Purplebricks (PURP) is shaking up the house-selling market, but you wouldn't know it looking at the pre-tax profits in its maiden interims. These include over £10m of administrative and marketing costs, much of which is associated with its flotation in December. A more telling figure is gross profits, which jumped nearly 10-fold to £4m.
The business model combines technology and customer facing software with the inclusion of local property experts (LPEs), which sets it apart from wholly online estate agents. The LPEs are picked for their experience and local knowledge, and provide valuations, support and advice throughout the sale. And these services are available 24 hours a day. Crucially, instead of charging as much as 3 per cent in commission, the average fixed charge for using Purplebricks is just over £1,000 including VAT.
Marketing costs look to have been well spent because since the service was launched in April 2014, Purplebricks has captured over 60 per cent of the online market and now reckons itself the UK's fourth largest estate agent. And it’s still growing; trading in the second half is already up by 275 per cent year-on-year.
Analysts at Hardman & Co forecast gross profits in the year to April 2016 of £9.8m, from £2m in 2015.
| PURPLEBRICKS (PURP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 76.5p | MARKET VALUE: | £184m | |
| TOUCH: | 74-79p | 12-MONTH HIGH: | 105p | LOW: 72.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 3p | NET CASH: | £9.7m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 0.8 | -2.5 | -1.79 | nil |
| 2015 | 7.2 | -6.4 | -3.44 | nil |
| % change | +777 | - | - | - |
Ex-div:- Payment:- | ||||
