Shares in OnTheMarket (OTMP:AIM) rallied 4.5% to 96.1p on Tuesday after the property portal posted a 46% increase in first half revenues to £14.9 million driven by a healthy rise in average revenue per advertiser.
OnTheMarket also raised its revenue forecast for the year to next January to slightly ahead of expectations, and despite marketing costs more than doubling in the first half, sees annual operating profits coming in ‘substantially ahead of expectations’.
STURDY SHOWING
During a strong first half, headline monthly ARPA (average revenue per advertiser) advanced by 52% year-on-year to £188, meaning the company generated an adjusted operating profit of £2.1 million, up from £800,000 a year earlier despite a step-up in both marketing and staff costs.
Period end net cash stood at a robust £9.9 million following repayment of UK government COVID support and debt relating to the acquisition of outstanding equity in the Glanty property technology business.
CEO Jason Tebb said he was ‘delighted to report that the first half of our year has seen a strong financial performance, operational growth and real progress with our strategic objective of building a differentiated, tech-enabled property business’.
UPGRADES ENSUE
With demand for residential properties in the UK remaining at very high levels, albeit with subdued sales and lettings instructions, positive trading has continued into the second half, prompting Shore Capital to upgrade its full year 2022 adjusted earnings per share forecast from 3.1p to 4.3p.
The broker pushed through more modest earnings per share uplifts of 5% and 3% for the 2023 and 2024 financial years respectively.
Shore Capital sees adjusted pre-tax profit of £4.4 million for 2022 ramping up to £10.5 million in 2024 and also anticipates ‘the introduction of a progressive dividend policy from FY23F onwards - adding to the group’s total return potential’.
