30 Mar 2020 07:00
The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
Purplebricks Group plc
("Purplebricks", the "Company")
COVID-19 Update
Purplebricks Group plc (AIM:PURP), the UK's leading hybrid estate agency, provides the following update regarding current trading and the potential impact of COVID-19 and Government guidance on the UK housing market.
Trading Environment
In light of the changing environment, the Company's first priority has been the health and safety of its people and customers, and Purplebricks has been adapting to this by capitalising on its strong digital capabilities. This includes moving the entire business to working from home and adopting a complete online model encapsulating video valuations, virtual viewings and connecting customers with potential purchasers via the Purplebricks online platform. Customers are also still able to list properties, providing their own photography and property details.
However, since the Government's restrictions on movement were implemented, the Company has seen a weakening in vendor and purchaser activity. Purplebricks also notes the Government's announcement regarding the housing market on Thursday evening which it is evaluating and anticipates it will have a further negative impact on instruction and completion volumes.
Mitigation Measures
Given the market uncertainty, the Company has taken immediate and significant measures to preserve cash and implement a lean operating model through this period. Purplebricks has undertaken a cost base assessment and has instituted a number of cost-saving measures, including reducing supplier costs and overheads. All TV and radio advertising has been suspended and online marketing costs have significantly reduced. The Company also be using the Government's COVID-19 Job Retention Scheme and are currently assessing how to implement.
The Company currently retains c.£35 million of cash on its balance sheet and has no debt. Following these stringent cost cutting measures there will be a materially reduced level of cash burn if revenue is significantly reduced over a sustained period of time.
Outlook
The COVID-19 situation continues to evolve and is likely to remain uncertain for some time. However, given the recent impacts Purplebricks now expects revenues to be below expectations for the full year to April 2020. It is too early to predict the impact on The Company financial performance for the 2021 financial year until the impact of COVID-19 on the housing market becomes clearer.
Nevertheless, the Company believes its flexible, digitally-led operating model leaves Purplebricks positioned for long-term success.
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Purplebricks | +44 (0)20 7466 5000 |
Vic Darvey, CEO |
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James Davies, CFO |
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Zeus Capital (NOMAD) | daniel.harris@zeuscapital.co.uk |
Nick Cowles, Daniel Harris |
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Citi | +44 (0) 207 986 4000 |
Stuart Field, Robert Farrington |
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Peel Hunt | +44 (0)20 7418 8900 |
Dan Webster, George Sellar |
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Buchanan | +44 (0)20 7466 5000 |
David Rydell, Jamie Hooper, Kim van Beeck |
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About Purplebricks
Purplebricks is a leading estate agency business. Based in the UK, it also operates in Canada and is invested in Homeday.de in Germany. Purplebricks combines highly experienced and professional Local Property Experts and innovative technology to help make the process of selling, buying or letting more convenient, transparent and cost effective. Purplebricks shares are traded on the London Stock Exchange AIM market.