Purplebricks says it has £100m net cash to exercise “relentless innovation” and benefit from an industry shake-out that will ”expose undercapitalised traditional and online competitors.”
In a trading statement covering the six months to the end of October, the agency says it now has 74 per cent share of the UK online/hybrid market; its UK revenue shot up by 39 per cent to £48.3m and what it calls “UK ancillary revenue” is up 25 per cent.
However it more than doubled its losses to £27.3m from a year earlier; and in the six month period under review it spent a huge £39m on marketing.
It says it completed on £5.4 billion of UK property in that six month period - in the same time a year ago, it completed on £4.6 billion worth.
Dramatically, it claims that in October (despite a slowdown reported by many rival agencies) it saw a 35 per cent growth in instructions in the UK compared to the previous month.
Group revenue over the six months - therefore including Purplebricks' international activities in the US, Canada and Australia - shows a 75 per cent rise to £70.1m. The company says it's on course to achieve full year revenues of between £165m and £185m.
These figures are stronger than some observers predicted but nonetheless show losses rising and in any case refer to a period well before the high-profile collapse of Emoov and a series of damaging headlines about the online agency sector.
Purplebricks' global chief executive Michael Bruce told shareholders: "Our UK business continues to make good progress, with strong sales growth, market share gains and a step-up in both profitability and positive cashflow. It is this strength that will see Purplebricks emerge stronger from the ongoing industry shakeout, which is expected to continue to expose undercapitalised traditional and online competitors.
"Following Axel Springer's investment in March, we are already seeing how shared knowledge and best practice across the business can benefit the entire Group.
"Purplebricks has led industry change and through our strategy of relentless innovation will continue to do so. We are always looking to improve the customer experience and with over £100m of net cash, we are uniquely placed to do so, investing in technology and first class people. We remain confident that our UK success will be replicated internationally and that we will deliver substantial value for our shareholders.”
He says the outlook for the company suggests it will, in his words, “continue to outperform the industry, demonstrating an ability to grow strongly and win share in challenging market conditions.”
He says that having now launched in phase one target states in the US, “early indications show brand recognition and consideration are growing strongly.”
Bruce continues: “We are confident, with new marketing creative launching in the new year, that we will see a step up in instructions from our most recently added DMAs, which are yet to generate a meaningful contribution. Our near term strategy remains focused on maximising operational delivery, which will drive further revenue over time.”