Strike secures another year of investor backing after...

Strike remained in the red in the run up to its acquisition of Purplebricks last year and has new financial backing from existing investors to continue trading, its latest accounts have revealed.

The online agent’s 2023 annual report shows the business received loans worth £26.2m from existing investors post year-end, the accounts show, and the backers have provided a letter of support confirming they will commit funds up to March 2025 and not recall loans during the same period.

The report said: “The company has prepared forecasts for the period to 31 March 2025 which indicates that the company can continue to trade within its cash resources for the 12 months following the signing of these financial statements (on 27 March 2024).

“Furthermore, the company has noted areas to mitigate budget risks during this period.

“Therefore, the directors have a reasonable expectation that the company has adequate resources to continue to trade for the foreseeable future.”

The report also shows that unsecured shareholder loans of £17.6m were borrowed during the accounting year up to 31 March 2023, carrying an interest rate of 12%. Subsequent to the year-end, these loans were modified to carry an option to convert the principal sum into shares.

Strike posted turnover of £13.2m in the 12 months to 31 March 2023, up from £8m a year before, the documents uploaded to Companies House last week show.

But higher administrative expenses at £27.8m – compared with £25.2m in 2022 – and cost of sales of £3.5m contributed to an operating loss of £18.9m. That is slightly better than the £19.8m loss posted in 2022.

After tax, the loss was £19.7m.

The business spent £775,000 on redundancies last year but group staff costs, including wages and pensions, still rose from £13.6m to £18.5m, according to the annual report.

The highest paid director received remuneration of £260,500, up from £234,000 a year before, the documents show.

Addressing the Purplebricks deal, the report said the combined strengths of the brands “present a compelling opportunity for the business to significantly disrupt the real estate sector.”

Strike has since rebranded as Purplebricks, which operates as a fee-free model.

A Purplebricks spokesperson told Estate Agent Today: “These accounts reflect a period of turmoil for the housing market, including the impact of the government’s mini budget and nine interest rate rises. Despite that, Strike Limited increased both revenues and gross margin in the financial year.

"Today, the group owns Purplebricks, the number one estate agent in the UK, as well as a substantial financial services business. We have seen strong momentum over the past six months as we begin to realise the benefits of Purplebricks’ considerable brand awareness combined with Strike's innovative business model.”