OnTheMarket’s (OTM) latest trading statement released yesterday has been well received by several leading analysts.
The property portal has just had its busiest ever quarter, as demand for properties increased sharply following the reopening of the housing market on 13 May.
OTM, launched in January 2015 by Agents’ Mutual, a large consortium of estate agents, including big hitters like Savills and Knight Frank, aiming to regain control of the homebuyer audience, continues to challenge what they previously described as the ‘duopoly’ of the two big property portals – Rightmove and Zoopla.
Its latest performance suggests that the property search platform is growing increasingly popular with consumers, illustrated by growth in traffic, with 80 million visits to its website in the three months to 30 September.
That resulted in 5.9 million leads, such as viewing requests or calls, to estate agents and housebuilders that list on the site.
Fiona Orford-Williams, senior analyst at Edison Group, commented: “Encouraging trends from OTMs interims, with increases in ARPA, up 15% to £124 and revenues up 28% to £10.2m despite the Covid-related discounts and the impact of lockdowns on housing transaction levels. The indication in the statement is that these factors cost around £1.8m in lost income [which would lift ARPA to £147 if added back].
“A sharp curtailment of marketing activity – down two-thirds – enabled a small profit to be logged, with guidance for the year for the group to be around breakeven, implicitly pushing the marketing levels back up again in H2, with a greater emphasis on data-led targeted campaigns, along with higher costs associated with upping service levels to agents.”
Following the departure of Ian Springett in March 2020, Jason Tebb has been appointed as chief executive officer.
Orford-Williams added: “New CEO Jason Tebb starts on 14 December, allowing Clive Beattie to step back to his CFO position. Tebb was previously COO of unquoted property group Ultimate Holdings and has plenty of agent-side experience, having also started his own. His main task will be in moving along the conversion of agency onto paying contracts.
“The group had net cash of £10.3m at end September and no bank debt.”
Assuming the UK housing market remains open and active, the group expects revenues and costs to increase from H1 20/21 levels in the second half year to 31 January 2021, as it continues to invest in the platform.
The group hopes to achieve a broadly breakeven adjusted operating profit position for the full financial year.
Beattie, acting chief executive officer of OTM, commented: “We continue to believe that our differentiated proposition, with agents at the heart of our strategy as both customers and majority shareholders, provides a strong foundation for future growth.
“Whilst we remain cautious amidst the ongoing uncertainty associated with the Covid-19 pandemic, the actions we have taken, and the demonstrable value we provide our agent customers, gives me continued confidence in the future success of the company.”
Marc Impressed with these early starts .You must get up before you go to bed .
Well the devil is in the detail Revenue fattened by the arrival of a one off £1m from the litigation with Connells That’s 1 top tier agent they are unlikley to secure.
Good inroads into securing new housebuilders
. “Encouraging trends”??
However the day job looking a bit shaky .The bus has gone into reverse since July despite all the incentives and freebies as agents have been voting with their feet .
Agency branches at 31 Jul -12,245 .However this has reduced to 11,799 by the 30th September. Only 9,400 agency branches under paying contracts, including c 3.5k branches on discounted rates.
In addition to the 2,399 on a free lunch ,what will those 3.5k branches enjoying discounts do when faced with the full monty?
Another TV advertising blitz will take a big bite out of the cash.
The heavy breath of Boomin’ to arrive also .
The SP finished slightly down yesterday having recently enjoyed a purple patch
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£1,000,000 wow-who carried the can for that blunder-could have been worse I suppose
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An ill-advised comment Major Tim – too little information can clearly be a dangerous thing! Rather than sitting in your glass house and throwing stones to satisfy your obsession with your former employer, perhaps you should spend more time reversing that hefty annual loss at your place?
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Read a little more deeply into the OTM results Major; they have spent much more than the £1m in legal fees over a number of years trying to fight that ill conceived litigation. As ever the only winners will have been the lawyers and as Hillofwad says they will have alienated what could have been a key client win for them. In terms of who carried the can, it was interesting that OTM changed CEO’s just after they announced the litigation was settled. OTM looks like a dead duck to me.
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Connells had already madE a legal costs Payment so I don’t think your correct here but I may be wrong .Either way it’s a very bad result for Connells isn’t it
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There is no ‘differentiated proposition’ with OTM apart from being remarkable in that they do not have one. Cultivation at grass roots with the agent, and active engagement would be a start, as Boomin hoves into sight it is clear that some enterprises have strategies and seek to execute them, others just drift.
All portals have been busy, Covid-19 has made real estate a more digital experience, but the big developments on the horizon are which portal is going to become an agent? Which portal or platform is going to monetise all the component parts of the property ecosystem? These things are coming quicker than may suppose.
As a concept OTM at its birth could have been a contender, but all that was long ago, if it wants to grow, it must first decide what it is, and what value and use it holds for the agent and the consumer, as adoption is key. Interesting to see what having a CEO with some agency background will do, my advice perhaps start talking to your customers, paying and non-paying, then look at what agency will be like in 2025, and fit a model around that.
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Agents want their portal to be THE MOST VISIBLE portal in the eyes of the public.
OTM is not.
Agents who joined OTM right at the beginning chickened out and dropped Z instead of RM….this project died in that instant…..
Conceived for the agents who killed it.
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It is in our area! Couldn’t disagree with your comments any more James.
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Hmmmmmm
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We get more leads from OTM than anyone else.
ONEDOME and RESIDENTIAL PEOPLE are starting to deliver a lot of leads too.
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Jeez, why the negativity? If those agents who haven’t joined, stopped finding reasons to ‘have a go’ and got onboard and supported the portal it would be sailing really well by now.
Every agent in our area is on OTM and an increasing number have dumped Rightmove. OTM is providing us with the vast majority of leads, we haven’t missed Rightmove at all.
I strongly feel, like it or not, OTM is the best chance we have to dislodge Rightmove. Yes there are others on the horizon, but there have been many new portals surface only to disappear again as quickly. OTM has done really well considering what a difficult challenge it has.
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Have you dumped Rightmove Debbie?
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Seems to me, its the Corporate agents constantly ‘chipping in’ for RM.
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