Yopa’s latest accounts for 2022 have revealed a “material uncertainty” that the business could continue ahead of a restructure in 2023.
The online agent has published its latest annual accounts for the 12 months to 2022, showing its losses increased from £4.6m in 2021 to £6.8m a year later, attributed to “hardening conditions” in the housing market due to political and economic uncertainty and Kwasi Kwarteng’s disastrous mini-Budget.
Total group revenue was £17.7m, down 5% annually, but the reports also shed more light on the recent restructure of the business, showing it is dependent on shareholder funds.
A note in the report highlighted that under a base case scenario and “reasonably possible” downside scenario, the company would require additional funds from shareholders Daily Mail Group Ventures and Grosvenor Hill Ventures to meet its liabilities for the full year 2023.
The report shows Yopa was acquired by Andor Holdco, a company jointly-owned by Daily Mail Group Ventures and Grosvenor Hill Ventures last year. It was funded by its shareholders and provided Yopa with a £3.1m loan in January 2023, increased by a further £1.7m in August to give the business “sufficient funds until it reaches breakeven by 31 December 2024.
The report highlights that Yopa’s exposure to the housing market and broader economic environment, and the need for working capital from its shareholders on a day-to-day basis, means there is a “material uncertainty” that may case “significant doubt” on tis ability to continue as a going concern.
However, Yopa said it was still appropriate to file the accounts on a going concern basis due to the Daily Mail Group and Grosvenor Hill Ventures’ commitment to support the business.
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Purplebricks all over again! How can an Estate Agent lose money in 2021? If you can’t make money that year you never will. Are these investors really that stupid? If they want to give away another £3m please contact me and at least I will give them a return on their money.
Like the previous Purplebricks which sold for a £1, the present CEO of Yopa Verona Frankish has zero estate agency experience, and whilst Verona was briefly at Purplebricks as Head of lettings, at that period it was fined for 'failing to properly serve legally-required documents to tenants' racking up a multi million fine. Time after time we are seeing zombie businesses that were doomed from day one as the business model is flawed, being run into the ground at an even faster rate as there is no-one in the wheelhouse who can steer HMS Titanic around that iceberg.
Given the number of key players who exited this ship on luxury lifeboats some time ago, it is probably months rather than another year before HMS Yopa joins, Purplebricks 1, Emoov, Tepilo, Doorsteps, Hatched, Easyproperty 1, plus a number of smaller onliners. When I meet fresh faced founders of proptech companies my first words are, 'what is the commercial model?' second words are what is the TAM, total addresable market, well for onliners TAM is 10% of the 800,000 estate agent sales a year, as 10% of all vendors using an agent like a cheap fee, and think agents do little work. Hence why Purplebricks had 80,000 instructions in its heyday, and could never get any more of the market.
I see 20 new decks from founders a month, it takes me about 8 minutes to weigh up their viability, I had two this morning, Zara my dog howled at both, and rightly so, hundreds of thousands pumped into both and as likely to make profit as Rishi Rich winning the next General election. Why oh why do new business owners do so little market research, I will tell you why it would show up the 'vanity projects' for what they were, a pipedream based on personal painpoints, often on industries they have no insight upon. Even more surprising is the blind investors who jump headfirst after the gold, not checking to see what the viability is.
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