Purplebricks in profit for first time

Purplebricks announced that it has achieved maiden profit in the UK and now plans to accelerate market share growth. It said it is agreeing a sale every 16 minutes, 24 hours a day.

The profit is an adjusted EBITDA figure – ie, before tax and after costs, depreciation, amortisation, net finance costs and share based payment charges – of £0.3m on revenue of £18.3m. In the previous six months it made losses of £6m.

Announcing its interim results for the six months to October 31, Purplebricks says it made a gross profit of £10.2m – equating to a gross profit margin of 55.6%.

Its revenue for the period grew 159% year-on-year, exceeding last year’s full figure sales of £18.6m.

It also announced that it now has 329 local property experts, having recruited 124 in the six month period. Since the period ended, further recruitment has boosted the figure to 340.

The firm also announced that instructions rose by 108%, and that average revenue per customer was up 20.6%, to stand at £1,000, excluding VAT.

It claimed that it sold and completed on £2.589bn worth of property, compared with a figure of £2.766bn for the whole of the previous year. Sales agreed subject to contract are worth a further £2.521bn.

Purplebricks said it is in a strong financial position, with net cash of £29.1m, and pointed to over 10,580 Trustpilot reviews, scoring it 9.4 out of ten, with over 10,000 rating it as excellent.

CEO Michael Bruce said: “Our strong results are testament to the seismic shift that is underway in the estate agency market. We continue to win over an increasing number of customers by offering them a complete and seamless high quality estate agency experience at an attractive fixed fee. I am especially proud that currently we are agreeing a sale every 16 minutes, 24 hours a day, and the number of properties sold in the first half is similar to the total number of properties sold during the whole of the previous year.

“These results demonstrate that the business model is working, with the UK generating a maiden half-year adjusted EBITDA profit whilst growing market share.

“We have also demonstrated that our team can internationalise our model with the successful launch of Australia which has performed better than any of the initial regional launches in the UK.

“Although we recognise that the UK market backdrop is tough, we continue to have a confident outlook for the future. We have momentum, a superior, low fixed cost flexible business model and a strong balance sheet, which we will leverage further in the early part of the busier spring market so as to build on our success to date.”

In Australia, there are now 50 local property experts, said the firm, with plans “well advanced” to extend its regional coverage into new territories. In the six months, instruction fees generated £0.57m in the first seven weeks.

Purplebricks – which does not say in its results exactly how many UK properties it has transacted – says that the recent Uber ruling on the employment status of workers has no implications for its own business. It says its local property experts “run their own independent business, engage and employ their own people and are successful independent entrepreneurial business people”.

It says 90% of its local property experts are self-employed, with 90% of fees paid up-front,

The firm adds that it is now working on a Purplebricks app for buyers, while a new TV advert is to start airing on Boxing Day.

Purplebricks also reports: “At the start of June 2016 we commenced an intensive test marketing campaign with Rightmove, which we hoped would raise further awareness and engagement and drive valuation opportunities. We are pleased with the outcome of the campaign and will further increase our engagement with Rightmove throughout 2017.”

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Written by: Houseladder