OnTheMarket delivers first full year of profitability in FY21

Vox Markets
Vox Newswire
08:57, 8th June 2021

OnTheMarket (OTMP FOLLOW) told investors that it is “well positioned to succeed” after the group delivered its first full year of profitability with revenues rising by more than a fifth in FY21. 

The majority agent-owned firm which operates the OnTheMarket.com portal saw revenue and average revenue per account (ARPA) increase by 22% and 16%, respectively, for the year ended 31 January 2021, in part reflecting higher revenues from new home developers.  

In 2H21, conversion activity resumed with 93% of agency advertisers on paying contracts at year end (FY20: 68%). As a result of the strong operational progress, the group delivered its first full year of profitability with profit after tax at £2.7m (FY20: loss after tax of £11.5m). 

After careful management of its cost base, the company said it was able to reduce its administrative expenses by 26% against 2020. By year-end, the group had a strong balance sheet with cash at £10.7m before deferred creditor payments of £0.4m (FY20: £8.7m). 

In total, cash generated from operating activities came to £5.1m, compared to a loss of £7 million in FY20 as consumer engagement amongst active property-seekers grew in FY21. 

The number of visits and average monthly leads per advertiser were up 13% and 22%, respectively, despite the effective suspension of UK housing market activity during the first lockdown and the curtailment of advertising expenditure (down 51% on FY20 to £5.9m). 

Once property market restrictions were lifted, 2H21 visits and average monthly leads per advertiser rose 30% and 31%, respectively, to 151m (2H20: 116m) and 130 (2H20: 99). 

OTMP said it has made a ‘positive start’ to FY22 with trading in line with expectations. It said marketing activity is driving consumer engagement and ARPA is expected to continue to grow ‘as agent conversions to paying contracts annualise in FY22, FY21 discounts unwind and as the migration of customers on reduced rate contracts towards full-tariff continues.’ 

Having achieved profitability in FY21, the Board now expects to be able to invest further operationally into the business and return to normalised levels of marketing expenditure. It added that its strong balance sheet is sufficient to support its organic growth strategy.  

Post-period, the firm completed its acquisition of Glanty Limited which it said is expected to bring a range of additional products, services and capabilities to OnTheMarket and widen its offering, including in revenue generating and revenue sharing products and services. 

Looking ahead, the company said the UK residential property markets remain ‘very active’, aided by ongoing government support initiatives. “The UK property market continues to be very active and our significant market opportunity remains. With our strong foundations and a new vision and strategy, we are well positioned to succeed,” said CEO, Jason Tebb. 

Tebb, who was appointed CEO in December 2020, added, “OnTheMarket has come a long way since its launch by agents in 2015. From this position of strength, it is now time for the next stage of our development and our new strategy is based on a clear vision of building a tech-enabled property business. We will become more than just a portal and provide best in class products and services that benefit agents, housebuilders and consumers.” 

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OTMP’s outlined strategy is to build and acquire technology solutions as a ‘next step’ in achieving its mission to deliver an agent backed alternative to Rightmove and Zoopla.   

In February, the group told investors that trading for the year to 31 January 2021 was ahead of previous forecasts following continued strong performance since the Christmas period.    

The number of visits to the site during January totalled 28 million while it also stated that weekly site visits have exceeded 6 million every week since the start of February 2021.     

Whilst it said it will continue to closely monitor the impact of COVID-19, it expects marketing expenditure to return to ‘more usual pre-COVID-19 levels’ in the year to 31 January 2022.     

Shares in OnTheMarket have increased by over 25% over the past month. The stock was trading 0.27% higher this morning at 105.28p following the publication of its final results. 

OTMP price chart

Reasons to FOLLOW OTMP

OnTheMarket, a majority agent-owned company which operates the OnTheMarket.com property portal, is a UK-based residential property portal provider. It aims to deliver an agent-backed portal to agents and new homes developers at ‘sustainably fair prices.’      

Back in September 2020, OTMP unveiled to investors that it has signed a portal listing agreement with Taylor Wimpey, one of the largest British-based house building companies.    

The agreement followed three months of record leads for OnTheMarket during which the portal had seen average visits of 26.8 million per month and an average of 2 million leads per month. Over 2 million leads were generated in August 2020, an 64% year on year rise.    

 “As part of our growth strategy we have continued to attract a wealth of developers and expanding this sector remains a key priority for the portal,” commented Helen Whiteley, Commercial Director of OnTheMarket, at the time of the announcement.       

Since that period, shares in OTMP have risen by over 15% in value. It said it believes its combined revenue growth and financial discipline will continue to provide ‘increasing value’.      

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Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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