Agents’ Mutual Limited. A Company limited by Guarantee. 25 th September 2014 Conference
Launching January 2015
100% agent-owned property portal Serious competitor to the existing major portals NOT to maximise financial returns to shareholders High quality property search service Minimum listing fees consistent with achieving and maintaining leadership For ALL bona fide Sales and Letting Agents ALL segments of the residential market. Company limited by Guarantee. No shareholders or shares. Directors approved and re-elected by the Members. They are unpaid. All firms listing on the portal are Members. Maximum liability = £1. All Member firms get one vote and an equal interest in the Company, irrespective of firm size. 90% vote required to approve a Sale.
June 2013 – 6 member firms Target 1000 offices; £3M funds January member firms offices Large national brands – 2% Prominent regionals – 20% Small firms (1-3 offices) - 78% £6M Funding
London
The Regions
Rightmove set to raise income to £200M by 2017 Zoopla needs to treble income to match Rightmove. Agent now have to list with both portal groups a duopoly with no real constraint on prices Income £65M - Costs £35.5M - Profit £29.5M - Margin 46% Income £140M - Costs £36M - Profit £104M - Margin 74%
The Threat
Part-service, remotely-located operators....mixed in with Full-service, locally-visible agents. Commoditizes proper agency Puts pressure on fees A race to the bottom?
PORTAL INCOME: Agent £20 per property per month – say, £60 Vendor direct £599 ? The Threat
Strategy Our portal Entering alongside the two giant players won’t work No reason for consumers to switch Extra cost to agents Too much marketing investment required Too risky to attract commitments and funding We have to create some disruption.
Strategy Use agents’ CONTROL over where they place their listings: Medium term commitment to list with the new portal – 5 years Members to list with maximum of one other portal of their choosing Effective on launch in January 2015 Fully exclusive listing ideal but not viable for agents
Strategy Use agents’ ABILITY to market a portal STOP building Rightmove’s brand STOP building Zoopla’s brand ACTIVELY PROMOTE the portal you own and works for you AGENTS Term commitment One other portal Co-branding/promotion COMPANY Excellent brand and portal Strong central marketing support Commercial drive + service ethic
Strategy Use agents’ ABILITY to market a portal STOP building Rightmove’s brand STOP building Zoopla’s brand ACTIVELY PROMOTE the portal you own and works for you
Strategy Neither Rightmove or Zoopla will have all the agents and properties we will have. creates a unique set of listings for our new portal a reason for consumers to use us leaves internet-only operators with our competitors Agents can publicise their switch and promote the new portal OnTheMarket will promote full-service, locally-visible agency No net increase in cost of portals to agents
CORPORATES INDEPENDENT AGENTS INDEPENDENT AGENTS Anchor tenants - before The 3 major corporates are the ‘anchor tenants’ for both Rightmove and Zoopla: - Advantageous terms - Share interests (Zoopla). Independent agents are just rent-payers. Agents’ Mutual now has its own ‘anchor tenants’ – more than offices - and they will take listings and fees away from the others. They will own and control the Company. Every firm which joins Agents’ Mutual becomes a member on equal terms with all others - one of the ‘anchor tenants’ - taking listings and fees from the others. CORPORATES INDEPENDENT AGENT MEMBERS INDEPENDENT AGENTS INDEPENDENT AGENTS INDEPENDENT AGENT MEMBERS Anchor tenants – Aug 14? offices CORPORATES INDEPENDENT AGENT MEMBERS INDEPENDENT AGENTS INDEPENDENT AGENTS Anchor tenants - Jan 15? INDEPENDENT AGENT MEMBERS offices
The objective Costs £30M* 12,000 agent offices £250 per month 10,000 agent offices At full scale
Strategy Raise development funding from member agents – the Gold members 5-year commitments from Gold and Silver members – in return for fixed fees. Fees lower than the big portals – but high enough to allow reinvestment for growth. Once full scale is reached – 10,000+ offices – fees can fall. Pre-launch subscription Year 1Year 2Year 5Year 9Year 8Year 7Year 6Year 4Year 3 £400 £200 £50 20% discount for 6-year commitment Full scaleGrowth Average monthly fees Average £4200 per office per year
Strategy If agents get behind it, Agents’ Mutual can deliver much quicker. £250 average listing fees or less – sustainably. Pre-launch subscription Year 1Year 2Year 5Year 9Year 8Year 7Year 6Year 4Year 3 £400 £200 £50 20% discount for 6-year commitment Full scaleGrowth Average monthly fees Average £4200 per office per year
Three membership schemes during the ‘Growth’ phase No commitment Higher pricing Not fixed Pricing and funding Firm sizeOffice Location Offices in Firm Volume Discount Prime London Other London Prime Country Other Country 1-3 0% £595£495£395£ % £565£470£375£ % £536£446£356£ % £506£421£336£ % £476£396£316£ % £446£371£296£221 No pre-launch funding Commit for five years Prices shown are fixed ? Price shown include: branded listings all platforms inc. mobile lettings. Lettings-only 50%
Pricing and funding Firm sizeOffice Location Offices in Firm Volume Discount Prime London Other London Prime Country Other Country 1-3 0% £595£495£395£295 £506£421£336£ % £565£470£375£280 £480£400£319£ % £536£446£356£266 £455£379£302£ % £506£421£336£251 £430£358£285£ % £476£396£316£236 £405£337£269£ % £446£371£296£221 £379£316£252£188 ENTRY TICKET Pre-launch subscription £600 payable in instalments > non-refundable Loan Notes of £2000 per office (£1000 lettings-only). annual interest of 7% repayable by Fee discount: 15% v Silver Commit for 5 years Fund the development Fixed pricing Firm sizeOffice Location Offices in Firm Volume Discount Prime London Other London Prime Country Other Country 1-3 0% £595£495£395£ % £565£470£375£ % £536£446£356£ % £506£421£336£ % £476£396£316£ % £446£371£296£221
Funding and financials £6M+ Pre-launch funding Listing fees £7M pa Listing fees £14M pa £21M+ Post-launch annual income 10 Months to LaunchJune to December Become the No.2 Portal take listings and income drive awareness & traffic Portal development Brand and marketing development offices 31 st JANUARY – CONTRACTS IN 6 th MARCH - FUNDS RECEIVED Regional and central sales forces offices offices £7.7M+ Pre-launch funding
£21M+ annual income First yearOne year to Launch £35M+ annual income Become a credible alternative to the No.1 Portal Match cost base and capability Undercut prices 6 months offices offices Funding and financials
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