Investment analysts Scotia Capital have issued the following equity research paper in relation to the UK HIPs market and solution providers such as MDA... According to Paul Steep, the director of software & IT services research "We have conducted a series of interviews with various market participants to assess initial acceptance, pricing and experiences with Home Information Packs. Our discussions support the expectation that HIPs will continue to full deployment in the U.K. despite some early growing pains in the first phase of the roll-out. We anticipate that HIP providers will be tested in earnest starting Monday, September 10, when the roll-out expands to three bedroom homes (covering 65% of U.K. housing stock). Our view is that over the next several months issues relating to the next phase of the roll-out are likely to be highlighted in the press by HIP detractors creating the potential for volatility in the stock."
The report goes on to say...
• We believe the HIP market remains in the development stage with market participants (eg estate agents, EPC inspectors, HIP providers) all still in the learning process as a result of limited market experience from the launch of 4+ bedrooms. Early feedback indicates the transition to the new scheme has been relatively smooth given the small initial market size (~18% or 340,000 home sales on an annual basis).
• Our view is that UK government’s recent announcement (August 17, 2007) to expand the scheme to include three bedroom homes as of September 10, 2007 represents the real test for HIP providers. This expansion will result in over 65% of the U.K. housing market coming online (~1.2 million homes sales on an annual basis). This significant expansion should test providers’ ability to deliver a higher volume of HIPs in a timely manner to meet market demand more closely reflecting full scheme conditions. Some market participants have cried foul over the rapid roll-out schedule raising concerns that the government has not taken sufficient time to review how the HIP supply chain is adapting to the 4+ bedroom implementation. The feedback we received did not highlight this as a major concern but estate agents were surprised by how quickly the government was moving (expectations were 3+ bedroom roll-out a month later). The latest data indicates almost 3,500 assessors are now accredited, meeting the government's original requirements of 3,000 to cover the entire market. Distribution of accredited assessors remains soft in two of ten regions (London and South East regions) but appears to be more than sufficient to support the 3+ bedroom rollout.
• Our view is that the accelerated implementation timeline for 3+ bedrooms signals the UK government’s focus on fast-tracking the roll-out of HIPs to ensure that the EPC component of the scheme is deployed. We believe the factors driving the government’s move relate to European Union energy savings directives and the government’s desire to ensure that the trained EPC inspectors have employment.
• Our view is that HIP providers are insulated from some of the volatility of retail pricing but have limited pricing power. Our research indicates that the HIP market consists of a wide range of retail pricing and marketing strategies. We found pricing for HIPs to generally be within the range of £300 to £400 but climbed to as much as £750 for larger or more expensive homes (ie +£1 million). The marketing strategies for HIPs to consumers also varied widely with certain estate agents offering a free HIP as part of their service to win the listing of a home while others advertise variable HIP pricing dependent upon a variety of factors (eg listing price, size of home). Our expectation is that retail pricing for HIPs will settle over the next six months as the HIP providers consolidate and as estate agencies standardize around how the cost of HIPs will be passed on to clients
• Our view is that over the next six to twelve months the market will consolidate with a large number of the marginal HIP producers exiting the market. We believe that given the tight margins and competitive nature of the business that the HIP provider market is likely to consolidate down to a handful of leading firms with MDA expected to be among the market leaders. At present, a consumer can obtain a HIP from an estate agent, a solicitor, a conveyancer or a dedicated HIP provider. There are a large number of HIP providers in the market with the Association of Home Information Pack Providers listing over 65 members ranging from small start-up operations to established firms such as MDA or LMS.
• Our discussions with estate agents indicate that some are still in the process of evaluating HIP providers. Our view is that the key factors in selecting a HIP producer will be: speed of HIP turnaround time, financial stability, and pricing of the offering.
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Friday, September 7
Brokers say next few months could be a rocky ride for HIPs suppliers
by
Charles Christian
on Fri 07 Sep 2007 21:28 BST
Thursday, September 6
2008 Legal Technology Awards launched
by
Charles Christian
on Thu 06 Sep 2007 16:59 BST
Legalease, the publishers of The Legal 500 and the Legal Technology Journal (whose launch editor was Charles Christian of this parish) has opened up nominations for the 2008 Legal Technology Awards. There are a total of 27 awards categories for law firms, IT teams, IT directors, inhouse legal departments and suppliers – including the award for the supplier of the best integrated system, which this year is being sponsored by The Orange Rag. Hooray!
Nominations close on 31st October, so you’ve got just under 8 weeks to submit your entries – the nomination forms can be downloaded from the awards website. (And if anyone would like to nominate Legal Technology Insider for the Outstanding Contribution to the Legal Market category – feel free to do so.) A shortlist will be published in mid-November and the awards gala dinner will take place at the Marriott Grosvenor Square on Thursday 31st January. www.legaltechnologyawards.co.uk Wednesday, September 5
Changes at the top at Thomson Elite
by
Charles Christian
on Wed 05 Sep 2007 16:32 BST
Thomson Elite has just announced two key management changes that have been made to support the increasing growth and drive the expansion of its global business. Jitendra Valera, previously Vice President of International, has been appointed to a new role within Thomson Elite as Vice President Global Strategy & Planning, and Kaye Sycamore, previously Regional Director for UK, Ireland & Asia Pacific has been promoted to Valera's previously held role of Vice President International.
Steve Buege, President & CEO of Thomson Elite said "Both these roles will be part of our newly created Strategic Marketing & Business Development function. These structural changes not only strengthen our management talent, but they also ensure a strengthened focus on both strategic business development and operational execution for our increasingly global business." Valera's new role, which will be based in the UK at the London office, will focus on developing Thomson Elite's global strategy and driving growth on a global scale. He will also take on new responsibilities for senior level co-ordination between Thomson North American Legal (TNAL) and Thomson International Legal & Regulatory (TILR) in the key growth area of software and services. Sycamore will provide a dedicated focus on operations in the UK, Continental Europe and Asia Pacific regions, while continuing to boost the growth of the International division. Sycamore will join Valera on the Thomson Elite executive team and will be fully supported by the various functional and management teams in the US. Sycamore says the sales success Thomson Elite has had outside of North America has spurred the need for leadership positions that address the macro planning needs of the region and the day-to-day operational challenges. "These changes will ensure that we continue to drive growth forward, whilst at the same time ensuring that our level of customer service to new and existing clients is local and relevant to the various regions we serve." Valera and Sycamore assume their new duties with immediate effect. Tuesday, September 4
IRIS join FAST - but don't they own it?
by
Charles Christian
on Tue 04 Sep 2007 13:58 BST
Confusing story here as it has just been announced that the UK's sixth largest software group has joined the Federation Against Software Theft (FAST). Glossing over the fact that, as FAST has been around since 1984, this is not exactly a ringing endorsement that it's taken the sixth largest player in the UK 23 years to get around to joining, the more confusing aspect is the identity of the new member. It's the IRIS Software Group.
Haven't we heard of them before? Yes, IRIS acquired Vin Murria's CS Group (and with it the legal software suppliers AIM, Laserform, Mountain and Videss) in July this year. And? Oh, and in May this year the CS Group bought FAST. So that means the IRIS Software Group, which has just joined FAST, actually owns FAST. Er, yes. Coming soon... Roman Catholic Church announce the Pope is a Catholic and the US Parks Department announce findings on the toilet habits of bears in Yellowstone National Park forest. |
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