Purplebricks is feeling bullish about its half-year profits which could give the struggling hybrid agency a much-needed boost and helping its share price rise by nearly 6% yesterday.
Its trading update for the six months ending 31st October details strong levels of new instructions during the last five months, despite a slow start after the lockdown, which would see it report an 8% increase to 35,387 instructions.
But it’s too early to say whether the new ‘Gold’ fee trial introduced in September, offering London vendors a £399 upfront service followed by a £4,100 completion fee, has helped to deliver more customers.
Purplebricks sold its Canadian business in order to concentrate on the UK a year after closing both its failed Australian and US operations. It says this focus means adjusted EBITDA for the first half of the year is expected to be comfortably ahead of the company consensus for the full year of £3.5m. It’s also sitting on more than £75m in cash reserves after the sale.
CEO Vic Darvey (pictured, above) believes its proposition has never been more relevant, particularly in the current market, and says its strategy has helped capitalise on the pick-up in market activity.
“We expect to deliver a pleasing profit performance in the first half, but it is too early to extrapolate this out to the second half of the year given the expected end to the stamp duty holiday and the potential impact of increased COVID-19 restrictions on the housing market,” says Darvey. “As a result, we are planning cautiously around the outlook for the full year.”
The platform will publish its full unaudited half-year results on 15th December.