4 May 2017 07:00
04 May 2017
Purplebricks Group plc
Full year trading update
Strong trading in spring market, good strategic progress
Purplebricks Group plc ('Purplebricks' or 'the Company'), the leading hybrid estate agency providing a new way to sell, buy or let property, today announces a trading update for the year ended 30 April 2017 ahead of reporting its final results on 29 June 2017.
Trading in the UK has been strong, with year-on-year instruction growth in the second half of the financial year up 83%. As a result the UK business is expected to record an adjusted EBITDA profit for the full year, building on the UK's £0.3m reported adjusted EBITDA in the first half.
Progress in Australia continues to be very encouraging with recent launches in Perth and Adelaide, adding to the existing states of New South Wales, Victoria and Queensland. With average revenue per listing exceeding A$5,000, Purplebricks estimates that Australian customers save an average of over A$12,000 in estate agents' fees when compared with a traditional commission structure.
The recruitment of high quality Local Property Experts (LPEs) remains a central element of the strategy. At the end of April there were 525 LPEs, of which 448 were in the UK (32 having just graduated at the end of April) and 77 in Australia, exceeding the target set in January 2016 of 360. Notwithstanding the rapid growth across the business, customer service levels have remained strong. In the last 12 months the number of Trustpilot reviews have risen from 5,000 to over 17,100, with the average score edging up from 9.4 to 9.5 out of 10.
With continued progress across the business the Company is on course to meet the board's full year expectations.
Commenting on the update, Michael Bruce, Group Chief Executive, said:
"This has been a year of great progress across the board. The UK business continues to go from strength-to-strength and the decision to increase marketing spend in the spring market has been successful. We have demonstrated that the business model works, with the first expected full year profit in the UK, while our early success in Australia highlights our ability to execute and the broad appeal of the Purplebricks customer proposition.
"US plans are progressing well, and our learnings from rolling out in the UK and Australia, coupled with the recent £50m fund raising position us well for a launch in the second half of 2017. We are confident in our future and excited about our global opportunity."
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Enquiries:
Purplebricks | +44 (0) 20 7457 2020 |
Michael Bruce | |
Zeus Capital (NOMAD) | +44 (0) 20 3829 5000 |
Nicholas How, Ben Robertson, Mike Cuthbert | |
Peel Hunt (Broker) | +44 (0) 20 7418 8900 |
Dan Webster, Adrian Trimmings George Sellar | |
Investec (Broker) | +44 (0) 20 7597 1234 |
Keith Anderson, Carlton Nelson | |
Instinctif Partners | +44 (0) 20 7457 2020 |
David Simonson, Mark Reed, George Yeomans |
Notes to Editors
Purplebricks is the leading next generation estate agency in the UK, 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 in February 2017 announced plans to enter the US market.
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 can chose 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 other than in 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 £25.0m 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.