OnTheMarket posts strong results as agents move to full-fee contracts

OnTheMarket figures for the first half of this year show stronger revenue and improved profits.

Agency numbers have increased modestly since January and the portal says it's moving towards a rebrand later this financial year.

The critical Average Revenue Per Advertiser - the key measure for portals - has shown a 52 per cent rise. It's now £188, up from £124; by way of context, Rightmove's ARPA is well over £1,000.

This morning's trading statement from OTM to shareholders shows its attempts to migrate agents from long-term free deals - negotiated by the previous leadership of the portal - to full-fee-paying contracts.

OTM says: "Average monthly advertisers listed were down five per cent ... reflecting a reduction in H2 20/21 as agents on long-term free of charge contracts were asked to migrate to paying contracts. Since 31 January 2021, agency branches listing have risen five per cent and new homes developments listed by six per cent."

Branches listed under full paying contracts stood at 10,190 on July 31 this year. And in what may be a strong indicator for the future, OTM reports: "Agents using OnTheMarket as their only property listings portal now represent 968 branches, demonstrating our ability to help customers secure instructions and complete transactions, without them needing any other portal subscriptions." 

Adjusted operating profit increased 163 per cent to £2.1m, despite increases of 105 per cent in marketing expenditure and a 28 per cenr rise in staff costs. Profit after tax was £0.5m, reduced by non-recurring costs arising from the acquisition of PropTech firm Glanty, the repayment of government furlough grants and an increase in some agent recruitment charges.

Jason Tebb, chief executive officer of OTM, says: “I am delighted to report that the first half of our year has seen a strong financial performance, operational growth and real progress with our strategic objective of building a differentiated, tech-enabled property business.

“Since joining OnTheMarket I have been focussed on engaging with our customers to understand how we can better serve them. Having spoken with hundreds of agents, I am encouraged that they are not only pleased we are listening, but also that the changes we have made to our proposition have been well received.

“The first stage of our transition is complete and we see this as the start of a mutually beneficial journey. We will continue to innovate and are actively exploring further new customer product and service offerings. As part of the next stage of our development we are undertaking a review of our branding and proposition to clearly articulate our USPs to serious property seekers and at the same time provide more tools for our agents and housebuilders, continuing to add value to customers and consumers alike.

“None of this would be possible without the hard work and enthusiasm of my colleagues. I thank all of them and look forward to working with them to deliver value to all of our stakeholders.

“With a growing and loyal customer base, strong engagement with serious and active property-seekers, progress against our strategic roadmap and a balance sheet and cash generation to support the Group’s current strategy, the Board looks to the future with confidence.”