OnTheMarket cautious after year of solid growth

Property marketing platform OnTheMarket reported significant growth in revenue, EBITDA, operating profit, and profit before tax in its full-year results on Monday.

The AIM-traded firm reported a 14% increase in revenue to £34.4m, while adjusted EBITDA rose 38% to £8m, and EBITDA jumped 81% to £3.8m.

Adjusted operating profit saw a substantial increase of 59%, amounting to £4.3m, while operating profit experienced growth of 110% to £0.1m.

Profit before tax also rose significantly, by 117% to £0.2m.

Furthermore, the company achieved a 35% increase in year-end cash, amounting to £11.3m, while average revenue per agent (ARPA) demonstrated growth of 12% to reach £210.

OnTheMarket attributed its strong financial performance to growth in paying customers, robust product sales, and continued expansion in new homes, which experienced 60% growth for the 12 months ended 31 January.

The company said it revenue growth across all income streams, resulting in a substantial rise in adjusted operating profit.

However, OnTheMarket Software incurred an impairment charge of £1.5m.

The firm said it experienced a reduction in traffic and leads compared to the prior year, mainly due to the unusually active property market in the first half of the comparative period.

OnTheMarket said it was strategically focussed on serious property seekers and high-quality leads, resulting in a significant increase in valuation opportunities by 26% year-on-year.

Looking ahead, OnTheMarket said it was cautiously optimistic about its performance in the 2024 financial year.

The company reported a positive start to the period, with current trading in line with the board's expectations.

However, it said the macroeconomic environment remained uncertain, with factors such as mortgage affordability, inflation, and the high cost of living contributing to a slowdown in housing market activity during the second quarter.

The company said it anticipated tougher trading conditions in the second half, which could impact its performance.

To counter the higher-than-expected cancellations of agent contracts, OnTheMarket said it was planning to diversify its revenue streams by introducing additional products and services.

In February, the lock-in period expired for the thousands of agents who signed new listing agreements at the company's initial public offering (IPO) in 2018.

Although some agents cancelled their membership, the majority have chosen to continue supporting the portal, the board reported.

“I am delighted to report a strong financial performance with record revenues and profits,” said chief executive officer Jason Tebb.

“Our ongoing strategic progress continues to enhance our offering for estate agents, lettings agents and housebuilders, whilst driving the network effects of the business.

“OnTheMarket was founded by agents to bring more competition into the market with a promise of long-term, fair and sustainable pricing.”

Tebb said the company remained focussed on that promise and delivering increased value for customers, at a time when agents were facing unjustifiable price rises elsewhere.

“Now is our time; we have a great platform, great services and more importantly, supportive customers, many of whom are shareholders of this great business - we are aligned in our objectives and we are looking forward to delivering for them.”

At 0801 BST, shares in OnTheMarket were down 2.09% at 53.36p.

Reporting by Josh White for Sharecast.com.