Purplebricks became the first online estate agent to list on the stock market this morning, at a placing price per share of 100p.
Early trading was at 105p but within 30 minutes the price slipped below £1.
The Neil Woodford-backed firm floated on AIM at a market capitalisation of just over £240m.
The company, which launched in April last year, is also backed by Wonga founder Errol Damelin.
Purplebricks has raised £58.1m based on its valuation of £240.3m, and the IPO will raise £25m for the company and £33.1m for some of its shareholders who sold stock as part of the placing.
Shares in only a portion of the company – 24% – are now available for trading. Trading is under the ticker PURP.L
A company statement this morning said: “Purplebricks aims to change the whole experience of selling, buying and letting residential property, by providing a transparent and superior customer service at a fraction of the cost of a traditional estate agent.
“The company has grown rapidly since its launch in April 2014, with its revenue in September being around ten times greater than the previous year.
“Based on the company’s recent monthly run-rate of fee paying customers, Purplebricks already has the fourth highest number in the UK.”
The statement adds that Purplebricks “typically also sells its properties faster than its online competitors”.
Chief executive Michael Bruce added: “Puplebricks’ successful listing on AIM today represents a major milestone in the evolution of the business over thelast four and a half years and is testament to the team’s hard work and commitment.
“The funds raised will allow us to further deepen our presence across the UK through additional invstment in people, technology, infrastructure and marketing to deliver our ambitious growth plans as well as value for all of our shareholders.”
Today’s Purplebricks’ statement went on to explain its strategy, based on a number of “key pillars”.
These include offering superior value, at an average fee of £1,080; local knowledge and personal service; 24/7 customer service; technology; marketing; and the fact that instructions convert quickly to cash.
It said that its low overheads, with no high street branches and the fact that 89% of its local property experts operate under licence and are not employed, meant that profit margins are high, reaching 59.2% in the year ending April 30, 2015.
In yesterday’s Mail, an article questioned whether Woodford has lost his Midas touch. However, it referred only to investments in the biotech sector and did not mention Purplebricks.
We will update this story as today goes on, so you may want to pay a return visit.
Comments (11)
Not even a week:
London Stock Exchange:
High
95.50
Low
87.50
Seems the direction is exactly as predicted.
Seems like there’s been some VERY interesting dealings today – including two identical mahoosive share ‘late’ buys of 140600 (nice round number innit…) at a quid and 95p respectively a pop, despite the dozen or so previous transactions being at 93p ish – and then one for 28k shares back down to 93p.
If I were a betting man (…which Mr Quirk and the readership know for a fact I’m not…) I might have had a wager on some people coming to a conclusion that such transactions point to a deliberate attempt to bolster the closing price.
Not me, though – like I said I’m not a betting man.
But I would suggest that some people might well assume that such shenanigans may have taken place.
Not me though – I don’t assume either.
Not often, anyway…
I think when their share price falls to below 36pence then perhaps the investors can start to think about how a real business works. It’s not all at a click of a button.
Sorry just realised ….. it is…. That’s exactly how those city fellows buy and sell shares.
Gosh it’s a good thing they don’t screw up otherwise we would all be in the, Oh! Hang on, we already are.
Book value of £4.4m and made a £5.4m loss – so a £240m is a no brainer really then!!??
£240m valuation
Well, the market doesn’t value it quite so highly –
94.1 – PURPLEBRICKS share price (PURP) – London Stock Exchange Link to live stock ticker: bit.ly/1RTJgpL
That’s 94.0 more than I would pay, then…
… that being said – as a shareholder I could turn up at the AGM with some probing questions…
Maybe I’ll buy one after all.
Would almost be rude not to…
Christmas- A time for fairy stories.
Prediction:
2017 – “Purplebricks runs in to management crisis after one of their licensed property experts runs amok in a ………………………..”
2018 – “Purplebricks looking to raise more funds by issuing bonds to shore up their dwindling ……………… ”
2019 – Anyone remember Purplebricks? Investors in uproar over shoddy (or is that shady?) business venture etc etc etc.
I could be wrong of course, it may come to pass that PB are ringing the death knell for the traditional agent.
Time will tell.
Just if every investor read the article above re chains they would realise that the public will probably only ever use them once.
“89% of its local property experts operate under licence and are not employed” Is that a selling point? Id say that this shows that you have 89% of the workforce who haven’t got a great deal of ambition and are hanging their hats on this whole thing taking off.
Its a bit like a pop up shop at Christmas selling baubles. You’ll get staff on temporary contracts who haven’t got that many choices grabbing a free bit of cash while the mood is right but then on the look out again once the season to be jolly is over!