Purplebricks Group PLC Trading update for first six months of the year (4139G)
06 November 2018 - 6:00PM
UK Regulatory
TIDMPURP
RNS Number : 4139G
Purplebricks Group PLC
06 November 2018
6 November 2018
Purplebricks Group plc
("Purplebricks" or "the Company")
Trading update for the first six months of the year
On-course to meet full year guidance
Purplebricks (AIM: "PURP"), the leading hybrid estate agency
operating in the UK, Australia and North America, announces a
trading update for the six months ended 31 October 2018 ahead of
reporting its interim results on 13 December 2018.
UK
The Company has continued to make good progress in the six
months ended 31 October 2018 with year-on-year revenue growth of
approximately 20% driven by double-digit growth in instructions
along with a continuation of increasing average revenue per
instruction from improved attachment rates of traditional and new
ancillary products.
Purplebricks continues to win market share against a challenging
market backdrop in the UK. The online/hybrid sector continues to
grow and a market share of 74% was achieved in the month of
October. This is despite increased competition and total category
media spend in the sector increasing 80%(1) . Purplebricks leads
the UK market in brand awareness with aided awareness of 97% and
unaided awareness of 48%.
International markets
In just over one year since launching in the US the Company has
established the foundations to realise the substantial market
opportunity. As at the end of October 2018 there are some 140 Local
Real Estate Experts (LREEs) and sales consultants operating in
seven states, with more currently in training and going through the
recruitment process. Prompted brand awareness in the launch state
of California has at October 2018 reached 44%, which is ahead of
the UK equivalent at the same time in its development. While most
of these states are in the very early stages of development,
sellside listings are growing and buyside revenue is increasing.
Attach rates on ancillary revenue streams from our independent
escrow business are performing strongly and we see significant
further opportunity to grow ancillary revenues in the US from
existing and new income streams.
Whilst we have experienced some challenges in Australia amid a
tough market backdrop, recent changes made to our customer
proposition have been well received and have resulted in a
significant increase in conversion from valuation to instruction.
Despite a slowdown in performance across the summer months, October
showed over 35% growth in new instructions on the month of
September following the launch of the new customer proposition.
There has also been a significant strengthening of the team over
the last few months.
Purplebricks announced its moves into Canada with the
acquisition of Duproprio/Comfree in July 2018 and into Germany in
October 2018 through the formation of a joint venture with Axel
Springer, which is taking an initial minority investment in
Homeday. Both deals are backing existing management teams with
local knowledge, proven track records and leading positions in
their respective territories. Purplebricks will benefit from the
upside as these markets transition their models, without the need
to commit substantial management time.
The Canadian business is performing strongly, in line with our
high expectations. With a structured plan now being implemented to
drive further significant growth through 2019. Web visits continue
to grow with over 5.4 million in Quebec and over 2 million visits
in the English provinces in the four months since acquisition in
July 2018. The strong traffic growth in the English speaking
provinces supports the local management team's strategy of further
expansion beyond Quebec where we are well placed to capitalise on a
significant opportunity.
As stated in the Homeday announcement of 15 October 2018, the
investment of GBP11.1m (Purplebricks share) is subject to antitrust
clearance, the process of which has now commenced.
As at 31 October 2018 the Company's balance sheet remains strong
with a net cash position of over GBP100m(2) .
The Company remains on course to meet the previously provided
guidance for full year revenue of between GBP165m and GBP185m.
Michael Bruce Group CEO of Purplebricks said:
"The challenging UK housing market is driving a shakeout in the
industry, highlighting weaknesses in both some traditional and
online agents business models. Against this backdrop Purplebricks
continues to grow and win market share. Longer term with the best
known brand in the sector, our flexible business model and the
strong balance sheet, Purplebricks is well placed to further
strengthen its leading UK position and replicate this success
overseas. We are confident about the future for our business."
Note
1 Source: Nielsen Ad Spend for the whole online/hybrid sector,
Jan-Sep 2018 v Jan to Sept 2017 excluding pay per click
2 Net cash at the period end is stated after the GBP29.3m cash
cost for the acquisition of Duproprio but before the Homeday
investment of GBP11.1m
For further information, please contact:
Purplebricks +44 (0) 20 7457 2020
Michael Bruce, James Davies
Zeus Capital (NOMAD) +44 (0) 20 3829 5000
Nicholas How, Benjamin Robertson
Peel Hunt (Broker) +44 (0) 20 7418 8900
Dan Webster, George Sellar
Investec Bank (Broker) +44 (0) 20 7597 5970
Keith Anderson, Carlton Nelson
Instinctif Partners +44 (0) 20 7457 2020
David Simonson, Mark Reed, George
Yeomans
The person arranging release of this announcement on behalf of
the Company is James Davies, Chief Financial Officer.
About Purplebricks
Purplebricks is the leading next generation estate agency in the
UK with operations in Australia, the US and Canada that combines
highly experienced and professional Local Property Experts (Local
Real Estate Experts in the US) and an innovative use of technology
to help make the process of selling, buying or letting so much more
convenient, transparent and cost effective. Purplebricks is
transforming the way people perceive estate agents and estate
agency.
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END
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