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.