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Purplebricks Group Plc

Purplebricks Group plc Strong trading, strategic investment, UK guidance upgraded

Purplebricks Group plc (LON:PURP), the hybrid estate agent providing a new way to buy, sell or let property, announced today its Interim Results for the six months ended 31 October 2017.

H1 2018

H1 2017

UK

Aus

USA

Group

UK

Aus

USA

Group

£m

£m

£m

£m

£m

£m

£m

£m

Revenue

39.9

6.8

0.1

46.8

18.3

0.4

18.7

Gross Profit

22.5

3.6

0.1

26.2

10.2

0.2

–              

10.4

Gross Profit Margin

56.5%

53.3%

69.6%

56.0%

55.6%

49.7%

55.5%

Administrative expenses

(9.3)

(3.0)

(3.8)

(16.2)

(3.8)

(1.7)

(5.5)

Marketing

(10.1)

(5.7)

(2.5)

(18.3)

(6.6)

(1.0)

–                

(7.6)

Operating profit/(loss)

3.2

(5.1)

(6.3)

(8.2)

(0.3)

(2.5)

–                

(2.8)

Adjusted EBITDA *

4.7

(5.1)

(6.3)

(6.6)

0.3

(2.5)

–                

(2.2)

Net Cash

64.4

29.1

* Defined by the Group as profit / (loss) before net finance costs, tax, depreciation, amortisation and share based payment charges

Financial highlights

· Group revenue up 150% to £46.8m

· UK revenue up 118% to £39.9m

· UK business adjusted EBITDA increased to £4.7m

· Average UK income per instruction up 14% to £1,138

· Australian revenue increased to £6.8m

· Average income per instruction in Australia $5,282 AUD

Operational highlights

· Number of UK Local Property Experts rose 107% to 650 as at 12 December

· Number of Australian Local Property Experts rose 600% to 105 as at 12 December

· UK Online market share increased to 74%

· Percentage market share in Australia higher than UK after first anniversary

· Commenced US expansion ahead of plan, with Los Angeles in September

· Solid progress in terms of local real estate experts (LREEs), currently totalling 40. Valuations booked, instructions secured and completions via our Escrow (conveyancing) business

· Launches in San Diego, Sacramento and Fresno in January 2018 along with engaging a further 18 LREEs

· Service rated Excellent with five stars in the UK, Australia and the US by independent review site Trustpilot

Outlook

· UK revenue guidance for the full year upgraded 5% from £80m to £84m reflecting a strong first half, recent investment in LPEs and infrastructure, to capitalise on momentum and further increase market share

· On-course to achieve full year revenue guidance of £12m in Australia

Commenting on the results, Michael Bruce, Purplebricks Group Plc CEO, said: “We have had a great first half, with strong trading, significant strategic progress and substantial operational upgrades. The UK business continues its rapid top line growth, which is driving a strong increase in profits and margin expansion. We continue to win UK market share from traditional operators in what is a challenging market and consolidate our leading position with competing digital and hybrid offerings.

As a result of our continued success we have seen the highly customer engaged Post Sales Support team more than double, the Conveyancing Sales team grow by more than 80% and our Purplebricks Concierge team expanded, with a view to them covering the whole of the UK. We have also made considerable strategic investments in people to support both UK and global growth. Our team in the UK, excluding LPEs, is now 375 strong.

Our overseas expansion is progressing well with Australia on track, and the launch into the US in September ahead of schedule. While it is very early days we are greatly encouraged by the initial response from customers and the quality of applicants looking to be Local Real Estate Experts. We are pleased with our progress to date, confident in our future, and as a result upgrade our UK full year revenue guidance by 5% from £80m to £84m.”

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