Half-year Results

24 May 2017

ZPG DELIVERS RECORD REVENUES AND EBITDA

Half-year results for the six months ended 31 March 2017

ZPG Plc (LSE:ZPG) ("Company", "ZPG") which owns and operates some of the UK's most trusted home-related digital platforms including Zoopla, uSwitch, PrimeLocation, Hometrack and Property Software Group today announces its half-year results for the six months ended 31 March 2017 (the "Period").

Financial highlights

Business highlights

· Revenue increase of 22% to £117.9 million and Adjusted EBITDA increase of 11% to £45.0 million

· Record traffic of over 314 million visits to the Company's websites and apps with 68%+ via mobile

· Further product innovation and differentiation with the launch of new Move Planner tool on Zoopla

· Acquisitions of Hometrack and Expert Agent help further improve product portfolio for our partners

· Strategic investment in brands and products resulting in record levels of awareness & engagement

· Continued to be highly cash generative with strong cash conversion ratio of over 90% during Period

· Net debt4 at end of Period was £209.3m as a result of additional funding related to various acquisitions

· Statutory Profit for the Period reduced by acquisition related costs and share-based payments

· Interim dividend of 1.9p per share to be paid on 23 June 2017 to shareholders on register at 2 June

Property

· Further UK Agency portal partner growth up 6% to 14,271 branches & inventory up 9% to 928k+ listings

· Continued acceleration of win backs with 750 portal branches having returned to ZPG over past 2 years

· Average revenue per partner5 (ARPP) up 5% driven by strong demand for both portal & software products

· Total number of unique Property partners, including acquisitions, up 35% to 23,516 as at end of Period

Comparison

· Strong switching levels across all verticals with revenue up 8% despite outperformance during H1 last year

· 15.9 million leads generated helping consumers save over £137 million off their household bills over Period

· Continued progress in developing & expanding financial services area with new dedicated mortgages team

· Ongoing regulatory support for role of Digital Comparison Tools (DCTs) outlined in recent report by the CMA

Commenting on today's announcement Alex Chesterman, Founder & CEO of ZPG 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. Our audience grew by 5% with a record 314 million visits to our websites and apps and we achieved record levels of brand awareness for both Zoopla and uSwitch.

"We also made good progress on our continued product differentiation with the launch of an innovative new Move Planner tool which provides a one-stop shop for all moving related services and are pleased to announce today a strategic investment in Zero Deposit, a new business seeking to transform the lettings market by providing an alternative to tenant deposits.

"Our Property division has performed very well, driven by continued portal partner win backs, strong demand for our upsell products and the continued migration of our software partners to cloud-based products. The integration of Hometrack into the wider business is progressing well and, since the acquisition, we have signed new deals with TSB and Bank of Ireland and extended our relationship with HSBC, now serving 17 of the top 20 UK mortgage lenders.

"Our Comparison division also performed strongly with high levels of leads and switching activity in every vertical. During the first six months of the year we helped millions of consumers find better deals and save over £137 million off their household bills and are pleased to report that uSwitch recently won two coveted awards at the MOMA Awards 2017 for both 'Most innovative use of mobile' and for 'Best app'.

"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."

Outlook

ZPG has had a good start to the second half of its financial year across both divisions and Management remains comfortable with market expectations6 for the 2017 financial year.

We are encouraged by the continued rate of returning portal partners, ongoing migration of software partners to cloud-based products and the growing demand for our additional products. We look forward to adding further value to both our consumers and partners as we continue to innovate and integrate our recent acquisitions into our product portfolio.

Our Comparison division is trading well and benefiting from heightened interest in energy switching from consumers in the run up to the Election. The CMA has made a number of recommendations following its 2-year study into the energy market, which we support in line with our mission to ensure that consumers get access to the best deals in the market.

We remain focussed on the significant cross-sell opportunity as a result of our unique product portfolio to help our consumers find, move and manage their homes and help our partners market, manage and maximise their businesses.

Our next scheduled trading update will be a pre-close trading statement in late September 2017.

-ENDS-

For further information, please contact:

Lawrence Hall, Head of Communications - [email protected] / 07890 078 945

Rachael Malcolm, Head of Investor Relations - [email protected] / 0203 8725 648

James Isola, Maitland 020 7379 5151

http://www.zpg.co.uk/

A webcast of the management team presentation to analysts and investors will be made available at www.zpg.co.uk at 09.00am this morning and registration can be accessed here. An audio dial-in will also be made available:

Standard International Access: +44 (0) 203 003 2666

UK Toll-Free Number: 0808 109 0700

United States Toll-Free Number: 1 866 966 5335

United States Toll Number: 1 646 843 4608

Participant password: PHD17TU

1. Adjusted EBITDA is defined as operating profit after adding back depreciation and amortisation, share-based payments and exceptional items.

2. Adjusted basic EPS is calculated as profit for the period excluding exceptional items and amortisation of intangible assets arising on acquisitions, adjusted for tax and divided by the weighted average number of shares in issue for the Period.

3. Profit for the Period includes exceptional items and amortisation of intangibles arising on acquisitions, adjusted for tax, of £13.0m during the Period, resulting from acquisitions

4. Net debt increase year-on-year is a result of the acquisitions of Property Software Group, Hometrack and Expert Agent since 31 March 2016.

5. Average revenue per partner (ARPP) represents total revenue from ZPG's Property partners in a given month divided by the number of Property partners during the month, measured as a monthly average over the Period.

6. As at 23 May 2017, market expectations for FY17 Revenue and EBITDA were £236.5m and £92.0m, respectively (Source: Bloomberg).

Cautionary Statement

This document contains forward-looking statements. These forward-looking statements include matters that are not historical facts. Statements containing the words "believe", "expect", "intend", "may", "estimate" or, in each case, their negative and words of similar meaning are forward-looking. By their nature, forward-looking statements involve risks and uncertainties because they relate to events that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that the Company's actual financial condition, results of operations and cash flows, and the development of the industry in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this document. In addition, even if the Company's financial condition, results of operations and cash flows, and the development of the industry in which we operate are consistent with the forward-looking statements in this document, those results or developments may not be indicative of results or developments in subsequent periods. Important facts that could cause the Company's actual results of operations, financial condition or cash flows, or the development of the industry in which we operate, to differ from current expectations include those principal risks and uncertainties disclosed below. As a consequence, the Company's future financial condition, results of operations and cash flows, as well as the development of the industry in which we operate, may differ from those expressed in any forward-looking statements made by us or on the Company's behalf.

About ZPG Plc (www.zpg.co.uk)

ZPG Plc (LSE:ZPG) ("ZPG") owns and operates some of the UK's most trusted home-related digital platforms including Zoopla, uSwitch, PrimeLocation, Hometrack and Property Software Group. Our mission is to provide the most useful resources for consumers when finding, moving or managing their home and be the most effective partner for related businesses.

We help empower consumers to understand the property and home services comparison markets and make smarter decisions, whilst helping professionals to win more business and operate more effectively. Our multi-brand, multi-channel approach creates a unique and unrivalled proposition with our websites and mobile apps attracting over 50 million visits per month and over 24,000 business partners using our services.

Zoopla is the UK's most comprehensive property website, helping consumers to research the market and find their next home by combining hundreds of thousands of property listings with market data and local information.

uSwitch is the UK's leading comparison website for home services switching, helping consumers to find the best deal and save money on their gas, electricity, broadband, TV, phone and personal finance products.

PrimeLocation is one of the UK's leading property websites, helping house-hunters in the middle and upper tiers of the market explore and find their dream home from the top estate agents, letting agents and property developers.

Hometrack is a leading automated valuation model (AVM) provider in the UK and Australia, providing residential property market insights, analytics, valuations and data services to partners including mortgage lenders, new home developers, investors, housing associations and local authorities.

Property Software Group is the UK's leading provider of software and essential workflow solutions for the management of inventory, marketing and communications for estate and lettings agents across the UK with a portfolio of brands including Alto, Jupix, Technicweb, Expert Agent, CFP, Vebra and MoveIT.

ZPG was founded in 2007 and has a highly experienced management team, led by Founder & CEO, Alex Chesterman OBE.

Business Review

ZPG has enjoyed a strong first half to the year across both its divisions, delivering improved transparency for our consumers and greater efficiency for our partners as a result of our unique portfolio of products and services. The business is more diversified than ever before and generated Revenue growth of 22% to £117.9 million and Adjusted EBITDA growth of 11% to £45.0 million in the six months to 31 March 2017.

Executing on our strategy & vision

Management is pleased with the progress made on ZPG's journey to create the best, integrated products and deliver on our mission of providing the most useful resources for consumers when finding, moving or managing their home and being the most effective partner for related businesses.

We have invested further in marketing our brands, creating a series of new national advertising campaigns for both uSwitch and Zoopla. Our refreshed uSwitch brand identity and new strapline of 'Switching made simple' has helped drive record levels of national awareness and brand awareness for Zoopla reached an all-time high during the Period with 88% of consumers nationally now having heard of the brand (Source: Harris Interactive).

Our consumer audience also reached record levels, with over 314 million visits to our websites and apps during the Period, delivering even greater value to our partners. And our strategic partnerships are proving to be of great value as they provide unique and differentiated products and services to our consumers and partners whilst giving us valuable insights into some of the leading innovators in our markets. We have recently invested in and agreed an exclusive strategic partnership with Zero Deposit, a new business seeking to transform the tenancy deposit space. Also, during the Period, we invested further in our existing partnerships with Bricklane, Landbay and Trussle.

We have continued to make good progress on cross-selling our unique portfolio of products to both our partners and consumers. On the partner side, our compelling proposition which enables property professionals to market, manage and maximise their business, has continued to gain traction as our partners benefit from increased efficiency, cost-effective lead generation and the ability to generate additional revenues from tools such as MoveIT. The number of partners, excluding Expert Agent, taking both our software and portal products increased by 397 during the Period, up 14% to 3,203 and we are starting to see significant traction with referrals across different parts of the business. We have also increased the cross-sell opportunity through the acquisition of Hometrack.

Our consumer tools, like the recently launched Move Planner, create a great opportunity to cross-sell to our highly engaged audience and to monetise leads for a variety of services ranging from conveyancing and removals to broadband and energy. We are already seeing good cross-sell results with our comparison products from this tool along with increased engagement levels on our Running Cost tool, up by 60% in March year-on-year. These initiatives have driven thousands of incremental switches and helped even more households get the best deals. We continued to develop our comparison tools with the addition of a dedicated mortgage team and the launch of an iPad app for uSwitch, which recently won both 'Most innovative use of mobile' and 'Best app' at the MOMA Awards 2017.

In November, we acquired Technicweb, one of the UK's leading estate agency website design and hosting businesses, as part of our mission to be the most effective partner for UK property professionals. This acquisition has now been integrated into our wider software business. On 31 January, we acquired Hometrack, the UK's leading provider of residential property market insights and analytics. Since the acquisition, Hometrack has signed new deals with TSB and Bank of Ireland and extended its relationship with HSBC, now serving 17 of the top 20 mortgage lenders in the UK. This acquisition has helped to further differentiate our products for both consumers and partners. On 28 February, we acquired Expert Agent, a cloud-based property software provider that provides essential systems for the day-to-day management of inventory, marketing and communications for estate agents and lettings agents across the UK. The Competition and Markets Authority (CMA) is currently reviewing this acquisition and ZPG is engaging with the CMA as part of this review.

Property

Revenues in our Property division increased by 44% to £55.8 million for the Period, driven by strong demand for our portal products along with the inclusion of a full six months of trading from Property Software Group, which was acquired on 28 April 2016, as well as the acquisitions of Technicweb, Hometrack and Expert Agent which were acquired during the Period. The audience to our Property platform remains highly engaged with over 276 million visits, up 3% year-on-year, of which 72% was via mobile and generated 10.4 million leads for our Property partners during the Period.

The total number of unique Property partners, including acquisitions, increased by 35% to 23,516 as at the end of the Period. This number has been restated to align portal and software partner count under the same methodology1. On a like-for-like basis (including acquisitions in both periods), the total number of unique Property partners increased by 4%. Within this we saw the number of UK Agency portal partners increase by 6% YoY to 14,2712, including 750 win backs over the past two years. And our inventory grew 9% YoY to over 928k listings at the end of the Period. ARPP increased by 5% to £352 due to strong demand for portal advertising products such as Premium Listings and AdReach, the continued migration of software partners to cloud-based products and the inclusion of acquisitions. On a like-for-like basis (including acquisitions in both periods), ARPP increased by 6% to £356.

Comparison

We experienced strong levels of switching across each vertical in our Comparison division, delivering revenues of £62.1 million, up 8% over the same period last year. We generated 15.9 million leads for our Comparison partners during the Period and saw ARPL increase by 10% to £3.91, driven by strong performance in the higher margin energy and financial services verticals. As outlined in our FY2016 results, the Comparison division had an exceptionally strong first six months in 2016 with record switching volumes in both the energy and communications verticals as a result of our market-leading collective switch, energy supplier price cuts and a highly-competitive supplier environment.

During the Period the energy vertical benefitted from returning switchers on fixed term deals and the communications vertical performed well whilst absorbing changes to the advertising standards for broadband. Management is pleased with the good progress in the financial services vertical in areas such as credit cards and banking and the creation of a dedicated mortgage team. The regulatory environment remained supportive for the role of Digital Comparison Tools (DCTs). In March 2017 the CMA published an update report which highlighted the role that DCTs play in offering substantial benefits to consumers in reducing hassle and increasing competition.

Looking Ahead

We remain incredibly excited by the underlying opportunities within each division and our unique cross-sell opportunities as we deliver on our mission to provide the most useful resources for consumers when finding, moving or managing their home and being the most effective partner for related businesses. We continue to lead innovation in our markets and look forward to developing and launching further products as part of our integrated proposition.

I would like to thank the entire team for their continued commitment to our mission.

Alex Chesterman OBE

Founder & CEO

1 The total number of unique Property partners has been restated to exclude 788 legacy software customers of Property Software Group who are not paying for an active support contract

2 The number of UK Agency partners includes an uplift of 525 in H1 2016 and 657 in H1 2017 for hybrid agents calculated on an equivalent branch basis in line with our peers

Finance Review

Revenue increased by 22% to £117.9 million and Adjusted EBITDA increased by 11% to £45.0 million compared to the same six-month period last year. The increase was predominantly driven by a strong underlying performance across both divisions and the inclusion of six months of trading from Property Software Group. The result also includes £3.8 million of revenue from Technicweb, Hometrack and Expert Agent, which were acquired during the Period. Full details of the like-for-like performance (including acquisitions in both periods) can be found in the Appendix.

Statutory Profit for the Period and statutory basic EPS reduced by 25% to £16.9 million and 27% to 4.0p, respectively after the impact of increased exceptional costs, amortisation of intangibles assets arising on acquisitions and share-based payments. When reviewing performance the Directors use a number of adjusted measures, including Adjusted EBITDA and Adjusted basic EPS, as they believe these give a more relevant indicator of the Company's underlying performance and a closer approximation to ZPG's operating cash flows. These measures are reconciled in the Summary Income Statement below.

During the Period, ZPG secured a £75.0 million extension to its credit facility and raised £74.3 million (net of fees) through the placing of 20.9 million shares, to help fund acquisitions. As at 31 March 2017, ZPG had a leverage of 2.3x with net debt of £209.3 million and substantial headroom against its covenants. The Company maintains a target dividend pay-out ratio of 35-45% of profits excluding share-based payments and exceptional items, and the Directors have declared an interim dividend of 1.9 pence per share, up 27% on the same period last year.

Summary Income Statement

Revenue

The Property division generated £55.8 million of revenue, up 44% on the same period last year. Agency revenue, which includes £9.9 million of revenue from acquisitions, was up 43% at £41.3 million. Excluding acquisitions, UK Agency revenue was up 8% to £30.1 million driven by returning partners and demand for new products such as AdReach. Overseas and Commercial revenue of £1.3 million, which is included within the Agency vertical, continued to perform in line with expectations. New Homes revenue increased by 18% driven by demand for additional marketing campaigns. Other Property revenue of £7.8 million was up 86% on the same period last year as a result of the inclusion of £3.1 million revenue from two months of trading from Hometrack. Other Property revenue, excluding Hometrack, which is predominantly third-party advertising revenue generated from across ZPG's property platform, increased by 12%.

The Comparison division generated £62.1 million of revenue up 8% against tough comparators last year as outlined in the Business Review. Energy and communications generated £30.3 million and £22.5 million of revenue respectively as uSwitch continued to benefit from its leading market position within home services. Other Comparison revenue, which is predominantly financial services, generated £9.3 million of revenue, up 43% as a result of ZPG's focused approach on niche verticals.

Operating costs

Operating costs increased 30% to £72.9 million comprising Staff costs of £23.7 million, Marketing costs of £40.6 million and Other costs of £8.6 million. The increase in costs is largely attributable to the inclusion of acquisitions, the timing of above the line advertising costs for the new nationwide uSwitch TV campaign which launched during the Period and costs associated with ZPG's new headquarters.

Adjusted EBITDA

Adjusted EBITDA increased by 11% to £45.0 million compared to the same period last year. Property Adjusted EBITDA increased to £24.6 million driven by a strong underlying performance, the inclusion of six months of trading from Property Software Group and acquisitions during the Period. Comparison Adjusted EBITDA reduced to £20.4 million as a result of ZPG's additional strategic investment in marketing, which is weighted into H1 2017, and the strong performance in the same period last year as outlined in the Business Review.

Share-based payments

The share-based payments charge increased as expected from £1.8 million to £3.5 million in line with 2017 grants for the LTIP and deferred bonus schemes.

Depreciation & Amortisation of other intangibles

Depreciation increased to £0.6 million due to costs associated with the Company's new headquarters. Amortisation of other intangibles increased to £1.3 million reflecting the Company's capital expenditure on further development of its integrated products.

Amortisation of acquired intangible assets

ZPG splits out amortisation of intangible assets arising on acquisitions and amortisation of other intangibles for the purposes of calculating Adjusted basic EPS. Amortisation of acquired intangible assets increased to £5.8 million as a result of the inclusion of amortisation arising on the acquisition of Property Software Group, Technicweb and Hometrack.

Exceptional items

Exceptional items include costs that Management believes to be exceptional in nature by virtue of their size or incidence. Total exceptional items of £8.8 million in H1 2017 primarily represent costs relating to both the Hometrack and Expert Agent acquisitions in addition to deferred costs relating to both the Property Software Group and uSwitch acquisitions.

Net finance costs

The Company incurred net finance costs of £2.5 million during the Period. The increased charge reflects the £125 million increase in the Company's credit facility since 31 March 2016 to £275 million to help fund strategic acquisitions.

Income tax expense

The Company's income tax charge was £5.6 million representing an effective income tax rate of 24.9%. This is higher than the statutory tax rate of 20% due to non-deductible transaction costs and management deferred and contingent consideration expenses arising on acquisitions.

Profit for the Period

Adjusted Profit for the Period, calculated as profit for the period after adding back exceptional items and amortisation of intangible assets arising on acquisitions adjusted for tax, increased by 5% to £29.9 million. Statutory Profit for the Period reduced by 25% to £16.9 million after the impact of increased exceptional costs, amortisation of intangibles assets arising on acquisitions and share-based payments.

Earnings per share (EPS)

Adjusted basic EPS, which strips out the impact of exceptional items and amortisation of intangible assets arising on acquisitions, increased by 3% to 7.1p. Statutory basic EPS reduced to 4.0p in line with statutory Profit for the Period.

Summary statement of financial position

3 Working capital is defined as both current and non-current, trade and other receivables less trade and other payables

4 Includes both current and non-current balances

The Company was in a strong financial position as at 31 March 2017 with net assets of £222.7 million. Intangible assets increased to £491.7 million reflecting goodwill and acquired intangible assets as a result of the Property Software Group, Technicweb, Hometrack and Expert Agent acquisitions. The increase in property, plant and equipment to £6.5 million reflects the Company's investment in its new headquarters as outlined in the Business Review. The Company recognised a liability of £44.9 million for deferred and contingent consideration payable as a result of the Company's acquisitions.

Net debt position

As at 31 March 2017 the Company had net debt of £209.3 million including loans and borrowings of £219.8 million. The overall increase in net debt can be attributed to the funding of acquisitions during the Period and the payment of the deferred consideration relating to both the uSwitch and Property Software Group acquisitions, net of increases arising from the share placing and operating cash flows.

Summary statement of cash flows

The Company continues to be highly cash generative with net cash inflows from operating activities of £39.6 million during the Period. Capital expenditure increased to £3.4 million as a result of developing new integrated projects such as the Move Planner as outlined in the Business Review and the inclusion of development time for Property Software Group. The Company had a net outflow of £155.7 million predominantly relating to the cash costs of the acquisitions of Hometrack and Expert Agent and deferred consideration relating to previous acquisitions.

Dividends

During the Period, ZPG paid a final dividend of 3.7p equating to £15.3 million relating to its financial year 2016. The Company maintains a target dividend pay-out ratio of 35-45% of profits excluding share-based payments and exceptional items based on the strong cash generation and long-term earnings potential of the Company. The Directors have declared an interim dividend of 1.9p, up 27% on the same period last year, which will be paid on 23 June 2017 to those shareholders on the share register as at 2 June 2017.

Appendix 1: ZPG KPIs

The figures below are for the six-month periods to 31 March 2017 and 31 March 2016. Each period includes a full six month's trading from Property Software Group, Technicweb, Hometrack and Expert Agent in order to give a more meaningful comparative.

1Other Costs represents technology, property and administrative costs

2Adjusted EBITDA is defined as operating profit after adding back depreciation and amortisation, share-based payments and exceptional items.

3Visits comprise individual sessions on the Company's websites or mobile applications by users for the Period indicated as measured by Google Analytics

4FTEs is defined as the number of full time equivalent employees across the Company

5Agency represents revenue generated from UK estate & lettings agents, overseas agents and commercial property agents. This includes revenue from Property Software Group, Technicweb and Expert Agent

6Other represents revenue generated from advertising, marketing services, data sales and includes Hometrack revenue

7ARPP (average revenue per partner) is defined as Agency and New Homes revenue generated from the Company's Property partners in a given month divided by the total number of Property partners during the month, measured as a monthly average over the Period

8Total unique number of Property partners is defined as the total number of UK estate & lettings agency branches, new home developers, overseas and commercial agency branches paying subscription fees for either advertising or software services

9Other represents revenue generated from financial services switching, boiler cover, business energy and data insight

10ARPL (average revenue per lead) is the revenue generated from energy switching, communications switching, financial services switching, boiler cover, business energy and data insight divided by the total number of Comparison leads during the Period

11A Comparison lead is measured at the point when a consumer completes an application form hosted on the Company's website or at the point in time when the customer leaves the Company's website having clicked through to a third-party website

Principal risks and uncertainties

As set out in the Strategic Report within the Annual Report 2016, the Group has identified the following principal risks and uncertainties:

· Changing online landscape and consumer trends - The Group participates in fast-moving marketplaces which are subject to rapid technological development and changes in consumer trends which may impact the Group's ability to offer the best products and services to its partners and consumers.

· Competitive environment - The Group operates in marketplaces which are highly competitive. The actions of the Group's competitors can have a direct impact on the Group.

· Regulatory environment - The Group operates in a number of regulated environments. Certain revenue streams within the Comparison Services business are regulated by the FCA. The Comparison Services division also voluntarily complies with the Ofgem Confidence Code and is involved in regular communication with Ofcom.

· Reputational and brand damage - The Group operates a number of identifiable and respected brands which could be damaged by factors such as unethical or unlawful activity, poor customer service or negative press.

· IT systems and cyber security - A number of the Group's IT systems are interdependent and a failure in one system or a security breach may disrupt the efficiency and functioning of the Group's operations. The Group may also be subjected to cyber-attacks. The Group holds consumer and Partner data which could be susceptible to loss or theft.

· Retention and recruitment - Success depends on the continued service and performance of the Group's Executive Management Team and other key employees. Skilled development, technical, operating, sales and marketing personnel are also essential for the business to meet its strategic goals.

· Macroeconomic conditions - The Group derives most of its revenues from markets within the UK. The Group is therefore dependent on the macroeconomic conditions in the UK and macro factors within each of the Group's key markets.

· Debt covenants and funding - The Group holds external debt and therefore must ensure compliance with its debt covenant ratios. The Group also needs to ensure that it has the funding required to deliver on its strategy and future growth plans and that it manages its debt and cash balances effectively.

· Integration of acquisitions - The Group is highly acquisitive, the integration of new businesses presents inherent operational, strategic and cultural challenges.

The Directors' assessment of the risks identified above has not changed materially during the six month period to 31 March 2017. The risks identified above will continue to affect the Group in the second half of the year. Actions taken to mitigate the risks identified have been disclosed in the Strategic Report within the Annual Report 2016.

During the Period the Group acquired Hometrack.co.uk Limited ("Hometrack") and Websky Limited ("Expert Agent"). The acquisition of these businesses adds additional risks as set out below.

The Competition and Markets Authority ("CMA") is currently reviewing the Group's acquisition of Expert Agent and accordingly the CMA has served an initial enforcement order under section 72(2) of the Enterprise Act 2002. The results of the review could present a risk to the carrying value of the acquired business and could have an adverse financial impact on the Group.

As part of the acquisition of Hometrack the Group gained control of an overseas subsidiary, Hometrack Australia Pty Limited, which is located in Sydney, Australia. The Group is now exposed to a degree of foreign exchange risk as well as inherent risks associated with operating in a new geographic and regulatory environment.

Related party transactions

There have been no material related party transactions in the period. Details of related party transactions are set out in Note 18 to the condensed set of financial statements.

Going concern

As stated in Note 2 to the condensed set of financial statements, the Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

Responsibility statement

INDEPENDENT REVIEW REPORT TO ZPG PLC

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2017 which comprises the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated cash flow statement, the condensed consolidated statement of changes in equity and related notes 1 to 20. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditor

London, United Kingdom

23 May 2017

Condensed set of financial statements

Consolidated statement of comprehensive income

For the six months ended 31 March 2017

Consolidated statement of financial position

As at 31 March 2017

Consolidated statement of cash flows

For the six months ended 31 March 2017

Consolidated statement of changes in equity

For the six months ended 31 March 2017

1The transfer from merger reserve to retained earnings in each period represents an equalisation adjustment in respect of the amortisation charge on intangibles which arose on acquisition of The Digital Property Group Limited on 31 May 2012.

Notes

1. General information

ZPG Plc (the "Company") is a digital media and lead generation platform registered in England and Wales under Company Number 09005884. The principal activity of the Company is the operation of some of the UK's most trusted digital platforms including Zoopla, uSwitch, Property Software Group, Primelocation and Hometrack. A copy of the Company's statutory accounts for the year ended 30 September 2016 has been delivered to the Registrar of Companies. The accounts are available on the Company's website at www.zpg.co.uk/investors. The Company's auditor reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2. Accounting Policies

Basis of preparation

The consolidated financial statements incorporate the accounts of the Company and entities controlled by the Company (its "subsidiaries") (together, "the Group"). Control is achieved where the Company:

· has the power over the investee;

· is exposed, or has rights, to variable return from its involvement with the investee; and

· has the ability to use its power to affect its returns.

The results of subsidiaries acquired are included from the effective date of acquisition. The results of subsidiaries sold are included up to the effective date of disposal.

The annual financial statements of the Group and the Company are prepared in accordance with International Financial Reporting Standards, International Accounting Standards and IFRIC interpretations (collectively "IRFS") issued by the International Accounting Standards Board as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard ("IAS") 34 'Interim Financial Reporting', as adopted by the European Union.

The half year results for the six months ended 31 March 2017 are unaudited. The auditor, Deloitte LLP, has carried out a review of the condensed set of financial statements and their report is included within this announcement. The comparative figures for the year ended 30 September 2016 have been extracted from the Annual Report 2016. These comparatives have been audited by the auditor and their report was unqualified. The comparative figures for the six months ended 31 March 2016 have been extracted from the Group's half year results for the six months ended 31 March 2016 which were reviewed by the auditor.

Changes in accounting policies and standards

The accounting policies applied by the Group are the same as those applied for the year ended 30 September 2016 as set out in the Annual Report 2016 with the addition of the two policies set out below. There are no new standards or amendments to standards effective for the periods presented that have a material impact on the Group.

Lease income

During the period the Group entered into a sub-lease agreement for the Group's previous head office at the Harlequin Building, London. The sub-lease is recognised as an operating lease as the material risks and rewards with regards to the property remain with the superior lease lessor. Operating lease income is recognised in the consolidated statement of comprehensive income on a straight-line basis over the period of the lease. Rent free and discounted rent periods are amortised through the consolidated statement of comprehensive income over the term of the lease.

Consolidation of foreign subsidiaries

The results and financial position of subsidiaries which have a functional currency other than the presentational currency are translated to the presentational currency as set out below (excluding currencies of a hyper-inflationary economy):

· Assets and liabilities for each statement of financial position presented are translated at the closing exchange rate at the date of the statement of financial position.

· Income and expenses for each statement of comprehensive income are translated at the average exchange rate for the period presented.

· All resulting exchange differences are recognised in other comprehensive income.

Foreign transactions and balances

Transactions in foreign currencies are initially recorded using monthly rates of exchange. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange at the statement of financial position date and the gains/losses on translation are included in the statement of comprehensive income within finance income/costs.

Going Concern

The financial position of the Group shows a positive net asset position with significant cash resources and high cash generation. Furthermore, the Group continues to generate both positive Adjusted EBITDA and profit after tax. As a consequence, the Directors believe that the Group is well placed to manage its business and financial risks successfully.

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the historical financial information.

Critical accounting judgements and key sources of estimation uncertainty

The Group's Management makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances. Actual results may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within future periods are consistent with those disclosed in the Annual Report 2016.

Judgements made in relation to acquisitions made in the period are set out in Note 8.

Adjusted performance measures

In the analysis of the Group's financial performance certain information disclosed in the financial statements may be prepared on a non-GAAP basis or has been derived from amounts calculated in accordance with IFRS but is not itself an expressly permitted GAAP measure. These measures are reported in line with how financial information is analysed by Management. The Directors' believe that these non-GAAP measures provide a more appropriate measure of the Group's underlying business performance and a closer approximation to the Group's operating cash flows. Furthermore, both the terms of the Group's borrowings and the remuneration of Management are assessed using one or more of the adjusted performance measures. Adjusted EBITDA and adjusted basic EPS are therefore considered key performance metrics for Management, the providers of the Group's external debt and other stakeholders. The non-GAAP measures are designed to increase comparability of the Group's financial performance year-on-year. However, these measures may not be comparable with non-GAAP measures adopted by other companies. The key non-GAAP measures presented by the Group are:

3. Business and geographical segments

The Board of Directors has been identified as the Group's chief operating decision maker. The monthly reporting pack provided to the Board to enable assessment of the performance of the business has been used as the basis for determining the Group's operating segments.

Whilst the chief operating decision maker monitors the performance of the business at a revenue and Adjusted EBITDA level (Note 4), depreciation and amortisation, share-based payments, exceptional items, finance income and costs and income tax are all monitored on a centralised basis. As the business evolves, and the divisions become more integrated, the Directors will continue to assess the relevance of splitting out costs for the Property Services and Comparison Services division.

Assets and liabilities are also managed on a centralised basis and are not reported to the chief operating decision maker in a disaggregated format.

The chief operating decision maker monitors six individual revenue streams as set out below. The six revenue streams are grouped under two headings: Property Services and Comparison Services. Adjusted EBITDA is monitored on an aggregated basis under these two headings. Certain central costs such as Board fees and the salaries of certain Executive Directors are allocated across the two divisions.

Property Services:

Comparison Services:

All material revenues are generated from within the UK and Australia (UK: £116.8 million, Australia: £1.1 million). In the year ended 30 September 2016 and the period ended 31 March 2016 all material revenues were generated from within the UK.

4. Adjusted EBITDA

Adjusted EBITDA is used by Management as a key measure to monitor the Group's business and the Directors believe it should be disclosed on the face of the statement of comprehensive income to assist in the understanding of the Group's underlying financial performance. Furthermore, the terms of the Group's revolving credit facility require Management to report on the Group's net debt to Adjusted EBITDA ratio. Adjusted EBITDA is therefore considered a key performance metric for Management, the providers of the Group's external debt and other stakeholders.

The Group defines Adjusted EBITDA as operating profit after adding back depreciation and amortisation, share-based payments and exceptional items. Exceptional items include costs and income which Management believes to be exceptional in nature by virtue of their size or incidence. Such items would include costs associated with business combinations, one-off gains and losses on disposal, and similar items of a non-recurring nature together with reorganisation costs and similar charges.

This is further adjusted for share-based payment expenses which are comprised of charges relating to: (i) warrants issued to certain of the Group's partners; and (ii) employee incentive plans which are aimed at retaining staff and aligning employee objectives with those of the Group. The Directors consider that excluding share-based payments and other non-cash charges such as depreciation and amortisation in arriving at Adjusted EBITDA gives a more appropriate measure of the Group's underlying financial performance and a closer approximation to the Group's operating cash flows.

Exceptional items comprise: