More investment in Purplebricks as Axel Springer increases its stake

The German publishing company Axel Springer has increased its stake in Purplebricks to 12.5 per cent - and says it may increase it further. 

The company this morning bought three million Purplebrick shares at £3.07p each; back in March the firm paid around £125 million pounds for its original 11.5 per cent stake in the hybrid agency. 

Financial news outlets are reporting a spokesman for the Alex Springer company saying: “We still view this as an innovative business model that allows us to participate in new markets ... It is possible that we increase the stake further but there are presently no concrete plans to that end.”

The original investment by Axel Springer included a £100m subscription for new shares in order to accelerate the company’s roll-out in the US and to support entry into new markets, as well as underwriting ““technological innovation and [to] expand Purplebricks’ service offering”.

Since that time Purplebricks has announced its acquisition of a similar hybrid listings platform in Canada and the mixed fortunes in its latest trading statement.

Last week the agency told shareholders it sold and completed on £9.7 billion worth of UK property in the year to the end of April 2018, with a further £3.7 billion sold subject to contract. This was, it said, 3.1 times the number of properties sold by its closest (unnamed) rival in UK agency - a proportion that accelerated to 3.3 times in the second half of the year under review. 

However, the figures also showed pre-tax losses of £26m over the year, up from £6m a year earlier, on higher marketing and expansion costs.