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Purplebricks moves deeper into the red

Purplebricks chief executive Helena Marston insists the brand's turnaround plan is working after posting a half-year loss this morning and revealing plans for further cost cutting.

A stockmarket update from the online agent showed its adjusted earnings before income, taxes depreciation and amortisation deepened to £8.4m for the six months to the end of October 2022.

That compares with a loss of £0.8m from the first half of the year.


It reported that instructions were stable at 21,205 but said fee income fell 1% to £34.4m during the period.

The agent said it had also increased its cost savings from £13m to £17m and has launched Purplebricks Financial Services five months earlier than planned.

Financial highlights include: 

  • Instructions stable at 21,205 (H1 22: 21,131), with average revenue per instruction ('ARPI') down 1% at £1,624 (H1 22: £1,642)

  • Total fee income also down 1% at £34.4m (H1 22: £34.7m), reflecting the stable level of instructions and ARPI. Revenue was £34.5m (H1 22: £41.3m), in line with expectations, the reduction reflecting the impact of movements in deferred and accrued income (in respect of both instructions and conveyancing respectively), which flattered H1 22

  • Gross profit margin of 47.0% (H1 22: 63.4%) reflecting the increase in fixed cost base following the transition to an employed model in September 2021, which is in line with our expectations

  • Adjusted EBITDA loss of £8.4m (H1 22: loss of £0.8m) reflecting lower revenue and as a result of the investments made in the period, including the change to an employed model

  • Loss from total operations of £14.6m net of finance expense (H1 22: loss of £20.2m also reflecting a tax charge of £7.3m)

  • Cash and cash equivalents at 31 October 2022 of £31.3m (30 April 2022: £43.2m), reflecting the loss in the period

Marston said: "The turnaround plan is working and is being delivered at pace, with the financial benefits starting to come through in the second half of the year. We have taken further steps to reduce our cost base, from an initial £13m of annualised savings to £17m, while also investing in our strategic priorities and increasing the efficiency of our field. 

“Our plan to diversify revenue streams and build a more scalable, balanced business, with less reliance on instructions is gaining momentum. We launched our new mortgage proposition last month, five months ahead of plan, and are rapidly scaling our conveyancing services to the buyer segment of our customer base.

“Our plan to drive instructions is now underpinned by a better understanding of the areas where we know we can win and initiatives to drive profitability in each of them.

“We are ever mindful of the current economic environment. Our relevant, low-cost proposition, effectively communicated via our new marketing campaign, supports our customers and is especially attractive in these economically challenging times.

“I am confident that the progress we are making and the initiatives we are implementing to drive better performance in the field, together with the additional cost actions to ensure we are a leaner, more efficient organisation, underpin our full year expectations including a return to positive cash generation in early FY24."

  • Andrew Stanton PROPTECH-PR A Consultancy for Proptech Founders

    If a 14.6 million loss is a Helen Marston turnaround, I hate to think what havoc this novice CEO will make if allowed to continue her reign of terror cutting all personnel to the bone and expecting anything but a death spiral of even more losses. Purplebricks gets cash from listing instructions, in 2023 that pie will be 12% less for all agents as the housing market cools, so that will add to her pile of woes.

    It really is time for an experienced CEO to step in. This is just a re-run of the Alison Platt Countrywide Plc fiasco, she too oversaw a 90% drop in share price, before she was forced out, but not before a huge swathe of talent had been culled. It is easy to remove peope who do not agree with you, far harder to build a substantial business through making the correct decisions and building a team that backs you.

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    Going into a slow market, she should be investing in lettings, yes mortgages in the long term are what will keep PB going but in the next 6 months the only way to stabilise will be to invest in lettings they already have a good book and with average lets of over 1k pcm on a 10% man fee they could easily make 1200-1500 on a single let they are focusing on the wrong thing.

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    If they don't focus on lettings, next year will be very difficult to survive.

  • Proper Estate Agent

    18 months left, then proper commisary.

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    When will they realise that CEO's etc, without serious Estate Agency experience always fail. Will someone please show me otherwise. Unless another foolish investor wastes their money into this flawed way of selling homes, then the DEATH SPIRAL continues. I for one relish that day, as can never forgive them for the damage of COMMISERY to our industry. Employees of Purple Twits, if you can't yet see the writing on the wall yet, then you have little hope.


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