Purplebricks is getting closer to being profitable, chief executive Michael Bruce said yesterday on national radio.
He told listeners of Radio 4’s You and Yours programme that his firm has 62% market share of the “non-traditional” agents – in other words, has the lion’s share of the online estate agency market – and that it is now listing 3,000 properties a month and selling 2,500.
On the current basis of 3,000 new listings a month with sellers paying £665 (not counting VAT) the firm would be making £2m a month, or £24m a year. However, that would be the absolute minimum revenue, as it excludes the higher London costs and ancillary sales.
Analyst Zeus has forecast a figure of £17.8m turnover for the year to the end of this month, which would take into account lower monthly listings earlier in the financial year.
Yesterday afternoon, on Purplebricks’ own website it said it had 6,493 properties.
Altogether, yesterday it had 12,288 properties, including those SSTC – 47% of the total.
In a slot on yesterday’s You and Yours programme, Bruce debated online versus traditional agency with Ed Mead, of London high street firm Douglas & Gordon.
The piece started with a seller in Camden, London, who had sold his property through Purplebricks.
He said he liked the fixed fee and not being tied in to an agent. He said it had taken just two and a half days from approaching Purplebricks to having his home on the market, and believed he had saved about £14,000 in fees.
Asked how much his firm charged, Mead said its average fee was 1.6%. Bruce quoted £965 plus VAT in London and £665 plus VAT outside London.
Mead said that during his 37 years in the business, sellers had never been compelled to use estate agents and some had made private sales.
He said of online agents: “I welcome the competition – they are sharpening everyone’s business.” He said standards in the industry had never been higher.
Asked by presenter Winifred Robinson whether he was finding it harder to justify his charging, Mead said: “Only 20% of our work is getting to the stage of acceptance of the offer.”
Bruce said that Purplebricks “fully supports” sellers between acceptance and completion, but claimed that the work done in that time by traditional agents was “minuscule”.
Robinson queried this, saying that traditional agents “are doing all the running around” when dealing with buyers who have sold through Purplebricks.
Bruce claimed: “Agents like Purplebricks are getting their properties through to completion as fast as, or faster than, traditional agents.”
Robinson mentioned that Countrywide was going to launch an online agency and asked Mead to comment as to whether online agency would become mainstream.
Mead said that it would only happen when conveyancing went properly online.
He said: “Over half our time is spent chasing up. It is an enormous part of what we do.”
Yesterday was another strong day for Purplebricks shares which closed at 159p.
Last night, a spokesperson for Purplebricks told EYE: “We will be providing a comprehensive update to the market on May 11, which will include current levels of sales.”
Comments (69)
On another subject…
If estate agents started to choose the solicitors they recommended base on the service level rather than the level of “kick backs”, maybe there would be less need to spend time chasing up the legal process.
They will also make some income due to “kick backs” from mortgage brokers, solicitors etc they recommend to the sellers and buyers.
I also expect their sellers are more motivated (as they are willing to make a upfront payment) and therefore may need less “hand holding” etc.
Assume the story is true, the public will think it is. What are you going to do about it, role over and die a slow death?
PurpleBricks figures
December 2015 new listings – 1264
January 2016 new listings – 1228
February 2016 new listings – 2567
March 2016 new listings – 2492
No one can dispute they have done well. The Bruce brothers have got their heads down and executed on every aspect of their business while other disruptors seem to have been focussing on just being disruptive.
The question is whether or not they have truly achieved product market fit or whether they are growing purely because they have the money to buy the customers. Only time will tell.
I for one think that, at their current prices, profits are still some way off.
Your source?
GetAgent is a data driven estate agent comparison site. We index Rightmove, Zoopla and OTM daily to track estate agent performance.
Is that clean ‘unique’ data or does it include properties that have been re-listed a few times?
Clean and unique Chris. We did see a spike which was a result of PB splitting their national RM account into regional ones (PB London, PB Birmingham etc) but that has all been deduplicated.
The listings have also been through our standard deduping processes which are very comprehensive.
Thanks. Much appreciated.
‘Colby GetAgent’
Hope you don’t mind me jumping in here – but this is a hugely important point that needs clarification.
When you say “The listings have also been through our standard deduping processes which are very comprehensive.”
Can you please confirm that a property, previously ‘archived’ several days or weeks earlier and then re-listed is ABSOLUTELY removed from your numbers?
If yes – what is the period of exclusion you work to?
Thanks in advance for the response.
even if these figures are correct, this is just one on line estate agent.
OK some will (or are) heading for the wall. But if you add all the onliners activity collectively I just wonder how much market share they are taking ?
2.95%
From 2014
Purplebricks.com’s extraordinarily upbeat investment pitch also set out its lettings targets: 4,362 instructions by July 31 this year (2014) ; 30,596 in the following 12 months (2015) ; and 39,660 the year after. (2016)
Purplebricks.com, in telling its would-be investors that it was anticipating enormous profits, says that following a loss this year of just over £1.5m (2014) forecast a net profit of £17.6 in the year to July 31 2015, and £24.9m profit the year after (2016)
(my year dates in brackets)
So no profits yet? how surprising. Look forward to see their company returns.
Can you post a link to this pitch, I can’t find it anywhere despite intense Googling, but know it exists? Thanks
Pah try this!
“Purplebricks’ target for its financial year ending July 31 2015 is 85,413 instructions and for the following year 100,849 – if met, that would represent 10 per cent of all sales”
Heres some quick fag packet stuff.
On PBs website they have 202 “local experts”. Lets pay them 20k per year (although PB advertise OTE of 60K most of the time! But lets say £20k each. Thats £4,040,000. Lets give them all one member of staff on say £10k. Thats £2,020,000. We know they are spending £12m per annum on advertising. Im really not sure what the portals are costing them but lets say £1,000,000 per annum. A central admin office with related staff and costs I would estimate £1m per annum. I havent taken into account any other costs (other staff not included above, vehicles, fuel, NI, postage, telephone, prof fees, equipment, bank charges, and other general expenses) So all of the first part added up comes to almost £20/21m per annum WITHOUT the other costs. Lets assume that all of the other costs equate to about 25% of the rest. Thats £5M totalling almost £25/26m. I think ive been very conservative on the above figures.
Doesnt look that good now does it? And thats assuming they are telling the truth!! If its more like Property Paddys figures then its a money pit altogether.
By the time they start making a bit of money the market might be going through another “wobble” and when that happens no one will be using an online receptionist to sell their house. They will need and want a proper estate agent.
Then……the wheels will come off and PB will be another failed try at online only estate agency
PB are so good they already have next months ‘NEW’ listings already on their books and advertised.
if I had a penny for every PB relisted property I’d have nearly £30.00 … and probably still make more than their local property experts.
Is the online/hybrid asteroid heading for earth? Yes
Are the high overhead model dinosaurs about to be wiped out? Yes
The agency species will have to re-evolve for sure!!!!!! It can run but it cannot hide….
Are you working for an online receptionist? Yes
Are you deluded? Yes
Will you be back with your tail between your legs!!!! Without a doubt…
sold…… if you call sticking it on rightmove and letting the seller deal with all the enquiries, viewings, sales chasing etc… ‘ sold ‘
my back of the cigarette box figures came up nearer £10.5m if it all went swimmingly
To be fair my forecast was 50% on instructions and expecting 20% lost instructions plus 30% fall out bed sales.
Obviously I’m a complete idiot or as some others have stated they are spouting complete BS
It irks the life out of me how it seems every time High Street Agency is represented, its some central London guy who charges £15k plus commission, in reality, nowhere near what most of us charge.
On a lighter note, we should have replaced Ed with our Fred on his £500 plus vat, that won’t half have c0cked Mr Bruce’s script up.
I take it you’re referring to ‘Flying Fred phooey’
I think 3000 per month is definitely over exaggerated but it depends how many so called local experts they have? And how many each of them are taking on. I mean I’ve worked out at the very very best they’ll be taking 1250 to 1500 per month. I agree with Chris Wood as well, in that they don’t really care too much about their local experts who aren’t very local at all. I don’t think each local expert hangs around for too long, before they find the next 1 for that area. Local expert staff turnaround I would imagine is high, but who cares about that if you’re at the top of the triangle earning all that money from your minions on the ground that you don’t care too much about. Nice!
At what point will the ‘Local Experts’ be in profit?
Being ‘local’ but covering areas of up to 5,000 square miles or more with inherent associated travel costs etc, I don’t think PB will care too much about them. I could be wrong of course.
My ‘local’ rep covers Devon and Cornwall circa 4,000 miles so 5,000 miles may be a little OTT but, I haven’t checked other rural parts of England Wales or Scotland which may be higher
Has everyone saved may 11th to their calanders?
Saving of £14k? How much lost on sale price I wonder.
Sales = Sale agreed or Completion???
Are they talking turnover or profit??
Sometimes I dispare at the intelligence of the average Radio 4 presenter and listenership
The fall through rate should be higher than most trad agents. 30%? 40%? 50%?
But they won’t care. They’ve been paid upfront.
According to RM they have uploaded 449 properties in the last 14 days.
Listing 3,000 and selling 2,500. That’s an 83% listing to sales ratio. Victor Meldrew would sum that up.
so 3,000 x £665 = £1,995,000 and this equate to profit based on £23,940,000.
Ok and this is minimum as they may be charging more elsewhere.
So I re-wrote my business a few minutes ago and I am well and truly in the money.
I cannot believe I added “costs” to my previous plans…..
PB, could you please tell me who pays the bills for your company as I would so like to partner with them, life looks so much rosier when I forget to take off expenditure.
How much does it cost to run nightly TV adverts nowwa days, forget that it doesn’t matter does it, they will not effect my bottom line. ****** great this….
Anyone interested crowfundRIC.co.uk start in a while…. you will make a mint if you invest .
20% of the fee goes to the government in VAT, the 24/7/365 staff are entitled to minimum wage unless they are self employed, (but working for a single employer invoicing only one customer raises HMRC & VAT implications) either way wage bill is going to be significant. The lack of constant board presence subliminal office or press advertising or genuine local connection means the advertising budget is huge, consistent and compulsory.
If you run the maths of all that I reckon the predicted huge profits are a very very long way off and could only be achieved by selling into the same vertical market opportunities as others are desperate to snuffle up.
It may well be BS Frown but, unfortunately, when BS is peddled on a national radio station the public tend to believe it.
Agreed. Unfortunately most members of the public won’t have time to fact check every advert they hear.
Which, Frown, if you are who I suspect you are, is why you continually make claims in the press and on your website that are regularly regarded as and shown to be misleading, safe in the knowledge that the public won’t check or know any better. It’s also why you have a nemesis. The Jury is out for now though.
I don’t know what press you are referring to or my website claims…
I think I am confused!
Some fresh air will probably do you some good, you may have been in your bunker for too long
Already had my daily fresh air walking along Harlyn Bay with the woofer, but thank you for your concern! 🙂
My apologies Frown, your previous posts gave all the impressions of someone with Mr Quirks characteristics. If you wish to challenge me to a duel I would completely understand.
Swords or pistols?
I wouldn’t dream of dueling a fellow trad agent.
A call center agent may be a completely different matter though.
….and one from the same county or are you on holiday?
A holiday would be nice but alas.
BS.
Has anyone access to ‘accurate’ figures?
Watch this space
I am eagerly waiting Mr. Wood.
can I remind people of this from March 2014
http://www.propertyindustryeye.com/we-will-make-huge-profits-purplebricks-promises-investors/
What accurate figures do you want?
Are you wanting the new unique listing numbers each month i.e. ones that contribute to additional income or do you want totals that include apparent new listings but which the initial fee can’t be double, triple, quadruple, quintuple or sextruple counted because the property has been listed a few times already?
With some vendors requiring a marketing break, some unsure whether they are going to sell or not and some seemingly suffering an as yet undiagnosed medical monthly cycle thing which can last a few hours or a few days which is a bit like OCD where certain properties are listed and unlisted because its the start of the month, it is quite hard to provide accurate figures, but you tell me what you want and I will see what I can do.
Number of actual listings vs sold.
As a customer Chris Wood has been given the information requested pertaining to his selling area.
Non customers might want to seek clarification of the numbers quoted.
Customers of what?! Purple bricks?!
Are you an idiot?!
Chris Wood is one of my customers I supply him with a service to help him win more instructions, sell more property and justify better rates of commission.
As for me being an idiot, possibly, but I’m smart enough to have built a system to analyse every single agent’s actual, factual performance rather than stuff which is extrapolated, claimed or simply made up or manipulated.
It seems only fair that if I publish Purplebrick’s numbers yours are published too. If you want to throw punches at Purplebricks do so fairly with a name they can set their lawyers on.
I might be an idiot, I’m not stupid!
And how did you get this data. Stolen like everyone else?
Thank you for your insinuation and the opportunity to post that we only ‘count’ data put in the public domain by service providers who have an open door policy in respect of their client’s data. Nothing here is stolen, taken or scraped just counted and compared.
The main data is a re-worked version of data issued for public consumption.
It was a question not an insinuation. If it is in the public domain it is after all public domain.
It’s the service suppliers and the like, adding smallprint terms to do what they want with my/our data.
I agree with that which is why I will not scrape or collect data that an agent doesn’t/ would not have express permission to share, which breaches data protection regulations or copyrights.
It is down to you and every agent on an individual basis to discuss terms and conditions with service suppliers. I take the view that all dead file data remains the property of the agency and should be purged on completion, others take the view dead file data can and should be shared.
Where will you get figures from if not on Rightmove?
Sorry I didn’t reply quickly enough.
I built a system to interrogate the entire internet not just Rightmove. It is so detailed and accurate overnight I have spotted a single story has been deleted from the EAT archive (written by Ros Renshaw and published on June 30th 2009)
” ” + site:
?
Amongst your data would you have figures for the other call centers?
Everyone is treated the same, the smallest independent through to the largest corporate.
Just looking at one ‘national’ agent who has a total 8 properties.
Is that URPAD or Mr and Mrs Clarke?
Are you looking at total listings or recent listings?
I don’t want to say , whoever it is was a passing observation picked out of the data at the time. They don’t need to feature in this discussion it was simply an agent who does not fit a stereotype and because of that they stood out.
OK, well i found 8 for the month.
For the one I wasn’t looking at at the time so do I.
The one you were, weren’t, wasn’t, is, isn’t…
At least we agree on the figures.