Purplebricks Group PLC (LON:PURP), the digital estate agency, saw its shares leap this morning on news it halved annual losses in its first full year of operation since listing on AIM in December 2015, and has upgraded its expectations for the UK market.
In the year to April 30, Purplebricks saw its loss on ordinary activities before tax reduced to £6.059mln, down from an £11.90bn loss a year earlier, as revenue more than doubled to £46.7mln, up from £18.6m in 2016.
The group said its UK operation had achieved its first operating profit, of £200,000, and had seen sales of £5.8bn worth of UK homes.
WATCH: Purplebricks 'doing well' despite poor UK housing market, says Proactive's Jon Hopkins
Purplebricks said it now expects UK revenues of £80mln for the current year, a near doubling from the £43m reported for the past year.
For its Australia business – which was launched last August – the group said its expectations remain unchanged following good progress to date, with revenues forecast to reach £12mln in the current year.
The firm – which is also gearing up for a launch in the US – said: “While the broader macro climate is uncertain and it is early in the financial year, Purplebricks remains confident in its prospects and of meeting the board's increased expectations.”
In strong position to become the number one estate agent in the UK
Michael Bruce, Purplebricks’ chief executive, said the group is “now in a strong position to become the number one estate agent in the UK for both listings and sales”.
READ: ‘Uber of real estate agents’ Purplebricks set to launch in California
He added: “We have materially grown our national footprint and have built a growing brand awareness and reputation for delivering customers a more convenient, transparent and cost effective service.”
Purplebricks does not run branches but has a network of self-employed estate agents combined with a digital service, while customers pay a fixed-fee for a basic service with add-ons for extra services.
Shares have quadrupled since float, but UBS still negative
In early afternoon trading, Purplebricks’s shares were over 5%, or 21p higher to 420p, having more than quadrupled from its 100p float price.
In a note to clients, analysts at UBS said: “Progress continues as expected and UK revenue guidance ahead of expectations is supportive, but we believe this is broadly already priced in.”
UBS reiterated a ‘sell’ stance on Purplebricks with a 12 month price target of 115p.
-- Adds video --