What: Onthehouse Holdings Ltd (ASX: OTH) has reported a set of full year profit numbers which are unlikely to inspire many investors.
Many investors have followed Onthehouse closely, wondering if it can build its fledging online real estate presence into a worthy competitor to REA Group Limited (ASX: REA). So far the results have been lacklustre.
For the 12 months ended June 30 revenues and profits were flat at $26 million, and $665,000 respectively.
So What: Onthehouse has two operating divisions. One is performing strongly, the other remains loss making.
The Real Estate Solutions division is the core asset and is a quality business. The division recorded a 1% increase in revenue to $21.5 million and a 10% uplift in earnings before interest, tax, depreciation and amortisation and corporate expenses to $11.3 million.
The Consumer Online division operates the website portal www.onthehouse.com.au, this is a business which operates against much larger peers such as www.domain.com.au and www.realestate.com.au. For the financial year just ended, this division's revenue fell 8% to $4.5 million and losses incurred increased to $2.9 million before corporate expenses.
Now What: With a share price that is down 35% over the past five years and a Consumer Online division that has so far failed to gain traction, a recent management shake-up has spurred Onthehouse into action.
The board is proposing to restructure the company and introduce an equity partner into the Consumer Online division. It is hoped that this will lead to the market reassessing the sum-of-the-parts for this company and also lead to skilled partners coming on board to drive the online real estate business.
