Purplebricks has this morning announced its long-awaited annual results, delayed since July 12 due to internal changes. It shows that revenue is down 23% to £70 million while gross profit has fallen by 27% to £42.1 million.
The company set out its performance recovery plan 'following a year of transformation', which saw former CEO Vic Darvey replaced by Helena Marston, a move towards a fully employed model and a range of scandals.
Marston, who finally took over in April this year after further checks were required on her appropriateness for the role - the announcement back in April found that Marston voluntarily declared herself bankrupt in September 2014, before this was discharged a year later - said: "Last year’s financial performance was significantly impacted by the challenges resulting from the implementation of our new operating model and investment in marketing that did not deliver the expected results, alongside a housing market which played against us. Nevertheless, our performance was not good enough."
She added: "I have today set out my plan to improve the performance of the business. Central to our plans are initiatives which we expect to drive higher instructions, grow revenues, reset our cost base and raise standards."
She said the agency has already taken decisive action by completing a substantial cost-reduction programme, re-training all its field agents to raise standards and improve conversion, increasing its prices and removing the Money Back Guarantee, as well as adopting a more targeted sales and marketing plan, and dramatically overhauling its processes and procedures.
"We are also assessing additional revenue streams including our new mortgage proposition which we expect to launch by the end of this financial year," she added.
“I am convinced that the potential for Purplebricks is huge. We have a proposition which is more relevant and valuable for our customers, as well as a brand which is the best known in the industry. I’m confident that the actions we are taking this year will set us on a clear path towards a return to sustainable, profitable growth.”
The results made for grim reading for the troubled agency, with the overall loss from total operations hitting £42 million, in contrast to a profit of £6.8 million in 2021
Furthermore, total fee income was £63 million, a fall of 28% on 2021. Meanwhile, the firm's instruction level was 40,141 units, down 31% from 2021.
The average revenue per instruction remained almost static at £1,568, compared to £1,501 in the previous year, while the firm's cash balance stands at £43.2 million, down from £74 million in 2021.
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Low cost agents like Purple Bricks ought to thrive in a market where properties were flying off the shelf and a vendor might think why not give PB a try and pay less fees. If in that period of time PB's instructions fall, then it shows that the public don't buy the basic concept that they are saving money. Most people realise that their are two ends to a sum that adds up to whether there is actually a saving.
They will never be a full on disrupter. Don't say it too loud but after 30 + years in the business I am convinced it is really the buyers that pay our fees. After all when the solicitor send us that cheque its a % of what the buyer paid for the property. The owner does not pay us in bricks.
They're in the death throes now, surely?
It was definitely 'the market'
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