Purplebricks ramps up UK dominance as revenues soar
PURPLEBRICKS has reasserted its dominant grip on the UK online estate agency market, reporting a 20pc surge in half-year revenues despite a slowdown in the wider sector.
The Aim-listed company said it had maintained its 74pc share of the online market in an investor update, after rival Emoov put itself up for sale. Michael Bruce, Purplebricks chief executive, said the sluggish market had led to a “shakeout” in the industry, “highlighting weaknesses in both some traditional and online agents’ business models”.
Purplebricks said the higher revenues were the result of double-digit growth in customer numbers, as well as swelling sales of ancillary services such as insurance and conveyancing.
The company, which charges a flat upfront fee of between £899 and £1,399, has grown rapidly as home sellers have sought a cheaper alternative to high street estate agents.
But while its UK arm is now in the black on an operational basis, the wider group including nascent arms in the US, Canada and Australia is yet to turn a profit. Pre-tax losses in the year to April rocketed more than fourfold to £26m.
Its shares closed up 2pc at 185p but are still down by more than half in the year to date.
Its US business, launched about a year ago, now employs 140 agents in seven states including California. According to the company, 44pc of Californians now recognise its brand, “ahead of the UK equivalent at the same time in its development”.
Purplebricks said its Australian business had bounced back amid a “tough market backdrop” and its Canadian arm, acquired in July, has been “performing strongly”.
It recently struck a deal to enter mainland Europe for the first time, buying a stake in Germany’s market leader Homeday through a joint venture with media giant Axel Springer.
Russell Quirk, chief executive of Emoov, which is one of Purplebricks’ biggest online competitors, told the
Financial Times on Friday that the company was seeking a buyer after finding itself in a “slightly precarious” financial position.