Shares in OnTheMarket hit another new low of 75.7p yesterday, dropping over nine per cent on the day and falling well below its previous low of 78p recorded last week.
OnTheMarket shortly celebrates its first anniversary of floating on London’s Alternative Investment Market; when it floated on February 9 2018, its price was 148p.
In May last year it recorded its all time high of just shy of 189p but since then it has drifted downwards. This is despite the well-reported increase in its number of agency branches from 5,500 to over 12,000 during its time as a quoted company.
The portal, which ends its financial year on January 31, is tipped to increase its total number of agency branches to 12,500 within the very near future according to Zeus Capital, the financial consultancy which was OTM’s broker when it floated.
Zeus’s research director Robin Savage says: “My forecasts for the next few years assume two thirds of the first year free agents convert and the average typical tariff is something like £350 a month, and by the winter of 2019, I expect OTM will be profitable on a monthly basis.”
Savage continues: “The number of leads generated continues to rise year-on-year, you’d expect that given the increase in marketing spend, and the cash balance left at year-end after the recent marketing campaign, my forecast assumes around £14 million.
“Investors should note that the majority of the company’s revenues are contracted on a multi-year basis and with £14m of cash, contracted revenue of over £14m per annum, the portal is well funded for the next 12 months or so.”
The Zeus executive predicts revenues for the period to January 2020 will be £28m “reflecting the conversion of two thirds of last year’s first year free agents.”
Savage concludes by saying that: “I expect OTM to make a series of announcements this year as its revenue stream grows.”
You can read a transcript of an interview with Savage here.