Purple Bricks makes £11.9m loss on £18.6m turnover

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Hybrid online agent charges customer even if they don’t sell their property

Backed by the high-profile fund manager Neil Woodford, the company has sought to carve out a slice of the estate agency market with a so-called “hybrid” business model. It has no physical branches, but recruits agents — mainly on a freelance basis — in an effort to combine an online platform with offline customer service.

The company’s revenues rose to £18.6m in the year to April, up from £3.4m the previous year. But Purplebricks widened its losses over the period to £11.9m from £5.4m, partly because of £1.4m of costs relating to its initial public offering.

Purplebricks said it expected its UK business to move into profit this financial year.

“In just our second full year of operation, we are leading change in an industry that has long been stagnant and is only now waking up to the opportunities and threats posed by technological advance and changing consumer behaviour,” Purplebricks’ chief executive Michael Bruce said.

“While others are following, we have retained our leading position, with 62 per cent of the non-traditional estate agency market and look to replicate this success in Australia,” he added.

Purplebricks had 205 agents at the end of April, up from 165 before its float. The company said it expected to employ 245 agents by the end of this month.

Instead of the percentage-based fees of agents such as Countrywide and Savills, Purplebricks charges a fixed £798 plus value added tax, or £1,158 plus VAT in Greater London, chargeable whether or not a home is sold. Services such as agents handling viewings incur extra fees.

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Written by: Houseladder