26th Jan 2016 08:49
LONDON (Alliance News) - Purplebricks Group PLC on Tuesday posted a widened loss for the first half of its financial year as it spent heavily on rolling out its offering, but the so-called 'hybrid' estate agent saw its revenue boom as it continued its rapid growth.
The company, which does not operate any high street branches and instead employs 'local property experts' who advise customers through the process of selling their home, said its pretax loss for the six months to the end of October was GBP6.4 million, compared to a GBP2.5 million loss a year earlier.
The loss resulted from sales and marketing costs the company booked as it added to its business, including launching in new regions of the UK, recruiting more property expert, stepping up its marketing campaign. Purplebricks launched in London in July and in Scotland in November, completing its full national roll-out. The company said it is now the UK's fourth largest estate agent, based on annualised introductions, only 18 months after launch.
While those costs hit its pretax profit, the growth is translating into sharp revenue growth. For the first half, revenue rose to GBP7.2 million, around nine-times the GBP800,000 Purplebricks posted a year earlier. The group increased its share of the online estate agency market to 60% at the end of October, from 43% in April.
Purplebricks, which listed in London in December, said trading in the second half has continued to be strong, with the number of instructions on its books rising nearly four-times-over since the end of the first half year-on-year. This has prompted the group to look to double the number of property experts it employs by April 2017 from the 150 it had at the end of October.
Michael Bruce, chief executive of Purplebricks, said the group will continue to seek to deepen its coverage of the UK, using the GBP25.0 million it raised from its listing on AIM, along with further investments in technology and marketing.
"Our compelling proposition of personalised, high quality service and affordable fees provides the best of both worlds, resonating with a growing number of customers and posing a fundamental challenge to traditional estate agents, who currently dominate the GBP4 billion market," said Bruce.
Shares in Purplebricks were up 1.2% to 75.89 pence Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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