November 29, 2017 / 7:22 AM / a year ago

Zoopla-owner ZPG's revenue jumps, but so do costs

(Reuters) - ZPG Plc, the owner of British property websites Zoopla and PrimeLocation, reported a 23.7 percent jump in full-year revenue as more people visited its price comparison sites, but costs rose as it spent heavily on acquisitions and advertising.

The company is expanding its business to take advantage of the growing popularity of price comparison websites as consumers look for bargains amid uncertainties in the property market following Britain’s vote to leave the European Union.

ZPG said on Wednesday it would buy Dutch property analysis firm ‍Calcasa for 26.5 million pounds, a week after it ended its pursuit of rival GoCompare.

Peel Hunt analysts said the acquisition came as a surprise as Calcasa’s business was not focused on the UK. “It no doubt demonstrates that ZPG’s ambitions lie not solely in the UK.”

The company said adjusted earnings before interest, tax, depreciation and amortisation was 96.4 million pounds in the period, largely in line with analysts’ estimates. Pretax profit rose 4.1 percent to 48.1 million pounds in the year ended Sept.30.

The company’s shares were down 3.6 percent at 332 pence at 1201 GMT.

ZPG had offered $600 million for GoCompare, known in Britain for its opera-themed Gio Compario television adverts, a deal that would have expanded its price comparison operations that already include, which it bought in September, and uSwitch.

While the failed deal was a setback for ZPG, its vast portfolio of websites helped it cross-sell its services.

“Zoopla is delivering over 25 percent of mortgage traffic to uSwitch, demonstrating the cross-sell benefits and resulting in unpaid traffic accounting for the majority of site visits,” Macquarie analysts said in a note.

Operating costs jumped 23 percent to 148.1 million pounds ($198.4 million).

ZPG’s revenue rose to 244.5 million pounds from 197.7 million pounds a year ago.

Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Saumyadeb Chakrabarty

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