Online agent easyProperty set to seek more funding as it posts losses of almost £11m

| Rosalind Renshaw

Online agent easyProperty has posted losses of almost £11m on a turnover of less than £1m.

Its results are for the year to September 30, 2016, for which it had been forecasting a profit of nearly £3m.

The report was approved by the board in mid-December, but only posted on the Companies House website this week.

In its last financial year, easyProperty had turnover of £874,937, up from £144,161 the year before.

In the 12 months to the end of last September it lost £10,941,652, up from a loss of £6,773,869 the previous year.

In a successful crowdfunding pitch in September 2014, easyProperty said it would make a profit of £2,908,359 in the year to September 2016, on a turnover of almost £24m (£23,709,491).

It also said at the time that it expected profits for the current financial year to be £9,729,111 on a turnover of £37,155,529.

The firm, called EProp Services plc, says in its new report: “The directors are pleased to report a period of further development for the business, albeit at a lower rate of growth than anticipated.”

During the year, in which it raised £16m through the issue of some 2m shares at £7.845 each, it also said it had “solidified its position in the market where it is aiming to be the leading provider of online estate agency services”.

It goes on to say: “The Group is still a very young business, competing within and disrupting an established market, and as is typical for businesses at this stage of their lifecycle it is generating start-up losses as it uses working capital to develop the business.”

As at the end of last September, it said its assets exceeded its liabilities by £9.2m and its net cash position was £8.6m.

Its net cash stood at £7.3m by the time it signed off its financial statements.

EasyProperty expects to require extra funds “in the foreseeable future”, saying: “The directors have ongoing positive relationships with shareholders and so the directors believe that further funding will [be] made available to meet any liabilities as they fall due in the foreseeable future.”

EasyProperty is headed by Robert Ellice, who has taken a big pay cut.

In the year to the end of September 2015 he was paid £402,053. In the last financial year he was paid £181,250.

Remuneration for the three non-executive directors went up from £71,647 to £221,878.

A sum of £57,067 appears in last year’s accounts as compensation for loss of office.

Overall staff costs went up, as headcount rose from 63 to 101. Staff costs last year were £3,575,778, up from £2,730,252.

At the end of 2015, Ellice said he was not looking to launch easyProperty on the stock market for at least two years, as a fundraising round had raised £25m including £14m from Toscafund. That particular fundraising round valued the firm at £100m, and Ellice said he believed his business would be worth over £1bn over the following two or three years.

EasyProperty launched in September 2014 with a huge bash at the National History Museum where attendees included Sir Stelios Haji-Joannou, who licenses his ‘easy’ brand to the business.

In the latest accounts, a figure of £333,000 is given for ‘trademarks and licences’.

beta.companieshouse.gov.uk/company/09210707

 

Days before launch easyProperty bids for £7.5m more funds

 

easyProperty decides against stock market float as it chases £1bn valuation

 

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38 Comments

  1. MarkRowe
    March 31, 2017 at 06:56

    Literally don’t know where to start with those numbers…

    £400k salary down to just under £200k…. wtf??? Ellis takes money from investors and makes a HUGE loss, doesn’t hit anywhere near his targets, then takes an eye watering salary…

    Can I jump off this mental world now, nothing’s making sense?

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    1. MarkRowe
      March 31, 2017 at 07:09

      Just to add.
      If one more ‘online/hybrid/lazy’ agent says in their marketing, through a press release or other form of communication to the public that they are fighting back against the high street agents high wages I’ll lose my sh*t and direct them straight to this article.
       

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    2. seenitall
      March 31, 2017 at 09:17

      Its amazing –     6.7million loss and then 11 million loss     Im sure when the EBtada accounts come out it will be amazing profit…………..
      So the company said x and y and the opposite has happened but dont worry thats to be expected in its life cycle………  
       
      Its amazing how much money is being paid out to the directors when the company is losing money – do investors not think about where they are putting the money?        Its easy to spend when its not your actual money isnt it?!  
      Perhaps these investors are our pension pot holders.   Its easy for waste and excess when you are not affected financially bit like the govenment.              The small independants with owners actually caring about the service and the quality of the work they do and then who have a direct financial interest in it are a dying breed.  I hope enough can survive long enough to weather the disruption but these big faceless corps becasue when they do fail and topple it will be the SME’s of this country that we need.

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  2. Chris Wood
    March 31, 2017 at 06:57

    Further proof, if required, that the public are not buying into the much hyped promise that a call-centre could and would provide the same, promised, levels of service as a good full-service agent with real local knowledge and contacts.

    The majority of firms who use this model have fallen foul of the ASA again and again for deploying advertising that misleads consumers. If you have to mislead consumers (and, by extension, investors) to win their business you shouldn’t be in business, try a new a new career. In the case of EasyProperty, may I suggest the funeral business?

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    1. Thomas Flowers
      March 31, 2017 at 08:39

      Has EasyMoney been taken yet?

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  3. Trevor Gillham
    March 31, 2017 at 07:09

    Easy come Easy go!

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  4. AIJS
    March 31, 2017 at 07:12

    Perhaps independent agents should organise a funeral march to mark the death of this business……. on second thoughts that would be a cheap tacky publicity stunt in bad taste!

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  5. Robert May
    March 31, 2017 at 07:17

    Its not cash they need its customers.

    Under £1m turnover with 1 person getting 18% of that? Of all the disruptors this is the one I have the least respect for.

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    1. Martin Burgess
      March 31, 2017 at 07:54

      Its worse Robert.. if you simplify and take his turnover at £875,000 – minus cost of sales leaving Gross profit of £492,000, then deduct his salary of £181,000 – he has taken a fraction under 37%. If I were a shareholder or potential investor, I would be looking very closely at Ellice’s value to the company and the ethics involved here.

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      1. Robert May
        March 31, 2017 at 08:01

        No you wouldn’t, you wouldn’t get that granular. This doesn’t pass the gut feel; 1000 & Nah! test; look at it, consider it for a fraction of a second and listen to your instinct. You could say the decision is an easy one.

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        1. Peter
          March 31, 2017 at 08:16

          INSTINCT – “an innate, typically fixed pattern of behaviour in animals in response to certain stimuli.”
          Let’s remind ourselves of the bandwagon that preceded the internet bubble, I see no difference; that is my instinct!

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  6. 40yearvetran08
    March 31, 2017 at 07:25

    101 staff with a turnover of £875k. Added 38 staff last year to add £144k. Guys, call it a day.

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  7. Martin Burgess
    March 31, 2017 at 07:42

    I believe Ellice originally had to stump up around half a million in order to cement his ‘credentials’ to Stellios.. Looks to me as though he’s wasted no time at all in reclaiming his money – whilst the dividend to shareholders is NIL. This isn’t a serious estate agency business, its simply a cynical personal wealth machine.
     

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  8. AgentV
    March 31, 2017 at 07:49

    ‘That particular fundraising round valued the firm at £100m’

    it feels as though you only have to put the word ‘disruptive’ in a new business opportunity and investors instantly turn into gibbering wrecks slobbering over the potential worth they are buying into!

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    1. g4lvo17
      March 31, 2017 at 11:50

      and they state that they believe the vaule would be £1 billion with 2-3 years , really ! what planet do these people live on ?
      unfortunately the crowd funding mug punters will swallow a lot of Bulls effluence before they realise that their money has long gone.

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  9. Blue
    March 31, 2017 at 07:50

    Good luck with that.

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  10. Trevor Gillham
    March 31, 2017 at 07:52

    Not so Easy after all is it. You simply do not need that many staff, write yourself a decent backend system to run your business super efficiently.

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  11. Martin Burgess
    March 31, 2017 at 07:59

    Two more EasyProperty board Direc’s resigned just prior to these accounts being published.. Rats..? sinking ship..?

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  12. Sparky190248
    March 31, 2017 at 08:05

    This is dead as disco

    give it another 6 months until the wake.

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  13. Shaun77
    March 31, 2017 at 08:24

    Anybody that thought the public, when disposing of their most valuable asset, would choose a brand that’s associated with being “cheap” and “budget” clearly doesn’t understand agency and the emotions that go with it.

     

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  14. Woodentop
    March 31, 2017 at 08:36

    Some people seem to have forgotten the dot.com boom ended back in the 1990’s. Tell me of any one web/call centre disruptor that has not lost £millions, not made false or misleading advertising and made a profit for investors worth getting out of bed for. As back in the 1990’s the winners are the big cheeses at the head raking in the fat cat salary, not from performance but from gullible investors who spend too much time with their heads in a bucket of sand with promises of Jackanory by stock brokers.

     

    They are not offering anything new to the market other than low fee’s they can’t cover costs/make a profit from. Most High Street agents provide a far better service and the public know this as they are not so gullible. I’m also seeing many PB boards now being replaced by other agents.

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    1. Property Ear
      March 31, 2017 at 11:52

      Yes, we’re seeing P.****** being disinstructed on an ever increasing basis in the West Country. Their stock unsold after months of being marketed at patently unachievable prices, yet they still got their loot for NOT doing what they say they’re so good at.  There should be a law against it – trouble is, it’s not just the ‘on liners’ shooting way over the top to get the job!!

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      1. Property Ear
        March 31, 2017 at 11:54

        Sorry – spelt bricks with a P instead of B again

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        1. AgentV
          March 31, 2017 at 12:34

          Perhaps there should be a place on twitter #disinstructed where everytime you see it happen you can post the record? 

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  15. TheCountryAgent
    March 31, 2017 at 09:21

    I’m not sure this has anything to do with property. 

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    1. Martin Burgess
      March 31, 2017 at 10:29

      It’s not.. the idea was cooked up by Ellice and his old school buddy Kingsley Wilson, who is now a partner in Chrystal Capital LLP, whoput together the original fund raising campaign (and who has shares in other Ellice companies). EP was never ‘designed’ to work, it was created to raise money… which it has done..

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  16. g4lvo17
    March 31, 2017 at 09:37

    When I get emails telling me that the Financial Controller of XYZ Petroleum has £127,000,000 and just needs me to email my bank account details, I feel I have more chance of seeing that cash than any return from these so called disruptors !!!!!!!!!!!

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    1. g4lvo17
      March 31, 2017 at 11:45

      censored my comment ? why, nothing liablous and quite mild compared to other comments in this thread, very disappointed PIE

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    2. AgentV
      March 31, 2017 at 12:36

      g4lvo17 – Financial director of XYZ petroleum
      Hey….Don’t you dare. He contacted me first, and I am currently in the process of paying my initial sum over to claim my 10%!!!!

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  17. Mark Walker
    March 31, 2017 at 10:00

    Yeah but what’s their Trustpilot rating?

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  18. fluter
    March 31, 2017 at 10:23

    “The directors are pleased to report a period of further development for the business, albeit at a lower rate of growth than anticipated.” Is this the understatement of the year or what? Oh, hang on, I forgot about PB’s claims! 

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  19. IHS
    March 31, 2017 at 11:04

    Basically going bust then?

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  20. Keyser Söze
    March 31, 2017 at 11:44

    It has been doing the rounds for sometime that EasyProperty were burning cash with little return. It looks as though they may be the first casualty. I believe a few of their employees are currently shopping themselves around.

    They are not the only ones burning cash though. All of the onliners are. Annually, when the cash is running low they all get the begging bowl out to the city. It is a matter of time before a number of the investors lose the faith and decide to cut their loses. I think we will see a few more casualties before the year is out with the more prominent onliners.

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    1. Thomas Flowers
      March 31, 2017 at 13:17

      Agree, unless they can come up with a cunning plan to raise more capital.
      How about launching in America, that ought to draw in the cash before this years EBITA adjusted financial results?

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  21. RAL
    March 31, 2017 at 12:11

    Just looks like money men being a bit too tricky…

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  22. J1
    March 31, 2017 at 12:30

    If he had borrowed the money off the wrong people I could see a murky ending for this chap.

    Playing catch up with PB is going to be almost impossible.

    How much are the other disrupters losing?

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  23. AgencyInsider
    March 31, 2017 at 16:57

    Schadenfreude

    noun

    Satisfaction or pleasure felt at someone else’s misfortune.

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  24. Ttop
    March 31, 2017 at 17:02

    This so called online sector (we are all online ) is slowly being found out – also so are weak so called high streets – their is a  cleansing phase taking  place and the public  are about to get the quality brokers they require – it’s not just listing its expert management that’s in the clients interest , and that’s when clients say ” wow , thanks so much” – 20k negs won’t cut it !

     – we may well in the long run thank Brexit and the online’s – great independents , it’s our turn !

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