OnTheMarket “delivering on expectations” says Zeus

OnTheMarket plc (LON:OTMP) full year results to January 2022 are in line with the February trading update:

¨ 32% rise in revenue to £30.4m (FY21: £23.0m);

¨ 12% rise in Group adjusted operating profit to £2.7m (FY21: £2.4m);

¨ Net cash on 31 January 2022 of £8.4m.

Revenue growth was driven by 32% rise in monthly Average Revenue Per Advertiser “ARPA” to £188 (FY21: £142). The average number of advertisers (i.e. Estate Agents, New Home developments) was flat at 13.3k; total number of advertisers at year end rose 8% to 13.7k.

OnTheMarket provided its agents with 58% more valuation leads (e.g. email requests for sales or lettings valuation) and 6% rise in visits (i.e. individual sessions on OnTheMarket.com’s web-based portal or mobile applications by users, as measured by Google Analytics) to 283m visits.

Glanty, acquired via a step-acquisition, contributed £0.6m to revenue and £0.6m loss after tax. If Glanty had been owned for the full year, it would have contributed £0.8m revenue and £1.2m loss after tax. Goodwill of £1.5m assumes 5 year revenue CAGR of 44% and EBITDA margins increase to 40% in perpetuity and a 14% discount rate.

Outlook: Jason Tebb, CEO, reports: “our strategy is working. Having listened and engaged with thousands of agents we are more convinced than ever in our strategy of building a differentiated, tech-enabled property business.” OTM is set to deliver profitable growth.

Zeus view: We expect OTM to deliver combined revenue growth and EBITDA margin of 40% (i.e. “rule of 40”), with 23% EBITDA margin and revenue growth of 17%, driven by:

¨ 6.3% rise in advertisers by Jan 2023, growing average number of advertisers by 6.5%.

¨ 9.0% rise in ARPA to £205, with reported Estate Agent ARPA rising c. 3% from £204 to £211, and New Homes developers ARPA rising 33% to £133 (n.b. in 2H New Homes ARPA rose 17% to £108 from £92 in 1H).

We expect Glanty to contribute to revenue growth and reach cash breakeven in 2023 calendar year. Our forecasts are consistent with an earnout of £4m in 2024 (based on revenue to 12 months to May 2024; capped at £12m), which could be settled in cash or shares.

We leave our forecasts materially unchanged: 2% cut to revenue and 1% increase to EBITDA. We take this opportunity to set forecast for the years to January 2024 and 2025.

Soon OTM will have “flexibility to pay dividends and/or introduce a share buyback programme”.

Valuation: At 86.5p, with 10p of cash, OTM is trading on 2.0x historic EV/Revenue and 1.7x current year (P/Revenue of 2.3x and 2.0x respectively). Investors confident OnTheMarket will operate to the “rule of 40”, should expect OTMP to trade on over 6x prospective revenue (i.e. c. £216m, which is 263p a share).

Summary financials

Market Cap£64.8m
Shares in issue75.0m
12m Trading Range75p– 129.0p
Free float95%
Next EventLate July AGM

Financial forecasts

Yr end Jan (£’m)2022A2023E2024E2025E
yoy growth (%)32171110
EBITDA margin (%)17232831
Adj. PBT #
Adj. PAT # †1.956.67.9
Avg FD shares (m)81828384
EPS (p) fd. Adj # †
DPS (p)
Net cash8.411.617.724.2
P/E27.614.110.9 9.1

# including share based compensation & MIP

† tax credits are included in PAT

Source: Audited Accounts and Zeus estimates

Click to view all articles for the EPIC: ,
Or click to view the full company profile:
    Share on facebook
    Share on twitter
    Share on linkedin
    OnTheMarket Plc

    More articles like this

    Fintel plc

    Fintel core revenue growth is higher than Zeus forecast

    Fintel plc (LON:FNTL), the leading provider of Fintech and support services to the UK retail financial services sector, has released a trading update for the six months to 30 June 2022, which reveals: Core revenue grew c.9% to

    Shoe Zone plc

    Shoe Zone analyst Zeus upgrades FY22 adjusted PBT forecast

    Shoe Zone plc (LON:SHOE) Better than expected demand and further strong margin performance leads to an upgrade in FY22E adjusted PBT from “no less than £8.5m” to “no less than £9.5m”. Zeus revenue forecasts increase by £1.5m (1.0%)

    OnTheMarket Plc

    OnTheMarket analyst Zeus confident in forecasts

    Foxtons, one of London’s leading estate agencies with more than 50 interconnected branches across London, has signed an agreement to advertise its UK residential sales and letting properties at OnTheMarket plc (LON:OTMP). Zeus view: Foxtons, the well-known London

    SpaceandPeople analyst Zeus restores estimates and valuation

    SpaceandPeople plc (LON:SAL) secures, sells, and manages flexible space for brand experiences, short term promotions and retailing in high footfall venues for its customers, including in shopping centres and travel hubs. The Group has issued a positive pre-close

    Lookers Plc

    Lookers shares are still undervalued says Zeus

    Lookers plc (LON:LOOK) has released an H1 trading update reporting a continuation of strong performance year to date. H1 2022 underlying PBT is expected to be c. £45m and Management anticipate full year PBT will also be ahead

    SysGroup plc

    SysGroup analyst Zeus forecast a 39.0% increase in revenue in FY23

    SysGroup plc (LON:SYS) is an award-winning provider of managed IT services, cyber security, cloud hosting and IT consultancy. The Group offers investors an attractive business model with high recurring revenue and a diversified customer base. SysGroup is competitively

    AFC Energy

    AFC Energy’s long term opportunity remains vast says Zeus

    AFC Energy plc (LON:AFC) has signed an agreement with another leading UK construction/infrastructure player, this time in Kier Group. We believe this further endorses our long term thesis that AFC will play an active role in encouraging the


    Inchcape performance exceeding expectations says Zeus

    Inchcape plc (LON:INCH) has released another positive trading update, with performance exceeding expectations so far this year. This follows on from a positive Q1 update on 28 April. Through quarterly improvement in Distribution volumes and operating margin, the

    boohoo Plc

    Boohoo Group analyst Zeus sees a strong performance in Q1

    ¨ Q1 financial highlights: Boohoo Group plc (LON:BOO) revenue of £445.7m is -8.3% YOY vs. a strong comp (Q1 FY22 revenue +32.1%), in line with Zeus’s forecast and management’s previously stated guidance. Gross sales growth remained positive +9%

    No more posts to show