OnTheMarket has reported a “strong” year since floating on the stock market, with over 12,500 branches now under contract to it – to whom it is sending more leads than Zoopla.
The figure is up 7,000 since admission to the AIM stock market in February 2018, but membership growth looks to have stalled at 12,500 this year.
Publishing its results for the year to the end of January, OTM said that the new recruits were a mixture of agents on free trials and others going straight to contract. Over 6,500 branches had joined on short-term offers. A total of almost 1,000 branches had signed in the 12 months which were paying an average of £337 per month.
Of those new contracts, it said 57% are long-term commitments of three or five years with shares, and the majority of the balance are on one-year contracts with an option to convert to a long-term contract with shares. A total of 1.7m new shares have been issued to agents signing long-term listing agreements.
As at June 3 this year, the portal displayed over 650,000 residential property listings – around 65% of Rightmove’s stock and over 83% of Zoopla’s.
It said that in May this year it delivered an average of 102 leads to each advertiser. It estimated that Zoopla sent 92, while Rightmove sent 171. OTM put the price on its leads at £100 for 30.
However, today’s results do not seem to have shown growth in estate agency numbers this year, as it continues to report the same number, 12,500.
The results say that “as at 31 January and 31 May 2019, OnTheMarket had signed listing agreements with UK estate and letting agents with more than 12,500 offices”.
OTM refers to free short-term introductory trial offers, bringing down its average rate per advertiser. Group revenue was £14.2m, with an operating loss of £14.5m.
Losses before tax widened to £14.494m against £12.070m the year before. Admin costs spiralled to £13.639m, up from £3.887m the year before.
Cash balance was £15.7m at the end of January.
Chief executive Ian Springett said: “OnTheMarket has delivered a year of strong operational progress since its IPO in February last year.
“The Group’s strategy to build strong network effects and deliver increasing value to our agents is working. We are established as one of the leading portals and our progress to date has given us confidence that we can continue to build on this strong start and develop a market-leading, agent-backed alternative to Rightmove and Zoopla.
“We are benefitting from growing agent support and are strongly positioned to continue our growth in agent offices listing and in agent firms converting to becoming investors alongside long-term paying contracts.
“The Board believes that with the continued support of agents, we are well placed to deliver long-term value to shareholders.”
He added: “OnTheMarket is already indisputably established as one of the leading portals and as a go-to destination for the most serious property-seekers in the market.”
Today’s results also discuss its enlarged staff, with 58 now working in IT at the end of January against 21 the year before, and 50 sales staff as against 15.
The results also refer to the litigation with Connells brand Gascoigne Halman, saying that the latter’s appeal was dismissed this January, although residual non-competition issues remain to be resolved. It says that the litigation proceedings are now focused on the “recovery of material costs and damages suffered by the Group due to Gascoigne Halman’s breach of contract”.
Yesterday, shares in OTM closed up almost 4% at 105p – still well below the launch price last February when it raised £30m capital.
Comments (32)
“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 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.”
£6.8 million – that’s a significant number not paying their dues !
Surely it’s worth taking a chance with otm free shares only 20 odd % of the cost? The only alternative is those agents that survive a slowing market tenants fee ben etc sticking there heads in the sand for another 8 months before all coming back on a platform like this to bemoan there fees going up 15% during rightmove’s annual pillage of there decreasing bank balances. Unless Estate agents take positive action you’ll probably be listed on Wikipedia next to Dodos.
The public couldn’t give a monkeys what they type into their browser they will look wherever the properties are. Your futures in your own hands!
Oh and yes we made the jump as have a few other in our local town saving so far £8400.00 – and no effect on business.
Be bold I’m not professing in anyway that OTM is perfection or a white Knight with our best interests at heart but given the choice of shelling out thousands per month against £100’s per month and still doing just as much business is a complete no brainer!! If OTM reaches Rightmove’s pricing structure 10 years down the line then we will simply move to the next newcomer.
Take a pint a 5k per year per office? Rather go to the grosvenor with my staff on a decent jolly.
“The Board believes that with the continued support of agents, we are well placed to deliver long-term value to shareholders.”
F*** the agents, we are only interested in the shareholders. It says it all. If OTM ever gets to the point of profit, long term expect the costs to go up to RM levels because long term that is the only way they can deliver value to the shareholders, it is not about value to the agents.
I’m glad someone else wrote this as I sound like a broken record saying time and again .
OTM is finished. A good idea on paper but, in reality, all it tried to do was mimic the No.1 business in the sector.
These figures show it will run out of money in the not too distant future and will face the same difficulties in raising additional finance as the likes of Purplebricks, YOPA & Housesimple.
I was happy supporting OTM and agree with what it stood for. I have listened to every decision they have made and not agreed with most, but have understood why they have done it.
The final straw that has wound me up was the addition of the premium features, yes to generate more cash but the original idea was a level playing field and every agent has the same expense….now no longer the case.
TNW78 in reply to your question read paragraph 6 which ends. OTM put the price on its leads at £100 for 30 – maybe it’s a typo perhaps it should have £100 for 3
Ok, so it seems the general feeling of this group is that OTMs claims about lead generation are not correct?
I thought this was a hard number? When a potential buyer takes an action to click on “send details”, an email is sent to the agent. It’s something that can be audited and proven.
Am I wrong or are we saying that OTM is being fraudulent?
I guess On The Market are counting all the hopeless spammy automated leads, when their rep visited me they were glowing with the number of leads they’d given us, although i had my own list and when removing all the spam it was a fraction of the leads they thought they were delivering.
The results also refer to the litigation with Connells brand Gascoigne Halman, saying that the latter’s appeal was dismissed this January, although residual non-competition issues remain to be resolved. It says that the litigation proceedings are now focused on the “recovery of material costs and damages suffered by the Group due to Gascoigne Halman’s breach of contract”.Anyone have an idea as to how much potentially ???
Stock market not impressed with these results
Nor should anyone else be
I have fully committed my morning to OTM this morning and making the most of it…
9:30am – Sell my first 10% shares.
9:45am – Diary Feb 2020 to sell my next 10% of shares.
10:00am – Diary 2023 to sell the remainder of shares.
10:15am – Use money from first set of shares sold to place a bet on Red Number 9 (officially a better chance of making money than leaving my shares in OTM
10:30am – Forget about OTM until 9am on 2nd Feb 2020.
Boom, they have 1 full hour of my support this morning.
But tell me why? You are presumably an agent that got shares when you signed up to OTM. OTM is worth c£60mln and RM worth c£5bln.
Surely OTM is massively undervalued if agents stick together and use the portal and put pressure on RM pricing.
Why would you dump shares immediately at a bargain price? Aren’t you just repeating the mistakes the industry made in the first place with RM, when it had agency ownership?
Is OTM much worse than their stated staistics would imply?
“if agents stick together” there you go…
IMO we are sooooo busy fighting a portal war, we are starting to forget what we are about.
Portals exist. I will be on them. But no more thought required. They are a digital shop window.
As for “sticking together” with my competitors… really! I get how you can feel a desire to stick together nationally, but our businesses all come back to local level competition… and I am not sure about your area, but around here, we would point our cars at each other and hammer the gas given half the chance.
Looking after number 1 now. Because I will get NO extra brownie points for helping level the playing field.
My business plan cannot care about the “other agents”…. happy for them all to make money, as long as we acheive our goal too.
What I am saying is that if all agents collectively cancelled RM today and signed up to OTM, they would collectively be better off by owning equity in a company that is charging 1/3 of the price.
So my question to agents is – what’s stopping you?
If you all cancelled RM today, and had OTM (and Zoopla), would you really be worse off?
Wow, that’s shocking. If eveyone cancelled OTM today… They would still be on the biggest portals who people have actually heard of too.
Sure, but if the whole industry was on OTM and not RM, then very quickly everyone would know OTM (and OTM say that recognition is rising anyway).
And the whole industry would have saved about c£600 per month each = £7200 per year. And they’d also own a slice of an extremely profitable company, worth far more than it is now.
Makes sense, no?
I agree, said it a million times, RM, Z and OTM each one, needs us more than we need them and a collective shift will potential be fatal for them…
But… 3 years on and we have failed to “come together” the market is getting a bit tougher now and no doubt the “we must save money, lets do something about the portals” debate raises its head again.
Why an earth we don’t do something in an easier market, and therefore get the best of both worlds, I don’t know. (Well I do, we tend to worry about our selves, when the going is good, we don’t care and when it is rubbish, we hope someone else will assist)
I am simply at the point, driving down overall costs for the good of my “competitors” is no longer something I care about. I negotiate the deal I want with the portals, if it is not low enough I come off. If I can make it work I will.
It’s just all ****** boring now…seriously can anyone be ***** to read all this “lets stand together bollox” Brexit has gone better than sorting out Rexit” (RM Exit)
Yet the directors have signed off the accounts on “going concern” basis, so they must be confident that income is going to go up (or costs down) over the next 12 months.
No doubt, shareholders will have questions for them at the AGM.
As a gold member I looked at my share certificate las week with the view of selling them the company is massively over valued at 1.05 per share and likely to collapse in January when the original gold member agents dont extend their contracts walk away – the claims made by OTM for lead generation is outrageous misleading and borderline criminal – Sell your shares before they are worthless
the claims made by OTM for lead generation is outrageous misleading
Can you expand on that? What is it that you feel they are doing that is misleading?
The natural answer is, as a member, he clearly isn’t getting anywhere close to numbers in % terms. I don’t believe it for a second. If it were true, they would of been shouting about it long before now, no question.
Thanks. Is there anyone on this forum that believes OTMs lead generation is actually improving and proving helpful over and above RM?
Yes, see my response above, and we’re hitting RM over the head with it
Plenty of candy floss burying the bad news they only have £10,2m cash left With an annual advertising bill running at £14.9m over and above revenue they are going to run out of cash before12 months . White knight needed
Question: Why do you feel your are not getting value for money? I’m guessing you pay less than 1/3 of Rightmove and, according to OTM, your lead per £ spent is significantly better? Plus you are contributing to the softening of Rightmove’s dominance.
Question for everyone: Surely now is the right time to collectively move from Rightmove? What’s stopping you? Are you locked in? Or do you still think Rightmove provides a better services?
Your kidding right? That’s a bit like someone hiding your business website from Google because Bing now exist and have a half decent percentage of the content. OTM doesn’t come a hairs width close to RM, or Zoopla.
That’s my point. If everyone stopped using Google and started using Bing it would become the standard platform.
But actually it’s different, Google is better than Bing (better algorithms, more data scientists) and there is no cost benefit.
Isn’t the only advantage that RM has, the number of users? And the second people go to OTM then that evaporates?
I’m not saying it’s an easy decision to make but rationally that’s what all users should do?
Maybe not where you are but we’re getting more OTM than RM leads for lettings and getting very close to that point on sales.
Absolutely incredible, whoever wrote the PR release must be a poet!
Definition of strong:
Lose £14.5m after losing £11m the year before, with enough money to push another 12 months. Its had £15.7m left in January and losing £1.2m a month, so presumably that healthy cash balance is less healthy at about £9.5m now?
They literally gave it away for free only converted 1 in 6 and didn’t beat rightmove, they now charge and still cant beat rightmove and they can use the word estimate what competition does.
To summarise this is bad, look through what’s been said and actually at the numbers, forget reps in here telling you N&E generates fortunes solely. This now announces the portal war is over, Rightmove have won.
Interested to hear how my OTMV1 Subscriptions are continuing to be spent and the “growth?” of Membership numbers……
If it’s a fail Mr Springett then its clearly time that you/OTM refunded ALL of my “Locked-in” OTMV2 Subscriptions as you will have failed to provide me with value for my money.
However ……maybe the Membership numbers have grown to 14,000/15,000/16,000? …….or have they fallen?