OnTheMarket threatens to go after agents who owe almost £7m in unpaid subscriptions

| Rosalind Renshaw

OnTheMarket has told its shareholders that it will go after agents who have not been paying their contractual fees.

It says it is owed £6.8m.

The latest annual report reveals: “The group has a number of customers who are not paying their contractually committed listing fees.

“The majority of these chose to breach the One Other Portal rule in their listing agreements and their properties were removed from the portal some time ago.

“Under IFRS 15 [a financial reporting standard regarding contracts with customers] these amounts are not recognised as revenues.

“It is the intention of the company to engage with these customers in due course, to seek either payment of both fees outstanding and further fees as they fall due or to reach a compromise position such that historic debts are held in abeyance and potentially waived in the future in return for entering, and honouring, a new long-term listing agreement with the company.

“As at 31 January 2019, net unrecovered cash amounted to approximately £6.8m.”

The annual report also shows that salaries and fees paid to directors were £793,000 last year, compared with £535,000 in 2018.

With effect from February 1, 2018, CEO Ian Springett’s salary went up from £170,000 to £250,000.

Commercial director Helen Whiteley’s salary went from £170,000 to £200,000, and chief finance officer Clive Beattie’s from £170,000 to £190,000.

No bonuses were paid – the previous year, the bonus figure was £81,000.

OTM’s latest results show a pre-tax loss for last year of £14.5m, up from £12m the previous year.

OTM had a net cash balance of £15.673m at the end of this January. By the end of last month, its cash balance was £10.164m.

The marketing spend went from £2.1m to nearly £15m in the year.

The annual report says that OTM’s strategy is to increase the number of paying customer agents, primarily through converting those who joined on a free trial.

The report says that if future conversion rates fall below expectations, it can quickly reduce discretionary expenditure such as marketing and advertising.

Elsewhere in the annual report, which covers the year to January 21, 2019, OTM chairman Christopher Bell is upbeat, saying: “Many challenges remain before us, but with the continued commitment of all our stakeholders, I am confident that we can achieve our aim.

“That is to provide an agent-backed alternative residential property portal, offering property-seekers a ‘go to’ premier search experience, charging property advertisers sustainably fair prices.”

Springett says that OTM has started to produce products and services that match and better those of its competitors.

A market appraisal guide has already been released this year, and the report says a market intelligence report product is now in beta testing and expected to be ready for release shortly.

Springett goes on: “Additionally, the group continues to evaluate opportunities to acquire businesses, particularly in the area of property technology, which can offer solutions to current business problems faced by its agent customers.”

Meanwhile, a broker has forecast a rise in OTM’s share price of over 200%.

Analysts at brokers Shore Capital have said that OTM has made “substantial” progress in developing all areas of its business.

In a new report, issued as Shore Capital initiates coverage of OTM, it says that it perceives a “compelling opportunity for it to take share from its rivals”.

The firm is forecasting substantial revenue growth, with profitability in 2021 and a share price of 302p.

OTM announced the appointment of Shore Capital as joint brokers earlier this month, following its purchase of Stockdale Securities, which was previously a broker to the challenger portal business.

OTM’s shares closed on Friday at 98p.

Its AGM is to be held on July 16.

https://plc.onthemarket.com/wp-content/uploads/253486-OnTheMarket-AR-2019.pdf

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37 Comments

  1. GeorgeOrwell
    June 24, 2019 at 07:10

    Like a “Gold Member” prisoner in a cell I chalk each month off, only 10 months to go, then I’m free of the prison that is OTM

    I note that the prison guards received no bonus however their annual salary rose substantially. Where is the justice there

    Walking an increasingly thin Line OTM

     

    Report
    1. Bless You
      June 24, 2019 at 08:35

      I don’t care about onthemarket. It tricked us all.

      What is annoying though is when a genuine rightmove killing product comes along we will ignore it due to this scam .

      Dangerous.

      Report
  2. ArthurHouse02
    June 24, 2019 at 07:25

    If the above doesnt teach you that OTM is a company you want to avoid, then you need help. Some members have to pay, some members get freebies and shares, some members can advertise on any portal they fancy, some are not allowed….despite a poor show all round Springett and pals rewarding themselves handsomely.

    This is not a challenger portal it is a company made to make its directors money.

    Report
  3. Property Poke In The Eye
    June 24, 2019 at 07:27

    Give it a rest OTM and forget about past breaches, get agents on side and don’t try and blackmail them by getting them to sign long term contracts.

    Agents are struggling to keep their heads above water, the last thing they need is threats from OTM.

     

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    1. Londonbound
      June 24, 2019 at 10:57

      Forget about past breaches?

      Estate agents are deadbeats and don’t honour anything.

      It’s laughable, too busy chasing online to pay their bills – worked for Chris Wood

       

       

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      1. PeeBee
        June 24, 2019 at 15:54

        “Estate agents are deadbeats and don’t honour anything.”

        Sorry – ‘Londonbound’ – remind the readers what you do for a living, please…

        Report
        1. Londonbound
          June 24, 2019 at 21:43

          Been out of the biz for a little over four months.

          Pulled a previously unused degree out of the bag and have moved on.

          I’m still amazed at the negativity towards online and the holier than thou attitude of you guys.

          As said, it’s laughable.

          Report
          1. Retiredandrelaxed
            June 24, 2019 at 22:59

            “There’s heavy reliance on Rightmove and Zoopla, and there’s little chasing or sales progression which can let sellers down. Negotiation over price goes out of the window and it’s undoubtedly the case that sellers doing their own deals won’t get the sale price that estate agents could get.”

             

            Quote from Karl Rusk, former Territory Owner at Purplebricks, published earlier today on another industry website.

             

            And you wonder why posters on here are negative about onliners?!

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          2. Bless You
            June 25, 2019 at 08:50

            Reason your out of biz is u failed or there was no money to pay you… blame the onliners pal.

            Report
          3. PeeBee
            June 25, 2019 at 11:17

            “Been out of the biz for a little over four months.”
             
            Oh – so until recently you were a deadbeat who honoured nothing, then.
             
            That’s much better… innit?

            Report
  4. smile please
    June 24, 2019 at 07:39

    I have heard they are willing to halve the debt in return for long term listing agreement.

    Report
  5. Tarkers71
    June 24, 2019 at 07:44

    Why should these agents get away without paying what they contractually signed upto.   Whilst I’m not a supporter of OTM by a long shot, the fact is these agents knew what they were doing when they signed the agreement and how is it fair on all those agents who have paid properly to be disadvantaged to support agents who morally have done wrong.   Agents are quick enough to go after vendors who do a “private sale”.

     

     

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    1. ArthurHouse02
      June 24, 2019 at 07:45

      It could be argued that they knew what they were signing up for, but they didnt get what they were promised or agreed to.

      Report
    2. smile please
      June 24, 2019 at 07:50

      Part of me agrees but I feel they are justified due to the lies OTM have made.
      A number of original members signed up on the belief they were to get preferred rates. 
      OTM have given the service away or greatly reduced membership for a considerable time. Hardly a bonus if you were an original member.
      OTM was also supposed to be owned by agents and never have additional products …. we all know what happened there.
      End of the day it’s not the company they signed up to.
      The likes of GPL have kept their head high, at the start buying all the BS that was spouted and then realising its cr*p but still paying the £400 a month for 5 years. I would feel mugged off every single month making that payment. 

      Report
      1. GPL
        June 24, 2019 at 08:15

          ……and I continue to pay monthly smile please, despite being totally shafted from the promises of OTM V1 to the FantasyLand OTM V2.
         
        Rather than being locked-in to V2, those original members that wanted to leave (because what they had signed-up for had ABSOLUTELY changed) should have simply been allowed to shake hands and walk away, however we know what happened.
         
        OnTheMarket and Ian Springett have clearly failed in my personal experience in terms of being honourable to the “product” that I was sold/bought, and the one that I am now paying for. However, being honourable/honest remains in my core being so I have less than 1 year to go before I can exit OTM V2.
         
        £3.02 per share? forecast in 2021 will make Zero difference to me. Currently the  financial loan that I made OTM V1, which was forcibly converted to shares by OTM V2, remains around a 1/3 less that original £1.65 ish opening ……and the £5 per share that was mentioned to me at the OTM Roadshow? ……the current Share Price is around 80% less that that particular figure.
         
        Thankfully my business is doing well in a challenging market, and it is no thanks to OTM. There is no substitute for hard graft/honesty/being able to adapt your business strategy to the current market conditions etc  
         
         

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        1. smile please
          June 24, 2019 at 08:20

          Well done for staying focused on your business.
          The ones I worry about are the one man bands still being sucked into this BS.
          They are committing 2 years of revenue for shares and a dream that will in my opinion end as a nightmare. 

          Report
        2. Reborncoyote25
          June 24, 2019 at 15:10

          As per usual, GPL, on this subject you echo my exact thoughts as an early Gold member. Springett’s remuneration figure leaves me speechless.

          Report
  6. DAE
    June 24, 2019 at 07:51

    Managed to sell 36,000 shares on Thursday at 0.95 each – if you hold shares you would be wise to do the same     Before they tumble

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  7. GPL
    June 24, 2019 at 08:00

     

    Shore Capital shoring up OTM with a 2021 Share Price forecast? One can’t accurately forecast the weather much beyond 1-2 weeks, yet Shore Capital can look into 2021? As Craig Revel Sharewood would say …….Aaaaa maaaaa zzziiiiinnnnnng!

    OTM have smacked into a Portal brick wall with Subscribers however rather than look at alternative/creative/positive solutions the best they can come out with is, we are chasing “Bad Debts?” You should have been doing that from Day 1. I remain locked into this V2 farce not though my choice Mr Springett & Co, through your skilful “Dark Arts” manoeuvring! ……..however I still pay my monthly subscription, until (like George Orwell above) I escape my OTM Portal Chains in Spring next 2020!

    If the OTM Board had any “member retention/increase” intelligence they would continue to drive positively towards those goals ……instead the only real goal remains personal financial gratification. You (OTM Board) should be ashamed of the way in which you have managed OTM, however the motto stamped on each and every one of you, and in particularly large letters on Ian Springett is “Greed is Good”!

    For the Record ……we know the failings of Rightmove, yet rather than capitalise and bring UK Estate Agency on board for the long term, you (OTM) remain focused on your personal financial return ……that focus is gradually turning you backwards ……much to the regret of many of the very agents that wanted you to succeed/wanted to support you.

    So, whilst what should be OTM’s objective is fiercely burning, you crack on and collect the buckets of money that you should have got long ago.

    2021 – £3.02? per share ……..is it the .02 that is supposed to make it credible?!! Dream On!

     

     

     

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  8. J1
    June 24, 2019 at 08:05

    They couldn’t  risk losing member numbers whilst selling their themselves to the city.
     
    Now their diminishing cash position is exposed, they admit that they have been mis-managing non payers to bolster the numbers.
     
    You can’t make this shambles up – a great opportunity ruined
     
    Nobody will trust them as a supplier of prop tech going forward.

    Report
  9. Richard Copus
    June 24, 2019 at 09:40

    A quarter of a million pounds is a massive salary to run such an unstable, but originally well intentioned business.

    Report
  10. MarkRowe
    June 24, 2019 at 10:25

    £640,000 salary for three people…. let’s just take that in for a moment…

    A public traded company making an increased pre-tax loss to £14.5m form £12m on it’s previous year… and three directors are making more money than they did that previous year.

    Ian, I know you wont be reading this as I’m far to lower down your members list (even though I am an original paying member of OTM) for you to even worry about and you’ll still gross £20,833.33 this month in your pay packet… but in my opinion if I had this level of money to spend on staff they would have made OTM work and Rightmove would have been toppled by now – you’re not worth the minimum wage, let alone a quarter of a million a year.

    That £20,833.33 per month could be spent simply on employing a few people to ensure you don’t f**k up when it comes to the promises you made, they could keep tabs and remind you so that the paying members are kept sweet, promote the portal positively and feel confident about ditching the duopoly… just a thought..

    🙂

     

    Report
    1. Ostrich17
      June 24, 2019 at 11:08

      The total remuneration for the entire board of five (including the two non-execs who form the Remuneration Committee) has increased from £616,000 to £793,000 !

      Should be some interesting questions at the AGM.

       

      Report
      1. smile please
        June 24, 2019 at 13:37

        Doubt it, no blighter will turn up and question it sadly.

        Report
  11. DarrelKwong43
    June 24, 2019 at 11:36

    How anyone is worth 1/4 million a year is beyond me, especially when they are making zero profit, and from the sounds of customers/member not providing a great service either.

     

    Report
  12. Spare Room
    June 24, 2019 at 13:33

    Forgive me as I don’t normally comment…

    Essentially this was a business that  pre-launch was delivered as the challenge to corporate greed. I remember  the slogan “Agents take back control”. After the initial hype, mud slinging and signing of contracts, the impact faltered. Then came the freebies which to some were welcomed and to others started to leave a nasty taste in the mouth. We then learnt that to move the business forward, all of the original promises were to be scrapped and cast in to fire. NO to the 1 other portal rule, NO to the Internet only listers and NO to member choice.

    IMHO this seemingly started with an idea that was based on principles us in the EA world would like, What has come since is obviously very different and has been hugely divisive.

    My guess is that OTM need new direction, they have lost the faith of their membership. It doesn’t take long to scroll through the comments to find out how some of the original founders and ardent supporters now feel.

    If OTM want to succeed then they need to stop asking the bill payer  for help and come up with a strategy that actually works otherwise turn of the lights and close the doors. Too much time, money and effort has been spent arguing about portals.

    Report
  13. GPL
    June 24, 2019 at 15:14

     

    If OnTheMarket has demonstrated one solitary thing, it is this ……there remains a vacancy for a true “Estate/Letting Agents Portal”, which can harness the UK Property Market and its Property Professionals ……Chancers, Charlatans, Dreamers need NOT apply.

    It needs to be run by those seeking to deliver for its Subscribers, and NOT for those with their fingers rammed in the jam jar!

    Dear ? ……..here’s a thought …….go into a “Genuine Partnership” with UK Estate Agency. Rightmove need not apply. OTM were employed to do the job, however have failed to deliver.

    Next applicant???

     

     

    Report
    1. smile please
      June 24, 2019 at 19:10

      …….R4 ………..?

      Report
      1. Property Pundit
        June 24, 2019 at 20:40

        Absolutely.

        Report
  14. The Outsider
    June 24, 2019 at 22:21

    All the agents need to do is last another year without paying and OTM will be insolvent

    Report
  15. AJP123
    June 25, 2019 at 06:53

    Very clever move, very clever. After all the positive spin PR nobody has bought in to the company, and the money is really starting to run out now, so how do you drum up interest? Tell people there is a £7m honey pot waiting there.

     

    Just to get this right, OTM has threatened hundreds of firms with legal action, that means their water tight contract would need to go through court hundreds of times. Legal bill alone would wipe them out.

     

    For £250k a year, I’ll give steer the ship, but here’s a freebie, dont bother agents have switched off. Only the reps remain on side on forums

    Report
  16. Breaking Dad
    June 25, 2019 at 08:30

    I’ve had OTM for a year for free and now they want me to pay, offering a 1 year contract with no shares, a 3 year contract with some shares or a 5 year contract with a whole heap of shares.  At the moment cost per lead is running at around £16 and cost per conversion from lead to deal is so high it’d give anyone a nose bleed.

    If I sign up it’ll only be for a year, but I’m more likely to just sack them off.

    Report
    1. PeeBee
      June 25, 2019 at 10:44

      £16 cost per lead on a free deal?

      WOW – that takes some doing!

      ;o)

      Report
  17. Budgie boy
    June 25, 2019 at 09:56

    They’ve really hacked us all off, they’ve ruined any chance of success with their “one other portal” rule. If they’d have dropped it, they wouldn’t be in the mess they’re in now, in my opinion.

    Report
  18. Kosh
    June 25, 2019 at 11:21

    Get over the petty grunting. OTM is going to break the duopoly and everyone needs to embrace it. It is already doing much better than Zoopla in my area and close to Rightmove on leads.

    Get your business heads on and stop the petty winging.

    Report
    1. GPL
      June 25, 2019 at 13:22

       

      Kosh? ……rhymes with ……Tosh!

       

      As I pay circa £300 per month to OTM     I can whinge, moan as much as I want.

       

      OTM is currently Portal No 3, parked up, doing f&@k all to break the Duopoly!

       

      Chas & F&@£?n Dave? You couldn’t write it!

       

       

       

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      1. Kosh
        June 29, 2019 at 12:57

        Disagree but respect your findings.

        But Zoopla is nowhere in my area, and OTM is bringing in the leads.

        From their media responses, you can tell Zoopla is worried.

        Report
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