'Innovator' Purplebricks will report profits next year say City analysts

The City consultancy which advises Purplebricks says the online agency will break even in terms of its month-to-month activities by the end of 2016 and will report profits by the end of the 2016-17 financial year.

Analysts at Zeus Capital, which worked with Purplebricks at the time it was floated on the Alternative Investment Market in December, say: “In under two years Purplebricks has established itself as a leading UK residential property agency with over 165 experience Local Property Experts (LPEs) based in local markets across the UK. We expect Purplebricks to reach break even on a monthly run rate later this year and report profits in its fiscal year ended April 2017.”

The consultancy was responding to the first set of figures produced for the City by Purplebricks.

In its interim results for the six months ending October 31 last year - so before the flotation - the agency shows a £6.4m loss but says it had a strong end to the trading period under review. 

Its revenues for the half year were £7.2m, up 777 per cent on the £0.8m it made in the same period in 2014, with a gross profit of £4.1m, up 814 per cent.

It also reported that it had completed its full national roll-out and had seen a 90 per cent increase in its number of local property expected. 

It made particular mention of its high customer service ratings on Trustpilot, where it averaged 9.4 out of 10 from over 3,500 reviews.

Purplebricks told the City it had increased its online market share from 43 per cent in April 2015 to 60 per cent by the end of October making it - within 18 months of its launch - the fourth largest estate agency (based on an annualised interpretation of the instructions it received in September).

"We have made great progress across the business in the last six months, culminating in our listing on the AIM market in December. The money raised will be used to deepen our national coverage through the recruitment of top quality local property experts and further investment in technology and marketing. This will build on our position as the number one next generation estate agent” said chief executive Michael Bruce. 

Meanwhile Purplebricks has had another boost in the form of its inclusion in a list of Business Innovators compiled by financial consultancy Bloomberg.

It was one of the firms included amongst “breakthrough businesses disrupting the way people live, work and think in the UK.”