Purplebricks Post ‘Strong’ Financial Performance, Announces New Pricing Model – Property Industry Eye
Purplebricks has released its results for the fiscal year ended April 30, 2021 (“FY21”) and provided an update on the execution of its strategy.
More details on the company’s plans to increase its market share ahead of the launch of its new pricing model were also revealed today.
The online real estate agency reported a ‘strong’ financial and operational performance, with turnover up 13% to £ 90.9million, from fiscal 20:80, £ 5million.
Instructions increased 14% to 58,043 from 50,948 12 months earlier.
In terms of market share, Purplebricks saw its share of properties sold by volume drop to 4.67% from 5.1% last year.
Average income per instruction rose 7% to £ 1,501 from £ 1,401, while his total fee income rose 22% from £ 71.4m to £ 87.1m.
Adjusted EBITDA of £ 12million (FY20: £ 2.9million) was recorded, up 314%, while the reimbursement of £ 1million of paid vacation was confirmed.
Operating profit of £ 8.2million released this morning, including a profit of £ 4.3million from non-commercial items, is a marked improvement over the loss of £ 5.7million recorded last year, while group profit on total operations reached £ 6.8million (FY20: loss of £ 19.2million).
The strong trading and sales of the Canadian business contributed to the cash position as at April 30, 2021 of £ 74million, up from £ 31million.
The company said it had “great confidence” in its latest pricing trials in the northwest of the country following positive results after the launch of a new pricing model in July.
The new money-back guarantee (MBG) and simplified two-tier proposal will now be rolled out nationwide later this month following “successful research and field testing.”
Vic Darvey, CEO, commented: “We are delighted to announce the conclusion of our price review this morning, following a successful trial in the Northwest. The Group has responded to changes in the market and we are delighted to offer clients an option to repay their prepayment if they do not sell their home. This illustrates our commitment to providing customers with the best service at the best price and we are very excited about the growth opportunity that this new initiative will generate over the next few years. “
With the company “healthy”, Purplebricks now plans to launch its renewed strategy to generate additional growth in FY21 with investments in “leadership, systems and our people”.
The new management team is already in place and working at a steady pace to implement its strategic initiatives, as the company seeks to meet its mid-term goal of 10% market share.
The Group wishes to build on what it clearly considers a good start to the year, with what it describes as “a very clear understanding of its operational barriers to success, and” with multiple strategic levers in place. to drive its growth ”, including new pricing structures, such as the money-back guarantee and a simplified two-tier proposal, launched in July 2021.
Although the sales market is buoyant at the moment, Purplebricks expects supply and demand to return to equilibrium after the summer.
As such, he says it is too early to quantify the benefit of the new pricing structures for the current fiscal year. His current expectation is that FY22 EBITDA will be stable year-on-year, in line with market expectations, as these strategies should accelerate revenue growth and advance mid-level targets. term of the Group over the next few years.
Once these initiatives have been successfully deployed, the Group indicates that it will accelerate its marketing strategy to increase instructions and share. As a result of these strategic changes, the Board of Directors expects Purplebricks to be able to generate annual revenue growth of over 20% over the medium term, with confidence in the Group’s ability to respect its growth strategy.
Darvey continued, “We are delighted to announce the conclusion of our price review this morning, following a successful trial in the Northwest. The Group has responded to a changing market and we are delighted to offer clients an option to repay their prepayment if they do not sell their home. This illustrates our commitment to providing customers with the best service at the best price and we are very excited about the growth opportunity this new initiative will generate over the next few years.
“We have had a solid year and I am particularly satisfied with the growth in our sales and operating results, as the Group continues to strengthen. This great performance was achieved in the shadow of the Covid-19 pandemic, and it remains a great source of pride that Purplebricks has come through the year stronger than ever.
“Most importantly, today we are introducing Purplebricks 2.0 and I think we now have the right leadership team, the right strategy and the right technology to continue growing the business.
“With a streamlined proposal and our new pricing structure in place, I have no doubts that Purplebricks is well positioned to gain market share, accelerate revenue growth and progress towards our mid-term goals. I would like to thank all of my colleagues for their efforts over the past year and I look to the future with considerable optimism.
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