OnTheMarket showed more losses as it released its results for the six months to the end of July.
While revenue was up 14% on the same period last year, at £8m, it chalked up an operating loss of £7.2m, up from £5.7m.
Its costs also rose by 23% to £14.8m as it spent more on its sales and IT teams.
The business, which is backed by agents, still had cash in hand as at the end of July, but at £8.8m this was sharply down on the £15.7m that OTM held at the end of January. The cash balance was £8.6m at the end of September.
OTM also reported that the average branch numbers listed at the end of July were 12,434 – well up from the 7,788 at the same time last year.
The number stood at 12,622 at the end of September. OTM said that this figure reflected “the recruitment of new agents offset by the removal of agent branches following the expiry of free trial periods”.
Web and mobile visits were also up, by 75%, to 120.7m during the period.
In the results announced this morning, OTM said that as at July 31, 1,308 branches had been signed up under new paying contracts. The figure increased to 2,346 branches as at the end of last month, September. Of this number, 42% are under long-term contracts of three or five years paying an average of £331 per month.
Others are on cheaper, shorter-term contracts, paying an average £203 per month.
The portal had already said in a recent update on September 26 that due to market conditions, it has been slower than anticipated in converting agents to long-term, full-tariff contracts, and announced that it has introduced the shorter, cheaper contracts.
OTM also included in its results an update on the litigation with Connells brand Gascoigne Halman, saying that in July OTM received payment of a further £1.1m in respect of cost recovery. This more than offset the fees involved in the litigation, over the then ‘one other portal’ rule, and where OTM won the case.
Reporting on its property listings, OTM said the number stood at 641,672 as at September 30. It said that this represented around 64% of Rightmove’s inventory and 85% of Zoopla’s.
OTM said that between July 3 and September 30 its listings grew by around 90,000 while Zoopla’s fell by some 66,000.
OTM had earlier reduced its revenue and profit guidance for 2020 and 2021 and in today’s results CEO Ian Springett referred to this, saying: “Our results for the six months to 31 July 2019 were in line with our expectations.
“Our recent guidance indicated that agents had not committed to full-tariff, long-term paying contracts at the pace expected, however they have responded positively to the changes to our offering.
“We continue to convert agents to full-tariff, long-term contracts with share issuance: 42% of branches signed to new paying contracts since conversion began have been under these contracts.
“Following the share issuance arising from these contracts, over 3,000 agent firms operating over 6,000 UK agency branches will be OnTheMarket shareholders, increasing the strong core membership around which we are building OnTheMarket.
“Their backing for their portal in a variety of practical ways is key to creating an edge over our rivals in the portals market.
“We have recently supplemented our offering to agents with the introduction of lower-priced, short-term offers, with the aim of maximising the number of paying agents and migrating all to full-tariff contracts progressively.
“Take-up of these short-term offers has led to an encouraging acceleration in the rate at which agents are converting onto paying contracts.
“The continued strong growth in the operational performance of the OnTheMarket.com portal provides encouragement for the future. We have delivered another set of record-breaking traffic and leads results for our estate and letting agent shareholders and customers.
“I thank all my colleagues for all their hard work in driving OnTheMarket forward in pursuit of its objectives.”
Yesterday evening, OTM’s shares closed at 83.5p, some 1.8% down over the day.
Comments (14)
….and let’s remember
Those souls that are now locked-in as I was?
If OTM delivers? ……then all will be good.
If not? …..in my view it will implode due to the severely disgruntled detainees not being prepared to continue to pay for failure to deliver.
Drop the “Daft Ad” OTM …….inject some life into your dull, dreary marketing
Simple solution – make Russell Quirk the CEO.
If anyone knows how to grow a loss-making business, it’s good old RQ.
So …….summing up, Ian OTM & Co
……what impact has OTM had on the Portal Advertising Landscape.
……setting aside the creation of a 3rd Portal, what is the actual impact of OTM for Agents.
……what difference has OTM made?
……if OTM folded tomorrow, what difference would that make?
On the last point it would turn my frown upside down 🙂
Can we please set up ‘tightmove’ where we have a pay per property subscription? Anyone else up for that? #tightmove
This project failed the moment it was floated……it lost all credibility as the share price has not lived up to the billing..
They lost their audience and of course the market has turned at a time when they want more agents’ money who are not prepared to pay following their free periods.
Their sales people are nothing short of rude and senior management almost non existent.
Share price is now hovering above 81p
It’s time on this earth is limited unless it has a cash call or puts its fees up significantly – either way it is a failed project which has really sidestepped itself.
#offthemarket
Wow what a company to invest in!!! Spend an extra £2.8m to gain an extra £1m income If you only have £8.6m in cash reserves and are losing £1.2m a month by Easter they will have run out of money. So what happens next? Get the cap out and pass it around the shareholders and tell them the future looks bright!! As lying to shareholders seems to be an acceptable policy where any property related share offering is concerned they will probably raise the cash.
“Following the judgment in the Group’s favour issued by the Competition Appeal Tribunal at the Court of Appeal in January 2019, the Group received payment in July 2019 of a further £1.1m in respect of cost recovery. This more than offset professional fees incurred in the period in relation to litigation and led to net income of £0.2m. ”
Pyrrhic Victory ! and all that goodwill squandered The only winners were the professionals who trousered £900k worth of fees
“Administrative expenses of £14.8m, up 23% (H1 18/19: £12.0m), primarily as a result of the Group’s investment in its sales and IT teams.”
The admin expenses up 23% are nearly double the revenue of £8m . All dressed up and nowhere to go
……minus GPL’s monthly Subscription from January 2020.
Ditto
Why would you not continue support a portal that has been set up challenge Rightmove and Zoopla and which initially received your backing? Is it the product, the people, the approach, the sell out or the advert? A combination of factors?
You were one of the most vocal supporter of OTM so what’s changed and what can they do to win back your support?
Because they have just created a rubbish zoopla. Rightmove is going nowhere until they show some leadership and tell agents to come off rightmove. As an industry we are fooooping useless.
……where do I begin fx?
Search my posts, talk to the nice chap from OTM that called me earlier this week for my Leavers Feedback.
I’m far from bitter, however I am very, very disappointed with OTM…….however I honoured my part of the original OTM agreement & the debacle V2 Lock-in V1 Member (here’s your handcuffs that we forgot to mention?!).
OTM will be no poorer for me singularly leaving in 01/2020 however the stagnant OTM V2 is immeasurably poorer for its failings and its ability to openly demonstrate with its forcible “Lock-in” period that trust is a very low priority in its grab for its Millionaires in Waiting!
The “Trust” that OTM could have easily capitalised/built on between itself and Our Industry has been swept aside with its St Trinians strategic approach.
I give you exhibit No 1 – A Chas & Feckin Dave TV AD with a cast of actors visibly tormented by their CV’s being stamped with the Oooooaaaaaaan the Maaaaaaarket Ad Campaign.
My final piece of advice for OTM – make 2020 the Year that you set the property world on fire with truly engaging/positive TV Ads & general advertising that drives the Brand & Our Industry ……the feckless Chas n’ Dave Ad needs to be locked/loaded/fired into oblivion!
School Report for OTM 2019 – “shows potential, seems incapable of learning from its mistakes, could be expelled in 2020!”