A Financial Times article reports a bank analysis shows Purplebricks with a market share of 3.3 per cent of properties marked ‘sold subject to contract’ while Countrywide’s many brands have 4.5 per cent between them.
The assessment comes from UBS and is contained in an FT piece - behind the newspaper’s online paywall - asking whether Purplebricks’ share price is over-valued.
The question is prompted by the fact that when the hybrid floated on London’s ‘junior’ market, AIM, in late 2015 it did not perform particularly well but has in recent months boomed spectacularly; its current price suggests the firm is worth more than Foxtons and Countrywide combined.
The piece suggests that Purplebricks’ share price has benefitted from a report by Which? claiming it was the most accurate online agency for valuations, and from its successful launch in Australia. The FT says the firm’s launch into America was “close to perfect.”
It also reveals that compared to many companies, a large proportion of Purplebricks’ shares are owned by directors and a small number of key investors “so relatively sparse trading volumes tend to exaggerate price moves.”
The piece is open-minded about whether Purplebricks will single-handedly revolutionise the UK agency landscape, and notes that while Countrywide’s share of properties listed ‘sold STC’ appears modest it does have substantial additional services such as mortgage broking and commercial property which are not in the Purplebricks offer to customers.
However, it says additional revenue could be achieved for the hybrid if it chose to increase basic fees or charge for further additional services.
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