OnTheMarket

LN: OTMP

£60.5m market cap

96.5p 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

Final FY19 results to end January show OnTheMarket laying the groundwork and building a meaningful business challenger to the two main incumbent UK property portals. The drive to convert participating agents to paying contracts is now under way, with almost 1,000 branches signed to date, at an average revenue per advertiser (ARPA) of £337 (Rightmove’s latest published ARPA is £1,005). Over half of these signings are for three- to five-years. Most of the balance are on shorter contracts, with the option to extend. It is this programme’s success that will determine the speed of the group’s transition into profit.

Y/E Jan
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2018A 13.6 5.4 2.7 7.4 13.0 N/A
2019A 14.2 (11.8) (13.6) (22.5) N/A N/A
2020E 28.5 (7.5) (9.4) (12.0) N/A N/A
2021E 54.3 10.1 7.9 10.1 9.6 N/A
Last updated on 18/07/2019
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. The new ban on letting fees for tenants will put further pressure on agents’ marketing budgets. A difficult property market may be useful, with OTM’s ‘new and exclusive’ listing option driving traffic from people with high purchase intent. Agency branches transacting less business will inevitably be more focused on cost and value.

Last updated on 18/07/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (7.7) (22.2) (40.8)
Relative* (9.8) (22.6) (39.5)
52-week high/low 166.5p/74.0p
*% relative to local index
Key management
Ian Springett CEO
Clive Beattie CFO