IMPAIRMENTS IMPACT ONTHEHOUSE RESULTS
Written on the 26 February 2015
EMBATTLED real estate website Onthehouse Holdings Limited (ASX:OTH) has posted a half-year net loss after tax of $9.13 million.
The loss represents a 1656 per cent decline, in comparison to its $587,000 profit in the previous corresponding period.
The result was impacted by non-cash impairment charges totalling $10.45 million, in relation to the company's intangible assets in Consumer Online and Data Analytics.
OTH chairman Tony Scotton says the company is focused on moving forward, with pleasing results in other aspects of the business.
"Statutory earnings for the first half has been impacted by a one off, non-cash intangible item following completion of the initial phase of the board's strategic review," Scotton says.
"While this has impacted short term earnings, we have made significant operational progress, restructuring our business divisions to position the group for future growth."
Revenue from continuing operations was up one per cent at $13 million in HY15, while underlying earnings before interest tax depreciation and amortisation (EBITDA) of $3.05 million was in line with the prior period.
The cash balance was down 72 per cent to $1.22 million, after the company used reserves to pay down borrowings and reinvest in the business.
Scotton says despite the intangible asset write down, revenue earnings remained stable.
"Underlying earnings, as measured by EBITDA, were in line with last year and with the trading update released in February," he says.
"The result was due to a small increase in revenue and a continued focus on reducing expenditures through a range of cost efficiency measures."
OTH founder and CEO Michael Fredericks resigned from the company in September 2014 after being embroiled in a misconduct dispute involving a private trust.
The allegations had no bearing on OTH and Fredericks was later cleared of the charges.
"The past six months have seen a number of challenges for the business and it is pleasing that the board has worked through the issues and is now in a good position to drive the company's future growth," Scotton says.
"We have strong relationships with numerous real estate agencies, and a continually scaling, highly engaged online audience.
"We have a clear set of short-term priorities to conserve cash, while continuing to drive the real estate solutions segment through sales and service initiatives and product innovation."
He says the new board and management team are looking forward to completing the strategic review to further develop OTH's real estate solutions division and consumer online division.