Purplebricks swings to FY profit, launches money back guarantee

In the year to 30 April 2021, the company swung to a pre-tax profit of £3.6m from a loss of £9.2m the year before, as revenue grew 13% to £90.9m. Instructions increased by 14% to 58,043 and average revenue per instruction was up 7% to £1,501.

Purplebricks said total fee income rose 22% to £87.1m, while adjusted earnings before interest, tax, depreciation and amortisation rose to £12m from £2.9m the year before.

The company said it has started the new financial year in a "strong" position, and its new pricing structures, which include a money back guarantee and a simplified two-tier proposition, are launching this month.

"The market for sales is buoyant at the moment, with fall through rates at their lowest in a long time, but with the very healthy demand currently outstripping new supply volumes," it said. "We expect supply and demand to return to more of a balance post summer.

"As such, it is too early to quantify the benefit from the new pricing structures to the current financial year. Our current expectation is for FY22 EBITDA to be flat year-on-year, in line with market expectations, with these strategies expected to accelerate revenue growth and drive progress towards the Group's medium-term targets over the next few years."

Purplebricks said that once these initiatives have been rolled out, it will accelerate its marketing strategy to grow instructions and share.

"As a result of these strategic changes, the board expects Purplebricks to be able to deliver annual revenue growth in excess of 20% in the medium-term, with confidence in the group's ability to deliver against its growth strategy."

The terms of the money back guarantee apply to properties marketed at the agreed valuation, allowing customers a refund on their full fee if they have not received a proceedable offer within 10% of their valuation.

At 0820 BST, the shares were down 1.7% at 83.79p.