OnTheMarket plc (LON:OTMP), the majority agent-owned company which operates the OnTheMarket.com property portal, has announced an update on trading for the year to 31 January 2021.
Trading ahead of expectations
In the Trading Update on 14 December 2020, OnTheMarket stated that the Group expected revenues and adjusted operating profit1 for the year to 31 January 2021 to be not less than £22.5m and £1.5m respectively.
Following continued strong performance over Christmas and through January, and subject to completion of the year-end audit, the Company now expects for the year to 31 January 2021:
· revenues to be approximately £23m (FY20: £18.8m); and
· adjusted operating profit for the year to be approximately £2.3m (FY20: loss of £9.2m).
Net cash at 31 January 2021 was £10.7m.
These expected results reflect the measures taken during the year to support agents through customer discounts, whilst at the same time reducing costs and conserving cash, particularly through a reduction in marketing expenditure.
The Group has seen continued operational progress and strong consumer engagement underpinned by a marketing campaign that included TV and radio as well as social media and other channels and the release of a new instant online valuation tool, “Value my home”, at OnTheMarket.com/property-valuation, which has been successful at significantly increasing valuation leads to agents.
More than 1.8 million leads were generated in January, with an average of 146 per advertiser2. Visits3 to the site in the month were 28.0 million and weekly site visits have exceeded 6 million every week since the start of February 2021.
At 30 November 2020, the Company had net cash of £10.9m and, excluding deferred creditor payments of £0.4m, no borrowings. In the announcement on 14 December 2020, the Company stated that it expected that marketing expenditure to support consumer engagement and lead generation for advertisers would be higher in December and January and as such, the net cash balance was likely to reduce slightly at 31 January 2021 but remain strong, with sufficient scope to invest in the business.
Due to the stronger than expected trading, at 31 January 2021 the Company had net cash of £10.7m and, excluding deferred creditor payments of £0.4m, no borrowings.
The Board continues to focus on balancing investment in the proposition to drive growth whilst carefully managing the Group’s financial resources.
While the Company continues to closely monitor the impact of COVID-19, it expects marketing expenditure to return to more usual pre-COVID levels in the year to 31 January 2022.
With a strong balance sheet and anticipated continued growth in the revenue-generating customer base, the Company is also planning to increase investment in new products and services and to invest further in internal website development resources. This will position OnTheMarket to take advantage of the significant growth opportunities available, providing customers with increasing value across a broader suite of products and services and continuing to strengthen consumer engagement, benefiting the Group in the medium and long term.
Jason Tebb, Chief Executive Officer, commented:
“I am delighted that in a year of challenging circumstances, we are able to report that trading was ahead of our expectations from just a few months ago. Our results to 31 January 2021 build on the strong foundations we have in place upon which we intend to deliver our vision of a portal that provides value to customers and consumers at all stages of the property cycle.
“Our broad and deep agent ownership and support, our commitment to fair pricing and our focus on our agent customers at the heart of our business will continue to differentiate OnTheMarket. We will seek to further evolve our offering through on-going product innovation and increasing consumer engagement through targeted, data-led marketing and the provision of a suite of additional services which will benefit estate agents, housebuilders and consumers.”
1) Adjusted operating loss or profit is defined as operating loss or profit before share based payments (including charges relating to shares issued for agent recruitment), share of profit or loss from associates, specific professional fees and non-recurring items. This is an alternative performance measure and should not be considered an alternative to IFRS measures, such as revenue or operating loss or profit.
2) Data for leads generated is drawn from the Company’s operating systems.
3) Visits comprise individual sessions on OnTheMarket.com’s web-based portal or mobile app by users as measured by Google Analytics.