Zoopla shares rise on market debut

Online property search firm Zoopla was given an initial value of £919 million today before shares rose on the first day of stock market trading.

Property webiste Zoopla got off to a solid start on their first day of conditional dealings, climbing to as high as 236p
Property webiste Zoopla got off to a solid start on their first day of conditional dealings, climbing to as high as 236p

The group, which owns websites including PrimeLocation, SmartNewHomes and HomesOverseas, priced shares in the float at 220p, compared with previous guidance for a range of between 200p and 250p.

The caution comes amid signs of a recent cooling in demand for new stock market listings and recent uncertainty surrounding internet-related stocks.

Shares got off to a solid start on their first day of conditional dealings, climbing to as high as 236p and giving the firm a market capitalisation of £985 million.

The offer amounts to 38% of the company's total share base and raised £370 million for its selling shareholders, including Daily Mail & General Trust, which owned 52% of Zoopla prior to the float. Estate agents Countrywide and LSL Property Services, which trades as Your Move, have also sold shares.

Zoopla is the 17th technology business to list on London Stock Exchange this year. They have a combined market capitalisation of £5.5 billion and raised £2.2 billion, over 100% more capital than in the whole of 2013.

Zoopla's founder and chief executive Alex Chesterman, who started the firm seven years ago, has sold some of his stake, which was valued at more than £70 million in the flotation.

He added: "We have received a strong level of investor support in our business which once again underlines the growth potential of Zoopla Property Group."

Zoopla has benefited from rising house prices and transaction levels, as the improving property market has been buoyed by Government initiatives such as the Help to Buy scheme.

The company makes money by charging estate agents and other property firms subscription fees to advertise their listings across its sites.