Daily Mail writes down Xceligent’s value to zero amid “disappointing” NYC expansion

Daily Mail and General Trust wrote down the carrying value of its real estate data subsidiary Xceligent to zero amid lower-than-expected revenues from a push into New York City, the company said Thursday morning.

“Quite candidly the revenues were disappointing and that suggests a longer and more challenging path for Xceligent to profitability,” DMGT’s CFO Tim Collier said during an earnings presentation.

“We’re working with the management team on a strategic review that will include all options,” he added.

DMGT also announced that it is in the process of selling EDR, its U.S. real estate environmental data and software business.

In October, DMGT fired Xceligent’s CEO and co-founder Doug Curry and installed the former Hanley Wood CEO Frank Anton as executive chairman.

The data subsidiary is waging a high-stakes legal battle against its chief rival, CoStar. In December, CoStar filed a copyright infringement lawsuit against Xceligent, alleging that its competitor systematically stole its property images. Xceligent responded by filing an antitrust lawsuit in June. DMGT said it spent £14 million ($19 million) in legal fees in the past year and that this was “principally” due to Xceligent.

Last year, Xceligent launched an expansion into New York City, CoStar’s most important market.

“Given the significant further investment and time required to achieve full national coverage, a decision has been taken to reduce the carrying value of the business to zero, resulting in an impairment charge of £42 million” or around $56 million, the company wrote in its full-year results released Thursday.

DMGT first invested in Xceligent in 2012, following the data company’s spinoff from crowdsourced property database LoopNet. The holding company also owns the British tabloid Daily Mail.