31st Jan 2022 09:48
(Alliance News) - Purplebricks Group PLC on Monday posted a revenue decline and a swing to loss during a "challenging" first half.
For the six months to October 31, Purplebricks reported revenue of GBP41.3 million. This was down 6.6% from GBP44.2 million a year before.
The Solihull, England-based estate agent swung to a pretax loss of GBP12.9 million from GBP4.3 million the previous year.
Gross profit fell 11% to GBP26.2 million from GBP29.6 million. At the operating profit level, Purplebricks swung to a loss of GBP11.1 million from a profit of GBP6.9 million.
The company said that since the end of the half, it has continued to see an imbalance between strong demand for housing and a limited supply of stock, which has driven house prices higher. Purplebricks said it expects this dynamic to continue through its second half, impacting instructions and gross margins.
Chief Executive Vic Darvey said: "The first half was undoubtedly challenging, with the implementation of a major change to our operating model coinciding with the UK property market experiencing a substantial fall in new instructions. This dynamic led to a disappointing financial performance but we are confident that we now have the right levers in place to drive a stronger financial performance going forward.
"Our lettings business, while relatively small, has significant potential. We were disappointed by the process issues that we became aware of in our lettings business in December. These are being corrected and a root and branch review of the lettings business has been completed in relation to our processes and procedures.
"Looking ahead, the outlook for the housing market remains uncertain and we expect the constrained levels of sales supply to continue throughout the second half. The initial results from our operational improvements are very encouraging and there are early signs of improving market conditions during January, although we do not anticipate a meaningful financial benefit until financial 2023."
Shares in Purplebricks were up 0.3% at 20.05 pence each on Monday morning in London.
By Heather Rydings; [email protected]
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