PURP.L Regulatory News (PURP)

29 September 2017

AGM Trading update

Strong progress across three continents, on course to meet expectations

Purplebricks Group plc ('Purplebricks', 'the Company' or 'the Group'), the leading hybrid estate agency, issues the following trading update for the period 1 May 2017 to 28 September 2017 in advance of its AGM to be held at 10:00am today.

Strong progress has been made across the business since the start of the financial year on 1 May 2017. Trading in the UK and Australia remains on course to meet the full year guidance provided at the Final results in June: revenues of £80m for the UK and £12m for Australia. H1 revenues in the UK are likely to be more than double the same period last year and many times ahead in Australia, although they had only been trading two months in the comparable period. Local Property Experts have recently increased in the UK from 540 as at 29 June 2017 to 640 and from 77 to 100 in Australia.

On 15 September 2017 the Group launched into the $70bn US real estate market, commencing a region-by-region rollout in the city of Los Angeles. The launch date was ahead of plan and has gone smoothly.

Our US TV advertising campaign was aired under the banner of "Real misery, the misery you feel when you have paid too much in commission and got nothing more for your money". The initial response has been encouraging with the volume of website visits and valuations booked exceeding both the UK and Australia at the same period in their development. Furthermore, we received our first buy side mandate soon after our launch campaign went live.

We are extremely pleased with the quality of the Local Real Estate Experts (LREEs) who have already joined us and those that are in the process of applying to work with Purplebricks. Valuation appointments went live on 24 September 2017 as we always allow time for LREEs to build up appointments in their diaries in advance of them completing their intensive training programme. Local management and central teams are fully operational in California and New York, working alongside the LREEs to help and advise customers 24/7.

The Company is well funded with over £64.9m of cash and no debt as at 30 August.


The Company will report its Interim results for the six months ended 31 October 2017 on 13 December.

Commenting on the announcement, Michael Bruce, Group Chief Executive, said:

"Launching into the US market is an important and proud moment in the Company's three year history. The level of hard work, commitment and dedication from the team to achieve this, while continuing to deliver on UK and Australian expansion, is testament to the culture and breadth of talent within our business.

We will continue to invest in infrastructure and teams to support our rapid growth, while our focus will remain on providing an excellent customer experience. We are relentless at working to ensure we understand our customers' needs and meet their expectations and are proud of our 27,000 Trustpilot reviews and our NPS score of +80. Considerable progress has been made across the Group in the financial year to date and we are confident in our future and in meeting the Board's full year expectations."

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Notes to Editors

Purplebricks is the leading next generation estate agency in the UK and Australia, combining highly experienced and professional Local Property Experts and an innovative use of technology to help make the process of selling, buying or letting so much more convenient, transparent and cost effective. Purplebricks is transforming the way people perceive estate agents and estate agency. Building on its UK success, Purplebricks launched into Australia in August 2016 and the US in September 2017.

Unlike traditional agents, where customers only pay upon the sale of the property, which effectively means that those that do sell pay more in order to cover the costs of those that do not sell, Purplebricks believes it is more equitable that everyone should pay, charging a flat fee at instruction. This helps to avoid the industry issue of timewasters and those that are merely 'testing the water' and underpins the low, flat fee model.

Customers in the UK and Australia can choose to pay at instruction or defer, at no extra cost, to the earlier of ten months from the date of instruction or the date of sale. If a customer wishes to defer payment, they are required to use Purplebricks' conveyancing services for the sale.

Purplebricks charges £849 (inc. VAT) for a sale anywhere in the UK besides London and surrounding areas, where there is a charge of £1,199 (inc. VAT). There are additional charges if the customer wants Purplebricks to undertake the viewings on their behalf, if they require an energy performance certificate or a Rightmove premium display, amongst other services that are available.

The business model is low cost, flexible and cash generative, without the need for an expensive leased estate. LPEs are self-employed and receive a flat fee per instruction and can earn additional fees from the sale of ancillary services including, but not limited to, conveyancing, mortgage referrals and insurance.

Purplebricks listed on the Alternative Investment Market (AIM) in December 2015, raising £25m of growth capital before listing costs at 100p per share. In February 2017 Purplebricks raised an additional £50m (gross) through a share placing to fund US expansion.