NEWSFLASH: Purplebricks upgrades its UK expectations as it agrees a sale every nine minutes

Purplebricks this morning announced UK revenues of £43.2m for the year to the end of April and an operating profit of £200,000.

Revenues were way over double achieved in the same period the previous year, which stood at £18.6m.

In Australia, Purplebricks had revenue of £3.5m but made an operating loss of £6.1m.

Altogether, Purplebricks lost £6m across both operations, which brought in £46.7m.

Average income per instruction in the UK stood at £1,035, and Purplebricks claimed it sold and completed on over £5.8bn worth of UK property, with a sale agreed every nine minutes, 24/7. It did not say how many properties it sold, but claimed its current conversion from instruction to sale is 83%.

This morning, City analyst Anthony Codling of Jefferies was sceptical.

He said: “Purplebricks is not, in our view, a shy and retiring company, until it comes to disclosing how many homes it sells.

“However, whilst we do not know the number of homes it has helped to sell, a key performance indicator in our mind,  we do know that it delivered losses of £6m in FY2017 against our estimate of a loss of £4m. We hope that at the results presentation we can coax the shy company to reveal the number of homes it has helped to sell.

“Marketing spend in FY16 was £12.9m rising to £18.2m in FY17 and it will start with a ‘2’ in FY18. The digital model may not have to fund a branch network, but it appears to us that the virtual high street is not as  cheap as one might imagine.”

Purplebricks chief executive Michael Bruce said: “This has been a very successful year in the early development of the Purplebricks model and brand.  

“We have materially grown our national footprint and have built a growing brand awareness and reputation for delivering customers a more convenient, transparent and cost effective service. In tandem with our growth we have invested in the business and strengthened the management team.

“This has allowed us to significantly grow our number of positive reviews on the independent review site Trustpilot (currently with over 20,000). We have retained our rating of excellent.

“Purplebricks is now in a strong position to become the no.1 estate agent in the UK for both listings and sales.  

“With the UK business now in profit it is encouraging to see Australia following a similar growth trajectory. Just eight months in and Purplebricks already operates in five key states, which represent 85% of all Australian property transactions. The launch of our Commisery campaign in Australia from May 2017 will further accelerate progress.

“All of this bodes well for the US, where plans to launch, first in California, in the second half of the calendar year are progressing at pace.”

Purplebricks also said it is confident about its prospects and of meeting the board’s “increased expectations”.

 

 

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105 Comments

  1. WOW139

    Easy to agree an offer when you do no work on quality of buyer or chain ………… you are NOT estate agents simply order takers of a cheap product still yet to make a profit even after all your bravado!

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    1. dave_d

      As an independent myself your comments do smack a bit of jealousy.. you can’t deny that they haven’t done extremely well.

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      1. PeeBee

        dave_d

        You are a complex animal!  Looking back over three years of posts it’s actually quite hard to work out exactly where your allegiances lie.

        We may not necessarily be able to “deny” that they’ve done extremely well – looking purely at figures as presented – but do you honesty, sincerely, applaud or admire the way they have achieved this?

        You’re gonna have to nail your colours to one mast or the other, Sir – that fence can’t be comfortable for the length of time you’ve been precariously sat on it using your ‘nads as balance…

        ;o)

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        1. dave_d

          I never realised anyone took any notice of my posts in the middle of this rabble.
          I don’t hold the same disdain for PB as a lot of people on here, perhaps I’m not long enough in the tooth only being 31 years of age or maybe its because lettings is far larger than sales for us.
          At the end of the day businesses have the ability to adapt to change and that is precisely what the industry has to do. I don’t applaud the way they have achieved what they have done but by the same token, if I had been the one who’d have created PB and had massive backing from more wealthy individuals then I would have done exactly the same thing. Wouldn’t you?
          Unfortunately some areas of the country will be harder hit than others particularly places like London predominantly where house prices and commissions are higher – maybe I would feel the same way if that were the case.
          Agents across the country have had two to three years to identify, adapt and proactively change their business models rather than be re-active – though unfortunate for most, no one believed it would actually happen and some still don’t. I’m pragmatic – “online” will continue to grow and the agents are don’t recognise it will cease trading. I made several changes to my business to ensure we remainded the market leader in our area even with the threat of online and cheaper fees.
          Not sure if this “nails my colours” guess i’ll have to continue to uncomfortably balance on this fence 😉
           
           

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          1. PeeBee

            “…if I had been the one who’d have created PB and had massive backing from more wealthy individuals then I would have done exactly the same thing. Wouldn’t you?”

            In a word – no.

            But then I would say that, wouldn’t i?

            The fact that it is completely and totally true is probably irrelevant – but those who know me would I sincerely hope and expect attest to it.

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  2. Chris Wood

    So, another loss then? Sale agreed or sale completed? So chance of selling for customers paying over £1,000 is…? Market sector growth has peaked, Purplebricks has just hoovered up a larger share of the sector in a shrinking market but needs to grow the sector to make any returns for investors and there are problems ahead for the company on a number of fronts.

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    1. Chris Wood

      I see the silent dislikers are up early this morning. Have you sorted your ICO and HMRC registration yet?

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      1. chriswoodstheturd92

        Chris, your focus on everything PB never fails to impress…
        Get a life. Or better still, concentrate on your home selling. 
        You’re a credit to estate agency, ha ha
         

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        1. AgentV

          chriswoodsthe****92

          I think you need to change your handle name….perhaps something that isn’t totally offensive would help!

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          1. chriswoodsthethird92

            Done. Momentary lapse. 

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        2. Chris Wood

          Imitation is the scincerest form of flattery.

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  3. Chrispy

    Easy to keep digging them out over service, conversion etc but it worries me how the public are now completely aware of them and the majority will consider using them. Simply put we need to up our game as they’re not going away any time soon 

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    1. AgencyInsider

      I am going to put a big star in my diary Chrispy – to remind me that this was the day when, for the very first time ever, I actually agreed 100% with something you posted. 🙂

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  4. IndAgent

    Agrees a sale every 9 mins and falls one through every 8.

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    1. Anonymous Coward

      Isn’t that the same for all estate agents.
      I’ve found that keeping sales together has been monumentally challenging:
      “What’s that you say Mr Buyer?   The property valued up, but you’re pulling out because you think it’s over-priced?”
      or
      “What’s that you say Mrs Vendor?   It’s Thursday you say… So you’re pulling out?”
      or
      “Yes Mr Vendor, they are going to be terribly upset that you can’t be bothered to keep looking any more. After all, it’s not as if your buyer and their buyer and the buyer’s buyer haven’t been waiting for 6 months for you to get act together now, is it…?”

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  5. grantlance

    That is a hell of a lot of revenue needed to make a very small profit, all during a period when properties have been selling themselves, you’re in for a rough ride when the market, as it appears to be doing, toughens up.  In perspective I know some single office independents that pull in those kind of profits.

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    1. dave_d

      I think you’re missing the point with this – their current expenditure will have massive marketing costs to increase revenue – as and when the public cotton onto the PB model they will reduce spend thus increasing their operating profit.

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  6. cyberduck46

    >However, whilst we do not know the number of homes it has helped to sell, a key performance indicator in our mind,  we do know that it delivered losses of £6m in FY2017 against our estimate of a loss of £4m. We hope that at the results presentation we can coax the shy company to reveal the number of homes it has helped to sell

     

    I would advise readers to take note of other analysts as well as Jefferies who always seem to be the only one with negative comments.

     

    I thought Jefferies had been using Robert May’s data so they could work this out. They said they were going to show us the figures for PurpleBricks and other major Estate Agents.

     

    You can’t really expect PurpleBricks to state a figure for completed sales when no other agent does.

     

    GetAgent wrote to me recently claiming the conversion percentage is 60%. My own data suggests 65%.

     

    My own data also suggests market share is increasing, contrary to what some observers are claiming.

     

     

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    1. PeeBee

      You’re late.  I almost thought I’d lost a £100 bet.

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      1. cyberduck46

        What bet? 🙂

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        1. PeeBee

          That you’d show up, of course.

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          1. cyberduck46

            Well now I need to know who lost the £100. It was a dead cert.

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            1. PeeBee

              There is no such thing as “a dead cert” in life – other than the end of that life itself, unfortunately for us all.

              No stakes will be collected or paid – so the detail is irrelevant.

              I note with interest that your property once again bolsters the numbers of “sales” that your Agent will no doubt make claim to have achieved in June (when the time comes around) – but the big question is whether it will beat that of May which is quoted in their City figures. 

              One every nine minutes – that’s a darned big claim, isn’t it?

              Fingers crossed that this one proceeds – I would certainly not wish upon you the mental torment of another fall-through and the potential knock-on effects that such an occurrence can and does bring on homeowners.

              But I suppose some see it as simply another convenient (part)statistic to add in a later month…

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              1. cyberduck46

                >One every nine minutes – that’s a darned big claim, isn’t it?
                 
                I don’t have much data for this type of queury and the data that I do have has not been verified.
                But for the last two and a half months I have a figure of a net increase of 3000 properties on the market that aren’t under offer.
                Again an approx. figure of 13500 new properties would have come onto the market making it about 10500 that will have come off the market to leave a net increase of 3000 in those two and a half months.
                That’s about 140 a day or 1 every 10 minutes (approx). Admittedly they won’t all be coming off the market because they’ve gone to sale agreed.
                On that basis it doesn’t look completely wide of the mark because we don’t know what period they are referring to when they say “Sale agreed in the UK every 9 minutes 24/7”.
                 
                 
                 
                 

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                1. PeeBee

                  “…because we don’t know what period they are referring to when they say “Sale agreed in the UK every 9 minutes 24/7”.

                  OHHHH YESSS WE DOOO…

                  From the ‘End of year results presentation on the PB website – whidh can be downloaded here: https://pbprodcms.azureedge.net/media/1874/purplebricks-end-of-year-results-final-without-videos.pdf

                  “Current monthly rate of sales agreed of

                  4979

                  May 2017″ 

                  Wonder why they used a month that wasn’t included in the financial year to which the presentation actually applies?

                  Don’t you find that somewhat unusual, Mr Investor?

                  Somewhat… “disingenious” perhaps?

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                  1. cyberduck46

                    >Don’t you find that somewhat unusual, Mr Investor?
                     
                     
                    It’s not unusual for a company to provide current trading statements in their annual report. Investors expect this.
                     
                    How experienced are you at reading Annual Reports? I get the feeling that for you and a few others the answer is “not very”. Usually it’s not as detailed but I’m sure investors appreciate the information.
                     
                    This is why you have to be careful when you do all those calculations that you and a couple of others are trying to do. You can’t assume everything relates to the reporting period which is a mistake repeatedly being made by those trying to make it look like the public and investors are being misled or there is some sort of conspiracy.
                     
                    I’ve just checked and this information was also provided with the final results so everything is OK. Nothing for you to get excited about PeeBee. 🙂
                     
                     

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                    1. PeeBee

                      In a word, Sir…

                      B0LL0CKS

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                    2. cyberduck46

                      PeeBee,
                       
                      I understand your dissapointment but things change.
                       
                      Credit where credit’s due though. 1 sale every 9 minutes is pretty impressive and it’s only going to increase as the number of LPE’s increase, the number of instructions follow suit and the number of Purplebricks’  properties on the market rises.
                       
                       

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                  2. PeeBee

                    “I understand your dissapointment…”

                    Sir… it is patently clear that you neither understand nor can have the ability to correctly spell what you apparently perceive as my disappointment.

                    IF you are affected by a recognised condition such as dyslexia then I apologise for making a point of highlighting what we who are unaffected simply (albeit erroniously) see as an error in haste to vent your ire; as pure laziness and lack of respect to correctly respond to someone who has expended time and effort to enter into conversation with you (even if the sum of that conversation is to point out you’re spouting B0LL0CKS); or something far worse.

                    I have to admit having already come to my own conclusion that it is actually just one (or more) of those three given reasons – but feel free to put forward an alternative if

                    a) it isn’t disingenious;

                    b) you want to try to make me feel ashamed (I won’t), or

                    c) otherwise weaken the thrust of my message (it won’t)

                    I would be extremely interested – whatever the result of the above offer – to hear from you the reason for my alleged dissapointment/disappointment.  Unfortunately (to me at least) there is no clue given as to its’ cause – so release this particular eejit from suspense and tell me – and whoever else gives a fuppenny – WHY AM I DISAPPOINTED?

                    or… do what you usually do and duck out of this particular duckshoot before you lose all of your feathers.

                    ‘cos from where I and others are sitting the horn has sounded for open season and you’re quacking around with a target drawn on your ‘nads.

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              2. StanLaurel35

                What about England losing on penalties to Germany? That’s a dead cert!

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                1. PeeBee

                  Okay – our unstoppable mortality AND England losing on penalties to Germany.

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    2. Robert May

      Using the numbers supplied in this article
      43,000,000/1034=  41779 instructions
      UK transaction average for the period £281,000
      5,800,000,000/ 281000= 20640 sales
      20640/41779= 49.4%
      57816   sale agreed per year to acheive less 20640 completions  means 37176 sales are aborted 1 sale falls through every 15 minutes 24//7
      41,779- 20640 is 21,139 vendors list but do not sell, spending  £21.86 m for the pleasure of seeing a listing on the internet and nothing more.
      From publicly available sources
      Countrywide  61,314
      LSL 27,029
      Foxtons 4026
      It is factually incorrect to claim other agents do not release their completion numbers
      20640/61314  Purplebricks sell 1/3rd of Countrywide
      Still no sign of the “HUGE profits“!
       
      P.S the name is Robert May not Richard.

      I guess it is fair to add that if the 83% kpi is correct 41779 instructions is 34,676 sales ( 56% of CW)

      5,800,000,000/34,676 is £167260 average price achieved. That is 59% of the transaction average for England and Wales.
       
       

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      1. cyberduck46

        Robert, apologies for using the wrong name. I have a problem with people’s names 🙂
         
        I’m not going to get into a discussion over data. I’ve got better things to do but you should really use the data from the company rather than snippets which are published by others. Also from memory it’s pretty impossible to even use the data provided by the company to come up with detailed calculations because you don’t know what time period the figures relate to.
         
        Of course you are in a position to give us comparible data but it’s still not publically available. I await that publication with interest to see how close my approximations are. That is provided it is presented in a similar way to mine which looks back at listings from over 10 months ago and checked against Rightmove data to see whether the sale was completed while listed with Purplebricks.
         
        I presume you agree that PurpleBricks’ market share is still increasing and not just at the expense of other online agents. I’m estimating 100% year on year market share growth (new instructions not properties on the market) based on my data.
         

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        1. Robert May

          That data is in the public domain, go and look at places like companies house or  individual company web sites.
          You started the discussion over data  with your troll about Richard May and Jefferies, you got the reaction you were after but possibly not the content. You gave me the excuse to unspin the publicity.
          I have used the numbers  dished out by Purplebrick PR and HMLR are you saying they are unreliable sources?
          If the time period isn’t the trading year what is it? Is this one of those lady’s shampoo surverys? 197 old ladies agreed so it must be a fact
          The numbers of listings is impressive but Purplebricks are not stealing enough instructions to disrupt the industry.  2 elections and a referendum are doing that.
          They are not winning enough instructions and are not making enough money from every property they list to be long term sustainable or to deliver the HUGE trading profits they predicted.
           

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          1. cyberduck46

            Robert, PurpleBricks do not need to disrupt the industry.
             
            To be a viable business they need to achieve a market share of about 7% and keep costs down. Then replicate the model in other countries. There are still big question marks over whether they can achieve this but they are on track with the results that are being discussed today.
             
            I suggest you search for a report from analysts Hardman & Co. who have a model in place for predicting profits based on market share growth to 7% and then on to 10% which they say will be far harder to achieve. instead of harping back to anything you may have read somewhere or other look at what has been achieved. Even if the huge profits you talk about were estimates by the company they would have been accompanied by risk statements and these kinds of statements need to be reviewed frequently. No analyst would look back to old predictions.
             
            The key to the model is scaling (growth of income exceeding growth in costs). If you look at the report from Hardman, PurpleBricks have pretty much met their 2017 estimates of 41000 instructions for the UK and bettered the estimates for Australia. For 2018 they have an estimate of 57000 instructions and then for 2019 77000 instructions. These estimates map onto losses of £5.5M for 2017 (very close to what was achieved) and profit before tax of £7.2M (2018) and £26.2M (2019). So you see a 35% increase in turnover would translate to a 200% plus increase in profit for 2019.
             
            This analysis was prior to the announcement to expand into the USA later this year which will clearly make a big difference to estimates but the basis of it all is the UK which as I say is in line with estimates (so far) but is clearly not guaranteed to happen. Market share growth continues but will there be a response from the industry to halt it?  If so would that be classed as disruptive?
             
            Who is to say that a greater than 10% market share is not achievable? If the current rate of growth is maintained then it would not be unreasonable to assume 6% market share for new instructions 12 months from now.
             
             

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      2. AgentV

        20640 sales with a revenue of £43,000,000 means PB would have to charge  £2,083 per property on a ‘no sale no fee’ basis.

        Thats more than our average fee for a complete full service start to finish….with all viewings accompanied, full negotiation services and chasing through to completion.  

        Wonder who then has the more efficient model? 

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      3. Chris Wood

        Mr Bruce is working off an average selling price of £240,000 “Mr Bruce, who added that the average selling price is £240,000.”
        http://www.telegraph.co.uk/business/2017/06/29/purplebricks-reports-soaring-revenues-prepares-break-america/

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    3. AgentV

      Let’s face it………if PB online listing service for one nano second thought disclosing the number of properties they actually sell would help their publicity…they would disclose the numbers. 

      By not disclosing the numbers they are continuing the same misleading web of deceit, just the same as creating adverts leading the public to believe they can sell their property for free, removing adverse reviews from no-trust Pilot and claiming they are real estate agents. 

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  7. PeeBee

    SO…

    A sale EVERY nine minutes, 24 hours a day.  That’s what they have said. To the City.

    Can’t just be ONE day – has to have been measured over a minimum period of time – not that we will ever know what that period of time is, of course.

    BUT… that equates to 58,400 “sales” per annum; 4867 per month… 1123 per week – 160 E V E R Y day.

    Or… put another way, somewhere round 7% of the entire UK annual sum total of property sales, according to LandReg figures.

    All that on 41,739 listings.

    Bl00dy clever, them PurplePeople…

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    1. Shaun77

      No doubt they’re referring to gross sales and given their relaxed approach to offer qualification and sales progression (seeing as they’ve already been paid) I imagine they often rack up several “sales” on the same property, so using “sales agreed” as a metric is pretty pointless.
      It’s only value is as a statement designed to impress the city and pull the wool over the eyes of the unsuspecting public.

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      1. PeeBee

        “I imagine they often rack up several “sales” on the same property…”

        Ask cyberduck46 for comment on that – they’ve racked up two on his already!

        My guess is he’ll just state that as a result he’s twice as happy with PB as he would have been with a High-Street Agent…

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      2. cyberduck46

        Yesterday PurpleBricks had 14413 properties on the market. Today 14435. In the last 24 hours a further 200 (approx) new instructions have been listed. This means 178 have gone off the market. So one sold every 9 minutes seems about right.

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        1. PeeBee

          “Yesterday PurpleBricks had 14413 properties on the market. Today 14435…”

          ACTUALLY, as at 0746am yesterday, Purplebricks had 29505 TOTAL listings whereas at 0748am this morning  they had 29509 – an increase of FOUR properties.

          “In the last 24 hours a further 200 (approx) new instructions have been listed.”

          The Zoopla figure of properties added in the last 24 hours (again, at 0748am) was 288.

          “This means 178 have gone off the market.”

          This means your maths is out.  WAAAAY out.

          Or someone else’s is – and that someone sure ain’t me.

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          1. cyberduck46

            I’m using Zoopla numbers excluding SSTC. I don’t know any way of getting a quick number from Rightmove.
             
            The number needs to be excluding SSTC.

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            1. PeeBee

              “The number needs to be excluding SSTC.”
              WHY?

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              1. cyberduck46

                Why does the number you look at have to be excluding SSTC?
                 
                Because PurpleBrick’s figure is the number of properties that transition from not being SSTC to being SSTC. It is this number that you are saying is a ‘big claim’.
                 
                You know by now that when PurpleBricks use the term “Sale Agreed” they refer to SSTC. Their statement was “Sale agreed in the UK every 9 minutes 24/7”
                 
                So you need to exclude SSTC and you pretty much come up with what PurpleBricks are claiming.
                 
                PeeBee I know you’re not stupid so this is the end of the discussion. I’m not going back over old ground arguing about what ‘Sale Agreed’ means. It’s all been said before 🙂
                 
                 

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  8. StanLaurel35

    I see they mention Trustpilot but no mention of allagents reviews   https://www.allagents.co.uk/purplebricks/

     

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  9. PepeM

    With a stated 72% and growing of the “online”market, the good news is that they are gradually killing the rest of that sector. If they reach 80% suspect there may be very little room for very few, if any businesses to exist in that sector with any meaningful profit. But it will leave a huge chunk of the market for strong, dynamic, full service high street agents.

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  10. Robert May

    These numbers are contradictory!

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  11. benbird

    Lol £200k operating profit!

     

    confirmation they are more or less an not for profit organisation!

     

    what a publicity disaster for them!

     

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    1. Robert May

        so  £200k return on £1billion invested, Wooooowzer 0.02%.  Waiter! another tap water and don’t spare the ice!

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      1. observer

        £1bn invested…
        Where does that come from?
        Just when I think you know what you are talking about, you come out with a gem like that!

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        1. Robert May

          Are you saying investors haven’t purchased £1billion of Purplebrick stock  with the hope of a share of the HUGE trading profits or 10% of all transactions they were promised?
          Perhaps it is the deviation from the prospectus that accounts for the failure to deliver a meaningful profit. Where the intention  was to employ profesional local experts it seems the recruitment process is now down to  “full training provided” Hardly  the experienced  local experts the prospectus promoted!
          Please don’t think I know what I am talking about, I just make it up; repeatedly with confidence, convction and consistency.

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          1. observer

            You are buying stock from somebody else, that isn’t investment into the company. That is a purchase of a commodity – in this case a share. Just a piece of paper that can be traded.
            When the stock was first released back in December 15, that was an investment because you were purchasing things that had not existed previously. Same when they further diluted to raise funds for the US expansion. Now though the market capitalisation is simply a valuation on the company, its assets and of course growth potential. Buying these shares is now simply trading. That trading has led to a valuation of £1bn.
            Are you saying that Google have had £650bn in investment?

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            1. Robert May

              Did I post the £1billion had been invested into the company

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              1. observer

                I think by referencing an ROI of 0.02% you did exactly that.

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          2. cyberduck46

            >Please don’t think I know what I am talking about, I just make it up; repeatedly with confidence, convction and consistency.
             
            Well not really Robert. Look back to the article from November 2016 “PurpleBricks to be in profit within months , promises its boss” and your comment was “Has anyone  got past the ridicule stage yet?”
             
            See http://www.propertyindustryeye.com/purplebricks-to-be-in-profit-within-months-says-its-boss/

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  12. Hillofwad71

    Almost a third of their revenue on marketing and planning to increase to maintain momentum !

    It seems they still set great store by their  Trustpilot rating when the public  are now aware this is easily manipulated as neg. reviews are removed

    The recruitment rollout means there will be certain territories which are “sublet” by the master   local expert where the bottom feeder on the lowest rung will be desperate for instructions to make a living. This is where  problems start creeping in methinks

    A bit like Amway

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  13. Beam Splitter

    A SALE EVERY FIVE SECONDS!!!!111!! A profit every quarter would be a start PB…

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  14. Thomas Flowers

    What a disaster!

    When I was interviewed for a manager’s position with a large corporate over 30 years ago the area manager said to me what is your main target?

    I said to complete on as many properties as I can?

    He said that is the wrong answer, it is to make as much profit as you can.

    Let us put PB’s huge effort to achieve a £200,000 profit into perspective.

    If Savills or Knight Frank sold just one property for £43.2 million times say 1% commission they would charge £422,000 in commission.

    I feel sure that they would make more than a £200,000 profit from that single transaction pro rata?

    Or put another way could that be less than £10 profit per completion?

    Sorry, I forgot, PB does not need to complete a transaction to get paid the same amount, do they?

    Oh, the misery continues for those many unsuccessful clients who may even end up paying two agency fees?

     

     

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    1. Hillofwad71

      What he should have said is always put the client first and the money will follow

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    2. cyberduck46

      >Oh, the misery continues for those many unsuccessful clients who may even end up paying two agency fees?
       
      Not necessarily 🙂
       
      As a PurpleBricks customer I received a letter from GetAgent stating “Sell your property through an Estate Agent that we recommend to you and we’ll send you a cheque for the fee you paid to Purplebricks”
       
      I had an even better offer from a local agent offering to sell for 0.75% commission. It wasn’t clear whether this included VAT or not but they were originally quoting 1.5% + VAT.

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      1. AgentV

        However all the time you remain unsold in a good market means that you are damaging your final sale result, probably reducing it by thousands. How long have you been on the market with PB for now?

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      2. Garret2

        Hi cyberduck46,

        It does seem you’ve been on the market with PB for sometime.
         
        How long has it been?
         
        If you let us know your postcode and price range we’ll be happy to let you know if it’s outside of the timeframe to be expected.
         
        You don’t want that property “going stale” – buyers looking on portals are “judging books by their covers” and they tend to get spooked when they see an old publishing date.

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        1. Chris Wood

          PeeBee has it 😉 

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        2. cyberduck46

          AgentV, Garret2,
           
          Thanks for your concern. 
           
          I am aware of the drawbacks of properties being on the market and deals falling through but it’s not unusual for properties close by to be on the market for quite a while.
           
          Also,we aren’t desperate to sell and have struggled to find somewhere we like so we can afford to be patient. We are looking to downsize so a rising market is in our favour.
           
           
           

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          1. PeeBee

            “We are looking to downsize so a rising market is in our favour.”

            NO IT’S NOT, you blithering eejit!

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            1. cyberduck46

              Of course it is.
               
              If you have a £600,000 property and you are downsizing then if the market rises then the property becomes more attractive.
               
              The advice came from Robert May. Let the market come to you is what he said if I recall correctly.

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              1. PeeBee

                You grasp ONE piece of the jigsaw out of the box and straightaway you’re convinced you’ve assembled it correctly.

                It’s people with your attitude and mentality toward the complexities of the property market and REAL Estate Agency that NSPR Agents were ‘hatched’ to ‘cater’ for – and quite frankly they are welcome to your like.

                If you want to be enlightened as to why you are so wrong, on so many levels, have a read of what Shaun77 has so eloquently posted below. *

                Trust me – there isn’t a ‘disingeneous’ syllable in the post – but I’m in no doubt whatsoever that it’s completely wasted on you.

                And your “young… bright and ambitious” PB ‘Expert’ won’t comprehend even the first line of it. 

                Doesn’t need to – he’s no doubt already spent his earnings paid to list your property all those months ago…

                Oh – and Robert was right.  The market will eventually come to you.  Just watch – without envy and regret if it’s possible – what it does to the price of other properties as it’s slowly creeping towards you…

                 

                *UPDATE*

                Ah – I see that you have in fact read Shaun77’s excellent post – and duly validated my prediction that it was, sadly, 100% wasted effort on his behalf.

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          2. Shaun77

            With respect, your timeframe has absolutely nothing to do with the value of your property. When a prospective buyer sees you’ve been on for months they reach the very logical conclusion that nobody wants to buy your house, so why should they? 
            They will not for second think “oh, I’m sure it’s alright love. I just suspect the seller isn’t in a hurry…”
            When on holiday and trying to decide which restaurant to eat in, do you favour the empty one over the busy one on the basis that the owner probably isn’t in a rush to sell food?
            Typically every month on the market will erode about 1% from your true value, so you are literally allowing money to slip through your fingers and puts into context the 1.5% commission a good agent will charge you to sell your property in such a way that will maximise the value, not dimish it.
            You also say that you’re not that fussed because you haven’t seen anything you like yet. This doesn’t surprise me because agents simply won’t be contacting you about prospective properties because you’re not in a position to buy. Dont assume that all available properties are advertised online as its simply not the case. Very often the portals are just displaying a carousel of unsold property.
            Even if you do stumble across your dream home, you wont be able to have an offer accepted because you don’t have a buyer for your property. So once again, your suffering for your agents inability to get the job done.
            And even if you do find a buyer and then find somewhere to buy, you need to hope that you’re not competing with other buyers. If you are, it’s unlikely the selling agent will recommend running with a buyer selling through an online agent as they will know there’s no focus on sales progression (through lack of jeopardy) so a higher likelihood of it falling through.
            Finally, you talk about being in a rising market so sitting on the market is no bad thing. Well, a rising market benefits new to the market stock, not stock that remains unsold. However, it’s clear the market is turning and the growth we’ve seen over the last few years has come to an end.
            If you genuinely want to move, I would strongly recommend re-launching with a proper agent, not one scrabbling around for 0.75% because they’re desperate.
             

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            1. cyberduck46

              Thanks Shaun77,
               
              I appreciate your advice.
               
              FYI, the property is actually under offer at a price that local agents recommended I list at.
               
              That’s not that I disagree with what you are saying but it’s not what I have seen with my particular property which I listed high and reduced relatively quickly. When the sale fell through there was actually a spurt of interest and the offer came from the viewings.
               
              In regards to choosing an agent, if it did actually come to that, how do you know as a member of the public which one to go for? I have had dealings with local agents and do keep an eye on properties on the market and I certainly don’t get an impression that there’s an agent who stands out.

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              1. Garret2

                Hi cyberduck46,
                 
                Out of interest, what date did these local estate agents give you the recommended list price you’re currently under offer at?
                 
                 

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                1. PeeBee

                  Please, Miss… Miss…

                  … I know this one!

                  Report
  15. Industry_Pro

    Please Note:
    The PB full year report states that expected UK revenues for 2017 current year will be £80m (£43.2m 2016). With a gross margin of 56% that equates to £44.8m GP before marketing costs, with an assumed marketing spend of £20m for 2017 (£14.4m 2016) that’s say £24.8m profit post marketing. Assumed OPEX of say £12m (£9.6m 2016)) equating to a bottom line of around £12.8m.

    The key number here is the expected increase in revenue from £43.2 to £80m which equates to an additional 35,500 listings taken from the market at their stated £1,035 per listing, that’s circa 700 additional listings per week across the board.

    That’s 35,500 listings lost from the market at a cost of say £62m in fees to the existing agency community at a time when listings, sales and profits are falling. (=35,500 x 60% contracted x £2,900 fee before someone asks).

    Do not focus on what PB are making/losing, focus on what your EA operation is losing from the market and will continue to lose going forward particularly if the PB upward UK trend continues at the current pace.
     
    Adapt, innovate and compete to stay alive.

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    1. Chris Wood

      In a market segment (call-centre) which appears to have peaked around a year ago and a general market where instruction volumes appear to be dropping, a revenue target of £80M is ‘ambitious’.

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  16. Keyser Söze

    Question for Robert.

    From your clean data, approximately how many new properties do you believe PB are bringing to the market each month?

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    1. Robert May

      They’ve told us ( £43.2m/ £1034) /12 = 3481
      3481/448 reps is 7.8/month per rep, so about £1560 per rep per month wages. Not  great as a living wage but not bad for about  3.5 hours work a week  (1.8 listings 2 hours a pop)

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      1. Keyser Söze

        They currently have 588 LPEs looking at their website which works out at 5.9/month.
        Which works out at £1180/month.
        Does the 3481 match up with your figures?

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        1. cyberduck46

          Keyser,
           
          From the company itself…
           
          April 2016 : 2827
          April 2017 : 5497
           
          My own estimate for April 2017 was 5486.
           
          My estimates for May and June (so far) are 5932 and 5480.
           
          If you look back at Robert’s estimates back in November 2016 you will see he was well off the mark when he stated “If there were an actual numbers sweepstake  for listings I would be quite keen to bagsy a number between 28,000 and 31,000  for the year, giving a turnover of  about £29.8m and £33.48m”
           
          UK revenue was in fact £43.2M.
           
           

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          1. Keyser Söze

            How have you worked out your estimate?
            From what I can see it is more around the 3,500 to 4,000 number.

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            1. cyberduck46

              >From what I can see it is more around the 3,500 to 4,000 number.
               
              3,500 is an approximate monthly average but from February onwards (since I’ve been monitoring their performance) it’s been a lot more than that. They ended the previous financial year with 2827 and this came from the company themselves. Instruction growth over a 12 month period is pretty close to 100%. I’m pretty sure it  was 19000 in the 2016 financial year. 
               
              I won’t divulge how I estimate the number of instructions but unlike other posters on here I’ve been pretty accurate in my profit estimates which I made before the financial year end (or just after but before the trading update in early May). They’re on one of the threads on this site somewhere. 
               

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              1. Keyser Söze

                Home is a good way of checking. This is what it shows for PB for available properties.
                 
                Less than 1 month 4,031
                Between 1 and 2 months 2,678
                Between 2 and 3 months 2,041
                Months 1 to 3 will be lower as properties will have been sold or removed from the market. But at a guess 3,000-3,500 would be a good estimate.
                If you are counting using RM or Z you will be counting properties that have been reduced in price. That’s why you have an inflated figure.

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                1. cyberduck46

                  I’m not including properties that have been reduced in price and my figures tally with what PB have stated and have shown in their turnover figures and trading updates. Nor do they include properties that have come back on the market after either a marketing break or a sale that has fallen through.

                  I’ve used different methods to verify my figures and have cross checked every time information has been released by the company as well as other historical information I have come across when researching. I’ve been investing for over 30 years and I’m convinced my figures are a good approximation.

                  The financial year was up to the end of April 2017. The revenue for the UK was £43.2M and the average income per instruction £1035. 

                  Whilst the accounts are not yet audited it would be a serious crime by the Directors to mistate any of the fundamentals that are included in the actual financial reporting by the company. They would easily be picked up by the auditor. Their last accounts were audited and there were no revisions from the unaudited accounts. 

                  Other statements from the company confirm that the best time of year for them is January to April and their statement in May confirmed a successful spring market as well as 83% instruction growth in the second half of the year compared to the previous year.

                  There was another statement claiming a record January.

                  Then there was the half year report for the period to the end of October 2016 where instructions increased by 108% on the same period compared to the previous year. Revenue was £18.3M and the average revenue per customer £1000. So the first 6 months produced approx. 18300 instructions.

                  They also state in the half year report published in December 2016:
                  “There is always a seasonal slowdown towards the end of each year leading into the busiest period which is the spring market. Current trading is showing similar yearonyear instruction growth with no material slowdown from Brexit.”. So close to 108% growth after the financial year end too.

                  Even the “sale agreed every 9 minutes” claim is supported by my figures if you see earlier in the thread.

                  Then there’s the growth in the number of LPE’s which can be validated by looking at the PurpleBricks website like I have been doing. As of today the number is 584. This growth rate just wouldn’t be happening if there were only 3000 to 3500 instructions per month, effectively the same as the audited figures from May to October 2016. 

                  I’d be very dubious about the figures you are getting from Home. If you know PurpleBricks’ business then they could not be reconciled with any of the other information that is available.
                   

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      2. cyberduck46

         
         Ah Robert, see what you’ve done there.
         
        First of all you avoided the question.
         
        Then misled. £1034 was the average for the year whereas 448 was the number of LPE’s at the end of the financial year. There were 320 at the start of the year.
         
        Also, it’s not clear how the £1034 was calculated. This might just be the total revenue divided by the number of instructions. Revenue may have come from other sources like data sales.
         
        Also, don’t forget about the share options. I’m sure LPE’s are very happy about the share price performance.
         
        This is the problem with just plucking numbers and jumping to conclusions.
         

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  17. JackParker01

    Why do they still try to drive the Trustpilot reviews? Its well publicised that all their positive responses are ‘one hit wonders’ and their few negatives are from subscribers that have used multiple times over alternate products/services… Any company can put £50-£100 on People Per Hour and have somebody in India drip feed positive results into a review system. Word of mouth is the true sigh of a company, and I’ve barely heard anything about PB in passing comments.

    It’s a shame the general public are so naive to this still, but what can we do…

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  18. Industry_Pro

    A glimpse into the future (perhaps):

    There are currently 448 LPE’s (and that’s just PB) that’s nearly one per major property centre; of which there are around 550 or so within the UK. The next phase of the hybrid model expansion will be two LPE’s per town and then possibly three as consumer demand for their product and volumes increase.

    It is during this expansion that the hybrid operators WILL introduce more expertise and a better quality of service – all at a lower price point, where ever that price point happens to be. For sure it will increase over time as they gain market share at your expense.

    As the market pendulum swings the fees charged by the hybrid operators will rise until a fee equilibrium is reached. Simple supply & demand economics.

    As a result more experienced listers will be drawn to the PB type model and their gain is your loss. As the momentum gathers the rate of transition and change will quicken.

    Today’s employed listers will have been empowered and encouraged to take the leap of faith and set up their own mini enterprises under the banners of national and perhaps regional hybrid brands.

    Possibly, one day the majority of experienced listing agents and quality fee earners will be running their own lower cost front facing businesses for the likes of PB and others, possibly for companies not yet created.

    Don’t watch and wait for this to happen at the expense and possible survival of your own traditional high cost and rigid business, adapt your business model, innovate within your operation, and review your revenue and more importantly your cost base. Perhaps even collaborate with your competitors to share and dilute costs, now there’s a thought.

    Consider this; in a typically large town with say 60 estate agents; for the occurrence of every contracted sale there are 60 premises costs (that’s £1.8m alone), 60 telephone bills, 60 portal costs (£650K), 60 car fleet costs – you get the idea…..
     
    Address and challenge the growing threat head on and do it today.

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    1. Chris Wood

      All agents must adapt to new market conditions, opportunities, competition and ways of working that is and has always been the way of the business world. The problem the current market and law-abiding agents has and have is that the market is not being policed. Laws are being ignored and company press-releases are treated, published and regugitated as inalienable facts with seemingly no cross-checking (what happened to the stated 88% listing to completion ratio that Mr Bruce made on MoneyBox?)

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  19. PropertyWebmasters

    So, which review website is true and accurate? It seems strange that TrustPilot reviews are so positive: https://uk.trustpilot.com/review/purplebricks.com (and they seem to get a new review every few minutes? Are people really super keen to write a positive review of PB?) yet direct reviews of PB Local Property Experts are so negative? https://www.allagents.co.uk/purplebricks/

    Something fishy going on here!

    Note; we are not an estate agency, but we work with many estate agencies worldwide and we truly understand the hard work that goes into a property sale/rental.

    The PB model is incredibly fragile in our opinion, not sure why Rightmove and Zoopla are accommodating them, every high street agency could offer this service if they wanted to and the portals could surely drop them at a moments notice, and support the agents that have lined their pockets for the past 15+ years.

    We feel that PB can only work in big cities where properties are in high demand, where an agent does not have to push hard to find buyers, and investors are rife. In small towns like Hartlepool where we are based, we are yet to hear a positive result. There have been a few SSTC’s but nothing ever seems to go through as an actual sale, the sale falls through at the last minute, which is strange in itself.

    No bitterness from our end, something just isn’t adding up with PB.

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  20. Industry_Pro

    Hi Chris & All
    “In a market segment (call-centre) which appears to have peaked around a year ago and a general market where instruction volumes appear to be dropping, a revenue target of £80M is ‘ambitious”

    Agreed £80m is very ambitious, it was taken from their official market report.

    But what if it is achieved in a diminishing listings market? What does that say about the consumer, their preferences and the future trends within our industry?

    Consumers have also been empowered in every market and it’s just that now is the turn of agency. It had to happen eventually.
     
    Don’t become a Nokia, a Hoover or a Blockbuster type casualty.

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    1. AgentV

      Industry_Pro
                              You seem very passionate about this. What are you suggesting? Are you an agent? 

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      1. Industry_Pro

         
        Yes, as above, & yes; 30 years within the industry where significant change is upon us.

        And no, I do not work for PB.

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        1. AgentV

          Your just the kind of person we would love to join us in developing new products to do exactly what you say. Can you email me at in@agentv.co.uk so we can make contact. 

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    2. Chris Wood

      “What if”?
      ‘If’ being the key word.
      Purplebricks promised investors a return this financial year. They haven’t delivered (again) and pre-tax losses have increased from -5.4 -11.9 (I would direct you to an earlier post and links but that has been removed as I’m clearly on the naughty step again following PBs’ lovely legal team being in touch again, I’m presuming)

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  21. Industry_Pro

    …….Property Webmasters

    “The PB model is incredibly fragile in our opinion, not sure why Rightmove and Zoopla are accommodating them, every high street agency could offer this service if they wanted to and the portals could surely drop them at a moment’s notice”

    Why are you surprised that RM & Zoopla are accommodating them? Within the portal charging model every 37 live listings constitutes a branch and therefore extra revenue for the portal. You would be a brave Director to say ‘No’ to that source of revenue.

    Quite simply this hybrid company has achieved what almost every estate agency company has not – ‘economies of scale, a lean and scaleable operating model and marketing clout’.
     
    We may not like their methods, we might scoff at their knowledge base and deride the quality of service provided, but the consumers apparently do like what they do and that’s what counts.

    And as stated previously the knowledge of their LPE’s will increase, the service will improve, the prices will rise; all of which will attract even more customers.

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  22. PropertyWebmasters

    Thanks Industry_Pro

    We agree, the whole market needed this shake up, and it is welcome… Agencies are starting to do something about it, which is good for us as a marketing company for agencies.

    We do feel that this would be very short sighted of RM and Zoopla if they are simply looking to make short term money from PB. If PB grows and grows, they would have less and less requirement to advertise with the major portals, they would themselves be a property portal. This cannot be far from PB’s thoughts.

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    1. Industry_Pro

      Property Webmasters – I agree with the general direction of your thinking.

      My view is that the whole market will eventually evolve from being a highly fragmented group of high cost low volume models to a slightly less fragmented group of lower cost and more efficient models with a number of large players among their ranks.

      The overall winners from this evolution will be;

      a) Certainly the consumer in terms of price and value

      b) Most of those businesses that recognise that significant change is afoot and do something about it now, and

      c) Definitely those individuals who make the transition from experienced employee to entrepreneur, who were previously deterred from setting up on their own due to the relatively high cost of entry. The low cost hybrid model has very much unlocked this potential – perhaps an unintended consequence of the new proposition.

      The losers will be those firms and sole traders who refuse to acknowledge that change is happening and remain frozen in the headlights.
       
      The overall number of players within the market might reduce slightly, say -20% and no more so than within the normal high’s and low’s of the property price/volume cycle and therefore the market dominance of RM & Zoopla will probably continue unless a third challenger/disruptor enters the fray, discounting ‘OnTheMarket’ who blew the opportunity from day one.

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      1. AgentV

        Industry_Pro

        It would be good to talk.

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  23. gk1uk2001

    “This has allowed us to significantly grow our number of positive reviews on the independent review site Trustpilot (currently with over 20,000). We have retained our rating of excellent.”

     

    Kind of helps that you systematically have any reviews that are 1-3 stars and ‘not verified’ removed from trustpilot though, doesn’t it, whilst allowing any that are 4 or 5 stars but ‘not verified’ to remain……………….

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  24. Simon Bradbury

    There’s absolutely nothing wrong with Purplebricks  – particularly in respect of their knowledge regarding estate agency legislation!

    Check out the response from their “Customer Support” team in response to a Trust Pilot review a few minutes ago.

    Anyone spot the error?

    “Thank you for taking the time to share your experience with others and for discussing your review with me in further detail over the telephone. We pride ourselves on delivering an honest and transparent service and I am extremely disappointed to learn about your findings. As discussed, it is important that any adverts produced by Purplebricks are an accurate representation of the property, and comply with the Property Misdescriptions Act. I have escalated your review to the Regional Director for Wales, who will investigate the matter in further detail, and will take the appropriate action to ensure any errors detailed on the advert, are rectified immediately. Once again, we really appreciate you bringing this matter to our attention and I do sincerely hope you will reconsider your decision to view properties with Purplebricks again. Kind regards, Customer Support “

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    1. Beam Splitter

      Wait, Purplebricks have invented time travel? So that’s why their profits are non existent, it’s all going on marketing and theoretical physics. Get that Customer Support Agent back to 1991! 

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    2. agent orange

      ive spotted the error!
      ” We pride ourselves on delivering an honest and transparent service”

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  25. PaulC

    The Trust Pilot Reviews are gained straight after the advert goes live..

     

    Customers can’t be bothered to update.

     

    One of our team use to be on the team that chase for reviews.

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  26. KByfield04

    As all agents know- an offer is not a sale. If this figure was an impressive one, why would PB continue to refuse to disclose this figure. Genuine performance can only be evaluated once this figure is known to assess how many they have ‘saved’ fees for and how many people have paid for nothing.

    What is more- can we pleeeease have their final figure NOT their EBITDA one? On £40m+ of revenue I imagine this is going to sting- a lot!

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  27. PeeBee

    What’s the bets that the wifey at Settled breather one chuffing mahoosive sigh of relief when this article took the EYE off their billshutfest…

    …but it’s certainly not forgotten!

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  28. PeeBee

    “Yesterday PurpleBricks had 14413 properties on the market. Today 14435. In the last 24 hours a further 200 (approx) new instructions have been listed. This means 178 have gone off the market. So one sold every 9 minutes seems about right.” (Credit: cyberduck46, 30 June)

    TODAY, PurpleBricks have 15069 properties listed on Zoopla.  Yesterday the figure was 15049. In the intervening time, some 61 (approx) listings were added.  This means 41 have “gone off the market” according to cyberduck46’s methodology. So – using the same methodology they have slipped back dramatically and now have the worst statistic of any they have previously released (9, 16, and 30 minutes) of one “sale” every 35 minutes.

    I’ll give him the last sentence – THAT seems about right.

    Wonder if they’ll be amending their latest City Update accordingly with the latest figure?

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