(Alliance News) - OnTheMarket PLC on Thursday reduced revenue and profit guidance as market conditions in the UK property sector continue to deteriorate.
The company, which operates the OnTheMarket.com property portal, said lettings agents are facing headwinds such as lower-than-usual transactions, reduced lettings fee income, a possible UK recession, the prospect of a no-deal Brexit, all leading to a "wait and see" attitude from prospective home buyers and sellers.
As a result, OnTheMarket has introduced new, shorter-term, lower-cost contracts.
As a result, for the year to January 2020, OnTheMarket sees revenue between GBP18.0 million and GBP18.5 million, which would be 27% to 31% higher than the year before. The adjusted earnings before interest, tax, depreciation, and amortisation loss is to be between GBP9 million and GBP10 million, a "small" year-on-year improvement.
For the year ending January 2021, the firm sees revenue between GBP27 million and GBP29 million, with a "broadly" breakeven adjusted Ebitda. OnTheMarket also expects revenue growth in financial 2022 as well as "significant" profitability.
"Notwithstanding the lower revenue arising in the short-term from the revised strategy, we are continuing to expand the team to support the growth in revenues. With net cash currently in excess of GBP8.5 million and the group's increasing recurring revenue base, disciplined financial approach and strong cost control, OnTheMarket believes it has the necessary funds and resources to implement its strategy and achieve the strong growth projected over the medium term for the benefit of all stakeholders," said OnTheMarket.
Shares were 12% lower on Thursday in London at a price of 85.11 pence each.
By George Collard; georgecollard@alliancenews.com
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