Zoopla ended last week as the one of the highest risers on the FTSE 350, as it returned to growth, the portal announced last week.

According to its latest trading update, the property website has attracted a net rise of 213 branches in the four months to 31st July. The news triggered a ratings upgrade for Zoopla from ‘sell’ to ‘buy’, with Broker Panmure Gordon suggesting that shares in the portal look undervalued.

Zooplalost a significant number of agency subscribers due largely to the launch of OnTheMarket (OTM) earlier this year and its restrictive ‘only one other’ portal rule. However, the group said that it had won back 100 agents in recent months – many from OTM – with market churn also nearing historic levels, according to Zoopla.

The group also announced that the volume of people visiting its website remained flat at 45.6 million, which is significantly below Righmove, but towers above OTM’s 5.2 million visitors.

Panmure Gordon analyst Jonathan Helliwell told the press that “near-term, OTM’s growth appears to have stalled.”
He added, “Zoopla’s inventory and traffic are holding up pretty well, and the housing market looks to be picking up. We think the stock could continue to push higher in the near term.”

But Zoopla still faces stiff competition from OTM for the coveted number two spot in the portals market, and Ian Springett, the CEO of OTM, remains confident that his website is on course to replace Zoopla as the second largest portal by the end of next year on their way to achieving their medium term objective of challenging the market leader, Rightmove.

Mr Springett (left) said, “Zoopla Property Group’s trading update only serves to underline the success and progress of OnTheMarket.com in continuing to disrupt the property portals market. Its tepid growth of 213 agent branches since its April 2015 update is a drop in the ocean in the context of its 23 per cent loss of agents, which equates to 3,812 agents, between 30 September 2014 and 31 March 2015.”

He added, “The fact is that Zoopla Property Group has lost overall share of agents and traffic as OnTheMarket.com has become established and as the overwhelming majority of our members retain the dominant market leader as their other portal.”

Contrary to suggestions reportedly made by Jefferies, joint sponsor of ZPG’s IPO last year, OTM’s ‘one other portal’ rule will remain in place.

Meanwhile, Zoopla’s latest trading update also revealed that Alex Chesterman has committed his future to the Zoopla Property Group with an £11 million share sale windfall plus long-term bonus deal worth up to £20 million over four years.

Chesterman, who has already made in excess of £70 million from selling part of his stake in Zoopla when it floated on the stock market last summer, will sell 4.25 million shares over coming months, worth in the region of £11 million at the current price.