Estate agent Purplebricks recorded its highest ever month for instructions in the UK in July due to the stamp duty holiday and pent-up demand following the coronavirus lockdown.
Shares in the company jumped 4.59 per cent this morning after it announced that it listed a record-breaking 7,000 homes in July.
Purplebricks this morning reported its financial results for the year ending 30 April, which included two months of the coronavirus lockdown.
Group revenue fell two per cent to £111.1m in the period, down from £113.8m last year.
UK revenue was flat throughout the first 10 months of the period until the pandemic hit, but was 11 per cent down for the full year.
UK instructions fell 23 per cent, although average revenue per instruction increased 11 per cent to £1,394.
Group earnings before interest, tax, depreciation and amortization (Ebitda) was £1.8m, down from £6.6m, including a loss of £1.4m from the Canadian business which was sold after the year ended.
UK ebitda reduced from £10.2m to £4.8m due to the suspension of the housing market in the final two months of the period.
The group’s total loss for the year was £19.2m, compared to £54.9m in 2019.
Why it’s interesting
Purplebricks said it continued to see new instructions throughout the pandemic, and the market had recovered well since reopening in the middle of May.
The jump in new listings last month was boosted by the government’s stamp duty holiday, effective 8 July. Chancellor Rishi Sunak increased the stamp duty threshold from £125,000 to £500,000.
Purplebricks chief executive Vic Darvey said more than 90 per cent of the homes sold through the platform are worth less than £500,000, meaning the “nucleus” of its audience have benefited from the new policy.
The firm is “fit for a second spike” due to its virtual viewings and valuations capabilities, Darvey said.
The estate agent, which furloughed 50 per cent of its UK workforce during the lockdown, said it would not claim the government bonus for staff returning to work. All employees are now back at work, Darvey told City A.M.
Staff have continued to work from home, although Purplebricks has reopened its Solihull office for those employees who prefer to use it.
What Purplebricks said
Chief executive Vic Darvey said: “Despite the challenges of Covid-19, our strategic initiatives are being delivered at pace to accelerate our digital and data capabilities, and with a very healthy net cash balance of £66m, I’m confident that we can take advantage of the changing landscape.
“The group is encouraged by the early signs of the housing market rebounding well following the lifting of the lockdown and the government’s stamp duty holiday.
We strongly believe that, in the current market, technology led estate agency is starting to emerge as the winning model and there is clear evidence that consumers are increasingly shifting towards apps and tech-based alternatives.
“With our strengthened leadership team and balance sheet, we are in a strong position to accelerate our model, extend our market share and grow our value-add revenues.”