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TODAY'S OTHER NEWS

Purplebricks could be bought by High Street agent, says client developer

The chief executive and founder of a developer and property investment group says Purplebricks is “an excellent business” but its recent financial problems may make it appropriate for a UK or global High Street agency to take it over.

Phillip Nunn heads The Blackmore Group, which has offices in London, Manchester and Dubai, and which in 2017 appointed Purplebricks to market homes on its St Augustine’s Church development in Greater Manchester. 

“Purplebricks is an excellent business. They have a revolutionary model, but every estate agent will be feeling the same with Brexit looming and slowing UK housing market” says Nunn.

“I actually think Purplebricks has the right idea in regards to their concept and business model because they are an innovation first business, ultimately they will be fine because they continue to stay ahead of the curve.

“The Blackmore Group has worked with Purplebricks and they are very efficient. Like most disruptors who are genuine innovators in their marketplace, such as Tesla, it is their constant drive to innovate and be the most ground-breaking in their sector that can also, unfortunately, make them subject to more volatility.

“Also, because Purplebricks is less established in the market they will be more vulnerable to market fluctuation. Larger, more established firms, like Savills for example, will not suffer as much as a result of the challenging climate we are now in for a number of reasons. They have a long-term business, they are more robust in terms of diversification and they have more access to international markets.

“What might also happen for Purplebricks is that this situation may open the doors for one of the older more established estate agents or bigger brands, be it UK or global, to come in and acquire them.”

Last week Purplebricks gave a profits warning based on a forecast of lower-than-anticipated revenue from its Australian and US business; its share price subsequently fell 24 per cent in one day although this has recovered slightly in the past two days.

In the summer of 2017, when The Blackmore Group selected Purplebricks to market its Manchester scheme, Blackmore managing director Patrick McCreesh said: “We chose Purplebricks because it operates 24/7 and their service is incredibly popular with consumers. The Blackmore Group are pleased to be marketing this scheme with Purplebricks and building a relationship that will accelerate the growth of both companies, with plenty of developments in the pipeline over the next few months. It’s the start of a great partnership.”

  • Andrew Stanton Estate Agency Insights And Strategies

    Purplebricks are ahead of the curve, for sure, the curve being get all clients to pay upfront.

    When the 50% who pay upfront never get to completion and the news leaks out, and new vendors feel this is not a great idea, and cashflow dwindles, then countrywide who made a 5% profit or lsl can swoop in and buy them?

    That sounds very likely, after all there must be many traditional agencies out there itching to buy a company that has never made a profit, and if anyone quotes to me the fact that the uk part of PB is making a profit, if you add the non uk losses, which are mounting daily it will be interesting to see where the share price of PB is by June.

    My advice, have a good look at the final balance sheet of Emoov and the monthly spend these onliners seem to need, bearing in mind they have no branches, very little staff, and yet they rack up huge debts, each sale unit actually making a loss.

    The only disruptor online agents seem to be, is to shareholders bank balances.

    Maybe Axel Springer will buy more shares, their original investment has dropped by nearly 40%, maybe they have more money to burn.

    After all with a slowing market, less property coming to the market and a business model which relies upon new vendors paying cash directly day one into PB, it is might be a great idea to be the biggest owner of shares just at the point the share price drops below 100p a share, five times lower than a share was worth 36 months ago. To mis-quote the Prime Minister, when a company has a share price going through the floor, and although the revenue keeps increasing year on year, if each year your losses also get bigger and bigger, then the business model is flawed and does not work - simples.

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    Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity. Facts do not cease to exist simply because they're ignored. There are people who are generic. They make generic responses and they expect generic answers. They live inside a box and they think people who don't fit into their box are weird. But I'll tell you what, generic people are the weird people. They are like genetically-manipulated plants growing inside a laboratory, like indistinguishable faces, like droids. Like ignorance.

     
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    Anybody know if The Blackmore Group paid PB up-front on all of the properties at St Augustine's Church?

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    Beige

     
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    Philip Nunn is delusional.

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    Says the man that "got shot of Rightmove" How's that working out for clients? Have you told them?

     
  • Andrew Ireland

    PB has only been around for five minutes compared to most estate agents, time to sell!!! Well I suppose its one way to get rid of creditors.

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    You are not entitled to your opinion but you are entitled to your informed opinion. No one is entitled to be ignorant.

     
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    Sounds like he was trying to convince himself to me. Revolutionary? Really? And how are they going to innovate and stay ahead of what curve? They have a shallow two dimensional model with little room to innovate. Even the 50% of customers they sell for will only comeback to them once every 5 years or so. The other 50% burned their money. They're unlikely to repeat the mistake. Sounds like he paid upfront and needs to talk up the share price to protect their investment.

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    Do even 50% of PB sellers go on to completion... I doubt that and people are starting to realise that £1500 to sell whether you do or you dont is simply ridiculous. LPE levels turning around like a roller-coaster ride. 5 year prediction of PB 20% market share now that is serious enough to be called complete b........s. I can not wait to see their demise, yes they might not go away completely but when the millions of losses and lots more coming will investors hold their nerve? I dont think so. If Purple Bricks stopped advertising tomorrow who would even know who they are.

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