TIDMOTMP
RNS Number : 7092N
OnTheMarket plc
26 September 2019
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
26 September 2019
ONTHEMARKET PLC
("OnTheMarket" or the "Group")
OPERATIONAL AND TRADING UPDATE
OnTheMarket plc (AIM: OTMP), the agent-backed company which
operates the OnTheMarket.com property portal, today announces the
following update on trading. The Group also announces that its
unaudited interim results for the six months ended 31 July 2019
will be released on 10 October 2019.
Key points
-- Further progress in converting free-of-charge trial agents to
paying contracts and in recruiting new agents:
o Based on the latest data, over 2,000 agent offices
have been signed under paying contracts, overwhelmingly
converted from free trial listing. Average ARPA(1)
of these contracts is GBP297 per month.
o 46% are long-term contracts of 3 or 5 years with
associated share issuance to align interests.
-- Strong agent listings and property content
o Agent offices listing remain in excess of 12,500,
reflecting recruitment of new agents offset by
removal of agents at expiry of their free trial
periods.
o UK residential property listings are now approximately
86% of Zoopla's and 65% of Rightmove's(2) .
-- Launch of new home developers offering
o Barratt Developments plc, the UK's leading housebuilder,
is contracted on a portal listing and additional
products advertising agreement.
o A dedicated sales team has been established which
has already added a number of smaller housebuilders
on paying contracts.
-- Increasing portal traffic, consumer engagement and value to advertisers
o September 2019 is expected to be another record
month for visits(3) , exceeding the 25.4m achieved
in May 2019.
o Leads are also anticipated to be at record levels,
further increasing the value OnTheMarket is delivering
to advertisers.
-- Investing to drive brand awareness with strong TV, digital, radio and poster advertising.
-- Maintaining a strong, disciplined financial approach, with a
current net cash balance in excess of GBP8.5m and Group revenues
more than covering ongoing operating costs before marketing
expenditure.
-- Updated guidance
o Due to market conditions, conversions have occurred
at a slower rate than originally planned, with
fewer having been to long-term, full-tariff contracts.
Revenue and profit guidance for FY20 and FY21
is therefore reduced accordingly as detailed
below.
Market conditions and strategy
Agents are facing well-documented headwinds with lower than
usual transaction volumes, reduced lettings fee income, the
possible onset of recession, the prospect of a no-deal Brexit and a
strong sense of uncertainty and a "wait and see" approach amongst
buyers and sellers.
These circumstances have given rise to a much more challenging
backdrop against which to convert agents onto full-tariff paying
contracts. Agents are taking longer to consider such commitments
and fewer are currently signing them than anticipated, with ARPA of
GBP329 per month for those that have. The Group has, therefore,
introduced shorter term, lower cost contracts, the ARPA on which is
running at GBP207 per month. The availability of this alternative
has raised the current rate at which agent offices are signing
paying contracts to record daily levels.
Guidance
FY20
Group revenue for the current financial year to 31 January 2020
is expected to be in the range of GBP18.0m to GBP18.5m (growth of
27% to 31% compared with revenues for the year to 31 January 2019).
OnTheMarket's disciplined approach to costs management means that
the Group's adjusted EBITDA loss(4) for the current financial year
to 31 January 2020 is expected to be in the region of GBP9m to
GBP10m, a small improvement over previous guidance.
FY21
Revenue for the financial year to 31 January 2021 is expected to
be in the range of GBP27m to GBP29m. Approximately half of this
growth is expected already to be embedded at the beginning of the
financial year based on the anticipated January 2020 monthly run
rate. The Group expects to achieve a broadly breakeven adjusted
EBITDA position for the financial year with monthly breakeven
achieved in Q2/Q3.
FY22
The Board's expectation is that revenue growth will continue
into the year ending 31 January 2022 and that operational leverage
and network effects will result in significant profitability and
cash generation being achieved in this period, approximately 12
months later than originally envisaged.
Outlook
Notwithstanding the lower revenues arising in the short term
from the revised strategy, we are continuing to expand the team to
support the growth in revenues. With net cash currently in excess
of GBP8.5m and the Group's increasing recurring revenue base,
disciplined financial approach and strong cost control, OnTheMarket
believes it has the necessary funds and resources to implement its
strategy and achieve the strong growth projected over the medium
term for the benefit of all stakeholders.
1) Average revenue per property advertiser, being revenues due
from property advertisers for a period divided by the number of
property advertisers for that period.
2) Zoopla listed 753,422 UK residential properties as at 25
September 2019. Rightmove, in its August 2019 House Price Index,
stated that it "at any time displayed a stock of over one million
properties to buy or rent".
3) Visits comprise individual sessions on OnTheMarket's web
based portal or mobile applications by users for the period
indicated as measured by Google Analytics.
4) Adjusted EBITDA loss or profit is defined as EBITDA loss or
profit before finance costs, taxation, share based payments and
exceptional or 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.
For further information, please
contact:
OnTheMarket
Ian Springett, CEO
Clive Beattie, CFO 0207 930 0777
TB Cardew (Financial PR adviser) 0207 930 0777 / onthemarket@tbcardew.com
Ed Orlebar 07738 724 630
Alycia MacAskill 07876 222 703
Zeus Capital (Nominated Adviser/Joint
Broker)
Martin Green, Pippa Hamnett, Jamie
Peel 0203 829 5000
(Corporate Finance)
Benjamin Robertson, John Goold
(Broking)
Shore Capital (Joint Broker)
Daniel Harris 0207 601 6100
Background on OnTheMarket:
OnTheMarket plc, the agent-backed company which operates the
OnTheMarket.com property portal, is the third biggest UK
residential property portal provider in terms of traffic. It aims
to deliver a market-leading, agent-backed alternative to Rightmove
and Zoopla, offering a first-class service to agents at sustainably
fair prices and becoming the go-to portal for serious
property-seekers.
OnTheMarket plc was admitted to AIM in February 2018 with GBP30
million in new capital in order to support a new growth strategy
for the business.
At its IPO in February 2018, OnTheMarket was 70% owned by over
two thousand agent firms. With backing from its agent owners,
OnTheMarket has developed unique sources of competitive advantage
such as the thousands of "New & exclusive" property listings it
receives every month from its agents to display 24 hours or more
before they are on Rightmove or Zoopla.
This announcement contains forward-looking statements that are
based on current expectations or beliefs, as well as assumptions
about future events. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as anticipate, target, expect, estimate, intend, plan, goal,
believe, will, may, should, would, could, is confident, or other
words of similar meaning. Undue reliance should not be placed on
any such statements because they speak only as at the date of this
document and, by their very nature, they are subject to known and
unknown risks and uncertainties and can be affected by other
factors that could cause actual results, plans and objectives, to
differ materially from those expressed or implied in the
forward-looking statements. There are a number of factors which
could cause actual results to differ materially from those
expressed or implied in forward-looking statements. The Group
undertakes no obligation to revise or update any forward-looking
statement contained within this announcement, regardless of whether
those statements are affected as a result of new information,
future events or otherwise, save as required by law and
regulations.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
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END
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