Purplebricks losses grow on international expansion

“Losses at estate agency Purplebricks have swelled over the past year following expansion overseas.

The company reported a pre-tax loss of £26.1m for the year to April, up from a loss of £6m the year before.

Purplebricks launched its business in the US last September after it expanded into Australia in 2016, and has since moved into the Canadian market.

The company reported operating losses in both the US and Australia, with only the UK reporting a profit.

Purplebricks’ share price fell 4.7% to 303.65p in early trading.

Asked whether Purplebricks had expanded too quickly, Michael Bruce, chief executive and founder of the company, told the BBC’s Today programme: “The UK business is profitable and considerably more profitable than it was last year, it is growing considerably.

“We’ve recently launched into places like Australia and the US and they are earlier in their evolution, but as far as the business is concerned it is very, very well positioned for future growth.”

UK operating profit rose to £6.5m from £1.1m in the past financial year, while in Australia losses widened to £11.8m from £6.1m.

Losses at the newly-launched US business increased to £16m from £100,000 in the previous 12 months.

In Purplebricks’ results statement, Mr Bruce said: “Whilst the markets in the UK and Australia have been and continue to be challenging for the industry, with overall transaction volume and sentiment down year on year, we have managed to gain market share, increase revenues and grow customer engagement in all three countries in which we operate.”

Total revenue at Purplebricks, which describes itself as a “hybrid” estate agency with online and local office operations, rose to £93.6m from £46.7m in the previous 12 months.

In the current financial year, the company has moved into Canada through the £29.3m acquisition of real estate group DuProprio.

Earlier this year, Purplebricks sold an 11.5% stake to German publishing group Axel Springer for £125m to fund the estate agency’s international expansion.”

Source – BBC News