OnTheMarket increased its revenues by 32% in the year ended 31st January 2020 but recorded a loss of £11.5m, down £3m on the previous year.
Advertiser numbers increased to 13,364, up 12%.
At 31 January 2020, 12,470 branches were listed at OnTheMarket.com. Over 8,000 branches were signed under paying contracts (including a minority on contracts with an initial free period before payment commences). This had increased further to over 9,000 at 31 May 2020.
Net cash fell sharply to £8.7m, a reduction of £7m on the previous year.
Average revenue per account fell £8 to £122.
The introduction to the results says:
Leveraging unique agent-ownership model
c.65% agent-owned, with over 3,000 agent shareholders operating c.6,000 branches at 31 January 2020.
Over 8,000 branches under paying contracts at 31 January 2020.
Progress with product roadmap, driven by technology
Successful rollout of suite of back-office products and new value-add consumer-facing products in addition to launch of new homes developments to address wider property market.
Strategic 20% stake acquisition in Glanty Limited with “teclet” product supporting agents by automating the lettings process.
Strategic and operational highlights post year-end
At 31 May 2020, total advertisers were 13,605 and agent ownership remained c.65%
Continued growth in paying customers, with over 9,000 branches under paying contracts.
Shares to be issued alongside new contracts signed will further increase agent shareholder numbers.
Net cash position
As at 31 May 2020, the Group had net cash of £8.8m, and, excluding deferred creditor payments of £2.3m, no borrowings.
COVID-19 impact and current trading
Trading in February and the first half of March was in line with the Group’s expectations.
However, the COVID-19 pandemic and subsequent government restrictions had an immediate impact on the ability of our customers to run their business, with transactions largely suspended.
Since the partial relaxation of restrictions on 11 May, the Group has seen strong increases in weekly new instructions, traffic and leads against the previously subdued levels. This is despite a substantial reduction in advertising expenditure.
In the first week of June, OnTheMarket.com visits were up 260% compared with the trough experienced during lockdown and up c.15% versus the first week in March, which was before the impact of the COVID-19 crisis on the housing market.
New instructions have recovered to early March levels, whilst stock levels are up as the backlog of transactions takes time to complete.
Outlook
Due to the continuing economic uncertainty, financial guidance remains suspended.
In the short-term, revenues will be reduced by the support we are providing our customers through the discounts we have offered them. Furthermore, the pandemic has impacted our customer recruitment and slowed the ongoing conversion of customers onto paying contracts.
However, the recent uplift in activity, which reflects increased brand awareness, is encouraging and we remain confident that we have the right strategy to support our longer-term vision to become the portal of choice for agent customers and property-seekers alike.
Clive Beattie, Acting Chief Executive Officer of OnTheMarket, commented:
“Since our financial year end, the emergence of COVID-19 has affected all of us and I have great admiration for the exceptional resilience and dedication of my colleagues during these challenging times.
“We have taken swift and decisive actions to protect the health and safety of our team, to conserve cash and to support agents so that OnTheMarket is positioned to capitalise in the future on long-term growth opportunities.
“The year to 31 January 2020 saw the Group deliver a strong operational performance, which was particularly encouraging given the challenging property market conditions.
“It was a year of progress during which we continued to invest in marketing and advertising to raise our brand awareness.
“We increased our paying agent base, broadened our customer markets with the introduction of new homes developers and achieved significant growth in portal visitors and in leads to our property advertiser customers.
“The current crisis has been a catalyst for many agents to review their portal choices and the value they derive from them.
“We have been encouraged by our performance since 11 May, which we believe reflects increased consumer awareness of, and engagement with, OnTheMarket.com.
“Being majority agent-owned, our interests and those of our agent customers are one and the same and there remains a clear long-term opportunity for OnTheMarket to gain market share.
“We look forward with confidence and a differentiated proposition that is highly valued by agents looking for sustainably fair pricing.”
Oh dear. At that rate of cash burn combined with the impact of the pandemic I’d be surprised to see them around to publish any 2021 results.
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Over 12k branches listed compared to RM 16k (and falling?) numbers.
Needs cash and effective marketing – I wonder who can provide that?
https://propertyindustryeye.com/purplebricks-founders-launch-foundation-to-create-a-healthier-well-run-and-respected-industry/
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Who RM?
Ah sorry I didnt see the link when I posted….
So yesterday’s Foundation story was an olive branch softener for agents to support their takeover of OTM in a couple of months…..
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If that ARPA had been £200 per advertiser their losses would be negligible.
Roll the ball forward and give EVERYONE a flat monthly bill of £250pm – say “Hello” to profit. No doubt the selling of non-essential essentials would further swell the P in the P&L.
That £250 figure is still best part of £100 less than what most original Gold Members signed up to back in 2014 – based on ‘assurances’ about the portal’s future that are so far from today’s reality as to be not worth mentioning again.
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<Rant>
“As at 31 May 2020, the Group had net cash of £8.8m, and, excluding deferred creditor payments of £2.3m, no borrowings.”
Yesterday I had an generic email from my Dentist basically asking me not to cancel my Denplan policy from which they derive most of their income ….obviously some of their patients had been cancelling. It was completely centred around them and i as a customer was incidental…. They havent been in contact for 3 months and I dont know when I’ll see them again…
Onthemarket reminds me of my Dentist…. Ive supported them from the start ….I want them to succeed ….but they ignore the personal which is important in life and dont make it easy to be on their side. Its like I only see them when they want my vote or similar….
I may own shares ….apparently agents own c65% ….but you dont motivate me any more. Sorry but thats the truth…
If you want re-engage with your customers/ shareholders I would suggest you get going…..before the money runs out.
Agents could once gain give you a lot of publicity (for little cost) if they believed in you
a Zoom meeting if you have to ….but better still a socially distanced roadshow ….why not its do able.
In the meantime why dont you ask your customers what changes they would like to see on the site / throw up a list of suggestions / and get your customers to prioritise the list. Not all maybe achievable but if youre transparent people will understand.
Instant customer interaction at relatively little cost.
</Rant>
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Erm…
Increased revenue by £4.6 million
Reduced loss by £3.0 million
Loss reduction sure costs a lot.
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