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.”