British real estate vertical OnTheMarket has introduced lower cost contracts to encourage more agents to convert to paying contracts from free trials.

OnTheMarket has seen fewer sales transactions and less income from lettings with buyers and sellers adopting a “wait-and-see” approach linked to Brexit.

The lower cost contracts have increased the numbers of agents converting to paying contracts, but at a lower ARPA, OnTheMarket said.

Property Industry Eye reports OnTheMarket told the City “These circumstances have given rise to a much more challenging backdrop against which to convert agents onto full-tariff paying contracts.

“Agents are taking longer to consider such commitments and fewer are currently signing them than anticipated, with ARPA of £329 per month for those that have.

“The Group has, therefore, introduced shorter term, lower cost contracts, the ARPA on which is running at £207 per month.

It also warned that revenue is likely to be lower than previously expected for the year to Jan. 2020.

It now expects revenue to be £18 million – £18.5 million ($23 million U.S.), with a loss of £9 million – £10 million ($12 million U.S.), better than previously forecast.

In the year to Jan. 2021, revenue will be £27 million – £29 million, 27% – 31% higher than the previous year. It now expects to become profitable in the year to Jan. 2022, a year later than previously stated.

The company said it had net cash of £8.5 million “to implement its strategy” over the medium term and that it expects adjusted EBITDA to be “broadly” break-even for the year to Jan. 2021.

 

 

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