OnTheMarket   has released its FY20 results to 31 January showing 32% revenue growth reducing adjusted EBITDA losses 39% during the period to £7.1m. Net cash as at 31 January was £8.7m.

Financial Highlights:

Group revenue increased 32% to £18.8m (FY19: £14.2m), driven by a significant increase in listed branches to almost 12,500 with approximately 8,000 branches under paying contracts by the period end.

Furthermore, the portal witnessed a 50% increase in traffic during the year, now totalling 237 million visits. Importantly, total advertisers increased 12% to 13,364 with monthly leads per advertiser up 75% to 96.

Administrative expenses were largely flat on the previous year at £28.0m (2019: £27.8m), consisting primarily of £11.9m (2019: £8.8m) staff costs and marketing expenditure of £12.0m (2019: £14.9m).

Marginal changes in net interest and income tax resulted in a 21% decrease in net loss for the 12-month period to £11.5m (FY19: £14.5m). Loss per share was 17.99p versus 24.02p.

Operating Highlights

The declared strategy at the beginning of the year was to both increase the scale of the business with more listed agents, agent offices and advertisers while converting agents, who had previously joined on introductory free contracts, into full-tariff paying contracts.

The Company has clearly accomplished both despite the housing market being somewhat subdued during 2019, due to both the snap General Election and ongoing uncertainty surrounding Brexit.

Of significant importance to shareholders during the year was the addition of property listings and development sites of housebuilders, a key target market segment for the Group.

The strategic acquisition of a 20% stake in Glanty Limited with “teclet” proprietary product technology automating the lettings process was a welcome addition, albeit unexpected, for investors and goes some way to indicating the ambitions the current management team has to bolt-on new services and additional revenue streams.

Post Period-End & Outlook

Sensibly, OTM offered deep discounts across its agent customer base during the pandemic supporting its agent shareholder base facing extremely challenging circumstances, whilst securing customers and revenue, albeit at lower levels. Whilst this move will hit revenue for the three months in the current financial year from April, agent support has undoubtedly enabled the Portal to recover rapidly following the partial relaxation of restrictions on 11 May, with site visits rebounding 260% in the first week of June versus the lowest point during lockdown.

This sharp rebound in traffic is undoubtedly testament to the increased brand awareness and network effects the Group has established during FY20.

Offsetting the anticipated short-term decreased revenue, is a corresponding decrease in marketing spend, which is one of the Groups heaviest carrying cost. This will undoubtedly go some way to preserving the strong and debt free balance sheet, which as at 31 May 2020, stood at £8.8m (excluding deferred creditor payments of £2.3m).

Outlook

The strong and highly differentiated value proposition from OTM, where both its interests and those of its agent customers are one and the same, clearly positions the Company for strong growth ahead of the wider housing market in general and its direct competitors in particular.

Investors should also note the continual increase in brand awareness for the portal which is complemented with the broadening of the number of offerings it can deliver with the instruction of new homes developers representing a complementary and significant revenue opportunity for the Group in FY21 and beyond.

Share Performance

Shares in OTM have recovered strongly from lows of 30p, seen during the height of the COVID-19 crisis, to close at 52p on Tuesday 10 June.

Clive Beattie, Acting Chief Executive Officer of OnTheMarket, commented: “…..We have taken swift and decisive actions to protect the health and safety of our team, to conserve cash and to support agents so that OnTheMarket is positioned to capitalise in the future on long-term growth opportunities."

 

Clive added; “We have been encouraged by our performance since 11 May, which we believe reflects increased consumer awareness of, and engagement with, OnTheMarket.com. We look forward with confidence and a differentiated proposition that is highly valued by agents looking for sustainably fair pricing.”