PurpleBricks FY2022

British real estate hybrid portal PurpleBricks has published its delayed financial results for the year to April 2022.

Operating during a buoyant period for the U.K. residential property sector, the company posted a disappointing set of results against a backdrop of impending lawsuits, an activist investor calling on chairman Paul Pindar to stand down and a new CEO Helena Marston with a big challenge ahead.

Revenue dropped 23% from £90.9 million ($111 million U.S.) to £70 million ($85.5 million U.S.). Gross profit fell 27% from £57.7 million to £42.1 million. Adjusted EBITDA came in at a loss of £8.8 million, compared to a £12 million profit in the prior year and the overall loss from total operations reached £42 million, compared to a profit of £6.8 million in 2021.

Total fee income decreased by 28% from £87.1 million to £63 million and instructions dropped by 31% from 2021 to 40,141 units. Average revenue per instruction did rise slightly, up from £1,501 to £1,568.

PurpleBricks initiated a restructure of fees since the reporting period ended. From July 11, its standard package increased from £999 ($1,191 U.S.) to £1,199 ($1,429 U.S.), the Pro Package went up from £1,399 to £1,599, the higher-priced regions’ Classic Package increased from £1,499 to £1,999, while the higher-priced regions’ Pro Package increased from £1,999 to £2,499.

PurpleBricks burned through over £30 million in cash reserves during the financial year. Cash on its balance sheet was £43.2 million, down from £74 million at the start of the year.

“Last year’s financial performance was significantly impacted by the challenges resulting from the implementation of our new operating model and investment in marketing that did not deliver the expected results, alongside a housing market which played against us. Nevertheless, our performance was not good enough,” said PurpleBricks CEO Helena Marston.

“I have today set out my plan to improve the performance of the business. Central to our plans are initiatives which we expect to drive higher instructions, grow revenues, reset our cost base and raise standards.

“We have already taken decisive action. We have completed a substantial cost-reduction programme, re-trained all our field agents to raise standards and improve conversion, increased our prices and removed the Money Back Guarantee, adopted a more targeted sales and marketing plan, and dramatically overhauled our processes and procedures. We are also assessing additional revenue streams including our new mortgage proposition which we expect to launch by the end of this financial year.”

A further notification to the London Stcok Exchange on Tuesday confirmed that Paul Pindar, non-executive chairman, purchased 2,500,000 ordinary shares of £0.01 each in the share capital of the Company (“Shares”) at a price of 14.76p per Share on 2 August 2022. Following this purchase, Paul Pindar and Sharon Pindar, a person closely associated, together hold 14,081,056 Shares representing 4.59% of the total issued share capital.

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