The market share of online agents is growing – and the race for second place is on.
But, questions commentator Mike DelPrete, is it a race worth winning?
In his latest analysis, DelPrete looks at listings by five agents and finds that Purplebricks is effortlessly dominant, while both Yopa and Emoov had had “strong gains” in inventory, followed by Tepilo.
However, he concludes, HouseSimple is going backwards.
He points out that both Yopa and Emoov raised large sums of money last summer – £27.6m and £9m respectively – and are deploying it in marketing campaigns.
He says Tepilo has not raised more money, but has significantly increased its marketing spend.
He claims that HouseSimple’s new CEO “pulled its marketing spend before a product relaunch”.
The conclusion, he says, is not rocket science – the more the onliners spend on marketing, the more new listings they get.
But the real losers, he says, are the traditional agents. Between them, Purplebricks, Yopa, Tepilo, Emoov and HouseSimple had listings in April up 32% from January.
Overall new listings market share for the online agents jumped fro 5.7% in January to 7.1% in April, while Purplebricks increased its market share from 4% to 4.5%, with 6.7 times the number of new listings of its nearest competitor.
So, with Purplebricks in the lead, the online agents are competing with traditional agents and with each other.
The race for second place, after Purplebricks, is on “with several players raising and spending tens of millions of pounds”.
There is, says DelPrete, clearly room to grow market share at the expense of traditional agents.
But here’s the million dollar question: “Can they make money, or is it an expensive race to the bottom?”
https://mail.google.com/mail/u/0/#inbox/1633afabe5c02d05
Comments (40)
dompritch134
What you say complete tosh.
A: You do work for PB – prove me wrong ?
B: PB et all are not making any real money (or too little to matter)
C: If after all this time the best PB can do is 5% market share then you’ll never have enough market share to last.
D: I have taken on 5 or 6 ex PB instructions over the last three years and only 3 or 4 properties in my territory have actually sold through PB in the last three years.
E: Well keep taking them dompritch134 cos you must be on something !
A: No I don’t, i’m sure PeeBee or one of the others will confirm this.
B: OK i’m sure your business analytical skills are note worthy and far more so than these investors
Axel Springer SE (largest digital publishing house in Europe)
Neil Woodford
Old Mutual
Capital Research
But hey you’re an estate agent and you know best
C: OK but I disagree.
D: Great sample size.
E: I’m not sure what this question or statement even means?
Can’t resist …
A: Of course he does. Who has ever heard of anyone who supports a company with such determination and devotion and time that has no interest.
B: Head in the sand, everyone including PB declare they are not making any real money. The financial organisations haven’t and won’t touch them with a very big barge pole. Axle Springer money has been declared for US and other projects, not UK. Most UK analysis do not support PB as a profitable model. I wonder why!
C: 5% wouldn’t be something to be proud of on a business plan to your bank manager, the door would loom very fast.
D: Many agents across the country are getting PB failed clients, amounting to more than 3 or 4.
E: That’s your problem, you don’t get it!
Woodentop I’m not sure why you seem so angy but as I have stated countless times, I do not, nor ever have worked for PB.
I do not post with an alias account, I do not hide behind names like woodentop or property paddy.
I think that is the end for today, time to enjoy the sun in my garden.
dompritch134
my name is pretty simple
I work in property and my name is ??? so I’m not hiding away, anyone can work out who I am and I’ve been in this industry since 1981.
About you working for PB. Have you ever heard the expression “the lady doth protest too much” ?
it means she is saying no but she really means yes, do you get it? huh ? see what I mean ?
Finally people that take “e” (s) are usually misguided fools who get stuff really wrong, like buying shares in PB or working for them or even bothering to defend them.
5% market share may be a lot across the country but not good per area as most of the agents (even the not so good ones) will have at least 2 or 3 times this and can then cross sell to create chains within the market, suffice to say PB cant so all (or nearly all) their sales are stand alone. Also vendors are not so well protected with PB as high street agents have a reputation to maintain so have to generate best price for all their clients.
Agents cost more because they do more ! And finally vendors are realising this.
But …. no answer to the contrary to what has been said. I’m not angry, you are the one that normally throws insults around. I just highlight the error of your remarks everytime you speak tosh. Stop speaking tosh and I will not have to correct you, its as simple as that.
So who is Dompritch134 if its that big a deal, that people shouldn’t hide behind a name?
A: No I don’t, i’m sure PeeBee or one of the others will confirm this.
I can’t confirm this, dom-boy – and you know it.
For all I know you could be one of their hundreds of self-employed whatevers
If you ain’t – you certainly should be, as their one-man DoPTH and part of the dom’n’ducky duo here on EYE spending uncharacteristically long periods of time posting your…
…posts.
Personally, I’d hate to be spending all my time and effort on their behalf without any form of recompense whatsoever. Your handful of shares ain’t making you squat – and I seem to remember you stating quite recently that you’d flogged them off – so that’s another ‘possible’ erased.
I don’t get the feeling you’re some kind of deranged charity worker bent on ‘giving something back’ – if that was the case you wouldn’t be making the profits you are on the flippers… would you?
And you don’t seem the stoopid sort – so it’s little wonder that there’s a big question mark above your head as to ‘why?’.
The real question is what will they all do to stay alive if the market goes down. They are barely keeping a float with no fat to weather the storm. History (their performance for investors) is starting to catch up with them all. PB have peaked and shares overall on a slide downwards and now the other hybrids are going to take a bigger share of PB market. Is this the dotcom boom and bust we saw in the 1990’s, time for all these disruptors to fail is by the end of this year? I also noted that PB radio advertising has taken a big turn and is now declaring why costs are lower to high street agents. Someone had a word in their ear?
>The real question is what will they all do to stay alive if the market goes down. They are barely keeping a float with no fat to weather the storm.
In the UK they are well above the break-even point and could probably withstand a 30% downturn before requiring any investment. The results for the 2018 financial year will show good profits growth for the UK.
No fat to weather the storm? They’ve just raised £125m and didn’t they already have cash of £60m or something like that?
So dream on if you’re hoping the UK business is failing. Still showing growth but just not as fast as it was.
Axels money isn’t destined to the UK market and that official from PB. Where on earth do you get 30% downturn from, do the number crunching and then add that to the losses they continue to make, the poor performance for investors year on year, the downturn in share prices, no yield, no dividend and lack of fresh investors … pray tell how they can pay the overheads. And they are about to declare another loss after saying they would make a profit? There is more than a hint of concerned viability for PB to continue if investor abandon them and how anything they say can be trusted (a long list). They can’t borrow money as they are considered one very big liability, risk and failure with no security as far as the financial institutions are concerned ? and thats the real barometer.
Woodentop, I’m basing my 30% figure on the fact that UK made a small profit for the financial year to the end of April 2017. In that year they had about 40,000 listings. For the financial year to April 2018 they had about 60,000 listings. So all other things being equal they can afford to reduce by about 20,000 to reverse back to what was essentially break-even.
I think you must be relying on old figures to the end of April 2017. Have a look at the interim figures which show an operating profit of £3.2m for the 6 month period to 31st October 2017.
You are also wrong in regard to the cash situation. You should take a look at the announcement regarding the recent £125m investment.
You will see that i) the existing cash resources were already £51.7m before the addition of £125m 2) All of the £125m hadn’t been allocated to the US “The Company intends to allocate approximately £50 million of the Subscription proceeds to the US rollout with the balance to be allocated to the other initiatives as appropriate.”
I suspect you don’t have much experience when it comes to analysing companies and you seem to completely misunderstand that the UK business is making a profit and that they have plenty of cash even without the new investment.
You probably also don’t realise that listings continue to grow.
>There is more than a hint of concerned viability for PB to continue if investor abandon them
PB UK is viable without the need for further investor support. You should do some research before stating such things publicly, but then again you wouldn’t be casting aspersions if you weren’t hiding behind anonymity.
Your post is one of the most misleading I’ve ever read on here.
Nuts absolute nuts. The figures I quoted are March 2018 listed on the stock exchange, released by PB December 2017 and April 2018. Put that in you pipe and smoke it, as you know full well as its also posted on an investments thread that you daily contribute to on with particular attention to PB, in complete ignorance in trying to support PB, to little effect with those readers. The use of Axel’s money is confirmed by PB. The loss’s were also confirmed at the PB shareholders meeting in December 2017 when they took PB to town over them.
You have been shown to be wrong many times, while as for me …. my record is sound and as a business analyst with previous experience specialising in Estate Agency for over a decade, amongst a host of specialities, which is why I was given my nickname. Ever since PB was born they have made no real profit, rely solely on investors money to keep them afloat as the revenue from listings doesn’t cover the overheads (see PB accounts). Listing may be growing, but strange they still are making a loss!!!!!!!!!!!!!!!!!!!!!!! and have declared as much within the last few weeks, we just have to wait to see how big or little. As has become the norm anything that involves PB own figures are so unreliable and refused to be independently verified by PB … strange that, got something to hide. Answers on a postage stamp.
As to your expertise … please explain since when has a company always running at a loss (£m’s) since start up over a number of years, been a viable business? You realy don’t know what you are talking about.
This is basic business economics that even school children learn today. Definition of a viable business:
The viability of a business is measured by its long-term survival and its ability to sustain profits over a period of time. A business is able to survive when it’s viable because it continues to make a profit year after year. The longer a company can stay profitable, the better it’s viability.
In PB case todate one big fat ZERO. December 2017 Purplebricks reported a rise in UK EBITDA to £4.7m, and an operating profit of £3.2m. However, investors far more concerned at group pre-tax losses of £8.2m, up from £2.8m the year before, despite group revenue soaring.
New Headline required:
“Commentator” reports rise in instructions in first four months.
Now – pack it and store it for next year, Mr DelPret.
And the following year.
And every year thereafter.
Just remember the location – best filed in the drawer marked ‘No 5h!t, Sherlock’ for future reference.
Quite encouraging if you’re a traditional agent, rather worrying if you’re an online agent.
With around 6k monthly instructors PBS circa 720 LPEs producing an av of 9 instructions each, many will not be making anything like a sustainable living. Turnover of these people is clearly growing.
Even with huge marketing budgets Emoov, HouseSimple and Tepilo and others not generating anywhere near enough new institutions to be profitable, the move towards no sale no fee can only make that worse.
Yopa bit of an unknown quantity but they are going to have to ramp up marketing massively to grow, as PB have shown. Will investors keep pouring money in ?
In the meantime top quality, well run traditional agencies continue to “up their game” slowing down the online growth.
Interesting battle ahead.
OMG!!!!!! ‘Pitch and Putt Pritchard” so is going to be all over you, dissing his mates like that!!!
“Can they make money, or is it an expensive race to the bottom?”
Let’s see how they perform when they’re taken off the ventilator i.e. investor’s cash runs out. Then we’ll get a true picture. Until then, they’re just artificial entities.
That is the key “Investors cash runs out”.
>But the real losers, he says, are the traditional agents. Between them, Purplebricks, Yopa, Tepilo, Emoov and HouseSimple had listings in April up 32% from January.
Yes but that’s just seasonality surely. 6672 for April compared to the figure PurpleBricks gave for April 2017 of 5497 gives a growth rate of 21%.
Looking at Mike’s figure of 5221 for Purplebricks in January this is at some odds with PurpleBricks’ trading update in February https://www.investegate.co.uk/purplebricks-group/rns/statement-re-share-price-movement—trading-update/201802020700047179D/ where they say “6,160 instructions in January 2018, up 66% year-on-year resulting in further overall market share growth”. Perhaps PB were talking about worldwide but even then there would be a big difference with Mike’s figures.
It would appear to be a race to see who can rinse the most amount of advertising money out of investors? The fact remains that none of the Onliners are turning a profit after all this time. To still be a failing business model despite vast sums of OPM being invested, what don’t investors get?
The truth will out…..
Yet PB UK made a profit last financial year in the UK and are on track to far exceed that this year.
So how big was the dividend from these profits and how much will it grow this year?
It reported a pre-tax loss of £6m and an operating profit of £200,000 off of £46.7m turnover during which it had a £50m round of funding from the City followed by Axel Springer’s buy-in of £125 million this year.
Mark, those figures are for the year to the end of April 2017.
Since then there have been interim figures to 31st October 2017.
For the 6 month period there was an operating profit of £3.2m and an EBITDA of £4.7M for the UK.
The results for the full year to the end of April 2018 will be released soon. Expect to see a significant increase on the 2017 full year.
Now there’s a distortion. They still haven’t made a profit, they hide behind a EBITDA return. (essentially net income with interest, taxes, depreciation, and amortisation added back in).
December 2017 Purplebricks reported a rise in UK EBITDA to £4.7m, and an operating profit of £3.2m. However, investors far more concerned at group pre-tax losses of £8.2m, up from £2.8m the year before, despite group revenue soaring
Pre-Tax (£ m) 2015 = £ -5.44m. 2016 £ -11.90m. 2017 £ -6.06m. (source London Stock Exchange)
Nearly £100m has gone through the business and still no profit!!!!!!!!!!!!!!!!!!!! Thats not a success, it is balancing on a knife edge. A weak market and they could collapse. They already had an eye opener this year of how fragile they are resulting in the profits for this year now forecast to be none? (see PB own forecast of lower than expected below).
Todate Dividend = Zero Yield = Zero. Share value since its peak in July 2017 has jumped up and down faster than a yoyo but with an overall gradual decline since (Source stock exchange 4th March 2018). JP Jefferies recommends underperforms and JP Morgan Cazenove list them as overweight.
What is the market today saying: Shares in Purplebricks suffered a double-digit fall after the hybrid estate agent warned that profits for the year to 30 April 2018 will be lower than expected. Shares in PB are an investment as speculative and high risk. Some people will have had their fingers burnt buying at the top, so is this the time to cut losses and bale out? If that is the case, it’s hard to see why Axel Springer has invested so heavily. Who’s a winner …. Michael Bruce sold cash of shares April 2018 for 2 pence short of £16m and coincidently just before they have to declare results forecast to being low? Not bad for a company that makes no profit!
The devil is always in the detail.
Bearing in mind some of these call centre agents list the same property 2 or more times, I would think these figures are likely to be misleading.
Mike Del Pretre has some great analysis on the sector, his reports are well worth reading.
So as to the naysayers and the ‘they will only ever get 5% market share’ detractors, maybe you should rethink your opinion.
Why? Indulge us.
Because investors’ money is infinite and they don’t mind zero returns. Or something…
How did your 10 day training course go?
Dom, maybe you can take some accountability for the despair as well as the credit for what you believe is success.
https://twitter.com/PurplebricksUK/with_replies
Hi Room101 when you have over 6000 instructions per month you will find that there will be a small percentage of customers who feel they have not had the service levels required, it is not really rocket science is it?
Personally I have just agreed a sale within 3 weeks, of the second property I have instructed PB to sell, if everything proceeds as it should, it would be a total fee for 2 properties @ £1200 = £2400.
The two properties have sold for asking price which was not only recommended by PB but also two local independent firms –
The value of the two properties £860000 @ 1.3% = £11,180 plus Vat @ 20% = £13416 High Street fees
Yes I saved £11,016,
Great savings. How much does that work out per hour you’ve spent trolling & spamming the internet sucking up to these listers?
Maybe you should worry about your own failing business, rather than atacking me as you seem to constantly, whilst hiding behind an anonymous account.
Or as Henry Pryor would call you ‘pond life’.
Any bets on how long before Robert May lectures me on how wrong my maths are, and how his calcs makes me losing £20k by using PB?
1. I don’t have a failing business.
2. Couldn’t give a rat’s a$$ what Pryor thinks…about anything.
3. I’m hoping Robert won’t stoop so low to engage with, or indulge, you.
4. Why do you only respond to selected posts directed at you? There are a few more of mine just on this thread alone you could have answered but chose not to.
Dom, I refer you back to a previous post of mine.
Room101
APRIL 5, 2018 AT 10:19#24
Dom – have you considered that selling a refurbished property with no onward chain is the reason why Purple Bricks works for you. If I have to concede that Purple Bricks have a place in the industry then this is it. You and PB are well suited.
I’ve been in the property industry since 1993 and have recently sold a vacant property to cash buyers. It was troublesome due to the legals / planning / searches / building regs / certification etc
The local traditional estate agent I employed went above and beyond to get the sale through to completion in 8 weeks and charged a flat fee equivalent to 0.5% based on the selling price. Putting my estate agent hat on, I don’t believe a PB agent who is paid on instruction for listing the property, and is therefore keen to chase down the next listing, would have had the time or inclination to put that much effort into completing the deal. And this was a relatively “easy” one due to there being no previous or ongoing chain.
Basing your “fanDom” of PB on the most simple of transactions and saying it is a model fit for all is not a balanced view now is it.
Your point does hold weight and it’s pleasant to get a reasonable response rather than the standard personal insults.
However you will find that PB do have a dedicated post sales support team.
postsalessupport@purplebricks.com and a dedicated phone number.
But in reality Building Certification is a requirement for the legal representative to obtain or seek an indemnity policy not the agent.
Planning and search enquiries the same.
Unless I am mistaken, ‘Room101’ did not state that those matters were the responsibility of the Agent to address – just the small matter of keeping the sale intact while those matters were addressed by those you mention.
His point being that the lister – nor the ‘post sale support team’ you refer to – have already been paid and therefore have nothing to gain by the success that the other Agent must secure to be paid.
But of course you knew that already…
“However you will find that PB do have a dedicated post sales support team.”
Seeing as you’ve ‘found’ them, dom-boy – perhaps you’d be so good as to point disappointed customer ‘JY’ in their direction – because only an hour ago the VERIFIED PURPLEBRICKS CUSTOMER posted this on Trustpilot:
“Also our contact left the firm and the new person didn’t contact us at all during the process of getting the sale sorted – we did not get any of the helpful pushing of some other estate agents or any ‘post sales support’.”
uk.trustpilot.com/reviews/5af1be9d6d33bc0d508f9a7a
…or how’s about this one, dom-boy –
“…did about 98% of the post sales to completion chasing myself. I even had to let them know that we had exchanged contracts as they were completely unaware that this had happened.”
https://uk.trustpilot.com/reviews/5af1ecb26d33bc0db010d32c
– from ANOTHER VERIFIED PURPLEBRICKS CUSTOMER complaining on Trustpilot tonight – is THIS the “dedicated post sales support team” you speak so fondly of?