Purplebricks posts loss after lettings setback
Online estate agency Purplebricks posted a first half loss of £20.2 million, including a £3.6m provision for potential claims arising from processing issues in its lettings business.
There was also £2.7m relating to impairment of goodwill and other intangible assets in the lettings business, and a charge of £7.3m arising from de-recognition of deferred tax assets.
Instructions fell by 38% to 21,131 (H1 21: 34,150), but average revenue per instruction (ARPI) increased by 15% to £1,642, driven by higher attachment rates, pricing optimisation and phasing of higher conveyancing income
Total fee income fell by 29% to £34.7m (H1 21: £48.8m), with the reduction partially offset by the increase in ARPI. Revenue was down 7% to £41.3m (H1 21: £44.2m), benefiting from revenue earned in the prior period.
Market share of properties sold by volume was 3.9%, down from 4.8% last year. Adjusted EBITDA loss came in at £0.8m (H1 21: profit of £8.4m).
CEO Vic Darvey said: “The first half was undoubtedly challenging, with the implementation of a major change to our operating model coinciding with the UK property market experiencing a substantial fall in new instructions.
“This dynamic led to a disappointing financial performance but we are confident that we now have the right levers in place to drive a stronger financial performance going forward.
“Our lettings business, while relatively small, has significant potential. We were disappointed by the process issues that we became aware of in our lettings business in December. These are being corrected and a root and branch review of the lettings business has been completed in relation to our processes and procedures.
“Looking ahead, the outlook for the housing market remains uncertain and we expect the constrained levels of sales supply to continue throughout the second half. The initial results from our operational improvements are very encouraging and there are early signs of improving market conditions during January, although we do not anticipate a meaningful financial benefit until FY 23.”