Purplebricks is anticipating “a prolonged period of low activity” during the Coronavirus crisis with 25 instructions a day according to a supportive consultancy.
Zeus Capital, which works closely with Purplebricks, says that the strong start to 2020 has obviously subsided badly thanks to the virus outbreak.
It says - in a statement issued just hours before the government's lockdown statement- that its previous estimate of Purplebricks breaking even in the long term with 120 instructions a day - in normal trading outside the virus period - could be revised down to 100 instructions a day, if the agency’s management reduced costs further.
“We have set our Full Year 2021 forecasts [for the financial year ending early 2021] assuming only 25 instructions a day in the first quarter, but rising in the following three quarters to an annual of 110 instructions a day” says a Zeus statement.
The consultancy adds: “Purplebricks is well capitalised with net cash of £41.6m on 30 October 2019. We expect group cash to be above £31m on 30 April 2020 and 2021 … We expect the Group‘s continuing operations in 2020/21 will be cash generative with strong control over administration costs and media spend.”
Zeus says that it is leaving unchanged its revenue forecasts for Purplebricks’ financial year just ending.
But it has “cut our forecast UK revenue for the year ending 30 April 2021 by 33 per cent to £67.0m and Group revenue by 29 per cent to £97m.”
Late last week a major shareholder in Purplebricks, Toscafund, cut its holding from 12.8 per cent to 9.8 per cent, prompting speculation about the future of the agency.