OnTheMarket

LN: OTMP

£68.6m market cap

111p last close

OnTheMarket is an estate agent-backed company that operates a synonymous property portal. It is the third-largest UK residential property portal provider in terms of traffic.

Investment summary

OTM continues to build market share and improve its brand recognition both with agents and the public. The renewed TV campaign helped drive 23.5m website visits in January, leading to many more leads to agents. At end January, OTM had over 12,500 agency branches under listing contracts (67% share), including 60 offices recently entering full tariff paying listing arrangements. The challenge now is to convert the balance of agents to paying clients and grow the proportion holding OTM shares. We continue to model the group moving into profit and becoming cash-flow positive in FY21. On an EV/revenue basis, backed by DCF modelling, the shares have good potential upside.

Y/E Jan
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 15.6 3.3 1.0 (1.4) N/A N/A
2018A 13.5 5.4 2.7 7.4 15.0 N/A
2019E 15.0 (14.4) (16.0) (27.4) N/A N/A
2020E 32.0 (7.8) (9.4) (12.5) N/A N/A
Last updated on 22/03/2019
Industry outlook

Historically, the UK online property market was dominated by two portal providers, Rightmove and ZPG, the former being the clear market leader. While they generate high traffic, prices charged to participating agencies have risen, with no respite in sight prior to OTM’s arrival. In a market where the volume of transactions has been under pressure, achieving good visibility is even more important. Silver Lake’s takeover of ZPG highlights the value.

Last updated on 22/03/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (19.9) 12.1 (15.9)
Relative* (20.0) 4.3 (18.0)
52-week high/low 181.0p/74.0p
*% relative to local index
Key management
Ian Springett CEO
Clive Beattie CFO