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Purplebricks exits US as losses reach £52m

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  • 03/07/2019
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Purplebricks exits US as losses reach £52m
Purplebricks has announced its departure from the US market less than two years after country launch as losses continue to mount.

 

However, the estate agent said its core UK business was operating well with revenue and operating profit both up from the previous year.

According to 2019 financial year results to April, Purplebricks saw an overall group operating loss of £52.3m, up from a loss of £27.8m in the previous year, although revenue increased by 55 per cent to £136.5m.

Its share price rose slightly to 95.5p in morning trading following the news, but it has suffered over the last 12 months, falling from a high of 326p in July 2018.

The US, Canada and Australia arms all reported operating losses during the period of £34.1m, £3.2m and £18.8m respectively – with the closure of the Australian business previously announced in May.

Its US business saw losses double to £34.1m with losses in Australia growing by almost 50 per cent.

Purplebricks entered Canada in July 2018 by purchasing duProprio and the firm said this part of its business was living up to expectations.

 

UK revenue and profit up

Only the UK-based operation was in the black with a £5.3m operating profit, up from £2.2m in 2018, while UK revenue was up by 21 per cent to £90.1m.

Average revenue per instruction was up six per cent and the estate agent completed on £10.4bn of UK property, up from £9.7bn.

According to industry data from TwentyCi, Purplebricks said in the UK it sold 3.5 times more properties subject to contract than the next largest UK estate agent, and had the highest level of conversion and lowest withdrawn level of the top 20 estate agency brands in the country.

It added that 77 per cent of listings either completed, exchanged or sold subject to contract within 12 months, with 56 per cent sold within two months.

 

Taken difficult decisions

Group chief executive officer Vic Darvey said it had been another year of strong revenue growth. “With a base of clear brand leadership in both the UK and Canada and a differentiated, technology-led proposition driving business model advantages, we now have a clear plan to unlock the next wave of growth and extend our market leadership,” he said.

“We have taken the difficult decisions to exit our businesses in both Australia and the US as it is very important that we now focus our resources on the UK and Canada, where we have a strong established presence and where there are significant opportunities to grow market share and deliver profitable growth for shareholders.

“Both exits will be conducted in an orderly manner with the expectation they will be completed by the end of 2019,” he added.

 

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