REG - OnTheMarket plc - Interim Results for Six Months Ended 31 July 2023
19/10/2023 07:00
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RNS Number : 5932Q OnTheMarket plc 19 October 2023
19 October 2023
ONTHEMARKET PLC
("OnTheMarket", "OTM", the "Group" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JULY 2023
REVENUE AND PROFITABILITY DEMONSTRATING RESILIENCE
OnTheMarket plc (AIM: OTMP), which operates the OnTheMarket.com property
portal, today announces its unaudited interim results for the six months ended
31 July 2023 ("H1 23/24").
Highlights
Restated
Period ended 31 July 2023 2022 Change
Group revenue £16.9m £16.8m 1%
Adjusted EBITDA(1) £3.1m £3.1m -
EBITDA £1.9m £1.9m -
Adjusted operating profit(2) £1.1m £1.3m (15)%
Operating (loss)/profit £(0.1)m £0.1m (200)%
(Loss)/Profit after tax £(0.1)m £0.4m (125)%
Period-end net cash £11.5m £11.3(3)m 2%
ARPA(4) £201 £205 (2)%
Average monthly advertisers(5) listed 13,323 13,118 2%
Period-end advertisers 13,363 13,212(6) 1%
Period-end agency branches 10,414 10,367(6) (-)%
Period-end new homes developments 2,949 2,845(6) 4%
Traffic/visits(7) 119m 106(8)m 12%
Average monthly leads per advertiser 101 103(8) (2)%
Resilient financial performance
● Revenue increased by 1% with ARPA down by 2%.
● Strong growth in New Homes revenues, up 26% and boosted by
increases in both advertiser numbers and ARPA.
● Adjusted EBITDA of £3.1m in line with the prior year and adjusted
operating profit of £1.1m down 15%
● Strong balance sheet including net cash of £11.5m and no
borrowings (31 January 2023: £11.3m).
Further strategic and operational progress
● Continued progress with our strategy of building a differentiated,
technology-enabled property business
● Average monthly advertisers listed up 2% to 13,323, with period
end agency branches up 1% to 10,414
● Period end new homes developments listed have increased 4% to
2,949
● 12% increase in traffic reflecting continued development of portal
and improved consumer experience
Outlook
● The macro-economic backdrop remains challenging, particularly for the property market, with lower transaction volumes, stubborn inflation, high cost of living, higher interest rates and a reduction in average house prices. The Board expects this to impact customers' businesses, particularly their discretionary spend which may in turn impact annual revenue.
● OnTheMarket will focus on opportunities to grow advertiser numbers via packages and short term incentives to stimulate trial and demand, which will in turn support accelerated revenue growth when market conditions improve.
● In H2 the Group will focus on customer retention and acquisition which the Board believes will accelerate growth in future periods, while maintaining a level of marketing spend to maximise portal traffic and lead generation for customers. As a result of these factors and decisions, our previously stated aspiration of growing both revenue and profits from last financial year may not be realised.
● The Board believes that the company continues to develop an innovative and easy-to-use portal, providing a strong platform to drive revenue growth in the mid-term through investing in consumer awareness, traffic and leads, continuing its strategy to become a tech-enabled property business across the entire customer and consumer ecosystem.
Jason Tebb, Chief Executive Officer of OnTheMarket, commented:
"We are pleased with our performance in the first half, despite the difficult
market conditions. Throughout this we have stayed true to our commitment to
agents by continuing to offer value at a time when they need it most.
Underpinning our resilience are the strong foundations we have built. We
continue to be supported by our agents and this positions us well for the
future. I would like to thank the OnTheMarket team for their continued
efforts."
Footnotes
1) Adjusted EBITDA is operating profit before amortisation,
depreciation, share-based payments, (including charges relating to shares
issued for agent recruitment), specific professional fees and non-recurring
items. This is an alternative performance measure and should not be considered
an alternative to IFRS measures, such as revenue or operating profit or loss.
2) Adjusted operating profit is adjusted EBITDA after amortisation and
depreciation. This is an alternative performance measure and should not be
considered an alternative to IFRS measures, such as revenue or operating
profit or loss. Please see the Financial Review and Key Performance Indicators
section below for a reconciliation of operating profit to adjusted operating
profit.
3) Period-end net cash in the 2022 column is net cash at 31 January
2023. Net cash at 31 July 2022 was £8.7m.
4) Average revenue per property advertiser, being revenues due from
property advertisers before the deduction of non-cash share-based agent
recruitment charges for a period divided by the number of property advertisers
for that period. ARPA presented herein is the average of the monthly ARPAs for
the period unless otherwise stated. A property advertiser is a listed agency
branch or a new home development advertising on OnTheMarket.com.
5) Advertisers are either estate and lettings agent branches or new home
developments listed at OnTheMarket.com.
6) Period-end figures in the 2022 column are at 31 January 2023.
Advertisers, agency branches and new home developments as at 31 July 2022 were
12,876, 10,460 and 2,416 respectively.
7) Visits comprise individual sessions on OnTheMarket's web-based portal
or mobile applications by users for the period indicated as measured by Google
Analytics.
8) Figures in the 2022 column are for the 6 months to 31 January 2023.
Visits and average monthly leads per advertiser in the 6 months to 31 July
2022 were 138m and 107 respectively.
9) Unless otherwise stated, all figures refer to the six months ended 31
July 2023 and comparative figures are for the six months ended 31 July 2022
("H1 22/23").
For further information, please contact:
OnTheMarket 0207 353 4200
Jason Tebb, Chief Executive Officer
Tom Carter, Chief Financial Officer
Teneo (Financial PR Adviser) 0207 353 4200
Giles Kernick onthemarket@teneo.com (mailto:onthemarket@teneo.com)
Barnaby Harrison
Zeus Capital (Nominated Adviser/Joint Broker)
Jamie Peel, Martin Green, James Hornigold 0203 829 5000
(Investment Banking)
Benjamin Robertson (Corporate Broking)
Shore Capital (Joint Broker)
Daniel Bush, John More (Corporate Finance) 0207 408 4090
Fiona Conroy (Corporate Broking)
Background on OnTheMarket:
OnTheMarket plc, the majority agent-owned company which operates the
OnTheMarket.com property portal, is a leading UK residential property portal
provider.
Its objective is to create value for shareholders and property advertiser
customers by delivering an agent-backed, technology-enabled portal - offering
a first-class service to agents and new homes developers at sustainably fair
prices and becoming the go-to portal for serious property-seekers.
Agent backing and support enable OnTheMarket to display "New & Exclusive"
properties to serious property-seekers 24 hours or more before agents release
these properties to other portals.
This announcement contains forward-looking statements that are based on
current expectations or beliefs, as well as assumptions about future events.
These forward-looking statements can be identified by the fact that they do
not relate only to historical or current facts. Forward-looking statements
often use words such as anticipate, target, expect, estimate, intend, plan,
goal, believe, will, may, should, would, could, is confident, or other words
of similar meaning. Undue reliance should not be placed on any such statements
because they speak only as at the date of this document and, by their very
nature, they are subject to known and unknown risks and uncertainties and can
be affected by other factors that could cause actual results, plans and
objectives to differ materially from those expressed or implied in the
forward-looking statements. There are a number of factors which could cause
actual results to differ materially from those expressed or implied in
forward-looking statements. The Group undertakes no obligation to revise or
update any forward-looking statement contained within this announcement,
regardless of whether those statements are affected as a result of new
information, future events or otherwise, save as required by law and
regulations.
Chief Executive Officer's Report
The period to 31 July 2023 marked further strategic progress following our
promising FY23 results. We have made significant progression toward our goal
of evolving into a technology-driven property business that encompasses the
entire property journey. As one of the UK's top 100 most frequented websites
(source: similarweb) and one of the UK's leading search sites, we are well
positioned to capitalise on the strong support from our agent and homebuilder
customers.
Resilient Financial and Operational Performance
Our financial performance has demonstrated resilience, with a 1% increase in
revenue. Despite a 2% decrease in Average Revenue Per Advertiser (ARPA)
attributed to increased customer recruitment incentives, we saw a 2% growth in
monthly advertisers, even after the expiration of the 5-year lock-in period in
February 2023.
The New Homes segment experienced good growth, with revenues up 26%, driven by
an increase in advertiser numbers and ARPA.
The Group maintains profitability, reporting an adjusted EBITDA of £3.1
million and an adjusted operating profit of £1.1 million.
Our balance sheet remains strong including net cash of £11.5 million, with no
outstanding borrowings (compared to £11.3 million as of January 31, 2023).
Continuous Progress and Strategy: We Listen, Innovate and Deliver.
Our commitment to customers and property seekers is driven by our four
pillars: portal, software, data and market intelligence, and consumer
communication and monetisation. We continue to blend traditional agency
principles with modern tech solutions, working closely with our agent and
homebuilder partners to understand their needs.
Enhancing the User Experience: MyPlace
In February, we continued our pursuit of engaging serious property seekers and
optimising interactions with agents through a series of consumer-facing
updates. The newly introduced MyPlace consumer dashboard offers a range of
features and user experience enhancements, aligning with our focus on
supporting agents in nurturing client relationships and generating
high-quality leads. These updates, part of our ongoing evolution since its
website and branding overhaul in December 2021, include several noteworthy
features:
I'm serious: the 'I'm serious' toggle allows users to signal their readiness
to move and unlocks numerous benefits. By activating this toggle, consumers
streamline their search experience, stand out to agents, and enjoy one-click
lead creation, real-time WhatsApp inquiries with agents, and access to
enhanced local market data.
MyLists: designed to facilitate third-party interactions, fostering a more
social and collaborative approach to property search. Users can now involve
family and friends in their property search by adding extra listings to their
curated lists and sharing private comments to gather feedback on specific
properties.
Multi-location search: we introduced a new feature for property seekers - the
Multi-Location Search. This innovative tool allows users to effortlessly
explore properties across multiple areas, simplifying the search process and
offering a more convenient way to find their dream home.
'Very Important Places (VIPs)': enables users to save addresses of significant
locations and see how far listings of interest are from these places, adding a
personalised touch to their property search. The introduction of profile
badges further encourages user engagement and provides valuable information to
agents, promoting a more qualitative approach to lead generation.
OnTheMarket Software launches TecHub
OnTheMarket Software, part of the OnTheMarket Group, launched TecHub, an
estate agency automation platform featuring a groundbreaking Home Management
tool in February. TecHub streamlines the sales and lettings process, offering
24/7 automation for buyers, sellers, landlords, and tenants. It enables users
to track property transactions, receive updates, make decisions, share
information, upload documents, and complete payments at any time.
Helping renters get 'Rent Ready'
In May, we successfully integrated Canopy into the portal, offering consumers
the ability to become ''rent-ready' with a Canopy RentPassport while
delivering pre-qualified leads to letting agents. This collaboration builds
upon their partnership extension in March 2022 and the launch of the
innovative MyPlace consumer dashboard in February.
Pioneering AI Integration: Transforming Property Search with 'Otiem'
In July, we became the first major UK property portal to incorporate AI
natural-language technology. 'Otiem' enabled users to effortlessly describe
their ideal property, allowing for a more intuitive and efficient property
search experience, while also providing a platform for voice search through
our upcoming mobile apps. Additionally, we developed AI-powered agent tools to
streamline property listing processes, further enhancing our commitment to
innovation and user experience.
Introduction of OnTheMarket Money: Expanding Financial Services
We enjoyed a significant expansion of 'OnTheMarket Money'. Partnering with
London & Country Mortgages (L&C), one of the UK's largest
whole-of-market mortgage brokers, this umbrella brand offers consumers access
to a range of financial services and essential products related to the
home-moving journey.
OnTheMarket Money enables consumers to access mortgage products and guidance
through the OnTheMarket portal. The website enhancements streamlined the
process by assisting consumers in obtaining a Mortgage in Principle and
estimating their borrowing capacity, saving them valuable time before
contacting agents. As part of our commitment to providing value to both
consumers and agents, work continued on plans to introduce additional
integrations, including a fee-sharing mortgage referral solution. This forms
part of our strategy of becoming a comprehensive technology company, offering
services across the property ecosystem, and fostering consumer interaction
opportunities.
Saving agents thousands - online calculator
In April, the "Saving agents thousands" campaign was launched to educate
agents about the financial benefits they could gain from their membership with
OnTheMarket.
The introduction of an educational calculator provided agents with a tangible
tool to quantify the savings they could make through our platform showing our
commitment to fair and sustainable pricing.
Listening to and delivering for our Scottish customers
In March, we took a pioneering step in the UK property market by offering a
dedicated contact form for Scottish Home Reports, becoming the first major UK
portal to do so.
In Scotland, it is a requirement to produce a Home Report for a property
before it can be listed for sale. Recognising the importance of these reports
to potential buyers, we introduced a 'Home Report' button on the details page
of all Scottish residential listings. Property seekers can easily request
these reports by providing their contact details, leading to an enquiry that
is sent to the agent via email. Agents can also upload Home Reports directly
to the platform, ensuring a seamless process for consumers and agents alike.
Additionally, we now allow agents to specify closing dates and times for
offers on Scottish listings, making the property search experience even more
efficient for users. These changes were a direct request from our Scottish
series of customer Town Halls.
Recognised as a Top Workplace: The Sunday Times Best Places to Work 2023
In May, OnTheMarket Group stood out as the only property portal to be featured
in The Sunday Times Best Places to Work 2023. This nationwide workplace survey
distinguished and celebrated the UK's leading employers, recognizing
excellence in various categories, including workplace wellbeing, diversity,
and employee engagement.
The agents' portal
We are executing our strategy to develop a technology-driven business. Since
joining OnTheMarket, my vision was to develop a platform and software that I,
as a former estate agent, always wanted, but never had. This understanding of
our customers, coupled with valuable insights gathered from our agent
community, is the driving force behind our strategy. We remain committed to
enhancing our product and service offerings, consistently delivering
exceptional value for money and maintaining fair and sustainable pricing.
However, we have so much more that we want to deliver, and we have many
exciting developments on the horizon.
Sentiment continues to improve towards our business among our core customer
base. In a survey of thethe many hundreds of agents who attended a Town Hall,
a remarkable 91% acknowledged that OnTheMarket is good value for money and
believe we listen to our customers. This sentiment is a testament to our
ongoing engagement initiatives, where our agent and homebuilder customers have
actively contributed to shaping the future of our business.
Over the past year, we've engaged with thousands of agents through various
channels, including partnering with business coaching specialists Property
Academy to offer a series of roadshows across the UK, meeting with over 600
agents, the continuation of our award-winning Town Halls, beta sessions,
developer forums, and one-on-one clinics. We extend our heartfelt gratitude to
all those who have generously shared their time, feedback, and insights,
helping us steer the course of our business.
As the agents' portal, we are delighted that many leading agency brands have
renewed their contracts, underscoring their belief in the value we provide and
their confidence in OnTheMarket. Furthermore, we are excited to welcome
award-winning house builders Redrow, one of the UK's largest housebuilders
with a network of 14 operational divisions. The agreement demonstrates another
successful period for our New Homes division, with consistent growth in
advertiser numbers.
None of these achievements would have been possible without the dedication of
our people. I am grateful to each one of them for their sense of purpose in
achieving our shared aims and I am excited to work with them on our plans for
the remainder of 2023.
Outlook
The macro-economic backdrop remains challenging, particularly for the property market, with lower transaction volumes, stubborn inflation, high cost of living, higher interest rates and a reduction in average house prices. The Board expects this to impact customers' businesses, particularly their discretionary spend which may in turn impact annual revenue.
OnTheMarket will focus on opportunities to grow advertiser numbers via packages and short term incentives to stimulate trial and demand, which will in turn support accelerated revenue growth when market conditions improve.
In H2 the Group will focus on customer retention and acquisition which the Board believes will accelerate growth in future periods, while maintaining a level of marketing spend to maximise portal traffic and lead generation for customers. As a result of these factors and decisions, our previously stated aspiration of growing both revenue and profits from last financial year may not be realised.
The Board believes that the company continues to develop an innovative and easy-to-use portal, providing a strong platform to drive revenue growth in the mid-term through investing in consumer awareness, traffic and leads, continuing its strategy to become a tech-enabled property business across the entire customer and consumer ecosystem.
I also want to express my gratitude to our agent and homebuilder customers for
their continued engagement and support.
Without you, none of this would have been possible. I remain firmly committed
to building the best property search site in the UK with the potential to
challenge the market leaders and in doing so, change the portal landscape,
forever.
Jason Tebb
Chief Executive Officer
Financial Review and Key Performance Indicators
Financial review
Revenue for the period was up 1% to £16.9m (restated H1 22/23: £16.8m). This
was driven by a £0.5m increase in New Homes to £2.4m (H1 22/23: £1.9m).
The reported operating loss of the Group was £(0.1)m (restated H1 22/23
operating profit: £0.1m). This is further analysed as follows:
Restated
H1 23/24 H1 22/23
£'000 £'000
Reconciliation of operating profit to adjusted operating profit:
Operating (loss)/profit (121) 71
Adjustments for:
Share-based employee incentives 245 205
Professional fees 132 15
Share-based agent recruitment charges 631 580
Staff related costs 66 29
Acquisition related costs 97 97
_________ _________
Operating profit before specific professional 1,050 997
fees, share-based payments and non-recurring ________ _________
items
Non-cash agent recruitment charges within revenues 5 301
_________ _________
Adjusted operating profit 1,055 1,298
_________ _________
Amortisation 1,743 1,476
Depreciation 316 317
_________ _________
Adjusted EBITDA 3,114 3,091
_________ _________
The basic and diluted loss per share in the period were (0.10)p and (0.10)p
respectively (H1 22/23: restated basic and diluted profit per share 0.51p and
0.47p respectively).
The Group ended the period with cash of £11.5m and no borrowings (31 January
2023: £11.3m).
Revenue and ARPA by source
The Group report revenues attributable to products and services offered to:
● estate and letting agents;
● new home developers;
● OnTheMarket software customers; and
● other, non-property advertiser customers;
Restated
Period ended 31 July 2023 2022 Change
£m £m
Group revenue
- Agency 13.7 14.2 (4)%
- New Homes 2.4 1.9 26%
- OnTheMarket software 0.5 0.5 -
- Other 0.3 0.2 50%
________ ________
Total 16.9 16.8 1%
ARPA
- Group £201 £205 (2)%
- Agency £219 £222 (1)%
- New Homes £135 £129 5%
Operational KPIs
Group operational KPIs were as follows:
31 July 31 January 2023 Change
2023
Average advertisers
- Group 13,377 13,089 2%
- Agency 10,429 10,547 (1)%
- New Homes 2,895 2,542 14%
Total advertisers 13,363 13,212 1%
- Agency branches 10,414 10,367 (-)%
- New homes developments 2,949 2,845 4%
● Average monthly advertisers listed were up 2% period on period.
● Period end agency branches remained flat from 31 January 2023.
Since 31 January 2023, new homes developments listed have increased further,
up 4%.
Income statement
The loss for the period attributable to the owners of the Group was (£0.1m)
(2022 restated profit: £0.4m).
Adjusted administrative expenses of £13.8m in H124 was marginally lower than
the prior year (2022 restated: £14.0m).
An agent recruitment charge of £0.6m (2022 restated: £0.6m) was incurred in
relation to non-cash share-based charges arising on the issue of shares
according to agents portal listing agreements signed in previous years.
Statement of financial position
Intangible assets increased to £9.4m (31 January 2023: £8.9m) due to
additional capitalisation of staff and consultant costs incurred in the
ongoing development of OnTheMarket.com and OnTheMarket Software products,
partially offset by the amortisation charge arising on those costs and on
costs previously capitalised.
Cash of £11.5m (31 January 2023: £11.3m) included £0.4m held by the EBT for
purchase of own shares.
Condensed Consolidated Income Statement
For the period ended 31 July 2023
Restated Restated Restated
Unaudited Adjusting Adjusted Unaudited Adjusting Adjusted
6 months to 31 July Items 6 months to 31 July Items
2023 (See Note 8) 2022 (See Note 8)
£'000 £'000
Notes
Revenue 6 16,867 5 16,872 16,789 301 17,090
Administrative expenses (14,929) 1,171 (13,758) (14,925) 926 (13,999)
________ ________ ________ ________
EBITDA 1,938 3,114 1,864 3,091
________ ________ ________ ________
Amortisation 10 (1,743) (1,476)
Depreciation (316) (317)
________ ________ ________ ________ ________ ________
Operating (loss/profit) (121) 1,176 1,055 71 1,227 1,298
________ ________ ________
Finance income 50 29
Finance expense (8) (8)
Share of loss of associate - -
Fair value gain on step acquisition - -
________ ________
(Loss)/Profit before income tax (79) 92
________ ________
Income tax - 291
________ ________
(Loss)/Profit and total comprehensive income for the period attributable to
owners of the parent
(79) 383
________ ________
(Loss)/Profit per share from continuing operations
Pence Pence
Basic 9 (0.10) 0.51
Diluted 9 (0.10) 0.47
The operating (loss)/profit arises from the Group's continuing operations.
There is no recognised income or expense for the period other than the
(loss)/profit shown above and therefore no separate statement of other
comprehensive income has been presented.
Condensed Consolidated Statement of Financial Position
Unaudited Audited at
at 31 July 31 January 2023
2023
Notes £'000 £'000
ASSETS
Non-current assets
Intangible assets 10 9,390 8,930
Property, plant and equipment 129 99
Right-of-use assets 659 951
Investments 47 47
Deferred tax asset 1,822 1,822
_________ _________
12,047 11,849
Current assets
Trade and other receivables 3,333 4,682
Cash and cash equivalents 11,548 11,333
_________ _________
14,881 16,015
_________ _________
TOTAL ASSETS 26,928 27,864
_________ _________
LIABILITIES
Current liabilities
Trade and other payables (5,931) (6,371)
Lease liabilities (559) (560)
Provisions (142) (639)
Current tax (7) (7)
_________ _________
(6,639) (7,577)
Non-current liabilities
Lease liabilities (85) (364)
Provisions (131) (74)
Deferred consideration (75) (75)
_________ _________
(291) (513)
_________ _________
TOTAL LIABILITIES (6,930) (8,090)
_________ _________
NET ASSETS 19,998 19,774
EQUITY ATTRIBUTABLE TO OWNERS OF
THE PARENT
Share capital 160 151
Merger reserve 1,228 1,228
Other reserve 6,519 6,372
EBT Reserve (213) -
Retained earnings 12,304 12,023
_________ _________
TOTAL EQUITY ATTRIBUTABLE TO OWNERS
OF THE PARENT 19,998 19,774
Condensed Consolidated Statement of Changes in Equity
For the period ended 31 July 2023
Share capital £'000 Share premium Other reserves £'000 Merger EBT Reserve Retained earnings £'000 Total equity £'000
£'000 reserve £'000
£'000
At 1 February 2022 149 43,756 5,264 1,228 - (31,730) 18,667
Profit for the financial period - - - - - (167) (167)
Other comprehensive loss for the financial - - - - - (358) (358)
Period
______ ______ ______ ______ ______ ______ ______
Total comprehensive - - - - - (525) (525)
loss for the period
Transactions with
owners:
Shares issued for agent 2 - 1,108 - - - 1,110
recruitment shares
Capital - (43,756) - - - 43,756 -
restructuring
Share-based payment - - - - - 522 522
charge on employee options
______ ______ ______ ______ ______ ______ ______
At 31 January 2023 151 - 6,372 1,228 - 12,023 19,774
______ ______ ______ ______ ______ ______ ______
At 1 February 2023 151 - 6,372 1,228 - 12,023 19,774
Profit for the financial period - - - - - (79) (79)
______ ______ ______ ______ ______ ______ ______
Total comprehensive - - - - (79) (79)
loss for the period
Transactions with
owners:
Shares issued for agent 1 - 147 - - 148
recruitment shares
Share-based payment 8 - - - 360 368
charge on employee options
Purchase of shares by EBT (213) (213)
______ ______ ______ ______ ______ ______ ______
At 31 July 2023 160 - 6,519 1,228 (213) 12,304 19,998
______ ______ ______ ______ ______ ______ ______
Condensed Consolidated Statement of Cash Flows
For the period ended 31 July 2023
Restated
Unaudited 6 months to 31 July 2023 Unaudited
£'000 6 months
to 31 July
2022
£'000
Cash flows from operating activities
Profit for the period after income tax (79) 383
Adjustments for:
Income tax - (291)
Finance income (50) (29)
Finance expense 8 8
Agent recruitment expense 636 881
Share-based payment 245 205
Amortisation 1,743 1,476
Depreciation 316 317
Acquisition related costs 97 97
Other professional fees - 44
________ ________
Operating cash flows before movements in working capital 2,916 3,091
Decrease/(Increase) in trade and other receivables 633 (94)
Decrease in trade and other payables (266) (101)
Decrease in provisions (367) (3)
Tax received - 12
________ ________
Net cash generated from operating activities 2,917 2,905
Cash flows from investing activities
Finance income received 48 29
Acquisition of intangible assets (2,203) (2,232)
Acquisition of property, plant and equipment (54) (51)
Purchase of own shares by EBT (213) -
________ ________
Net cash used in investing activities (2,422) (2,254)
Cash flows from financing activities
Proceeds from issue of shares 9 -
Professional fees incurred - (99)
Repayment of lease liabilities (288) (279)
________ ________
Net cash used in financing activities (279) (378)
________ ________
Net movement in cash and cash equivalents 215 273
Cash and cash equivalents at the beginning of the period 11,333 8,412
________ ________
Cash and cash equivalents at the end of the period 11,548 8,685
________ ________
Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents
comprise cash at bank and in hand. This is consistent with the presentation in
the Statement of Financial Position.
Notes to the Condensed Consolidated Financial Statements
For the period ended 31 July 2023
1. General information
The principal activities of the Group in the period under review were the
provision of online property portal services to businesses in the estate and
lettings agency industry under the trading name of OnTheMarket.com, and the
provision of software services to UK estate and lettings agents by Glanty
under the trading name teclet.
The Company is a public company limited by shares and it is incorporated and
domiciled in the UK. The address of its registered office is C/O Almond +
Company Limited, 11 York Street, Manchester, M2 2AW. Its shares are listed on
AIM.
2. Significant changes in activity the current reporting period
No significant changes were noted in the current reporting period.
3. Basis of preparation of half-year report
The interim results for the six months ended 31 July 2023 should be read in
conjunction with the Group's last annual consolidated financial statements as
at and for the year ended 31 January 2023. These condensed interim financial
statements have been prepared in accordance with the recognition and
measurement requirements of UK-adopted International Accounting Standards
(UK-IAS) and adopting the accounting policies that will be applied in the 31
January 2024 financial statements, but do not contain all the disclosures
required for full compliance with UK-IAS. However, selected explanatory
notes are included to explain events and transactions that are significant to
an understanding of the changes in the Group's financial position and
performance since the last annual financial statements.
The 31 January 2023 full year accounts have been reported on by the Group's
auditors and delivered to the Registrar of Companies. The auditors' report
was unqualified and did not contain any statements under section 498 (2) or
(3) of the Companies Act 2006 or any matter to which the auditors drew
attention by way of emphasis.
The interim financial statements were approved by the board of directors on 18
October 2023. The interim results do not constitute statutory financial
statements within the meaning of section 434 of the Companies Act 2006. The
half year results for the current period are unaudited.
4. Going concern
The Group made a loss before tax for the period ended 31 July 2023 of £(0.1)m
(restated 6 months profit to 31 July 2022: £0.1m). The Group had a period end
net cash balance of £11.5m and no borrowings (31 January 2023: £11.3m).
The Directors have prepared and reviewed cash forecasts and projections for
the Group for the next 12 months. They have also conducted sensitivity
analyses and considered scenarios where there is an adverse impact on future
revenues, together with the mitigating actions they may take in such
circumstances, such as a reduction in budgeted discretionary expenditure, a
significant proportion of which relates to advertising and marketing cost that
can be reduced materially at short notice.
The Directors are confident that the Group will remain cash positive and will
have sufficient funds to continue to meet its liabilities as they fall due for
a period of at least a period of 12 months from the date of the half year
announcement and have therefore prepared the half year announcement on a going
concern basis.
5. Judgement and Estimates
There are no new judgements estimates in respect of the six months to 31 July
2023.
6. Revenue by source
The Group report revenues attributable to products and services offered to:
● estate and letting agents;
● new home developers;
● OnTheMarket software customers; and
● other, non-property advertiser customers;
Restated
Period ended 31 July 2023 2022 Change
£m £m
Group revenue
- Agency 13.7 14.2 (4)%
- New Homes 2.4 1.9 26%
- OnTheMarket software 0.5 0.5 -
- Other 0.3 0.2 50%
________ ________
Total 16.9 16.8 1%
Agency Sales are predominantly billed monthly in advance, and these are
recognised as deferred income. The Group has contract liabilities of £1.5m as
at 31 July 2023 (31 January 2023: £1.7m).
Contract liabilities of £1.7m at 31 January 2023 were recognised as revenue
in the half year ended 31 July 2023 (2022: £1.7m).
A proportion of sales in the period are billed monthly in arrears and are
recognised as accrued income. The Group has accrued income amounted to £0.6m
for the half year ended 31 July 2023 (31 January 2023: £0.6m).
Agency revenue is reduced by £5k of agent recruitment charges during the year
(2022 restated: £300k).
All revenue is generated in the UK for the Group's services.
7. Operating Segments
The Group determines and presents operating segments based on internal
information that is provided to the Chief Executive Officer, who is the
Group's chief operating decision maker.
The Group's reportable segments are as follows:
● OnTheMarket software
● Rest of the Group
Management monitors the business segments at a revenue and operating profit
level separately for the purpose of making decisions about resources to be
allocated and of assessing performance. There was no inter-segment revenue
during the period.
Costs, assets and liabilities are not attributed to the different revenue
sources other than for OnTheMarket software and so segmental reporting under
IFRS 8 is not appropriate for the remainder of the Group.
No customer made up more than 10% of Group revenues in the current or prior
years.
Operating profit in relation to the Rest of the Group segment is managed
together and as there are no internal measures of individual segment
profitability, relevant disclosures have been shown under the heading Rest of
the Group in the table below.
OnTheMarket Software Rest of the Group Group
6 months ended 31 July 2023 £m £m £m
Revenue 0.5 16.4 16.9
Operating (loss)/profit(1) (0.9) 0.8 (0.1)
Depreciation & amortisation 0.3 1.7 2.0
OnTheMarket Software Rest of the Group Group
6 months ended 31 July 2022 (restated) £m £m £m
Revenue 0.5 16.3 16.8
Operating (loss)/profit(1) (0.8) 0.7 0.1
Depreciation & amortisation 0.2 1.6 1.8
(1) Operating loss is stated after the charge for depreciation and
amortisation.
(2) Assets and liabilities are not separately monitored by the Chief Operating
Decision Maker and therefore not identified above.
8. Adjusting items
Restated
Unaudited Unaudited
6 months to 31 July 6 months to 31 July
2023 2022
£'000 £'000
Share-based employee incentives 245 205
Professional fees 132 15
Share-based agent recruitment charges 631 580
Staff related costs 66 29
Prepayment for employee services 97 97
________ ________
1,171 926
Share-based management incentive charges include employer's national insurance
charged on options exercised in the year as well as the movement in the
expected future employer's national insurance charged based upon the year-end
share price.
Professional fees incurred in the year relate to due diligence fees and legal
fees relating to the post IPO lock-in share placing in February 2023
Agent recruitment charges relate to share-based charges arising on the issue
of shares to agents committing to long-term service agreements in line with
the Group's strategy to grow the agent shareholder base.
Staff related costs relate to costs associated with termination of employment
of employees and costs associated with employee share-based plans.
Acquisition related costs represent the amortisation of prepayments for
employee services incurred as part of the acquisition of Glanty Limited
(OnTheMarket Software) and amortised over a three-year period from
acquisition.
9. Earnings per share
Restated
Unaudited Unaudited
6 months to 31 July 6 months to
2023 31 July
£'000 2022
£'000
Earnings attributable to equity
(Loss)/profit (for the period from continuing operations (79) 383
attributable to owners of the company
________ ________
Total basic earnings and diluted earnings (79) 383
No. No.
Weighted average number of
equity shares
Basic 77,825,274 74,769,071
Diluted 79,704,742 80,716,457
Earnings per share Pence Pence
Basic (0.10) 0.51
Diluted (0.10) 0.47
10. Intangible assets
Development Technology related intangibles Customer related intangibles Total
Group Costs £'000 £'000
£'000
Cost:
At 1 February 2023 19,997 2,892 444 23,333
Additions, internally developed 1,798 405 - 2,203
_______ _______ _______ _______
At 31 July 2023 21,795 3,297 444 25,536
Amortisation:
At 1 February 2023 13,727 639 37 14,403
Charge for the period 1,416 243 84 1,743
_______ _______ _______ _______
At 31 July 2023 15,143 882 121 16,146
Net book value: ________ ________ ________ ________
At 31 July 2023 6,652 2,415 323 9,390
The development costs relate to those costs incurred in relation to the
development of the Group's online property portal, OnTheMarket.com. The
development costs capitalised above are amortised over a period of 4 years
which represents the period over which the Directors expect the Group to
consume the assets' future economic benefits. The development costs are
amortised from the point at which the asset is ready for use within the
business.
The technology and customer related intangible assets acquired through
business combination relate to the development of software by OnTheMarket
Software for TecLet lettings and TecLet CRM products and represent the fair
value of those assets acquired as part of the Group's acquisition.
11. Related party relationships and transactions
There were no related party transactions during the period ended 31 July 2023.
12. Post balance sheet events
There were no significant post balance sheet events.
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