Member Info for cyberduck

Really not sure how PURP can command a market valuation of £314M.

OK further scope for increasing average income per instruction and reducing costs but you can only go so far with those two. They really need to be increasing market share. You can blame market conditions on a reduced number of instructions but you would want to see an increase in market share.

I would add though that my experience using them to sell my home was better than I've had with traditional agents. But clearly traditional agents still rated highly by about 95% of home sellers.

My proxy has always been lower than the actual reported figures for instructions from PB in the UK but my number for November is 3601 versus 4301 for November 2018. Down 16.3%.

Thanks steph,

So do they break down their percentage holding in these companies and the price paid? The stuff I read was pretty high level. I still say you need to know this and evaluate each company.

I am sceptical in regard to valuations and I wouldn't trust the valuation just because another VCT had paid such and such amount. I've seen too many investors get carried away with valuing tech. I come from a computer science background and I've seen people who don't understand hooked by the latest in gobbledygook. Just reading the article shows you how little VCT's actually know about tech. They were asking what AI is back in 2015.

>The more I look at it the more I am convinced the NAV is conservatively calculated and there is hidden treasure as we had for TEF

Steph, did you take a look at the Woodford Patient Fund? Surely the same arguments apply to them too? You'd think they would have had the pick of the best tech companies around yet they didn't have a great record (but perhaps you have to be more patient?). Why are you so convinced it is different with GROW?

With these funds apparently keen to invest in small technology companies (and taking a cut of the investment money themselves) you have to wonder whether the values are realistic. Or are they just paying more each time the company asks, creating the impression of growth in value?

I think you'd have to look at each company that the fund invests in and ask yourself whether what has been paid is realistic or is there just so much cash around with those hoping to find the next Google or Facebook that people are paying silly prices? But are you actually provided with this info.?

Are there any of these funds that have been going for long enough to look at how many of their investments work out? Technology has always been around so you'd expect so. I can remember a couple these type of funds folding after the tech bubble burst. Do you know if any have been going since before the financial crisis?

I held shares in PurpleBricks for a while which is slightly different but the original owners raised capital in several stages. There were some investors pre-IPO but they eventually got listed on AIM at £1 per share from memory. Later on they raised capital by issuing new shares at £2.20 a share and investment funds were falling over themselves to get some. A few weeks later the owners sold some of their own shares at £3 because investment funds weren't satisfied. Then a while later they raised more capital at £3.60 and the original owners also sold some then too. In terms of the business, things didn't quite pan out the way investors hoped and the shares are now trading at about £1 (after being around £5 at one time) and the original owners have now sold all their shares.

Sain will tell you about another online Estate Agent which was about to have an IPO. Before doing so they had one final round of crowdfunding and I think the reason they gave (or one of them anyway) was to reward the investors who had supported them up until that point. A few months later they called in the receivers.

Steph, it would certainly be worth looking at whether any of the Woodford vehicles are invested in any of the underlying investments. Woodford of course sacked as manager of the income fund and then resigned as manager of the other funds.

If they are looking to sell holdings then this could put downward pressure on the companies in questions as well as these type of companies in general.

The Woodford fund that invested in these type of companies was his "Patient Capital" fund. I don't think it did that well from memory. Worth doing a bit of research on them in my opinion as I think they've been around a while now.
https://www.hl.co.uk/news/articles/archive/woodford-patient-capital-full-portfolio-released

Something more recent https://www.investorschronicle.co.uk/funds-etfs/2019/11/07/woodford-patient-nav-reduced-again/

One other point. There are only a finite number of investment opportunities in these high tech companies available but this doesn't stop managers taking on more cash. A company that boast a 20% return on their portfolio may well struggle to do this as they raise more cash or take on more money (depending on what type of fund it is) as opportunities of the same standard may not be available. If somebody starts a fund based on a past performance of 20% when doing the same thing privately, this might have been on a much smaller scale. Worth asking some questions I think.

Steph,

>That said if one looks at history and not hope GROW has not performed as steadily or as well as Polar in the last 5 years. That can be a buy signal (it is just temporarily undervalued due to sentiment) or maybe a signal of underling problems to the investment model. I need to research further.

I did look a bit more into GROW yesterday and they make claims of 20% yearly portfolio growth over the long term. Not quite what you are looking for but if they can do that over the future years then that will be a very fine return.

I see in a trading statement from just the other day they are looking at growth of 12% "fair value" for the first 6 months. One thing that did raise a bit of a flag and which I would check if I was invested is when the events that created the valuations took place. These events typically (well from my perhaps flawed understanding anyway) relate to further fund raising and the price paid by the investors. I got the feeling that this might have been very close to the start of the 6 month period and if that's the case the cautious side of the greedy and yet fearful investor in me would be wondering if it was significant.

For me, the way they value the investments is hugely fragile in general. People generally get carried away when they value technology. GROW saying they've had long term 20% annual returns but again the cautious side of me wonder if they were investing during the tech bubble in 2000. What actually is their 'long term' and is it just during the long bull market?

I hope this works out for you and I'll be watching the SP and kicking myself if it does but too risky for me at this stage of life. Incidentally I was looking into recessions and market corrections the other day and BWY's SP actually doubled during the dotcom correction. That was something that surprised me.

Steph, had a quick look at GROW. Not sure p/e ratio is the best measurement for these type of companies. I imagine earnings fluctuate from year to year depending on what they sell of the underlying investments.

Only been going a few years and they invest in high risk companies. Valuations of the underlying investments are their own I think and it's not like the valuations are based on solid assets like land. I would imagine the valuations put on these high tech. companies could be pretty volatile.

High risk I'd say.

>can anyone speculate why structurally PCT and GROW have such juicy P/E ratios of 4 to 5?

steph, can you provide some links to info. on them. I had a quick look for GROW yesterday but didn't find one that specialised in EU tech.

IG allow you to buy. For ISA too.

Really positive statement. Export sales up 69%. 45% of export business to the US and I think they only have 4 products launched there and they have not all been full year contributions. Plus they acquired 8 more ANDAs for the US market.

>An retail organisation really needs face to face contact with customers to add any material growth to cross sales.

Face to face is obviously better but ancillary revenue was 44% of PB's 2019 FY UK revenue. They state Ancillary revenue percentage is a KPI used by the Board to measure the performance of the business in generating non-instruction income from customers.

Having seen PB's rapid expansion in the number of LPEs when they expected growth to continue as it had done I would imagine they also did the same in terms of internal capacity handling.

Now that the anticipated demand didn't materialise LPE numbers have dropped to match the actual demand. I would expect there are plenty of savings to be had in terms of their admin costs as well as their marketing costs.

As long as the company is there or thereabouts in terms of breaking even then time is on their side. It's not about the next couple of months but more like the next 10 years (providing they aren't making big losses). Some very big investors who have deep pockets and given the size of their investments are unlikely to call it a day for the sake of a few extra million should more funds be required.

Like you say. Potential for other revenue streams. They've spent all this money on marketing and now have strong brand recognition.

Don't write them off just yet.

>Very woolly update Lets face it

Always is. You have to wait until half year results for the details.

>The additional £100 increase in fee

They've only just increased by £100.

There was I think a £50 increase last year (from memory) but I was told this went straight through to LPEs.

>Having posted a £52m operational loss year its difficlult not to improve on that

They are not talking about just reducing losses they have said they've reversed it and are trading profitably.

>never going to be able to sustain the level of marketing spend .So should imagine any improvemnt there will be offset by the loss of instructions

They expect to report an improvement in the marketing-to-revenue ratio. So no, the improvement hasn't been offset by the loss of instructions.

>cyberduck do you mean the 36676 was for H1 2018? and the 31431 for H1 2019?

Sorry GentlesUncle20 I didn't see your question.

Yes, the number of instructions according to my proxy is lower for this 6 month period.

Some good signs for shareholders from the trading update today and unless I've missed something it does look like they have indeed reduced costs.

“expects to report an improvement in the marketing-to-revenue ratio as planned efficiencies are now being realised”

Also “significant losses incurred in the prior period have now been reversed and the Group enjoyed profitable trading in the First Half.” I didn't expect that. I thought they'd still have losses overseas. Perhaps it comes down to interpretation of what "profitable trading" is.

My proxy has always been lower than the reported figures for instructions from PB in the UK but my number for H1 is 31431. For H1 2019 it was 36676. So down 14.3% approx.

All things being equal I'd imagine they'd struggle to make a profit in the UK on these numbers.

Of course they did increase their fee and stopped paying LPEs support if they weren't getting enough instructions. Other factors will be whether they have cut other costs and whether they've increased average income per instruction by selling ancillary products or services.

I think there's a trading statement soon but perhaps all will not be clear until the half year report which I think will be in December.

Last trade on the Dhaka Stock Exchange up 8.76% to 81.9 on the opening price.

So in pence that's 75p with the current exchange rate.

Ask price of 39p is still very close to a 50% discount, where according to my research 33% discount is an average at the time of the last 8 earnings announcements.

>All very smelly to me

So what do you think the explanation is?

This guy isn't a new LPE. It would be a very strange thing to do to write his own review.

https://www.purplebricks.co.uk/search-local-expert/stephen-hendriks-1273755 "I’ve worked in sales for 20 years and estate agency for 10. I’ve been a sales negotiator, a sales progressor, a sales valuer, a branch manager and a mortgage adviser. I’m bringing a wealth of knowledge with me to Purplebricks and I will pass on that knowledge along with passion, enthusiasm, dedication and commitment directly to every single one of my customers."

This is the guy who is being maligned on social media. I'd love to see what evidence these people have. Hiding behind anonymity.

Just seen the posts on PIE and I see it's the infamous PeeBee who has been making allegations about this guy's integrity. PeeBee is obsessed with PurpleBricks and spends an inordinate amount of time pointing out when 1 star reviews are flagged up on TrustPilot but doesn't offer an objective view by pointing out the 5 star reviews that are flagged up except when he has decided in his own biased thinking that there is something fishy about the review.

>Competitors posting bad reviews is commonplace but the naive ones who post multiple reviews will get caught through automated detection of cookies

Correction: "will get caught" should have been "can be caught".

>You then have to question if it was an imposter and someone opened up an account with Trustpilot as Stephen Hendricks who wasn't Stephen Hendricks then how do they allow that to happen ?

Very hard to stop this. Not commercially viable for review sites to check identity for online account creation. Even if you require a mobile number you can buy PAYG sim cards for peanuts.

Competitors posting bad reviews is commonplace but the naive ones who post multiple reviews will get caught through automated detection of cookies and ip addresses which could well explain explain "The reviewer has created multiple profiles to review the same company multiple times.".

>Oz total insntructions today just 66 .Why on earth dont they shut the whole thing up?

They have to be careful how they will look.

Sain,

Proof that TP contact posters of 5 star reviews. Something that might escape your attention if you pay attention to traditional agents who never seem to mention this for some reason. TP of course claiming that more positive reviews are flagged up than negative ones.

If I was to speculate I's say it's more likely to be a competitor trying to damage PB than an extremely dumb LPE giving themselves a positive review. Could be wrong but surely there must be a limit to how stupid Estate Agents can be?

Personally my experience was better with PB than all my dealings with Traditional Agents. I try to be objective but maybe this is colouring my judgement?