Purplebricks
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Purplebricks blames slow start to Spring market on weather, training and economy
Purplebricks has hit its first purple patch after it was revealed today that group revenues for the financial year are likely to be 5% lower than its target of £98 million. In a statement released this morning, the company says a difficult few weeks during late February and early March are to blame for the drop in performance, although Purplebricks says overall group cashflow is on track to be double that of last year’s, helped by good performances from its US and Australian operations. It blames the slowdown on “macro issues” within the economy – presumably the ongoing Brexit jitters – plus the ‘Beast from the East’ storm and the fact that 10% of its LPEs were withdrawn from the market for a training course during late February and early March. These factors drove down sales instructions by 17% during the first three weeks of this month year-on-year, Purplebricks reveals. New instructions “While Purplebricks has experienced strong growth in its UK division to date and it continues to build market share in both the total estate agency market and hybrid estate agency sector in the UK, it has experienced lower than expected levels of new instructions for the Company during…
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Purplebricks signals imminent move into Europe with extra £125m from German publisher
German publisher and property portal owner Axel Springer has invested £125 million in Purplebricks for 11.5% of its share capital, it has been announced, subject to a board meeting likely to rubber-stamp the deal next month. The surprise move by the €7 billion publisher of Europe’s largest tabloid newspaper Bild is to help fund a faster roll-out of the hybrid agency in the US, to prepare for entry into new markets and to improve its IT systems. Berlin-based Axel Springer’s investment, which echoes the Daily Mail’s involvement with Zoopla, is being led by its classified advertising chief Andreas Wiele, who joins the Purplebricks’ board as a non-exec director. But the investment also adds to Axel Springer’s existing property portal portfolio – it operates several leading European versions of Rightmove including SeLoger, Immowelt and Immoweb. European expansion? And like many UK publishers who have invested in digital media in the past, the move is designed to offset the huge migration by many agents from traditional publishing to online, and suggests an imminent move by the hybrid agent into European markets such as Germany and France. “Under the leadership of its founder Michael Bruce, Purplebricks has created a highly innovative digital real…
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ASA rejects complaint against allAgents
Review site is successful in proving its ‘independent’ status, as used in its advertising and marketing, in a case involving negative Purplebricks reviews.
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Purplebricks is being caught up by rival YOPA says leading investment bank
Purplebricks’ growth is stalling and it’s being caught up by rival YOPA, say analysts at Swiss banking giant UBS It has released a research note that both highlights Purplebricks’ slowing growth and cuts the likely final market share in the UK from 15% to 12%. UBS has subsequently dropped its target price for Purplebricks from £3.05p to £2.85p. Shares in Purplebricks are currently trading at approximately £3.36p each. The bank has also reiterated its advice that investors should sell their shares in the company. As well as flagging up slowing growth for the hybrid agency, the bank says its Subject to Contact market share has been flatlining since September last year at approximately 5%. Raise questions “Given the importance of the Spring Market, we believe that this level of progress will be below management’s expectations, and will raise questions around the potential market share Purplebricks is able to achieve,” it says. UBS also says that one of its key competitors, Savills-backed YOPA, is beginning to catch up Purplebricks and now has 0.5% of the market, and that many hybrid and online agents are now offering ‘no sale, no fee’ options to customers, something Purplebricks does not. “Whilst [YOPA’s market share]…
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Purplebricks gifts new CEO in UK stock options worth £400,000
Purplebricks has revealed that its recently-appointed CEO in the UK Lee Wainright has been given stock options worth £415,000 through the company’s employee share option scheme. Lee (pictured, below) has been given 100,000 shares in Purplebricks at an exercise price – i.e. the fixed sale value of each share – of £4.15p, although how long he will have to wait to cash them in is not made clear. Purplebricks is tight lipped about why Lee has been granted the stock options now, but risky start-up companies such as Purplebricks often use share options to make up for the higher salaries that senior executives might earn if they were working for longer-established, more profitable organisations. That, in Lee’s case, was Countrywide where he was Managing Director of Bairstow Eves and Mann London before joining Purplebricks 12 months ago, where he initially held the title of UK Operations Director. It is also likely that he has been given these golden handcuffs to soften the blow of what is a bone-rattling role. Only a few weeks after being appointed UK CEO, Lee endured a painful grilling when he appeared on a BBC Radio 5Live show that investigated some of its marketing practices. The…
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Both Purplebricks and OpenRent change claims made on their websites following ASA investigations
Two of the UK’s largest online agents have been reported to the Advertising Standards Authority (ASA) about misleading claims on their websites. The first is Purplebricks, its 11th referral since it started up in 2015. A complainant challenged whether the way the company provides information about its standard fee of £849 was misleading. An icon is positioned next to text saying “our standard fee £849” which, when hovered over, pops up with the text: “This is our standard fee for everywhere outside of London and surrounding areas, where we charge £1199 inc VAT. Around 40% of our customers pay us a fixed fee of £300 to cover ALL viewings”. The complainant understood that the average fee was therefore likely to be higher than £849 and challenged whether this was misleading. The ASA says it agreed, saying that “we noted that it was only when a user hovered over the icon that information about the additional cost for the viewing service became visible”. “We approached the advertiser with our concerns and they agreed to amend their website.” Instead, the Purplebricks site now says “viewing service is optional £300” on the main page, rather than as a pop-up. OpenRent complaint The second…
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Traditional agents just ‘twiddle their thumbs’ in their high street branches, suggests Purplebricks
A video published recently on YouTube by Purplebricks suggests that traditional estate agents just sit and “twiddle their thumbs” in their high street branches. The 30-second video, which has attracted nearly half a million views since it was published both on its own website and on Youtube, features an apathetic woman reclining on a couch who asks whether, if she uses Purplebricks, she will have to “do everything myself?”. The video goes on to make the claim that its Local Property Experts can “manage every aspect of your sales wherever and whenever you need – we think that’s far better than then them twiddling their thumbs in an office on the high street”. Designed to allay consumer fears about using Purplebricks, the video is believed to have been produced by Snap, the same agency that cooked up the company’s ‘commisery’ TV campaign. Three other videos have been filmed for the ‘series’ including ‘how can you charge so little’, ‘why would I sell with someone new’ and ‘why would you get me the best price’. Investor worries The videos have done little to allay City investor worries about Purplebricks. Its share price has yet to recover from the report published recently…
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Purplebricks is ignoring advertising watchdog’s ruling over fee transparency, claims CIELA
Purplebricks is to be investigated by the Advertising Standards Authority (ASA) over a ruling the watchdog published last year which upheld a complaint by the Charter for Independent Estates and Lettings Agents (CIELA) about its TV advertising. CIELA claims that Purplebricks is still not being clear about its upfront fee structure, despite the ASA saying it should do when, in October, the ASA found that Purplebricks’ ‘commisery’ TV ads had breached its Code of Broadcast Advertising. In the comments, the ASA said Purplebricks must “ensure that when making a comparison to other fee models in their ads, they made it clear that their flat fee was always payable.” Last week CIELA made a further complaint to the ASA, pointing out that several of Purplebricks’ online adverts made the same claims, and had not been amended to reflect the ASA’s earlier decision. CIELA has been told by the ASA that its complaint will not be taken forward. In an email to CIELA, it has said that “having considered your complaint, we have determined that it is not necessary to reinvestigate the issue, in light of the previous ruling. “Instead, we will refer this matter directly to our Compliance team to take…
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Purplebricks shares continue freefall despite robust radio defence of sales by new UK CEO
The Purplebricks share price has continued to tumble today dropping this morning by 10% to £3.74p a share, down from its all-time high of £5.13p. This follows a price crash late last week during which its share price dropped by nearly 15%, prompted in part – it is claimed by Purplebricks – by a market report from investment analyst Jefferies that claimed it is selling fewer properties than the 78% sales rate it currently promotes. The company’s new CEO Lee Wainwright (pictured, below) went public over the weekend and appeared on a BBC5Live radio programme, during which he called into question the basis of Jefferies report, saying: “Purplebricks wouldn’t be growing at the rate it is if we were only selling half the properties we list”. “The reason we’re capturing the imagination of consumers is that the old way [isn’t] working,” he added. “I’ve been in the estate agency for 26 years, I’ve worked on the high street, I know that the performance of Purplebricks is incredible compared to the high street estate agencies. “Customers want a better way, they want more transparency on fees and the convenience of 24-hour technology and they want a cost-effective way of doing estate…
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AllAgents asks reviewers to prove their posts are not ‘fake’
Glasgow-based reviews website allAgents has taken the “unprecedented step” of asking people posting on its site to prove they are genuine customers of an agent before their comments can go live. The site, which has been involved in a prolonged battle with Purplebricks over claims by the agent that some negative posts on allAgents are ‘fake’, says it has made the move “due to previous threats of legal action” by Purplebricks. “They are not fake, they are genuine customer concerns,” a statement released by allAgents over the weekend says. AllAgents claims it is now the only review site in the UK to ask customers for proof of this kind prior to posts going live. The announcement is the culmination of nearly six months of wrangling between the two firms after Purplebricks asked the site to take down the ‘fake’ negative reviews. The website declined to do so. In December talks between it and Purplebricks broke down after allAgents’ Director of Business Development said the hybrid agent’s “business ethics are not in line with our own”. one-star reviews Of the 11 reviews posted on the reviews website since the New Year, all bar one award Purplebricks one star out of five…
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