(Alliance News) - Purplebricks Group PLC on Tuesday unveiled plans to move to a fully employed model for its field sales agents, as part of a new strategy which could add up to GBP9 million in costs in the current financial year.
Shares in Purplebricks were down 5.2% at 67.40 pence in London on Tuesday morning.
The change will come into effect immediately and see the end of self-employed local property agents.
"The move to a fully employed model for Purplebricks' agents represents a further enhancement to the company's business model, following a review of how the company can best serve its customers, support its field teams in the future, and meet the demands of a strong market," the company said in a statement.
The online estate agent will now have ownership over the recruitment, training and management of local property staff, which it said will lead to a higher level of customer service and greater opportunity to increase ancillary revenues. Greater security and benefits to incentivise staff were also given as factors for the move.
"As normality returns, we believe that moving to a fully employed sales model will benefit and support our people and make Purplebricks fit for the future," commented Chief Executive Vic Darvey.
As guided in July, Purplebricks said it remains too early to quantify the benefit from new pricing structures, including a money back guarantee and a simplified two-tier proposition, to the current financial year.
The change in employment status is expected to incur costs of between GBP3 million and GBP4 million, with ongoing administration costs expected to be around GBP1 million higher in the current financial year, which ends in April 2022, and beyond.
The company also announced it would also significantly increase investment in a new marketing campaign later this year, adding an estimated GBP3 million to GBP4 million in costs on top of the previous forecast.
Medium-term guidance remains unchanged, with Purplebricks continuing to expect annual revenue growth in excess of 20%.
By Will Paige; willpaige@alliancenews.com
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