiaries                                                    (155,540)  -      
 Amounts paid into escrow in relation to deferred and contingent consideration  (7,436)    -      
 Interest income received                                                       618        -      
 Dividend income received                                                       35,000     -      
 Net cash flows used in investing activities                                    (127,358)  -      
 Cash flows from/(used in) financing activities                                 
 Proceeds on issue of debt, net of issue costs                                  123,291    -      
 Repayment of debt                                                              (11,000)   -      
 Interest paid                                                                  (779)      -      
 Proceeds on issue of shares                                                    -          50     
 Equity contributions received                                                  -          50     
 Dividends paid                                                                 (8,667)    -      
 Net cash flows from financing activities                                       102,845    100    
 Net increase in cash and cash equivalents                                      4,568      100    
 Cash and cash equivalents at beginning of period                               100        -      
 Cash and cash equivalents at end of period                                     4,668      100    
 
 
Company statement of changes in equity 
 
For the year ended 30 September 2015 
 
 Sharecapital£000                                       Sharepremiumreserve£000  Mergerreserve£000  Retainedearnings£000  Totalequity£000  
 At 1 October 2014                                      418                      50                 90,495                151              91,114   
 Profit and total comprehensive income for the period   -                        -                  -                     26,302           26,302   
 Transactions with owners recorded directly in equity:                                                                                     
 Dividends paid                                         -                        -                  -                     (8,667)          (8,667)  
 Share-based payments                                   -                        -                  -                     1,721            1,721    
 At 30 September 2015                                   418                      50                 90,495                19,507           110,470  
 
 
 Sharecapital£000                                       Sharepremiumreserve£000  Mergerreserve£000  Retainedearnings£000  Totalequity£000  
 At 22 April 2014                                       -                        -                  -                     -                -       
 Loss and total comprehensive income for the period     -                        -                  -                     (318)            (318)   
 Transactions with owners recorded directly in equity:  
 Issue of Ordinary Shares                               418                      50                 90,495                -                90,963  
 Issue of Preference Shares                             50                       -                  -                     -                50      
 Equity contributions received                          -                        -                  -                     50               50      
 Redemption of preference shares                        (50)                     -                  -                     -                (50)    
 Share-based payments                                   -                        -                  -                     419              419     
 At 30 September 2014                                   418                      50                 90,495                151              91,114  
 
 
Notes to the Company financial statements 
 
1. Accounting policies and basis of accounting 
 
The Directors have applied International Financial Reporting Standards (IFRS)
as adopted by the European Union. 
 
The accounting policies and the financial risk management policies, where
relevant to the Company, are consistent with those of the consolidated Group
as set out in Notes 1 and 25 to the consolidated financial statements
respectively. 
 
Statement of comprehensive income 
 
The Company has taken advantage of the exemption available under section 408
of the Companies Act 2006 and has not presented a statement of comprehensive
income. The profit for the period ended 30 September 2015 was £26.3 million
(2014: loss of £0.3 million). 
 
2. Auditor's remuneration 
 
The Company incurred a cost of £55,000 (2014: £30,000) for statutory audit
services for the period ended 30 September 2015. 
 
3. Employee costs and Directors' remuneration 
 
The Company has no employees other than the Directors of the Company.
Remuneration paid to the Directors was accounted for and paid by the Group's
trading entity, ZPG Limited. Details of Directors' remuneration are set out in
the Directors' remuneration report. 
 
4. Investments in subsidiaries 
 
Investments in subsidiaries are valued at cost less any provision for
impairment. 
 
The investment in subsidiaries balance of £200.5 million represents the
Company's 100% shareholding in ZPG Limited and Ulysses Enterprises Limited.
Ulysses Enterprises Limited was acquired on 1 June 2015 as set out in Note 14
to the consolidated financial statements. 
 
During the year the Company recognised an increase in the investment in ZPG
Limited in respect of the Group's share schemes. Consistent with the Group
accounting policies outlined in Note 1.19 to the consolidated financial
statements, equity-settled share options granted directly to a subsidiary are
treated as a capital contribution to the subsidiary. The capital contribution
is measured by reference to the consolidated share-based payments charge and
is recognised as an increase in the cost of investment with a corresponding
credit to retained earnings. The credit to retained earnings does not make up
part of distributable reserves. 
 
 2015£000                                     
 Investment in ZPG Limited at 1 October 2014  91,332   
 Acquisition of Ulysses Enterprises Limited   107,425  
 Share-based payments - capital contribution  1,721    
 200,478                                      
 
 
5. Trade and other receivables 
 
 2015£000                                 2014£000  
 Amounts held in escrow                   7,446     -  
 Amounts receivable from Group companies  70,000    -  
 77,446                                   -         
 
 
The Directors consider that the carrying value of trade and other receivables
are approximate to their fair value. All trade and other receivables are
classified as non-current receivables. 
 
Amounts held in escrow are held for the settlement of deferred consideration
due on the acquisition of uSwitch. 
 
The Company has a receivable of £70.0 million due from Ulysses Enterprises
Limited. This amount is designated as an unsecured, intercompany loan. The
loan accrues interest at Libor + 2% and has no fixed repayment date. The
Company is comfortable that the amount is recoverable in full. 
 
6. Trade and other payables 
 
 2015£000                            2014£000  
 Trade payables                      11        -    
 Accruals                            1,894     37   
 Amounts payable to Group companies  20,000    348  
 21,905                              385       
 
 
The Directors consider that the carrying value of trade and other payables are
approximate to their fair value. All trade and other payables are classified
as current liabilities. 
 
Details of the Group's exposure to liquidity risk are given in Note 25 to the
consolidated financial statements. 
 
7. Deferred and contingent consideration 
 
Details of deferred and contingent consideration are given in Note 18 to the
consolidated financial statements 
 
8. Loans and borrowings 
 
Details of loans and borrowings are given in Note 20 to the consolidated
financial statements 
 
9. Equity 
 
Share capital 
 
Details of the Company's share capital are included in Note 22 to the
consolidated financial statements. 
 
Merger reserve 
 
The merger reserve represents the difference between the investment recognised
in ZPG Limited on restructuring in 2014 of £90.9m and the value of the shares
issued of £0.4 million. 
 
10. Financial instruments 
 
The IFRS 7 - Financial Instruments' disclosures, where relevant to the
Company, are consistent with those of the Group as set out in Note 25 to the
consolidated financial statements. 
 
11. Related parties 
 
a) Key management personnel 
 
There are no employees of the Company. The Directors are employed and/or
remunerated by the Company's subsidiary - ZPG Limited. There were no
transactions during the year between the Directors and the Company other than
the issue of shares and share options as outlined in the Directors'
remuneration report. 
 
b) Subsidiaries 
 
Transactions with subsidiaries 
 
On 1 June 2015 the Company acquired Ulysses Enterprises Limited and its
subsidiaries as set out in Note 14 to the consolidated financial statements.
The transaction included Zoopla Property Group Plc assuming and discharging
external debt of £79.7 million through an intercompany loan with Ulysses
Enterprises Limited. During the period to 30 September 2015 Ulysses
Enterprises Limited repaid £9.7 million of this balance to the Company. 
 
During the year ZPG Limited paid dividends of £35.0 million to the Company and
settled bills to the value of £20.0 million (2014: £348,000) on behalf of the
Company. 
 
The Company issues shares to employees and estate agent partners of ZPG
Limited as part of the Group's share-based payment schemes as set out in Note
23 to the consolidated financial statements. 
 
There have been no other transactions with the Company's subsidiaries during
the year. 
 
Year end balances with subsidiaries 
 
At 30 September 2015 £70.0 million of the intercompany loan due from Ulysses
Enterprises Limited was outstanding. Interest at Libor + 2% is due on the
outstanding balance. 
 
A trading balance of £20.0 million is due to ZPG Limited. This amount will be
settled on receipt of any dividend from ZPG Limited. No interest is payable on
the balance. 
 
There were no other related party transactions in the period. 
 
c) Other related parties 
 
There were no transactions between the Company and any other related parties. 
 
12. Subsequent events 
 
There have been no reportable subsequent events between 30 September 2015 and
the date of signing of this report. 
 
13. Ultimate controlling party 
 
The Directors are of the opinion that there was no ultimate controlling party
in either period presented. 
 
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