* Listing likely to value group at more than 1 bln stg
* Plans expansion into commercial property this year
* Other new services in pipeline, possible international
(Adds detail, background)
By Kate Holton
LONDON, May 22 Britain's second-largest property
website Zoopla plans to list its shares on the London stock
market next month to tap into rising confidence in the country's
housing sector, potentially valuing the group at about 1 billion
pounds ($1.7 billion).
Majority owner Daily Mail & General Trust (DMGT)
said Zoopla's existing owners planned to sell shares in June to
institutional investors and the estate agents who pay to list
properties on its websites.
Zoopla, which was launched in 2008, trails Rightmove
in the online property sector, drawing more than 40 million
visits a month to its websites and mobile applications, compared
with about 80 million visits for its larger rival.
It joins a rush of companies seeking to join the London
market and follows recent listings by online groups AO World
and Just Eat and property agent Foxtons
Founder and CEO Alex Chesterman told reporters that Zoopla
plans to launch additional products and services after the share
sale, with a move into the commercial property market penned for
this year and possible overseas expansion in the future.
"We have a very strong growth story," Chesterman said.
"We've built a leading market proposition in an industry with
high barriers to success. Ninety percent of all properties for
sale or to rent are advertised on our platform."
Any listing is likely to be lifted by the strong sentiment
around the British housing market, particularly in London, where
prices have surged 17 percent in the 12 months to March, pushed
up by cash-rich foreign investors.
The company makes 86 percent of its revenue from the
subscription fees paid by estate agents to list their
properties, with the rest coming from advertising and the sale
of research data.
The move is not without risk, however. Shares in AO World
and Just Eat are down by more than 40 percent and 25 percent
respectively since they joined the market this year, while other
listings have slipped as investors have turned more selective.
Chesterman declined to predict how much the sale would
raise, but analysts said the move to have a free float of around
25 percent is likely to value the group at more than 1 billion
UBS said the listing could value the company at about 1.2
billion pounds ($2 billion), while analysts at Liberum value
DMGT's 52.6 percent stake at 575 million pounds.
By comparison, Rightmove has a market capitalisation of more
than 2.3 billion pounds and its share price has risen by 235
percent in the past four years, lifted by the recovering economy
and housing market.
Media group DMGT, the publisher of Britain's Daily Mail and
MailOnline, is set to remain Zoopla's largest shareholder. An
overallotment option of up to 15 percent of the total offer will
be made available.
Other shareholders include Chesterman and estate agent and
property services group Countrywide.
Zoopla reported six-month revenue to March 31 of 38.3
million pounds. Adjusted core earnings were 18.7 million pounds,
up from 14.8 million pounds a year earlier, having suffered a
full-year loss of 0.6 million pounds as recently as 2011.
DMGT announced the market listing as it posted half-year
operating profit up 21 percent on an underlying basis, helped by
price rises for its newspaper and tight cost control.
Shares in the group, which said its forecasts remained
unchanged for the year, were up 8.9 percent in mid-morning
trade, giving it a market value of 3.2 billion pounds.
The group also sold certain small assets including
recruitment portal Jobsite. It said the disposals were expected
to raise about 150 million pounds, raising hopes of money being
returned to shareholders.
($1 = 0.5925 British Pounds)
(Editing by David Goodman)