OnTheMarket’s announcement on Friday that it had conditionally raised £30m through a placing of ordinary shares, rather than the £50m it had originally aimed for, could have repercussions for the windfall due to boss Ian Springett.
It had been reported that founding CEO Springett’s 3.9m shares in the business could be worth around £20m if it achieved the valuation of £200m to £250m it originally expected.
But the company last week revealed that its market capitalisation on admission to the AIM market would be a more modest £100m, with a launch share price of 165p.
That means that Springett’s windfall could also be rather more modest, although his shares will still be worth an estimated £6.45m.
He is likely to be “locked in” for a period of time, during which he will not be able to sell his shares.
News of OnTheMarket’s lower valuation did not impress estate agent Graeme Lumsden, who launched an ultimately doomed bid to campaign against a vote to float OnTheMarket, arguing that the demutualisation of Agents Mutual would take power away from the original members.
Lumsden said: “In response to the news of OTM falling £20m short of its much-hyped £50m target, I’m sure that if the OTM AIM vote was run again, knowing what we know now, the outcome would be different.
“However, we swallowed the hype offered and now witness the disappointing reality.”
Nor did George Salmon, an equity analyst at Hargreaves Lansdown, appear convinced.
He said: “Backed by estate agents themselves, the launch of OnTheMarket in 2015 was meant to disrupt the duopoly of Rightmove and Zoopla. The group is now the UK’s third biggest portal, but all this really means is that it’s first among the also-rans.
“The challenge of toppling Rightmove remains a significant one.”
Springett clearly doesn’t see it that way, despite the fact that his pockets may feel a little lighter following the flotation than he may originally have hoped.
As part of Friday’s announcement, he said: “The IPO will enable us to implement our marketing plans to build brand awareness and portal usage as well as to invest to scale up the supporting organisation and infrastructure to the benefit of consumers, agents and investors.”
Meanwhile, the Sunday Telegraph yesterday put a “buy” rating on ZPG, the parent company of OTM’s rival Zoopla.
Columnist James Ashton said: “In housing, ZPG counts 25,000 estate agencies among its customer base, and reports that some are returning from its rival OnTheMarket website.
“There is a theory that a slower housing market means fewer branches, which would be bad for business.
“A counter view is that agents will have to invest more to shift their stock.
“In addition to listing homes on its portal, ZPG offers various software, printing and data add-ons.
“An average customer buys 1.4 of these products and the company is bullish it can carry on cross-selling.”
Where has the “marketing spend” been up until now
What has IS done with your money boys and girls?
Get out while you still can – oh dear you can’t can you
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Lumsden said: “In response to the news of OTM falling £20m short of its much-hyped £50m target, I’m sure that if the OTM AIM vote was run again, knowing what we know now, the outcome would be different.
“However, we swallowed the hype offered and now witness the disappointing reality.”
Yes, I said exactly that…..
…and I would add this, The New Corporate Theme Tune played out on The Gramophone at OTM HQ
https://youtu.be/EPcy45EuGcI
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You couldn’t make this up if you tried, GPL –
But when I clicked the YouTube link you posted, I was faced with a ZOOPLA sponsored ad!!!
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Well PeeBee…. to provide some alternative entertainment to OTM
I was down south, yes England, many years ago…. I left my Kilt & Bagpipes behind…. anyway was staying with a friend who is a grossly overpaid Dentist (note to self – not an Estate Agent in my next life!), we were heading out for dinner and he asked if I minded a pal of his joining us, no problem I said…. Hey Presto, who turns up? none other than Alan Gorrie, lead singer of The Average White Band! ……what a laugh we had…. which brings me back to OTM, what a laugh we’re having!
All Together Now……. “Let’s go round again, maybe we’ll turn back the hands of time……”
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….and so we can all join IS & Co singing their New Themetune
The Lyrics to “Let’s Go Round Again” by The Average White Band, a fine group, in their day…
Baby, I’m back
And right away I have come to you
To see if the love that we knew before
Has passed the test of time, ooh
Time could change almost everything
Sometimes it all seems the better side
Are the feelings we once shared
So baby
Let’s go ’round again
Maybe we’ll turn back the hands of time
Let’s go ’round again
One more time (One more time)
One more time (One more time)
Now baby, I know that you think I will be different now
Inside of me nothing has changed
So I’m asking you again, oh
Please no one else could have brought me back
No one that ever could change me please, of the memories I kept within my heart
Let’s go ’round again
Maybe we’ll turn back the hands of time
Let’s go ’round again
One more time (One more time)
Let’s go ’round again
Maybe we’ll turn back the hands of time
Let’s go ’round again
One more time (One more time)
One more time (One more time)
One more time (Oh oh oh)
One more time (One more time)
Let’s go ’round again
Maybe we’ll turn back the hands of time
Let’s go ’round again
One more time (One more time)
Let’s go ’round again
Maybe we’ll turn back the hands of time
Let’s go ’round again
One more time
Let’s go ’round again
Maybe we’ll turn back the hands of time (Oh, just maybe)
Let’s go ’round again
One more time (One more time)
One more time (One more time)
Maybe we’ll turn back the hands of time (Oh maybe)
Let’s go ’round again (Oh maybe)
One more time (One more time)
One more time (Oh yeah)
Maybe we’ll turn back the hands of time (Oh maybe we’ll turn back the hands of time)
Let’s go ’round again
One more time (Oh oh oh oh)
Songwriters: Alan Gorrie
Let’s Go Round Again lyrics © BMG Rights Management US, LL
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How about the ending and music to the film ‘Knowing’ an end of world saga?
Does OTM become an irrelevance if certain ‘key’ members and others now decide to use Prime Location and/or ZPG as well?
Bet they could strike a really good ‘mutually’ agreeable deal now the OOP rule is to be dropped?
Who benefits most from this debacle, OTM or ZPG?
No voters are unfairly tied into the OOP rule with a contract that has materially changed. Why?
Meanwhile, RM march on unscathed by a Springate/Chesterman spat fuelled by members money?
I remember Ian Springett once described pay anyway agents as’ parasitic and a bit of a con’.
Time will soon tell whether he may regret that statement?
https://www.youtube.com/watch?v=CkC6OKBYVLI
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I love how everyone with the benefit of hindsight are now complaining over their decision to regret the ‘hype’
I’m going to set up a Just Giving page to help Springett overcome his short fall 🙂
The good news is, that the opening value being at this lower level, his interests are directly linked to the performance of OTM and will speak volumes as to his capabilities now or not! If he weren’t shackled and had the higher value h’d be off to the hills! Agents need this to work…simples, you are gifting the value of your data to Zoopla who are milking it in the tech and data businesses they are buying up and Rightmove will squeeze you more on fees if unchecked. Springett was always going to divide opinion amongst many…we will now see if he justifies the faith given to him…
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P-Daddy IS didn’t give a sh** then and he doesn’t now. Simples indeed.
I never sucked up the Hype, I voted No, got shackled and shafted even more. Simples for Slingett & Co, sh*** for my company.
My staff and I work damn hard and every single month I give away nearly £300 per branch for this fiasco, plus as a Day 1 Gold Member I loaned these Goofballs my hard earned money.
In other countries this would be defined differently and there would be the sound of the Rubber Heel Mob making their way to HQ with legal documents.
It’s champagne all the way for these OTM Head Clowns and sh** out a trough for the dummies like me, and many others.
What makes it even worse is the tripe that’s verbally blurted out at each announcement about this fiasco.
I’ll announce this – OTM? Why don’t you **** *** and give us our money back!!!
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Don’t listen to J1. Please stay in. The last thing most of us want is for OTM to go down the pan. Whilst it survives the majority of us on RM and ZPL can continue to eat their breakfast. Good luck IS you always knew this would make you a buck or 2, LMAO.
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