Purplebricks Group PLC (AIM:PURP) saw a 23% slump in revenue as the tech-led estate agency's chief executive office admitted "our performance was not good enough."
For the year ended April 30, Purplebricks reported revenue of £70mln reflecting a drop in house-selling and buying instructions on the estate agency platform.
To combat the drop the agency plans to offer mortgages by the end of the financial year and expects “positive cash generation” by early 2024.
"We are...assessing additional revenue streams including our new mortgage proposition which we expect to launch by the end of this financial year,” Purplebricks’ chief executive Helena Marston said.
Purplebricks generated an underlying loss of £8.8mln, down from a profit of £12mln last year.
The estate agency attributed the decline to less activity and a reduced gross margin following its transition to a "new operating model and increased marketing costs”.
Supply dynamics in the UK housing market are “likely to remain challenging for remainder of the year” amid an increasingly uncertain macroenvironment, the company said.
"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,” said 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.”
Purplebricks carried out a cost-reduction programme, expected to deliver £13mln of savings a year, retrained its field agents and raised its prices from 11 July.
It has also removed its money-back guarantee, which “failed to deliver the expected increase in instructions”.
In the first quarter of fiscal 2023, following the changes, the agency said it received 11,000 net instructions and generated £16mln of revenue.