(Alliance News) - Purplebricks Group PLC on Tuesday reported a swing to loss as the online estate agent lamented challenges from its new operating model and a UK housing market that "played against us".
For the year ended April 30, the Solihull, England-based firm swung to a pretax loss of GBP34.8 million from a profit of GBP3.6 million the year prior.
Instructions fell 31% to 40,141 in the year. The lower figure was partially offset by a 4.0% increase in average revenue per instruction, however, which rose to GBP1,568 from GBP1,501 the year prior following the introduction of 'classic' and 'pro' packages.
Revenue dipped to GBP70.0 million, down 23% from GBP90.9 million the previous year, while total fee income dropped 28% to GBP63.0 million from GBP87.1 million.
"Last year's financial performance was significantly impacted by the challenges resulting from the implementation of our new operating model and investment in marketing that did not deliver the expected results, alongside a housing market which played against us," said Chief Executive Helena Marston.
As a result of its disappointing performance, the firm laid out a "recovery plan" moving forward as it aims to have positive cash generation by early financial 2024.
The four key objectives of the recovery plan are: cost management, growing and diversifying revenue, growing instructions, and raising standards.
It also said it aims to retain "significant" headroom in its cash resources by early financial 2024.
Purplebricks said its trading in the first quarter of its 2023 financial year has shown an improved trajectory but cautioned that the UK housing market is likely to remain challenging for the rest of the financial year.
Nonetheless, the company said it believes to have "the right plan in place" which it says will "change the direction of travel and deliver significant improvements, with a return to growth."
The company did not declare a dividend.
Shares in Purplebricks were down 1.7% at 14.75 pence on Tuesday morning in London.
By Heather Rydings; heatherrydings@alliancenews.com
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