Purplebricks revenue surges; to launch in Australia

Online estate agency Purplebricks reported a surge in full-year revenues but losses widened significantly as sales and marketing costs swelled.

In the 12 months ended 30 April, revenues jumped 448% to £18.6m. However, the adjusted loss before interest and tax widened to £10.5m from £5.4m in 2015, with sales and marketing costs up to £12.9m from £3.5m as Purplebricks continued to grow its brand.

Still, the company insisted that the UK business would move into profit in the current financial year.

Purplebricks, which is backed by fund manager Neil Woodford, said customers were responding well to its hybrid model and noted that it sold properties worth nearly £2.8bn in the year, with a further £1.7bn sold subject to contract.

Chief executive Michael Bruce said: "In just our second full year of operation we are leading change in an industry that has long been stagnant and is only now waking up to the opportunities and threats posed by technological advance and changing consumer behaviour. While others are following we have retained our leading position, with 62% of the non-traditional estate agency market and look to replicate this success in Australia.”

The company said Australia’s £3.3bn market was a “compelling proposition”, as market sellers there are currently charged around £5,900 to list their properties on online portals.

Peel Hunt said: “Given the low-cost hybrid offering from Purplebricks it is well placed to continue to dominate online competitors and take share from traditional high street agents in both the UK and Australia.

“The shares have had a strong run in 2016, rising by c50%, which compares to the traditional agents falling by an average of 10%.”

At 0950 BST, Purplebricks shares were up 2.7% to 134.84p.