Purplebricks has published its results for the year ended 30 April 2021 (“FY21”) and provided an update on its strategy execution.
More details on the company’s plans to grow market share ahead of the launch of its new pricing model have also been revealed today.
The online estate agency has reported a ‘strong’ financial and operational performance, with revenue up 13% to £90.9m, from FY20: £80.5m.
Instructions increased by 14% to 58,043, up from 50,948 12 months earlier.
In terms of market share, Purplebricks saw its share of properties sold by volume fall to 4.67%, from 5.1% last year.
Average revenue per instruction increased by 7% to £1,501, up from £1,401, while its total fee income increased by 22% from £71.4m to £87.1m.
Adjusted EBITDA of £12m (FY20: £2.9m) was recorded, up 314%, while repayment of £1m furlough monies received has been confirmed.
The operating profit of £8.2m reported this morning, including a benefit of £4.3m from non-trading items, is a marked improvement on the £5.7m loss posted last year, while group profit from total operations reached £6.8m (FY20: loss of £19.2m).
Strong trading and sale of the Canadian business contributed to cash at 30 April 2021 of £74m, up from £31m.
The company said that it had ‘high confidence’ in its latest pricing trials in the North West of the country following positive results after the launch of new pricing model in July.
The New Money Back Guarantee (MBG) and simplified two-tier proposition will now be rolled out nationally later this month following the ‘successful in field research and trials’.
Vic Darvey, CEO, commented: “We are excited to be announcing the conclusion of our pricing review this morning, following a successful trial in the North West. The Group has responded to a changing market and we are delighted to offer customers an option of reimbursement of their upfront fee payment if they do not sell their home. This illustrates our commitment to giving customers the best service at the best price and we are very excited about the growth opportunity this new initiative will drive over the next few years.”
With the business ‘in good health’, Purplebricks now plans to launch its refreshed strategy to deliver further growth built during FY21 with investment in ‘leadership, systems, and our people’.
The new leadership team is already in place and working at pace to deliver on its strategic initiatives, as the firm looks to deliver on their medium-term target of 10% market share.
The Group wants to build on what it clearly sees as a strong start to the new financial year, with what it describes as ‘a very clear understanding of its operational barriers to success, and ‘with multiple strategic levers in place to drive its growth’, including the new pricing structures, such as Money Back Guarantee and a simplified two-tier proposition, which launching in July 2021.
Although the market for sales is buoyant at the moment, Purplebricks expect supply and demand to return to more of a balance post Summer.
As such, it says it is too early to quantify the benefit from the new pricing structures to the current financial year. Its current expectation is for FY22 EBITDA to be flat year-on-year, in line with market expectations, with these strategies expected to accelerate revenue growth and drive progress towards the Group’s medium-term targets over the next few years.
Once these initiatives have been successfully rolled out, the Group says it will accelerate its marketing strategy to grow instructions and share. As a result of these strategic changes, the Board expects 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.
Darvey continued: “We are excited to be announcing the conclusion of our pricing review this morning, following a successful trial in the North West. The Group has responded to a changing market and we are delighted to offer customers an option of reimbursement of their upfront fee payment if they do not sell their home. This illustrates our commitment to giving customers the best service at the best price and we are very excited about the growth opportunity this new initiative will drive over the next few years.
“We’ve had a strong year and I am particularly pleased with our revenue growth and operating profit, as the Group continues to grow from strength to strength. This great performance has been achieved in the shadow of the Covid-19 pandemic, and it remains a great source of pride that Purplebricks has come through the year stronger than ever.
“Most importantly, today we present Purplebricks 2.0 and I believe that we now have the right management team, right strategy and right technology to continue to grow the business.
“With a simplified proposition and our new pricing structure in place, I am confident that Purplebricks is well placed to gain market share and to accelerate revenue growth and drive progress towards our medium-term targets. I would like to thank all colleagues for their efforts over the last year and look to the future with considerable optimism.”
Purplebricks brings ‘Home support’ campaign to life