OnTheMarket (OTMP ) has reported “a strong financial performance, operational growth and real progress” this morning in its half-year results for the six month period to 31 July 2021.

As a result of its positive performance, the Board anticipates revenues to be slightly ahead of expectations and adjusted operating profit to be substantially ahead of expectations for FY22.

The majority agent-owned company and operator of the OnTheMarket.com property portal reported revenue and ARPA up by 46% and 52% respectively over the six month period.

Adjusting the prior period revenues to add back COVID-19 related customer support discounts of £1.8m, revenue and ARPA growth remained strong at 24% and 28% respectively.

Growth followed the conversion activity undertaken in 2H to 31 January 2021, whereby agents on long-term free of charge contracts were asked to migrate to paying contracts in order to continue listing at OnTheMarket.com. In addition, the Company also benefited from an accelerated roll out of agency products, specifically its Automated Valuation Model.

Adjusted operating profit increased by 163% to £2.1m, despite increases of 105% in marketing expenditure, to £4.5m, as well as a 28% increase in staff costs, to £4.7m.

A strong balance sheet was maintained with cash generated from operating activities £2.6m after repaying CJRS loans of £0.4m (1H20/21: £2.9m after receiving £0.3m of CJRS loans).

Jason Tebb, Chief Executive of OnTheMarket, said “I am delighted to report that the first half of our year has seen strong financial performance, operational growth and real progress with our strategic objective of building a differentiated, tech-enabled property business.”

The number of agency branches listing grew 5% since 31 January 2021 to 11,198 while new homes advertiser numbers also grew further, with 2,164 developments listed at 31 July 2021, up 6% from 2,042 at 31 January 2021 and up 43% on the number listed at 31 July 2020.

The Company reported strong growth in both traffic and average monthly leads per advertiser, up 36% and 26% respectively, with 159 million visits and 132 leads per advertiser per month.

‘Whilst H1 20/21 was impacted by the effective suspension of the property market as a result of the coronavirus pandemic, both of these metrics also represent growth on H2 20/21, a period of intense activity as consumers sought to move as lockdown ended,’ it explained.

The Company highlighted to investors that whilst demand for residential properties in the UK has remained at very high levels, sales and lettings instructions have remained subdued.

Despite this factor, OnTheMarket said trading has continued positively into H2 21/22, with a greater number of agents paying and more listing to trial its offering, and the Board now anticipates revenues for the full year to 31 January 2022 to be slightly ahead of expectations.

Adjusted operating profit is expected to be substantially ahead of expectations for the current year, which the Company said is a reflection of its positive operating leverage.

Full-year advertising expenditure is expected to be H2 21/22 weighted while more marketing investment is expected to result in 2H adjusted operating profit being around breakeven.
Commenting on the Company’s outlook, Tebb added: “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.”

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