OTM will soon be profitable, City analyst tells agent shareholders

first_imgHome » News » Marketing » OTM will soon be profitable, City analyst tells agent shareholders previous nextMarketingOTM will soon be profitable, City analyst tells agent shareholdersZeus Capital says the portal will have a difficult 2020 but it expects it will be profitable in 2021/2 as member agents move to paying full fees and revenues increase by £10m.Nigel Lewis25th June 20200808 Views OnTheMarket will see its revenues shrink substantially in the coming months but is still on track to break even during 2020 and make profits next year, a leading City analyst has said.This will be good news for the thousands of agents who now hold shares in the company, offered to them as part of sweetener deals to sign long-term contracts.Zeus Capital also reckons the portal’s recently-announced extension of its discounts scheme will cost it up to £1 million as revenues drop from £23 million to £22 million.As a consequence, Zeus Capital also says the portal will have to trim nearly £900,000 off its projected marketing spend of £8 million in order to keep its forecasted profits at current levels.This may worry some agents, who are concerned that the portal has already stepped off the marketing gas during the lockdown months.OnTheMarket CEO Clive Beattie (yes) recently told The Negotiator that: “We decided to focus our expenditure on lowering our fees during Coronavirus, which means we pretty much stopped our marketing activity as we’ve tried to control our costs”.But Zeus is upbeat about the portal’s financial future – it says that as agents begin to come off their introductory offers and start paying full-fat fees, OTM will see its revenue jump by over £10 million a year to £32 million by 2021/22.Commenting on the portal’s share value, Zeus says: “OTM has substantial net cash of over £8m, a capital light business model, long-term contracted revenues and an ability to manage its costs to conserve cash.“As paying advertisers rise and discounts fall away, contracted revenues will rise and in 2021 calendar year OTM should report profits.”clive beattie OnTheMarket OTM June 25, 2020Nigel LewisWhat’s your opinion? Cancel replyYou must be logged in to post a comment.Please note: This is a site for professional discussion. Comments will carry your full name and company.This site uses Akismet to reduce spam. Learn how your comment data is processed.Related articles Letting agent fined £11,500 over unlicenced rent-to-rent HMO3rd May 2021 BREAKING: Evictions paperwork must now include ‘breathing space’ scheme details30th April 2021 City dwellers most satisfied with where they live30th April 2021last_img

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