Purplebricks is now the largest agent in the UK by listings on Rightmove, broker Zeus Capital has said.
The claim has been made by Zeus Capital research director Robin Savage.
Savage also said that Purplebricks’ growth has been “at the cost of its competitors who are not terribly happy”.
He said that next spring Purplebricks will take more share of the market, and in the UK will make EBITDA profits of £15m during the current financial year, rising to £30m next year and £45m the year after that.
Savage said that the customer experience of Purplebricks has been overwhelmingly positive.
He said: “There made be the odd detractor who has difficulty selling their home for particular reasons – but there are considerably more happy customers than there are unhappy ones”.
Zeus Capital is broker to Purplebricks and advised it on its successful stock market launch. Zeus Capital is also advising OnTheMarket on its own IPO.
An interview with Savage can be heard here: https://www.directorstalkinterviews.com/interview-purplebricks-group-plc-interesting-time-investors/412737330
Meanwhile, easyProperty has said that its own diminishing stock on Rightmove is due to the fact that these are legacy properties being handled centrally and not by its licensees. But yesterday easyProperty boss Jon Cooke admitted that he does not know what the firm’s current national inventory actually is. See next story.
06:30
They say we’re young and we don’t know
We won’t find out until we grow
Well I don’t know if all that’s true
‘Cause you got me, and baby I got you
“Purplebricks.com, in telling its would-be investors that it was anticipating enormous profits, says that following a loss this year of just over £1.5m, forecast a net profit of £17.6 in the year to July 31, 2015, and £24.9m profit the year after”
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Its a Gimmick –
what other performance figures are they showing? zilch, nothing.
A common misconception is that EBITDA represents cash earnings. EBITDA is a good metric to evaluate profitability but not cash flow. EBITDA also leaves out the cash required to fund working capital and the replacement of old equipment, which can be significant. Consequently, EBITDA is often used as an accounting gimmick to dress up a company’s earnings. When using this metric, it is key that investors also focus on other performance measures to make sure the company is not trying to hide something with EBITDA.
http://www.investopedia.com/terms/e/ebitda.asp#ixzz4uWcGTd6B
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>He said that next spring Purplebricks will take more share of the market, and will make EBITDA profits of £15m during the current financial year, rising to £30m next year and £45m the year after that.
What he actually said was the UK division would make these profits.
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“but there are considerably more happy customers than there are unhappy ones”
that’s because their customers have nowhere to go now to voice their unhappyness!
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But is PB one business or a collective of many small businesses?
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Sounds more like someone who knows how to tell a good story on behalf of someone who pays them, but has no reality with life.
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Can someone tell me why their local property experts are allowed to carry out valuations?
Are they qualified surveyors or can I (not a qualified surveyor) now offer valuations too?
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Estate Agents don’t perform valuations, we perform Market Appraisals for listing. The valuation is carried out by a Surveyor, so in truth yes anybody can value a house, but whether they do it successfully is another thing altogether!
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that’s what I thought, yet they advertise their service as valuation, even though it is clearly a market appraisal.
I was told not to offer a valuation service (when doing a market appraisal) in the early 2000’s and have never referred to it since.
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No bias here then?????
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Clever marketing + reviews. They’ve learned the lesson from the successful hotel chains. Just take a look at what they have done: got great reviews and scores and then driven up their rates – simple really.
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Ah Yes… Zeus Capital comments…
No bias at all.
I look forward to their Purplebricks & OnTheMarket updates, juggling those positive words & stats.
It reminds me of someone who owns a racehorse, looking to sell it… that tells anyone who will listen what a great horse it is…. in the hope of inflating the price… then one of those listening to glowing reports happens to notice the horse under discussion has 3 legs!
It’s great, it’s fantastic, it’s a Winner! ….Oops, it just fell over!
Tell me Zeus… what makes the World go round?
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Dr Zeus comments…
Dear Pimplefarts,
You haven’t sold my home, yet I have already paid you over £1000?
What happens next?
Dear Customer,
We recommend that you instruct a real Estate Agent to sell your home.
Goodbye.
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Fantastic news, what an amazing 12 months it has been for this progressive and brave company.
Well done all the LPE s and the management team.
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Progressive? Not convinced….yet Brave? You’re having a laugh!
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(down the bottom for our flouncing feathered friend )
The information was posted where Eye’s reply system allowed it. I am guessing your rose tinted glasses make anything not purple invisible. The reply was there in ample time for you to reply
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Erm, how many of PB’s listings on Rightmove are like this one I wonder?
Only 2 photos and an incomplete address.
Is this a phantom ad or just incompetence, as surely no client would ever consider this remotely acceptable?
http://www.rightmove.co.uk/property-for-sale/property-69024521.html
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I have a cunning plan, it is very likely a little bit questionable (morally/legally speaking)
If every traditional estate agent in the UK offered a 2 tier commission structure that goes a bit like this:
You find the buyer, the vendor shows the buyer around and progresses the sale for £799
or charge your normal fee for traditional agency service.
Now technically this gives the vendor the choice of spending more with PB or using their local agent for a little less unless they prefer the full service.
Give it 6 months and PB and others will be up against the wall.
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How long will it be before Purple Bricks makes the leap and leaves rightmove and just uses its own portal. rightmove is effectively allowing purple bricks a free ride. As the market changes and there is a reduction in high street offices, rightmove will get another reduction in income. The market is changing and Purple Bricks stands to do best out of it as their (fee) is payable regardless of a sale.
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cyber, see Robert Mays comment above about what “hes said previously”. Just because he says it, doesn’t make it true..
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the Hardman estimates are the 3rd attempt at getting the numbers right, it is like running a bookies based on C4+1 racing
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http://www.propertyindustryeye.com/we-will-make-huge-profits-purplebricks-promises-investors/
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http://www.hardmanandco.com/docs/default-source/company-docs/purplebricks-group-documents/purplebricks-dec15
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you have the 2016 version
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Robert,
The thing you don’t appreciate is that estimates are revised constantly by analysts. I really don’t follow them that closely but I’ve been told fortnightly in some cases.
Why would you constantly refer back to old estimates? I’ve also got the Hardman 2015 report but what use is it? No forecast for Australia was included and as an investor you always look for the most recent estimates and opinions.
The only thing you can use it for is to say estimates are not guaranteed which any reasonable person understands.
Perhaps we should look back at some of the estimates in relation to Countrywide? Perhaps we should take a look at forecasts from your associate Anthony Codling to see how often he gets it right.
I was very interested to read this article on analyst Jefferies who Anthony Codling works for http://www.mikedp.com/articles/2017/8/21/transparency-and-bias-in-the-face-of-disruption
“Jefferies issued twenty separate “buy” recommendations for its corporate clients, spanning over 2,000 days, while issuing none for their direct competitors. It issued five separate “sell / underperform” recommendations that spanned 700 days for direct competitors of its corporate clients.”
“Meanwhile, the sustained positive stock recommendations for Countrywide and LSL corresponded with massive underperformance (a 71 percent and 52 percent drop in stock price), while the negative stock recommendations for Rightmove and Purplebricks corresponded with a big gain in stock price (60 percent and 88 percent respectively). Investors would have lost a lot of money if they had heeded Jefferies’ advice.”
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Oh you’re not not back at it yet then? you can’t expect to get anywhere if you don’t put the hours, in especially when you’re up against someone who does.
The £665 is a red herring, it’s the misleading bit in the whole affair. That was the loss leader number used to sucker in punters who at the time would end up according to the numbers, on average cough up over £1000. That is the corner flash, ‘from’, figure used to make price comparisons with no sale no Fee commissions.
Purplebrick weren’t going to make a profit on 36,000 lots of what they said they’d charge but 36,000 lots of what they did charge.
Did you answer the question?
Let me answer the question you will use to divert from saying it’s unethical to take a listing fee from someone who has no hope of selling.
An NVQ in a not property specific subject, 3 months as a trainee plus a 2 week in house course is not enough qualification or experience to qualify anyone as an expert. It is shameful, misleading and wrong to even think of doing so.
A failure to recognise half a shared ownership flat isn’t worth the same as full share and not having enough experience to understand the challenges of selling shared ownership properties means at least 1 vendor who, you’ve suggested is a liar, was knowingly charged a fee she could not afford. That is shameful, misleading and wrong.
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Predicting things that might happen is obviously down to interpretation however reporting facts is something that the CEO of a listed firm is required to get correct and accurate.
You have pointed us to a story where the CEO of a firm stated there would be operational profits achieved with 3000 listings per month.
If the firm has listed more than 3000 per month and has done for a while, where are the profits we were told about?
“On the current basis of 3,000 new listings a month with sellers paying £665 (not counting VAT) the firm would be making £2m a month, or £24m a year. However, that would be the absolute minimum revenue, as it excludes the higher London costs and ancillary sales.
Analyst Zeus has forecast a figure of £17.8m turnover for the year to the end of this month, which would take into account lower monthly listings earlier in the financial year”
You can help me out by explaining why when the average fee was reported £1034, 155% higher than in that prediction from April 16, the more than 3000 listings monthly average for the year 16-17 didn’t turn in a profit.
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Robert,
Ah, I see what you’ve done now. You’ve seen an ambiguity and interpreted it in a way that fits your agenda, which is that you would like to portray the CEO as somebody seeking to mislead rather than somebody who in a radio interview has simply made a mistake.
So we have an ambiguous statement. We have him talking about 3000 listings and £665 which comes out as approx. £2M a month revenue. But he does say “making £2M a month”.
So there are 2 possibilities:
1) He’s made a mistake when he says “making £2M a month” when he should have said £2M revenue ; or
2) He’s tried to kid people into thinking that PurpleBricks have no cost of sales or expenses and that all turnover is in fact profit.
Given the two choices any reasonable person would go for 1) but those of you with a complete lack of objectivity and empathy for those making comments in a live situation rather than on paper wouldn’t see it like that of course.
What did you think about the article on Jefferies?
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I didn’t read it and chose to ignore it in the same way you ignored the question of the ethics of giving expert incorrect advice to a vendor in negative equity in order to grab a listing fee.
In respect of the 3000 listings at £665 being enough to make a profit, the figures at the end of the trading year showed that statement to be incorrect. Apparently 3400 monthly listings at an average fee of £1034 wasn’t enough to make a profit so where did all the un-forecast expenditure suddenly come from? £24millon was supposed to deliver a profit yet £42million didn’t.
I have to say once again I just don’t follow all the contradictory numbers
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>In respect of the 3000 listings at £665 being enough to make a profit
I’m not disputing this wasn’t said somewhere but can you point me to where it was claimed that this would be enough to make a profit?
>I have to say once again I just don’t follow all the contradictory numbers
You’re going to have to point to an example if you want me to give an opinion.
Are you wondering why Zeus estimated £17.8M and PurpleBricks £24M for turnover? In that case I’d say it’s because it’s an estimate from 2 different sources.
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http://www.thebusinessdesk.com/westmidlands/news/730540-profit-and-revenue-through-the-roof-at-online-estate-agency-purplebricks
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Robert,
That’s for a different accounting period.
What contradictory numbers are you referring to? No wonder the numbers are confusing you, Do you see any contradictions for a particular accounting period?
Where was it claimed that 3000 listings at £665 on a monthly basis would be enough to make a profit?
I’m finished for the day but will check back first thing tomorrow morning to see if you have responded.
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I’m just finishing for the day, I already posted that about 13 hours ago, you obviously didn’t bother reading the analysis; it outlines the profit figures/ instructions stats.
Now I’ve answered your question how about getting back to the ethics of taking money from a negative equity vendor knowing full well someone mislead them on the saleability of their home?
Is it ethical to take a listing fee from a vendor knowing the advice given was misleading and there was no chance of the property selling at the price suggested?
This is a closed question requiring only a Yes /No answer. (Happy to accept Y or N )
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here is the source of the data you are now claiming is unreliable, it is the data Bruce was presumably relying on when his (not Eye’s) publicity machine produced the 3000 listing story
The story onEye was obviously based on the 35,555 instructions at £1080 per listing which can be extracted from the analysis by Hardman
http://www.hardmanandco.com/docs/default-source/company-docs/purplebricks-group-documents/purplebricks-dec15
you were given an opportunity to debate taking a fee from a negative equity vendor, you declined and have since intimated she is a liar.
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Robert,
p.s. the last time I will check back to see you have provided me with the evidence in regard to this “non ethical” sample case will be 11am.
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OK, Robert, I won’t be checking back now.
Feel free to provide me with any details & evidence of this case you keep referring to when I post on future threads.
Or if you actually can point to any alleged actual contradictory numbers, your reasoning/calculations as to why you think they are contradictory and provide me with links to the actual sources rather than something propertyindustryeye.com have summarised then I’ll be happy to look at that providing I am not too busy at the time.
You have my email address anyway so feel free to continue this by email.
I note you have once again failed to demonstrate your allegations.
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Provide me with the source and the details of your ethical question and I’ll comment on that. I think I’ve seen you mentioning this case before so please point me to the details.
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