Credit Suisse says threat to portals from Agents’ Mutual is ‘real’

| Rosalind Renshaw

Another analyst, Credit Suisse, was also busy yesterday on the subject of the UK portals.

It said that it sees limited threat from Agents’ Mutual to Rightmove and Zoopla – although it warned that the threat is “real”.

It also expects Agents’ Mutual to reach its recruitment target of 5,000 agents by launch.

Yesterday, the bank slashed its target price for Rightmove from 3,100p to 2,655p, and for Zoopla from 290p to 270p – while reiterating its ‘outperform’ rating for both.

Credit Suisse said: “We conclude that Agents’ Mutual membership is growing, the risks are real and will impact Rightmove and Zoopla 2015 numbers, but that with the stocks down 13% and 17% respectively over the last month, the risks are priced in.”

It went on: “However, funding for Agents’ Mutual may be insufficient.”

Credit Suisse compared Agents’ Mutual pot of £9.4m in 2014, and £22m next year, with Rightmove’s and Zoopla’s annual spend of between £42m and £46m.

Credit Suisse also said that newsflow would be “negative” in the short term for both Rightmove and Zoopla as Agents’ Mutual membership continues to grow, but that the latter’s medium-term impact would have only a limited impact on its two competitors.

The bank said: “Around launch, newsflow will likely shift as the venture actually has to deliver on the promises made to agents.

“We flag launch delays, poor site usage, weak early traffic and a lack of leads as potential issues.”

Rightmove shares ended yesterday at 2,063.50, up 43p (2.12%) as the company continued its share buy-back policy.

Zoopla shares were 201p, down 1.20p on the day.

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22 Comments

  1. JWVW
    October 22, 2014 at 07:09

    I struggle to see the benefit of these analysts "advice" – or indeed any advice they give. It's all garbage made up after a decent lunch in an expensive restaurant in the City. I know – I've been with them when the story has been made up. OTM is about to launch. 5000 agents is a possibility by January. More will drop Z than RM. Let say 65/35 in favour of RM for 'fun'. That is a loss to RM of over £10m pa at £500 amonth subscibers – and many many more are paying a lot more than that. These sort of figures should log a drop in the share price of 10-20% and more for Zoopla. My advice is SELL both. Set your eyes at a Zoopla price of 150p and 1750p for Rightmove. Realism is the order of the day.

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  2. Ric
    October 22, 2014 at 08:08

    It just fuels the fire in my belly even more…… #otm2015 lets make it happen! They under estimate and do not account for the power of the leading local independent agents who are behind this at village levels throughout the land…………the beacons are lit!

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  3. El Burro
    October 22, 2014 at 08:33

    The peasants are clearly revolting, Brothers in Arms will soon be ringing out from every 3 series BMW in the land!!!

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  4. jmeapps01
    October 22, 2014 at 09:12

    Interesting that PIE choose to use the phrase 'Credit Suisse say the threat is real' as opposed to 'Credit Suisse sees little threat from AM to RM or ZPL'. Once again bias reporting from PIE. Also interesting that PIE choose to run this story after the one about city analysts warn on AM, just trying a bit of damage limitation guess!!!

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  5. jmeapps01
    October 22, 2014 at 09:15

    Hey JWVW. You are obviously completely mad. Good for you chum.

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    1. RealAgent
      October 22, 2014 at 09:56

      Is he? ….I'm not sure about the sale price but I would agree with the percentage that will drop Z. I appreciate that isn't what you want to hear but referring to previous post, this is an "industry" publication of course it is going to be in support of an "industry" driven and evidently supported portal. I would suggest that every publication has a bias, its been said about National newspapers, even TV stains for years. What you are really saying is that PIE doesn't support YOUR views, if that's the case might I suggest you read another publication!

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      1. RealAgent
        October 22, 2014 at 09:58

        *clearly that was supposed to say stations!

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  6. Paul H
    October 22, 2014 at 09:52

    These analysts are all ***** clueless with no understanding of our industry whatsoever. I see that Credit Suisse now predicts that there will be 5000 sign ups for launch yet Paribas are still working on the figure of 2000-3000 being "churned out". How about we just launch the ****** thing and see where the chips land.

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  7. GPL
    October 22, 2014 at 10:02

    @jmeapps01 Ok, so you work for one of the portals or are in love with RM, ZOOP etc. As I have said in another post this morning Planet Wrongmove @ Co have their great Big Financial Intergalactic Spaceship to protect and all the financially piggies that feed from its dividends and share price, hence the Emergency Balloon being hosted from mothership Wrongmove when the share price slides. Any assessment of threat from AM by any analyst will jot be based on its share price or market value although as we can see some analysts may be looking thru their financially tinted Wrongmove Glasses?…. you did get yours didn't you? Tescomove, Asdamove, Morrisonsmove were all market leaders at one time however competition came and cracks appeared, heads rolled and the public spread their gaze and their shopping habits. That's what will hopefully happen here and competition from AM should have a positive effect in many different ways. It's interesting to note that more tech staff arrive at Wrongmove which just confirms how the portal works, techie folk, marketing folk, building the online shop window that we choose to advertise in. So, I and others will be shopping elsewhere for our shop window, just like the Tesco, Asda, Morrisons folk… and if it means that Wrongmove & Co pay mote attention to those that feed them…. because I don't recollect EVER being asked for my opinon, or input or wants from Wrongmove as to what I as a paying member want from their portal….. however I do remember the endless "buy yet another super duper product calls!" Obviously the WrongmoveTechFolk are mind Mind Magicians and know what I should have or should that be…. want? There are 3 "Customers" of Wrongmove & Co… the Shareholders, the Public and the Agents….. the thing is?….. Wrongmove have bound/gagged Customer No 3 and locked them in a cupboard somewhere, only allowing them to slip their monthly fee under the door to ensure the Wrongmove Starship keeps steaming around the galaxy farting dividends and share price increases! If you hold up a UV light when a Wrongmove Employee walks into a room you'll see them wearing a Balaclava unseen in normal daylight. Embrace the arrival of Agents Mutual, its a good thing, it doesn't want to feed the financial piggies!

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  8. Woodentop
    October 22, 2014 at 11:20

    At last someone who knows what they are talking about. Credit Suisse for those not in the know have more knowledge about estate agency in the UK than any other analyst since the early 1990's and don't normally come out with comments. These guy's know there business extremely well and are only flagging up what one expects about any new company prior to launch and really hinges on "has to deliver on the promises made to agents". If it does (as does any new venture) the righting is on the wall, they will be very successful after all it doesn't need to make a profit to succeed and that is something the likes of RM and Z or so worried about and why RM continue to buy back shares, it supports it's share value without it and they would be going down hill.

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  9. Woodentop
    October 22, 2014 at 11:34

    For AM to be an instant success, agents need to get into their heads what they are providing and fully support it, you did with RM & Z!!!!!!! I've been on 40plus web portals and I still get most of my business from my own web site which cost me £50 per year. Yes, fifty pounds, while nearly £1,ooo with RM a month and I'm seeing very little result. AM is considerably less and now all the independent agents in my area are signed up (leaving two corporates out in the cold who combined DO NOT have the market share by any stretch of the imagination). Guess where we will all will be directing out buyers to!!

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  10. wilko
    October 22, 2014 at 12:22

    "but that the latter’s (AM) medium-term impact would have only a limited impact on its two competitors" Does anyone know what length of time they refer to when they say "medium term"….It's just that the signed up 4000-5000 AM members at launch are committed for 5 years so their money will not be going back to the main portals until at least then…….and that assumes AM bombs out in/or over 5 years. Existing portals cant increase revenue from memberships of high st agents (as they may then switch portal) so the only increases to revenue for 5 years will be put onto online agents or new start ups, which wont be that significant. I really wouldn't be backing either of the duopoly (share wise) at the moment, and I'm not sure anyone would fancy their shares – pro or anti AM.

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  11. CP
    October 22, 2014 at 12:26

    It's staggers me that an estimated 35% of agents plan to drop RM … a brand name that is wired into Joe Public's brain so much so that it is one of the most visited websites in the UK with millions of visits every month … Just wait until Joe Seller finds his as yet unsold property has been dumped off RM and placed on the unheard of OTM … My bet is that 80% of sellers will kick off big style and those that don't definitely will if their property continues to hang about … AND … underestimate the growing number of buyers and sellers who only use Zoopla at your peril … If anything I find Zoopla users are more enthusiastic about the site than RM users … and if a Z user finds their property is off Z I expect them to kick off every bit if not more than RM users … I think non OTM agents are going to have a field day come January.

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    1. wilko
      October 22, 2014 at 13:28

      "My bet is that 80% of sellers will kick off big style"….Why would it be 80% of sellers….that's impossible bearing in mind OTM wont have 80% exclusivity of sellers! Also why will they "kick off big style" ????

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    2. Ric
      October 22, 2014 at 13:57

      CP – Why are agents on Z and RM not having a field day NOW with agents only on RM?

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      1. CP
        October 22, 2014 at 14:08

        wilko – I mean 80% of sellers who are taken off RM or Z to go OTM, not 80% of all sellers, shouldn't that have been obvious? Ric – being taken off RM or Z is a totally different matter to never having been on there in the first place, again surely that is obvious … As for the 'kick off' just wait until non AM agents start to mailshot AM agents clients in January – any AM agent who thinks that won't happen is in cloud cuckoo land.

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        1. wilko
          October 22, 2014 at 14:59

          "As for the 'kick off' just wait until non AM agents start to mailshot AM agents clients in January – any AM agent who thinks that won't happen is in cloud cuckoo land" Why will they "kick off"??? I'm not planning to hide the fact to my existing clients and future ones, that their property will be listed on Rightmove and On the Market-so if they receive a mail shot it won't tell them anything they don't know. Have you got the hump with OTM because they won't let you on it? Or is it because Zoopla and Rightmove will be coming to you to increase their charges as you have to stay with them?

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        2. Ric
          October 22, 2014 at 16:35

          CP this is why you would be no problem to me as a competitor!……….EVEN IF I was taking my properties off Z……reason……. "Mailshots"……and there you go…… pick up the phone! your leaflet will never carry the weight my voice will and any decent agent will be conversation upon conversation ahead of some poor leaflet delivered by a Z slave which simply proves you think the internet is more important than your brand and just being on Z is all it is about……………..Good luck with the "mailshot" very inspiring and personal to the client.

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    3. Trevor Gillham
      October 22, 2014 at 14:04

      I think that most of RM's visitors are agents checking listings, oh yeah and the remainder are vendors checking their still listed.

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      1. CP
        October 22, 2014 at 14:10

        Trevor Gilham – I trust that last comment of yours was tongue in cheek because if it isn't explain how I sell more properties than most of my local competitors without being on the high street.

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        1. RealAgent
          October 22, 2014 at 14:22

          My experience of people who have to tell others how good they are is that they are generally not!

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  12. Woodentop
    October 22, 2014 at 17:13

    Try telling all those vendors that haven't sold with RM or Z etc it as a good idea to stay with them. Done them no favours, has it and it runs into tens of thousands. The public will move to where they are taken by agents. Those that stay with RM or Z is up to them, but there is always a counter argument to anything they come up with, if you are that worried. The only people I see worried are on-line only portals which are not allowed on MA but then they are not estate agents.

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