First-half losses have more than doubled at Purplebricks as the online estate agent warned that it saw little prospect for immediate improvement in the UK property market.
Purplebricks made a pre-tax loss of £27.3m in the six months to 31 October, up from £11.4m in the equivalent period last year. The company, listed on the AIM junior stock market, lowered the upper end of its full-year revenue forecast from £185m to £175m. Its shares slumped by 12% to 131.5p, which means the company has lost nearly three-quarters of its value from its 2018 peak of 489p.
In a statement, Purplebricks said it saw no short-term relief to “challenging market conditions”.
Michael Bruce, the Purplebricks chief executive, said the company would “emerge stronger from the ongoing industry shakeout, which is expected to continue to expose undercapitalised traditional and online competitors”.
The stalling housing market – weighed down by Brexit uncertainty on top of affordability issues after years of rapidly increasing prices – has put pressure on British estate agents. A direct rival to Purplebricks, eMoov, collapsed last week, while shareholders in Countrywide, previously the UK’s largest estate agent, were forced to inject £140m into the company in August to avert failure.
This week the Royal Institution of Chartered Surveyors said its monthly market health check showed house prices falling by the most for six years, with Brexit highlighted as the main reason for buyers and sellers holding back.
Purplebricks, which earns fees from sellers for advertising their property but does not have any physical branches, remains profitable in the UK. British revenues rose by 39% to £48.3m. It made revenues of £70.1m worldwide during the period, up by 75% compared with the year before.
However, the company has staked its future on a rapid expansion overseas, with operations now open in the US, Canada, Germany and Australia. Purplebricks received a £125m investment from Axel Springer in March to fund the growth.
