Michael Bruce, Purplebricks CEO, commented:
“Our UK business continues to make good progress, with strong sales growth, market share gains and a step-up in both profitability and positive cashflow. It is this strength that will see Purplebricks emerge stronger from the ongoing industry shakeout, which is expected to continue to expose undercapitalised traditional and online competitors.“Following Axel Springer’s investment in March, we are already seeing how shared knowledge and best practice across the business can benefit the entire Group.
“Purplebricks has led industry change and through our strategy of relentless innovation will continue to do so. We are always looking to improve the customer experience and with over £100 million of net cash, we are uniquely placed to do so, investing in technology and first class people. We remain confident that our UK success will be replicated internationally and that we will deliver substantial value for our shareholders.”
Purplebricks Group plc (LON: PURP), the world’s leading hybrid real estate agency, today announced its Interim Results for the six months ended 31 October 2018.
|
First Half |
2019 |
2018 |
2019 |
2018 |
Change |
||
|
|
IFRS 15 |
IFRS 15 |
IAS 18 |
IAS 18 |
IFRS 15 |
IAS 18 |
|
|
Group |
£m |
£m |
£m |
£m |
% |
% |
|
|
Revenue |
70.1 |
40.1 |
71.0 |
46.8 |
75 |
52 |
|
|
Gross profit |
42.0 |
23.0 |
42.3 |
26.2 |
82 |
61 |
|
|
Gross profit margin (%) |
59.9 |
57.3 |
59.6 |
56.0 |
+260bps |
+360bps |
|
|
Operating loss |
(25.6) |
(11.4) |
(25.3) |
(8.2) |
122 |
205 |
|
|
Adjusted EBITDA[1] |
(21.0) |
(9.8) |
(20.7) |
(6.6) |
125 |
214 |
|
|
Net cash[2] |
103.1 |
64.4 |
103.1 |
64.4 |
60 |
60 |
|
Financial highlights (IFRS 15 basis [3])
· Group revenue up by 75% to £70.1 million (H1 2018: £40.1 million)
· UK revenue up by 39% to £48.3 million, UK ancillary revenue up 25%
· International now represents 31% of Group revenue
· Group gross margin up by 260bps to 59.9%, UK like for like [4] gross margin up by 180bps
· UK Adjusted EBITDA £8.4 million, up 265% (H1 2018: £2.3 million)
Operational highlights
· Completed on £5.4 billion of UK property (H1 2018: £4.6 billion), saving customers £96 million in commission
· UK hybrid market share of 74%
· UK average revenue per instruction up 6%
· Australian model evolved to work better for customers, LPEs and Purplebricks
· Confidence to expand US business to Arizona, Nevada and Florida – now operating in seven states, representing more than 20% of US-wide instructions
· DuProprio/ComFree our Canadian business acquired in July 2018 continues to meet management’s high expectations
· Agreed minority JV investment in Homeday.de, the leading German hybrid real estate agent
· Appointed Vic Darvey (former Managing Director of MoneySupermarket) as our first Group Chief Operating Officer, starting January 2019
Outlook
Our UK business continues to outperform the industry, demonstrating an ability to grow strongly and win share in challenging market conditions. Whilst we expect no short-term improvement to this market dynamic, we are confident that we will continue to outperform and take further UK market share from competitors throughout the second half of our financial year.
Having now launched in phase one target states in the US, early indications show brand recognition and consideration are growing strongly. We are confident, with new marketing creative launching in the new year, that we will see a step up in instructions from our most recently added DMAs, which are yet to generate a meaningful contribution. Our near term strategy remains focused on maximising operational delivery, which will drive further revenue over time.
With six months of the year behind us and in light of the above, the Board narrows the range of our previously disclosed 2019 guidance, under IAS 18, from £165-185 million to between £165-175 million, in line with current market consensus.The adoption of IFRS 15 will result in an approximate 2% downward adjustment to our guidance, with a minimal impact on profit and no impact to cash.
