Interim Results for Six Months Ended 31 July 2023

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 EBITDA1	£3.1m	£3.1m	-
EBITDA	£1.9m	£1.9m	-
Adjusted operating profit2	£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	£11.33m	2%
ARPA4	£201	£205	(2)%
Average monthly advertisers5 listed	13,323	13,118	2%
Period-end advertisers	13,363	13,2126	1%
Period-end agency branches	10,414	10,3676	(-)%
Period-end new homes developments	2,949	2,8456	4%
Traffic/visits7	119m	1068m	12%
Average monthly leads per advertiser	101	1038	(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 Jason Tebb, Chief Executive Officer Tom Carter, Chief Financial Officer	0207 353 4200
Teneo (Financial PR Adviser) Giles Kernick Barnaby Harrison	0207 353 4200 [e-mail]
Zeus Capital (Nominated Adviser/Joint Broker) Jamie Peel, Martin Green, James Hornigold (Investment Banking) Benjamin Robertson (Corporate Broking)   Shore Capital (Joint Broker) Daniel Bush, John More (Corporate Finance) Fiona Conroy (Corporate Broking)	0203 829 5000 0207 408 4090

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 £'000	H1 22/23 £'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 fees, share-based payments and non-recurring items	1,050 ________	997 _________
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 2023	31 January 2023	Change
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
	Notes	Unaudited 6 months to 31 July 2023 £'000	Adjusting Items (See Note 8)	Adjusted	Unaudited 6 months to 31 July 2022 £'000	Adjusting Items (See Note 8)	Adjusted
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 at 31 July 2023	Audited at 31 January 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 £'000	Other reserves £'000	Merger reserve £'000	EBT Reserve £'000	Retained earnings £'000	Total equity £'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 Period	-	-	-	-	-	(358)	(358)
	______	______	______	______	______	______	______
Total comprehensive loss for the period	-	-	-	-	-	(525)	(525)
Transactions with owners:
Shares issued for agent recruitment shares	2	-	1,108	-	-	-	1,110
Capital restructuring	-	(43,756)	-	-	-	43,756	-
Share-based payment charge on employee options	-	-	-	-	-	522	522
	______	______	______	______	______	______	______
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 loss for the period	-	-	-	-		(79)	(79)
Transactions with owners:
Shares issued for agent recruitment shares	1	-	147	-		-	148
Share-based payment charge on employee options	8	-	-	-		360	368
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 £'000	Unaudited 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)/profit1	(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)/profit1	(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 6 months to 31 July  2023 £'000	Unaudited 6 months to 31 July  2022 £'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 6 months to 31 July  2023 £'000	Unaudited 6 months to 31 July  2022 £'000
Earnings attributable to equity
(Loss)/profit (for the period from continuing operations attributable to owners of the company	(79)	383
	________	________
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

Group	Development Costs £'000		Technology related intangibles £'000	Customer related intangibles £'000	Total
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.     

 

END