Countrywide shares went up some 7% by lunchtime yesterday, while Purplebricks went down by about the same amount as the City scented a possible fall-out from Emoov’s collapse.
However, the effect of that had nothing on the fall-out from the cancellation of the Commons vote on Brexit.
With the debate still under way when the markets closed, Countrywide gains retreated to a rise of 2.55%, finishing at just over 10p.
Purplebricks’ collapse widened further, with a fall of 12.74% over the day, with the share price finishing at 150.7p.
The FTSE 250 index fell to its lowest level for two years, while sterling slumped against the dollar.
Countrywide’s shares have been bobbing around at under 10p for much of the last month.
Notably, it has not yet issued a trading update for the third quarter of this year.
Last year, Countrywide issued this on November 9, and in 2016 issued it on November 24.
We have approached Countrywide for comment as to whether it will be issuing the usual quarter three trading update, or if this is simply delayed.
Comments (50)
>Given the only way the likes of PB get enquiries is PPC or expensive media advertising, shows the amount they must be hemorrhaging.
From the 2018 audited annual report for the UK….
Profit from Operating Activities £4.2M
cost per instruction = £332, revenue per instruction = £1168.
As has been pointed out many a time this is their PRE EBITDA figure, take away tax obligations, depreciation etc (like most independent run businesses) and they will be lucky to make a profit at all.
EBITDA = Earnings before I tricked dumb Auditors
No tax obligations to take away because of carried forward losses and the group doesn’t make a profit.
Depreciation & amortisation of £1.4M already deducted – the adjusted EBITDA figure is £8.1M
Whichever way you look at it they were making a profit in the UK. From Industry Analyst Mike Delprete “Materially profitable in the U.K” and “Whether you look at operating profit (£4.2 million), adjusted EBITDA (£8.1 million), or my preferred EBITDA with stock-based compensation added back in (£5.7 million), the business is finally generated profits after years of investment”
Quite happy for you to demonstrate “they will be lucky to make a profit at all” with some actual figures for tax liability, etc. though 🙂
Had an interesting chat with our Google account manager today, shame this might be lost in a thread but wanted to get the figures out before i forgot.
The average “Estate Agent” keyword is £2.77 and Goggles own figures show you need 30 ‘Clicks’ on average to generate 1 enquiry.
Given the only way the likes of PB get enquiries is PPC or expensive media advertising, shows the amount they must be hemorrhaging.
Lets say you convert 1 in 10 enquiries (i think i am being generous, as an enquiry could be anything) that is £831.00 per instruction.
The cost per acquisition is massive.
This is why we have now knocked google ppc on the head. Its just a fruitless exercise. Better ROI elsewhere.
Wow Smile, that’s amazing and good info. Thanks!
Certainly puts digital advertising such as PPC in to perspective. Why is it so expensive? Because every daft bu$$er is doing it!
PP – Thats our thoughts, we can continue throwing money at it (same as everybody else) or decided to invest elsewhere.
Lets be honest you need at least 1 interaction a day for a ‘local agent’ that equates to almost 2.5k per month.
I can get a really good neg for that spend.
As was seen with Emoov these companies are only worth what they have in the bank. They burn investor cash and when they run out there is nothing of any value. The only difference with Purplebricks is they have more cash than the others so it will take a little longer. Mind you if you are treating yourself to Football Clubs and Racehorses along with a deluded strategy of world domination it won’t be too much longer. Someone pass me the popcorn!
PB do have a cash buffer that will last for a couple of years. The question is when will Axel Springer step in and change the failing management?
They have already committed PB to the Canadian venture and have a parallel management team running – ready to takeover the whole show at a time of their choosing (possibly when the share price hits rock bottom)?
How much do they have as a cash buffer? From memory its circa £50 million p.a. running costs. thats a heck of a cash reserve to have.
I know AS invested 120 odd million but that is not cash deposited into the account that will include advertising, consultancy, performance based.
Next year will sort the boys from the girls, not only Online Vs High Street, but also the poorly run high street independant and corporate agents.
Any agent living on credit now, may as well look at an escape plan before the choice is taken away from them.
As at 31 October 2018 the Company’s balance sheet remains strong with a net cash position of over £100m
This is before the £11m investment in Homeday.
So, at the rate they are burning cash, a couple of years – or,until AS make a move to arrest the situation?
yes but a 100m cash position does not mean they have £100 million in the bank (correct me if i am wrong)
It just means they have access to £100 million, i.e credit facilities, investors who have given assurances, money on account, money that is in a budget but not yet spent, working capital. – As we saw with Emoov those assurances are not always honoured.
I sincerely hope that PB (and their auditors) are not including credit facilities or investor assurances as cash on the balance sheet !
AS paid PB £100 million to buy a 11.5% share of the company earlier this year.
The Emoov assurances were not contractual – although the loan arrangement which was substituted certainly would be.
Expect the FTSE and other to drop further today.
Concerning CW delayed trading result. Think we can all read between the lines why.
Even a dead cat bounces
I don’t believe the Brexit vote has anything to do with the share price drop (though it might be wheeled out as a convenient excuse). Investors and mainstream news organisations simply appear to be waking up to call-centre agents questionable claims and even more questionable methods of operation.
Has anybody had a genuinely good experience with a call centre anything, ever?
Those people who earn money from writing glowing reviews? (Source BBC 5 live)
To be fair to the purple ones, two of my ex colleagues (I worked in property but not agency) sold with them and I had a number of conversations with both as their transactions proceeded (both completed via PB) as I wanted to obtain some genuine feedback. Both sellers were full of praise for PB, including post sale (stc) support from their LPE. Both also achieved good prices.
To be clear, I am not an advocate for the payanyway part of the industry but the question of call centre experience was raised above and, understandably, there is plenty of poor press for PB here. Two sellers had a genuinely good experience and in the interests of balance and fairness, I think it worthwhile making the observation.
And before any of the more suspicious posters here voice it, no, I didn’t work for any of the online brigade or their ilk, nor do I have shares or any vested interest.
Get ready for the stream of abuse @retiredandrelaxed.
It’s genuinely good to hear that some clients are receiving good service and, there is no doubt that some of the people franchising/ employed by Purplebricks and emoov etc, were and remain good agents. I don’t think many on here would honestly dispute that. Like most detractors, my beef is with the manner in which the parent company and the Directors appear to believe they can continually make misleading (see ASA) statements and sail close to the edge or even over the line of the law* with apparent impunity. The real reviews on social media and Mumsnet etc speak volumes.
*see https://www.propertyindustryeye.com/purplebricks-to-withhold-commission-from-local-property-experts-after-over-450-breaches/ amongst other alleged legal transgressions
The FTSE is down 13% over the last 12 months and in virtual continual decline in last six months. Not just affecting property stocks. Of course Brexit is a factor. Whether you are a leaver or remainer the uncertainty is badly hurting the market.
Brexit and troubles in Ukraine etc are bound to have some effect for some firms however, too many CEOs are using it as a convenient scapegoat for poor corporate decisions/ strategies. PURP s’ stock price has collapsed over the past year for no other reasons than those previously stated. Purps’ got 99 problems but Brexit ain’t one of them.
Love the Jay-Z reference Chris
Mr Wood and his sweeping assumptions with his axe to grind, it can be quite embarrassing really.
Tell you what’s embarrassing mate, purplebricks share price. How are yours doing? If my memory serves me correctly, didn’t you last buy at around 300p thinking you’d done well?
146.90p down 2.5% today for anyone wondering as at 08.30am.
Ah DomPritch. As repetitive, intrusive, and pointless as the Christmas-music-loop in Sainsburys.
Some assumptions, some knowledge and my axe is always kept razor sharp.
Ah, Dom, welcome back, a constant reminder of one of my favourite addresses I’ve ever sold ( that’s actually completed sold, not your version )
Bell End
htsnom79 – that comment made me choke on my coffee and I had to log on to congratulate you on a perfect analysis of dom. Brilliant.
Ah DirtyDom returns with his tinted purple goggles.
Must be feeling the burn in those share prices huh? Please do us a favour and crawl back under that purple pebble you were hiding under.
Feeling the warmth of the agency industry right here!
Merry Christmas!
‘Tis the season of Peace on Earth and Goodwill to All Men. Even to DomPritch.
Yesterday, CWD share price considering the turmoil were fairly robust.!Bricks SP journey continued further south .
Lee Wainwright was appointed Chief Operating Officer on Jan 9th.this year .Their very own Jonah had arrived with the share price free falling 62% since. A whopping £900m has disappeared over a cliff it even makes Emoov fall from grace look pedestrian.
What was seen as a high profile recruitment at the time bringing in some valuable estate agency experience The Invisible Man has certainly kept his head below the parapet.Granted 100k share options at 415p as a Golden Hello they will be remaining in the bottom drawer for sometime.
Meanwhile in Oz JV informs us that the recent rise in the number of LPES stemming the exodus has been due to the upgrading of “viewing assistants “to LPE status . Backstop means Backstop !
Sounds like the tickbox for a LPE must be do you know how to use a camera and a torch !.
“Sounds like the tickbox for an LPE must be “do you have a pulse?””
(Fixed that for you.)
Pathetic and ill informed as usual Chris. I’m a non high street agent. I left the high street so I could offer a better service than I could from the confines and restraints of a town centre office. I have a pulse, a camera and a torch……and over 20 years of working in the dying high street. I’m a committed, professional and passionate estate agent. I love my job and I love selling houses. I always have and always will offer the very best service I can. I could go on but it’s pointless. You have tunnel vision and your hands over your ears. If it doesn’t fit your agenda (whatever that is) you don’t listen or even try to understand. Stop the attention seeking and concentrate on your own business and try and devote less time to bashing the competition and making little snipes at every opportunity. It’s not becoming of a professional.
SLF
Fair enough but the example was in Australia .,How would you feel as an experienced,time served agent 20 years under your belt was effectively dismissed as just a bonus to your role and a VIewbar rep was elevated to your status
Do you really think that serves the best interest of the client ?
Thanks for the mention Hillofwad71.
We have an appropriate slang word in OZ for people who find themselves in circumstances like this:
“Mupet” or Muppets
Most
Useless
People
Ever
Trained
Purpmisery. Ha!
If bricks pull out of world growth then they will just have UK market. Make about 10 million a year and be worth around 100 million . Share price still over priced .
A lot depends on the rate of growth in income in the UK and the rate of growth of costs. They have said turnover has grown in the UK by 20% in 2019 H1 but the key to a SP based purely on the UK business will be costs. How much have they increased? This will dictate how rapidly (if at all) they are growing UK profits.
It is unlikely to be the case but if they grow UK turnover by 20% every year and maintain fixed marketing and admin. costs then they will be growing profits very quickly and will demand a valuation at many times earnings.
“turnover has grown in the UK by 20% in 2019 H1” – really? Crystal ball in overdrive at the moment?
PB’s company year is to the end of April. H1 2019 was the period to the end of October and PB announced their UK turnover had increased by 20% in their trading update.
Sorry, not trying to be difficult here but how can H1 2019 not include any part of the year 2019? Genuinely struggling to understand this?
May 2018 is the start of PB accounting year and ends April 2019, So H1 is half of the 2019 financial year.
Because PB’s Financial Year is the 12 months to the end of April the 2019 Financial Year is to the end of April 2019.
This means H1 2019 (the first 6 months) is to the end of October 2018.
Understood now – thanks
Apologies for being slow on the uptake