Purplebricks still growing fast

So, while revenue doubled, so did the cost of sales, with marketing and administrative expenses up by three-quarters. The upside is that the Axel Springer cash injection means that the planned roll-out in the US can now be accelerated. Gaining momentum in new markets takes time, but in the UK – the most mature operating area – cash profit jumped from £1.7m a year earlier to £8.1m, whereas the cost involved in launching and establishing businesses meant that the Australian operation made an £11.8m cash loss in its first year. Losses amounted to £16m in the US business, but the group has expanded its footprint in North America via a post period-end deal to acquire Canadian digital real estate brand DuProprio for £29.3m.

The business model continues to attract more users, and Purplebricks now has three-quarters of the UK online market, enabling it to sell over three times more properties than the next largest UK estate agency brand. Average revenue per instruction rose to £1,168, while the number of agents or local property experts grew by 43 per cent. Revenue in Australia jumped by 285 per cent, with the average revenue per instruction up 22 per cent to £3,170, but further investment is being made in advertising to grow the brand further. In the US, services were started in September 2017, and the areas served have been expanded. Brand awareness has grown significantly, and further expansion is planned both geographically and in the type of services on offer.

Analysts at Peel Hunt are forecasting an adjusted pre-tax loss for the year to April 2019 of £41.5m and a loss per share of 13p (from losses of £26.2m and 9.8p in 2018).