Property website Rightmove yesterday cut its losses on home information packs after it pulled plans for investment i n new services worth £22 million.
The move follows a board-room review of HIPs in the wake of the Government's decision last week to withdraw home condition reports from the launch.
Rightmove said it had planned to spend £22 million developing HIPs services, of which around £7 million had already been spent. Costs from discontinuing the work were expected to exceed £1.2 million, it added.
Shares in Rightmove slumped 19 per cent last week - to below their March flotation price - after it said revenues and potential earnings from its HIPs product were likely to be "significantly lower" than market expectations.
However, its shares rose three per cent to 295p following yesterday's move.
Last week stockbroker Panmure Gordon valued Rightmove's HIPs business at zero, rather than £180 million previously. It also reduced its target price for Rightmove shares to 310p, from 425p.
Despite the blow to its HIP plans, which were due to come into force next year, Right-move said it stuck by upbeat forecasts for trading this year.
Earlier this month it said it was confident that revenues and pre-tax profits for the full-year would exceed the top end of the range of City forecasts.
It added that it no longer saw an upper limit of 80 per cent on market penetration after three of its ten operating regions breached the level. East Anglia reached 87 per cent, followed by the Southeast and East Midlands at 86 per cent each.
Growth in customer numbers saw the number of estate agent offices on its books increase by 21 per cent on December 2005 to stand at 10,360 in June.
The addition of business from George Wimpey, David Wilson and Redrow Homes meant the usage of its website by new homes developers rose 53 per cent to 2,367.
Rightmove listed on the London market at 335p. The move saw approximately 18 per cent of the company's shares placed on the market, reducing the 30 per cent holdings of Countrywide, Connells and Halifax to around 22 per cent. Royal & Sun Alliance's ten per cent stake was cut to 4.9 per cent.