Purplebricks plummets in annual loss, shares fall

A sign for online estate agent Purplebricks is pictured outside a property on a residential street in London, Britain November 24, 2021. Picture taken November 24, 2021. REUTERS/May James

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  • Exercise-adjusted core loss of 8.8 million pounds
  • Annual instructions fall 31% to 40,141
  • View FY23 revenue of stg67.5m-stg72.5m

Aug 2 (Reuters) – Purplebricks (PURP.L) reported a full-year loss on Tuesday as Britain’s largest online-only estate agency struggled to implement a new operating model and faced a housing market difficult, causing its shares to fall more than 10%.

The UK housing industry, which has done well during the pandemic due to government support and strong demand, is now facing soaring costs, labor shortages and pandemic-related supply chain issues.

Chief Executive Helena Marston said last year’s results were hit hard by the challenges of implementing its new operating model and marketing investments that failed to pay off, alongside a housing market that has worked against it.

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“Our performance wasn’t good enough,” said Marston, who took over the business in April.

These missteps, along with higher costs and a reduction in new housing instructions after a stamp duty holiday ended, affected revenues, profitability and cash flow.

Purplebricks changed its business model in 2021 by making its sales agents permanent employees and removed a money back guarantee pricing system that failed to lift the new housing instructions.

Marston, speaking to analysts, unveiled plans to launch a new mortgage operating model by the end of the current fiscal year, where Purplebricks would act as a third-party seller of mortgages.

The company’s results on Tuesday coincided with weak housing data from mortgage lender Nationwide, which showed UK property prices rose at a slower pace in monthly terms in July than in June. Read more

Nationwide data weighed on homebuilder stocks, with top players Barratt (BDEV.L), Persimmon (PSN.L) and Taylor Wimpey (TW.L) trading down around 2-3%.

AIM-listed Purplebricks said it now expects to generate revenue in the range of 67.5-72.5 million pounds ($82.5-88.6 million) over the course of the year. financial year 2023. It reported turnover of £70 million in the last financial year.

The company, which sold its international assets to focus solely on the UK market, said the adjusted basic loss for the year ended April 30 was 8.8 million pounds, compared to a profit of 12 million. books recorded a year earlier. The company’s annual instructions fell 31% to 40,141.

($1 = 0.8186 pounds)

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Reporting by Aby Jose Koilparambil in Bengaluru; edited by Uttaresh.V and Jane Merriman

Our standards: The Thomson Reuters Trust Principles.

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