TIDMPURP
RNS Number : 2758R
Purplebricks Group PLC
04 November 2021
4 November 2021
This announcement contains inside information for the purposes
of Article 7 of the EU Regulation 596/2014 as it forms part of the
UK law by virtue the European Union (Withdrawal) Act 2018
("MAR")
Purplebricks Group plc
("Purplebricks", the "Company" or the "Group")
Half year trading update and notice of results
Purplebricks Group plc (AIM: PURP), the UK's leading tech-led
estate agent, today issues the following trading update for the six
months ended 31 October 2021.
Housing market update
After an exceptionally strong period for the UK housing market
in FY2021, buoyed by the stamp duty holiday, the six-month period
to 31 October 2021 has been more challenging. New instructions have
slowed significantly in recent months, given continued strong
demand across the housing market is not being met by sufficient
supply of instructions. This imbalance has resulted in new
instructions coming to market being approximately 23%(1) below the
comparative period last year.
Strategic transformation and momentum
The Group has driven considerable transformation during the
first half of the year and has significantly invested in and
transformed its business model in this period, introducing new
pricing and a simplified proposition alongside a new operating
model. We are pleased with the progress we have made transitioning
our sales team to a fully employed model, which will offer our
agents greater security and benefits and will enable the Company to
scale up quickly when market conditions improve. We have over 95%
of our new sales team in position and are starting to see
encouraging progress across both conversion rates and ancillary
attachment rates. We are also pleased with the progress we have
made in enhancing our digital capabilities as we continue to
transform the buying and selling experience for consumers.
Given the supply and demand imbalance in the market and the
disruption caused by the business transformation, we expect to
report a reduction in instructions for the six-month period to c.
22,000 (H1 2021: 35,387). Our cash position as at 31 October 2021
was approximately GBP58m (31 October 2020: GBP75.8m), which
reflects a period of significant investment in digital,
non-recurring costs incurred in managing the business through the
pandemic and one-off exceptional costs in transitioning to a
fully-employed model. We expect the cash position to stabilise in
the second half of the year.
Outlook
Going forward, uncertainty remains regarding the imbalance of
supply and demand in the housing market and given the disruption
caused by the business transformation, we expect this dynamic to
continue into the second half of the financial year, impacting new
instructions for the full year. The cost guidance provided with the
Group's update on 10 August 2021 remains unchanged, and therefore
adjusted EBITDA(2) is expected to be below previous guidance.
However, we are confident that our transformed business model
will partially mitigate the impact of market conditions on
instruction levels. This transformation is yielding positive
results in terms of growth in ARPI and we are starting to see
progress in our market share aspirations and are well-positioned to
grow following the completion of our transition to a fully employed
model in the second half.
The Company's medium-term guidance remains unchanged, and the
Board continues to expect Purplebricks to be able to deliver annual
revenue growth in excess of 20% in the medium-term, with confidence
in the Group's ability to deliver against its growth strategy.
Vic Darvey, CEO, commented:
"Following a stronger period for instructions last year, supply
in the market has fallen as we slowly adjust to a below normal
level of activity following a period of successive lockdowns and
the end of the stamp duty holiday. Our service proposition remains
strong and compelling, with properties selling quickly, but the
reduced amount of stock coming to the market is proving
challenging.
Against this more challenging backdrop, the team is continuing
to execute on our transition to the new operating model. We are
encouraged by the early results we are seeing on the ground and
whilst they are not yet reflected in the overall group performance,
we are confident in the strategy and that we have developed a
strong platform for growth as activity levels pick-up. We are
committed to our mission of achieving 10% market share by being the
go-to-place to buy, sell or let your home."
Notice of Half Year Results
The Company expects to publish its unaudited half year results
for the period ended 31 October 2021 on Tuesday 14 December
2021.
1: Source: Rightmove
2. Adjusted EBITDA is defined as operating profit, adding back
depreciation, amortisation, share based payment charges and
exceptional items.
Enquiries
Purplebricks +44 (0)20 7466 5000
Vic Darvey, Chief Executive Officer investors@purplebricks.com
Fiona O'Nolan, Equitory, Investor Relations
Zeus Capital (NOMAD)
Daniel Harris, Nick Cowles + 44 (0)20 3829 5000
Citi
Stuart Field, Robert Farrington +44 (0) 207 986 4000
Peel Hunt
Dan Webster, George Sellar +44 (0)20 7418 8900
Buchanan
David Rydell, Jamie Hooper, Kim van Beeck +44 (0)20 7466 5000
Forward-looking statements
This announcement includes statements that are, or may be
considered to be, "forward-looking statements". By their nature,
such statements involve risk and uncertainty since they relate to
future events and circumstances. Results may, and often do, differ
materially from forward-looking statements previously made. Any
forward-looking statements in this announcement reflect
management's view with respect to future events as at the date of
this announcement. Except as required by law or by the AIM Rules of
the London Stock Exchange, the Company undertakes no obligation to
publicly revise any forward-looking statements in this announcement
following any change in its expectations to reflect subsequent
events or circumstances.
About Purplebricks
Purplebricks is a leading technology-led estate agency business,
based in the UK. Purplebricks combines highly experienced and
professional local property experts and innovative technology to
help make the process of selling, buying or letting more
convenient, transparent and cost effective. Purplebricks shares are
traded on the London Stock Exchange AIM market.
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END
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