Purplebricks has ‘more significant growth’ to come, says biggest investor Woodford

Purplebricks helped contribute to fund supremo Neil Woodford’s “fortnight from hell,” it has been claimed, as several of the investing veteran’s top holdings declined in value.

The online agent makes up 10.9% of Woodford’s Patient Capital investment trust but investigations into its transparency and the way it operates by Radio 4’s You and Yours and BBC Watchdog last week rattled investors and made the online agent one of several holdings to impact the fund.

The investment trust was also hit by drug company AstraZeneca’s worst ever day of trading after a cancer treatment trial fell short, while tobacco company Imperial was also affected by plans to cap nicotine content. The AA and Provident Financial also saw their values decline, contributing to what The Daily Telegraph described as a “fortnight from hell” over the weekend.

Overall, the investment trust has seen its share price drop 4.15% over the past fortnight.

Purplebricks’ own share price fell 7% on the day of the BBC broadcasts last Wednesday to as low as 399p but has since recovered.

The BBC attention came just days before Woodford released an interim report on his Patient Capital investment trust that said Purplebricks had made the largest contribution to returns in his in the first six months of this year.

Woodford, who would have written the report before the Purplebricks investigation was mentioned, said he is confident there is “more significant growth” to come.

He said: “The largest contribution to returns came from hybrid real estate agency business Purplebricks, which began its association with the portfolio as an unquoted business before pursuing a stock market listing in late 2015.

“Growth throughout this period has been nothing short of exceptional, as the management team have successfully executed their ambitious plans to dominate the UK’s nascent online estate agency industry, while at the same time significantly disrupt the traditional estate agency model.

“Its rapid progress in the UK has emboldened the management team to replicate their business model in other territories, launching in Australia last year and announcing plans to establish a US presence earlier this year.

“In the period under review, shares in Purplebricks more than trebled in price, reflecting the success that the business is demonstrating in the UK and increasingly overseas.

“I am also confident there is more significant growth to come for the business in the years ahead.”

Launched in 2015, the share price of Woodford Patient Capital has increased 7% in the first half of 2017, while Purplebricks returned 221% over the same period.

Purplebricks’ shares ended last week up 1.96% at 464p, recovering from a dip amid the BBC investigations.

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7 Comments

  1. Robert May

    The king is in the altogether, the altogether….

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    1. revilo

      Oi!

      That’s my line!

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  2. GeoW10

    Nice one Robert!!

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  3. seenitall

    Article said “I am also confident there is more significant growth to come for the business in the years ahead.”

     

    growth?     what about profits? or return on investment?        It can ‘grow’ as much as it likes but unless thats converted into profit its just hot air and will dissapate just as quickly.

    So after this further growth what then? stagnation? contraction?

    price increase?      as the price increases then the gap between a normal no sale no fee agent and a listing and paid agent will be diddly squat.    Thats when pb will fail, that when the listing model does not make sence.

    Grow as in more local experts?  more markets?   still doesnt repay the investors or make a good return on money invested they are only growing as they are cheap.  Too cheap to keep doing what they are doing.

     

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  4. Woodentop

    Nothing more than a spin doctor. The trouble for Woodford is that one day going to be found out with the resulting consequences. He has to stay loyal or he will loose his head and he knows it?

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  5. Property Paddy

    If I spent a few million on shares in a newly listed company and didn’t want to lose the shirt off my back I would tell you there is ample growth ahead.

    For example

    buy shares in Tescos

    A: cos every little helps

    B: they are opening up loads of new stores all around the world

    C: I own thousands of shares in Tescos

    see what I mean ?

    p.s. I don’t really own shares in Tescos and I don’t think you should buy any shares just because I said you should !!!!!!

     

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  6. Beam Splitter

    Purplebricks has ‘more significant growth’ to come, says increasingly nervous investor

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