OnTheMarket shares have plunged almost 11% this morning after a warning on revenue.
In an unscheduled trading update, it said that “due to market conditions” it has converted fewer agents than planned from free to long-term, full-tariff contracts.
It has therefore reduced its revenue and profit guidance for the next two financial years – 2020 and 2021 – accordingly.
OTM told the City: “Agents are facing well-documented headwinds with lower than usual transaction volumes, reduced lettings fee income, the possible onset of recession, the prospect of a no-deal Brexit and a strong sense of uncertainty and a ‘wait and see’ approach amongst buyers and sellers.
“These circumstances have given rise to a much more challenging backdrop against which to convert agents onto full-tariff paying contracts.
“Agents are taking longer to consider such commitments and fewer are currently signing them than anticipated, with ARPA of £329 per month for those that have.
“The Group has, therefore, introduced shorter term, lower cost contracts, the ARPA on which is running at £207 per month.
“The availability of this alternative has raised the current rate at which agent offices are signing paying contracts to record daily levels.”
OTM now expects revenue for the current financial year, to January 31, 2020, to be in the range of £18m to £18.5m, with losses expected in the region of £9m to £10m.
For the year after, it is forecasting revenue in the range of £27m to £29m.
The group said it expects to achieve broadly break-even adjusted EBITDA for the 2021 financial year. For the financial year ending January 31, 2022, it expects “that operational leverage and network effects will result in significant profitability and cash generation being achieved in this period, approximately 12 months later than originally envisaged”.
OTM also reported over 2,000 agents are now signed up to paying contracts, with the “overwhelming” number from free listings. These agents are paying £297 per month on average.
Its statement to the City concludes: “Notwithstanding the lower revenues arising in the short term from the revised strategy, we are continuing to expand the team to support the growth in revenues.
“With net cash currently in excess of £8.5m and the Group’s increasing recurring revenue base, disciplined financial approach and strong cost control, OnTheMarket believes it has the necessary funds and resources to implement its strategy and achieve the strong growth projected over the medium term for the benefit of all stakeholders.”
Not a surprise. Nothing to do with market it’s the product and offering.
And again OTM changes the charging structure after locking agents in to higher contracts.
Disgusting company. Hurry up and go bust.
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Correct, it’s a shame as I’d love to stuff rightmong and hoopla but unfortunately whilst OTM constantly chop and change their minds about one portal policies, upsells, wasting money on court cases and flimsy agent share deals, they are missing the point. I also find their army of ex-rightmong employees as equally arrogant as when they worked for the monopoly that is rightmong.
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I don’t agree at all. I strongly believe that OTM is our only chance of sorting out RM and without it RM and Zoopla’s fees would have undoubtedly risen more this year than they already have. Yes, they made some mistakes and have struggled to find their way but I’m convinced they are getting there at last.We are one of the agents they have struggled to convert, but we HAVE decided to pay as the product is good, easy on the eye and easy to use, is currently being well promoted on the TV and frankly is giving us better leads than Zoopla. We’ll put off dropping Zoopla for now as we might take the leap of faith and drop RM instead ….
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Well said…!
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Totally agree
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The very definition of clinging-on by your fingertips.
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NO that would be the “Lomans/Readers” group lol!
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Not surprised at all. Great idea but no follow up.
I left the 2 messages and emailed them through their website to see what packages I could take out with them as I loved the concept.
Not one returned call or email.
Such a shame.
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Breakeven 2021 in your dreams. If whoever rolled out these dillusional statements were ever made legally responsible for them when it doesn’t materialise ( after in most cases hovering up gullible investors and pocketing their money ) we might get some sensible projections. Profit/break even? Never ever ever.
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Doomed
We are all doomed.
Ala Dads Army
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Since we had our fallout and stopped advertising with OTM 2 years ago whilst they were throwing all their revenue at Solicitors rather than Marketing. They have never responded in writing to any of our queries or concerns. Shame because their website was better than Rightmove and Zoopla – so much potential wasted.
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Ok…. I’ll read the full blurb later, however…..
I get difficult market conditions, challenging times for agents etc etc
What I don’t get is when does the detached Ian Springett and his detached BoD wake up and implement a workable strategy that encourages/supports Our Industry?
Of course! They can’t!! ……because they answer to Shareholders 1st!
They didn’t listen during their great V1 to V2 Conversion, and they now stagger along from one blind alley to the next?
So, I’m locked in till Spring 2020, then leaving! …..not because OTM won’t work or doesn’t have a future ……simply because it takes my money & DOESN’T LISTEN!!!
OTM? ……FULL of Promises, yet FAILING to Deliver!
Take a note Mr Springett – that clunking noise you can hear is your OTM Engine beginning to fail! Get your @rse into gear and fix it, before it dies!
…..from your Enthusiast OTM V1 Member & now SHACKLED OTM V2 Prisoner.
Brexit may be a shambles however the historic path of OTM runs it a close 2nd
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I really hope you don’t. As frustrated as you might be by OTM, just consider if it fails and we are returned to the 2 horse race. Both Zoopla and especially RM will have a field day increasing their rates. My eyes are watering just thinking about it 🙁
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In many ways, this bunch are worse than RM.
They saw the apathy against RM, saw a window of opportunity to replicate the business model while conning everyone into thinking they were on the agents’ side.
Very poor form.
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Did you ever attend one of the early presentations held by Ian Springett when OTM/Agents Mutual was mere pipe dream? I went to a number of them and I was, and I remain, convinced that his heart was in the right place, he really was on the side of the agents. Alas OTM didn’t gain sufficent support from the industry and so they had to resort to share selling in order to keep the thing afloat. Such a shame as he was determined that wouldn’t happen. Our own fault really!
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“Alas OTM didn’t gain sufficent support from the industry and so they had to resort to share selling in order to keep the thing afloat. Such a shame as he was determined that wouldn’t happen. Our own fault really!”
Don’t get me started on the aforementioned Debbie
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……and I receive a call from Rightmove Customer Service today, coincidence or taking advantage?
Come on Ian Springett & Co …..what happens next?
I have an Appointment to chat with my Rightmove Lady next week. I asked about whether there was a Local Rep yet? ……No was the polite answer and an apology for not having one.
Question No 1 – when is Rightmove reducing its charges?
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Stupid stupid agents ! Constantly moaning about RM and their ever relentlessly increasing charges and here was the one BIG opportunity to do something about it and the industry failed ! You reap what you sow !
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Wow a negative story about on the market, have they stopped spending as much on advertising on here?
As always it funny to read the comments from estate agents about who you hate the most, I’m sure the on the market owners are are happily sitting at home counting their money…
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So £30m raised from IPO and this forecast now says they’ll have lost all of that in the 3 years. What they planning on running on? Fresh air and agents good will!?
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Well maybe if we all signed up they would have a fighting chance – it’s for our benefit ultimately. I really do shudder to think what will happen if they don’t succeed.
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And if the more wealthier guys had paid more money in then the dream would remain.
This stinks of poor management not lack of support.
What benefit have you felt so far? Genuinely anything?
I’ll explain what happens, parasites in the industry disappear back in to the wilderness, Rightmove continue as normal, Zoopla rejoice and agents go back to selling houses rather than be cheerleaders and stock brokers.
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From the “commentators” who throw stones at those who do not or no longer support OTM V2, tell me, when I and other agents were putting up Loan Funds to Agents Mutual/OTM V1 ……where were you?
What I currently witness with OTM V2 is its failure to securely build from its stalled OTM V1 momentum. It’s a numbers game for sure however it’s much more than that. OTM are failing to take Our Industry with them, failing to listen, failing to deliver, failing to change strategy…… in reality it has created a Portal No 3, which Agents don’t need or want.
What Agent in their right mind sees a future with a Chas n’ Feckin’ Dave OTM Musical Ad Campaign?
All the portals are at a crossroads in many respects, Rightmove simply up’ing it’s annual charges because it says it can? – that strategy is now dangerously thin, Zoopla launching new technology/being Agents best friend – at least they are trying ……and OTM The V1 that became V2 on the basis that it was the Agents Champion? – I’ve seen nothing that suggests OTM gives a **** about Agents.
It’s astounding that OTM V2 has lost “the dressing room” …..the silence is deafening, apart from Stock Market announcements – because it’s accountable to its Shareholders!
OTM needs to get its head out of its @rse and rethink its strategy – it’s okay to change strategy ……otherwise OTM can keep running up and banging its head up against a Portal brick wall, and keep banging it’s head, and keep banging ……and?
I certainly don’t have the magic bullet for success however I do know a donkey when I see one – OTM is beginning to mimic a donkey. I like donkeys ……but I wouldn’t pay to advertise on one …..and that seems to be the view of those Agents choosing not to commit financially to OTM.
Unless I see a significant change of strategy from OTM very soon, I have to assume it’s looked in the mirror, knows it’s a donkey, and has accepted it’s a donkey.
Hee Haw, Hee Haw……
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Much rather pay for OTM than other portals if they don’t succeed then agents are doomed with extra charges from the bigger duopoly that will strangle Agents with revenge.
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Trust your own marketing skills and your own websites. The number of leads we get from RM are pretty thin and Zoopla a little better. We absolutely do not need a 3rd Portal and certainly not OTM, who just cannot be trusted at all.
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