Purplebricks Group plc Strong trading in spring market, good strategic progress

Purplebricks Group Plc

Purplebricks Group plc (LON:PURP), the leading hybrid estate agency providing a new way to sell, buy or let property, today announced a trading update for the year ended 30 April 2017 ahead of reporting its final results on 29 June 2017.

Trading in the UK has been strong, with year-on-year instruction growth in the second half of the financial year up 83%. As a result the UK business is expected to record an adjusted EBITDA profit for the full year, building on the UK’s £0.3m reported adjusted EBITDA in the first half.

Progress in Australia continues to be very encouraging with recent launches in Perth and Adelaide, adding to the existing states of New South Wales, Victoria and Queensland. With average revenue per listing exceeding A$5,000, Purplebricks estimates that Australian customers save an average of over A$12,000 in estate agents’ fees when compared with a traditional commission structure.

The recruitment of high quality Local Property Experts (LPEs) remains a central element of the strategy. At the end of April there were 525 LPEs, of which 448 were in the UK (32 having just graduated at the end of April) and 77 in Australia, exceeding the target set in January 2016 of 360. Notwithstanding the rapid growth across the business, customer service levels have remained strong. In the last 12 months the number of Trustpilot reviews have risen from 5,000 to over 17,100, with the average score edging up from 9.4 to 9.5 out of 10.

With continued progress across the business the Company is on course to meet the board’s full year expectations.

Commenting on the update, Michael Bruce, Group Chief Executive, said: “This has been a year of great progress across the board. The UK business continues to go from strength-to-strength and the decision to increase marketing spend in the spring market has been successful. We have demonstrated that the business model works, with the first expected full year profit in the UK, while our early success in Australia highlights our ability to execute and the broad appeal of the Purplebricks customer proposition.

“US plans are progressing well, and our learnings from rolling out in the UK and Australia, coupled with the recent £50m fund raising position us well for a launch in the second half of 2017. We are confident in our future and excited about our global opportunity.”

The company also announced that Neil Cartwright, Chief Financial Officer, is to step down from the Board and will leave the Company due to ill health.

The Board is pleased to announce that James Davies, most recently Chief Financial Officer of William Hill Online (the digital business of William Hill PLC) has been appointed to the role of Chief Financial Officer with effect from 4 May 2017. Neil will leave the Company on 30 June 2017 in order to help facilitate a smooth transition.

Prior to William Hill, James held the position of divisional CFO at Kingfisher plc and previously was for three years employed as the deputy to the Group Finance Director of UBM plc. Before this James spent five years in UK M&A at Deutsche Bank and eight years in the Tech team at Close Brothers.

Commenting on the announcement, Paul Pindar, Purplebricks Group plc Chairman stated: “On behalf of the Board I would like to take this opportunity to express our deep gratitude to Neil and our very best wishes for his full recovery. Neil has been with Purplebricks since the start of 2015 and has played a significant role in its rapid growth and success to date, including steering the Company through its IPO in December 2015 and its recent fund raising for US expansion.

I would also like to take this opportunity to welcome James to the Board. James’ broad international experience in consumer brands, technology and capital markets, will prove invaluable as we continue our rapid evolution.”

Commenting on the announcement, James Davies, stated: “Purplebricks has in just three years led permanent change in the estate agency industry and notwithstanding its rapid progress to date, the future opportunity is compelling. I am delighted to be joining the Company at such an exciting time in its evolution and look forward to helping it manage the growth and realise the global opportunity.”

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