Purplebricks has revealed a weak first half of its financial year in the UK including a 15% decline in instructions, a 31% increase in operating costs and a 34% drop in profits to £5.5 million.
Market share has remained at 4%, although CEO Vic Darvey has once again predicted the company is ‘on track’ to take 10% of the UK property market.
Darvey has blamed its poor UK performance on the weakening sales market but says cost cutting and higher average revenue per instruction (ARPI) have helped offset this and, overall, its UK revenue dipped by only 3% to £47 million.
Its results also confirm that the company is planning to overhaul its pricing structure following a £100 fee hike earlier this year. Four options are to be tested in the field including splitting its fee in half and charging customers partly up-front and partly on completion.
The company has also launched several internal initiatives including new market data analytics for LPEs to use during valuations, improving its customer service operation and improving its tech.
Purplebricks’ overall group results should be better but the huge cost of closing its Australian and US operations weighs heavily on its balance sheet.
Both businesses are due to be fully closed by the end of 2020 but are expected to cost up to £14 million to shut down. Despite this the group generated a profit of £4.3 million during the period, compared to a £48 million loss during the same period last year.
“We are very pleased with the progress made in the period in light of the market backdrop,” says CEO Vic Darvey (left).
“We’ve seen resilient trading in the First Half, with our diverse revenue streams and strong ARPI growth improving the quality of earnings and balancing out declining market conditions.
“We end the first half having now stabilised the business and the significant losses incurred last year have now been reversed with the Group enjoying profitable trading.”