Purplebricks this morning announced strong trading in the UK against a “tough backdrop”.
It said its “digital” competition had little impact and that its share of the non-traditional market is now 74% “despite greater investment by digital peers”.
Reporting its interim results for the six months to October 31 – the first half of its financial year – Purplebricks revealed operating profits of £3.2m against a loss of £0.3m in the same period last year, and said it sold and completed on £4.62bn of UK property. Its UK income was £39.9m in the period.
Purplebricks said it now expects its UK revenue for the full financial year to be £84m, ahead of its forecast of £80m.
While this morning’s results do not disclose UK instruction numbers, Purplebricks does say that monetisation per instruction is up 14%, to around £1,140.
The firm also announced that its number of Local Property Experts is now 650 and it will be recruiting more in the New Year, and that it now has 58 UK Local Letting Experts. It has new TV adverts about to air.
Purplebricks also flagged its upsell of Rightmove premium listings and argued that its brand awareness is better than Rightmove’s.
At group level, Purplebricks reported an operating loss of £8.2m, up from £2.8mm last year. It reported £6.3m of start-up losses in the US and £5.1m in Australia.
Overseas, its operations are now in the five states across Australia and Purplebricks said it has the third highest brand recognition.
It said its US operations are going well, with plans to launch into San Diego, Sacramento and Fresno next month.
Purplebricks said it had been a “bold decision” to enter the US market but said: “We are looking to modernise the US market as we have done successfully in the UK and are doing in Australia.”
Group CEO Michael Bruce said: “We have had a great first half, with strong trading, significant strategic progress and substantial operational upgrades.
“The UK business continues its rapid top line growth which is driving a strong increase in profits and margin expansion.
“We continue to win UK market share from traditional operators in what is a challenging market and consolidate our leading position with competing digital and hybrid offerings.”
City analyst William Packer of Exane BNP Paribas said that the results showed a “strong set of numbers”, especially in the UK, where Purplebricks is growing its market share versus both hybrid and traditional peers.
Another analyst, Anthony Codling of Jefferies, was more cynical, saying that Purplebricks had not revealed how many homes it had sold and was speaking “in riddles”.
He said: “No doubt investors will be expecting a rosy year ahead for Purplebricks.
“The operating statistics reported today look impressive, although despite the sparkle we still cannot see how many customers have actually been able to sell their homes after paying Purplebricks an average of £1,138 (ex VAT). Perhaps all will be revealed if we shine ultra violet light on the results statement.
“Once again Purplebricks continues to speak in riddles – saying it sold and completed £4.6bn of property with a further £3.8bn in the pipeline.
“However we cannot tell how many home sales that equates to.
“However, that is the one thing we think that potential customers should be asking: ‘If I pay you more than £1,000 what are the chances that you sell my home and how close will you get to the asking price?’.”