Online real estate agent Purplebricks Group PLC (LON:PURP) reported a 20% in first-half revenue as it continued to gain market share despite a slowdown in the UK housing market.
In a trading update on Tuesday, the company said it achieved double-digit growth in the number of properties it listed in the UK, or what it called instructions and an increase in revenue per instruction.
The group had a 74% share of the UK’s online hybrid real estate market in October.
"The challenging UK housing market is driving a shakeout in the industry, highlighting weaknesses in both some traditional and online agents business models,” said chief executive Michael Bruce.
“ Against this backdrop, Purplebricks continues to grow and win market share. Longer term with the best-known brand in the sector, our flexible business model and the strong balance sheet, Purplebricks is well placed to further strengthen its leading UK position and replicate this success overseas. We are confident about the future of our business."
Purplebricks expands its global presence
Purplebricks launched in the US just over a year ago and since then the firm has seen growth in sell-side listings and buy side revenues.
The company expanded into Canada in July with the acquisition of DuProprio, a Canadian real estate company, and its English language subsidiary, ComFree, for almost £30mln.
Purplebricks said the Canadian business is “performing strongly, in line with our high expectations”. In the four months since the acquisition, there have been more than 5.4 million web visits in Quebec and two million visits in the English provinces.
In October, the company announced it would also move into Germany by creating a joint venture with Axel Springer, which is taking a 25.9% stake in Homeday. Homeday has a 50% share of the German online estate agency market.
READ: Purplebricks enters German real estate market through €25.4mln joint venture
Purplebrick's stake is worth £11.1mln for an effective 12.9% stake. The deal is subject to regulatory approval.
In Australia, the group said it has had to contend with a challenging market but changes to its customer offering have been well received, leading to a 35% rise in new instructions in October compared to a month ago.
Purplebricks leaves forecasts unchanged
Purplebricks maintained its guidance for full-year revenue of £165mln to £185mln. It had a net cash position of more than £100mln at the end of October.
Shares rose 3.4% to 187.55p in morning trading.
Peel Hunt maintained a 'buy' rating on the stock, saying the trading update was reassuring with full-year estimates unchanged.
"Despite operating in some challenging markets, Purplebricks continues to grow and win market share," it said.
"Brand recognition is growing, supported by a flexible business model and strong balance sheet and the group is well placed for further growth in the UK and overseas."
Peel Hunt continues to expect Purplebricks to report revenue of £173mln for the 2019 financial year and sees it making a profit in 2021.