Acquisition costs explain 20% Zoopla and PrimeLocation profits fall, says firm
The company behind Zoopla and PrimeLocation has hailed a record rise in half-year revenues, but acquisition-related costs caused profits to drop in the period.
FTSE 250 firm ZPG (Zoopla and PrimeLocation) reported a 22% rise in revenue to £117.9 million for the six months to March 31 as it racked up record traffic of more than 314 million visits to its sites and apps.
The number of agents signed up to its platforms also rose 6% to 14,271 branches.
But pre-tax profit fell by 20% to £22.5 million, down from £28.1 million last year, due to the acquisitions of market intelligence tool HomeTrack and online software provider Expert Agent.
The acquisitions contributed to £8.8 million of exceptional costs, up from £4.9 million a year earlier.
Adjusted earnings, stripping out the costs, rose 11% to £45 million.
Chief executive Alex Chesterman said: "We have enjoyed a strong first half to the financial year across both divisions and are delighted to report record revenues and adjusted EBITDA for the period."
He added: "We remain incredibly excited by the underlying growth across each of the business divisions, our recent acquisitions and the significant cross-sell opportunities to our highly engaged consumer audience and our unrivalled partner base."
Jefferies analyst Anthony Codling said that ZPG stands out as a safe haven amid an uncertain housing market experiencing economic headwinds.
"Zoopla's robust business model acts as a protective atoll around the group, allowing investors to reach for the sun lounger rather than the life jacket," he said.
Shares in ZPG rose over 3% to 370.8p in midday trading.