A Purplebricks sign outside a property
(Picture: PurpleBricks)The boss of online estate agent Purplebricks today claimed the crisis-hit business is back on track despite losing £20.2 million in the last six months.
Chief executive Vic Darvey told the Standard: “After a challenging few months we’ve made a number of changes to the business.
“We introduced a new pricing structure and a money-back guarantee and moved our local property agents from self-employed to employed.”
But he warned that the costs associated with the changes “will impact profitability in the short term”.
The online estate agent has had a bad year, with shares down 75% in the last 12 months. The business was valued at £1.7 billion in 2017 but is now worth just £63 million.
The latest setback was a problem uncovered in its lettings business late in 2021. The company confessed to lapses in customer service that led to tenancy laws breaches. It meant tenants were able to claim back up to three times the value of their deposit from the firm. As a consequence, Purplebricks delayed publishing its half-year results in December and warned the farago could cost it up to £9 million.
Today Purplebricks revised the provision figures down to just £3.6 million.
Darvey said: “It was a technicality that was a breach of regulations. We got one of the big four accountants in to carry out a root-and-branch review of the lettings business.”
He denied reports that Purplebricks is looking to offload its lettings business and said that it could be a major growth area in future.
“There’s an opportunity to be disruptive by creating an online portal between landlords and tenants,” he said.
The £20 million net losses for the six months until the end of October compared to a profit of £3.9 million in the same period a year earlier.
Analysts at Citi Research said: “It would be a brave investor who interpreted these results as an immediate buying signal” and warned that “current year consensus forecasts are likely to slip again.” But Citi said the results “could well prove to have been the turning point in the performance of the group’s share price”.
The stock rose 0.5p, or 2.5%, to 20.50p this morning.
