Purplebricks Group plc (“Purplebricks”), have announced their Interim Results for the six months ended 31 October 2017, including the Australian and US divisions of the group.
In Australia, revenue for the period was recorded at £6.8m, up from the corresponding period last year at £0.4m. Adjusted EBITDA shows a loss of £5.1m, twice that of the same period last year. The average income “per instruction” (sale) in Australia was reported at $AUD 5,282, with an increase in staff members to 105 as at 12 December.
Commenting on the overall result, Michael Bruce, Group CEO said, “We have had a great first half, with strong trading, significant strategic progress and substantial operational upgrades. The UK business continues its rapid top-line growth, which is driving a strong increase in profits and margin expansion. We continue to win UK market share from traditional operators in what is a challenging market and consolidate our leading position with competing digital and hybrid offerings.”
Since launching in Australia in September 2016, Purplebricks have sold more than $1.1bn in property and say they plan to expand the Australian management team, continuing to build on existing infrastructure for growth. Currently, there are 105 “Local Property Experts”, and the company’s statement says they are pleased with improved brand recognition with 10 per cent of consumers surveyed recognising the brand unprompted.
The Australian business is “on track” and performing ahead of expectations, according to Bruce.
Focus on technology
With technology being the foundation of the Purplebricks offering, the announcement makes reference to the goal of improving user experience and how to reduce friction in every interaction with the current service offering. The company has plans to migrate the advanced features introduced for the US launch to the UK and Australia. Over 80 developers now oversee the Purplebricks app across the UK, Australia and the US.
Branding and marketing
From a marketing perspective, a continued investment is planned in above-the-line marketing through Facebook, Google and Bing, with the company stating they are looking for better ways of using social media in a targeted way to drive more activity amongst sellers; with Email marketing to play a wider role moving forward.
In the USA (another new market for the group), revenue for the period was recorded at £0.1m, with adjusted EBITDA showing a loss of £6.3m, twice that of the same period last year.
In Australia, Matt Siddons (formerly Marketing Director at Domain) leads the charge as Chief Marketing Officer.
Fees and Auctions
Purplebricks charges a flat sales fee of £2,708 ($4,500AUD) everywhere other than New South Wales where the fee is £3,309 ($5,500 AUD) which includes professional photography, marketing and advertising on the portals as well as the Purplebricks Australia website.
The company says that “while Australian pricing is above that of the UK the overall percentage saving for customers is broadly similar.”
Recognising the role of auctions in the Australian property market, Purplebricks also offers an additional auction facility with a top-up fee, which includes an auctioneer with all viewings held by a Local Property Expert or an experienced Viewing Assistant.
Consolidated and US results
In the UK, revenue was up 118 per cent to £39.9m and adjusted EBITDA up to £4.7m.
For the group overall, revenue reported was up 50 per cent on the same period last year to £46.8m, with adjusted EBITDA showing a loss of £6.6m.
