Purplebricks boss Michael Bruce has used the company’s new annual report to pay tribute to its Local Property Experts.
He says in the report which covers the financial year to the end of this April: “We are extremely privileged to have secured some of the best people in our industry who have a strong desire to be part of a business that is changing the way people think about estate agents and estate agency.
“They are passionate about customer experience, giving customers that ‘light bulb moment’ where they have met an estate agent who has promised a service, delivered on that service, sold their house and saved them money.”
Bruce also repeats in the report claims made when Purplebricks announced its results to the stock market in July – including that it sold 3.1 times the number of properties in the UK than the next largest estate agency brand.
By ‘sold’, it makes clear that this is Sold Subject to Contract.
It also says that by the end of its last financial year, it was selling (SSTC and exchanges) more homes than any other group of estate agency brands in the UK.
Furthermore, it sold 81% of its listings (completed, exchanged or SSTC) in the 12 months to the end of April this year, and secured an average uplift of £6,000 on the asking price of properties in the £250,000 to £300,000 range.
Bruce also says that average revenue per instruction rose to £1,168 – adding that this is set to grow.
Bruce concludes his section in the annual report by saying: “We expect future developments in estate agency to continue to see a migration away from the high street . . . We expect Purplebricks Group plc to remain at the forefront of this change in the industry landscape.”
Elsewhere the annual report stresses that Purplebricks expects more growth both at home and abroad.
Chairman Paul Pindar says: “Purplebricks is continuing to lead significant change in the global estate agency market, offering better choice for customers and a low, fair fixed fee.”
Pindar adds: “While we have grown quickly, there remains enormous potential for our hybrid agency model to further disrupt the traditional model in both the UK and overseas.
“We have recently secured a £125m strategic investment in our business by Axel Springer which will support us in achieving this.”
The annual report, sent out to shareholders yesterday, covers a year in which Purplebricks brought in revenues of £93.7m, up 101% on the prior year, with an adjusted EBITDA profit of £8.1m in the UK, offset by losses of £11.8m in Australia and £16m in the US.
Pindar says that these losses “reflect our investment in launching and establishing these early stage businesses”.
He concludes: “The last financial year has seen strong growth and a solid operating profit in the UK, despite tough market conditions as well as rapid and effective expansion overseas.”
He says that in the current financial year there will be “significant initiatives in marketing, technology and product development as we continue to leverage our competitive advantage”.
The annual report says that in the financial year to the end of April it had an average of 569 people on its payroll, up from 239, at a payroll cost of £23,236,000.
Michael Bruce received £188,000 in remuneration, including share based payments of £38,000. Finance director James Davies received a total of £811,000. The pair also have share options, as do a number of members of staff.
The non-executive directors, including Paul Pindar, received £30,000 each.
This spring, Michael Bruce and brother Kenny, together with non-executive director William Whitehorn, sold around £25m of shares to Axel Springer.
As at the end of June, Bruce and his wife held an 11.01% stake in the company; Axel Springer held 11.5%; and Woodford Investment Management held 27.6%.
Comments (45)
Haven’t made time really to look at the Annual report because usually it’s pretty similar to the results announcement.
Just spotted this which might be quite interesting:
“Technology will drive long term success for Purplebricks, it will help to delight, excite and surprise customers as we make the process of moving home increasingly simple, straightforward and stress free. It will also help our people deliver the service with greater ease, making them more productive and as a result more successful. We have previously announced our intention to invest further in technology that we believe will also drive greater revenues, reduce the cost of delivery, optimise conversions and expose our growing brand to a wider audience. We are executing on our strategy and are working towards a launch of the first stage of development towards the end of the first half of the 2019 financial year.”
So possibly something new on the technology front announced pretty soon. Hopefully some sort of upgrade on what Rightmove offer. They must surely be working towards video but no hint of that. Perhaps some sort of integration with their conveyancing partner?
“Haven’t had time really to look at the Annul report because usually it’s pretty similar to the results announcement.”
I suggest you look at the KPI amendments on P.18 of the report.
The underlying instruction revenue per listing is down by more than 8% on the amended 2017 KPI numbers and at £ 799 (inc. VAT) is less than PBs minimum charge of £ 849 (inc VAT).
This is a material difference and one which shareholders would have expected Grant Thornton to report on.
Tis remarkable how Mr Bruce mirrors his late father Lenny. This from wiki; ‘A stand-up comedian, social critic, and satirist. He was renowned for his open, free-style and critical form of comedy which integrated satire, politics, and vulgarity’.
The pronouncements we get from junior are definitely comedy gold. I do fear though that his company will suffer an early demise like his poor father…..
“Furthermore, it sold 81% of its listings (completed, exchanged or SSTC) in the 12 months to the end of April this year”
Clarification required. The above is directly from an official statement from the Chief Executive of a Listed Company in their Annual Report to the Stock Market, which was “Approved and signed on behalf of the Board”. The actual wording on the document is
” No 1 at selling houses: 81% of listings sold (completed, exchanged or SSTC) within 12 months to April 2018″
SO – the claim is 81% “sold”. Is this numbers of “sales” in the period… or actual numbers of individual, unique properties which “sold” during the given period.
If it is the former, then PB must be obligated to state
* of that “81% of listings” were duplicates – ie “sold” more than once in the period?
* how many of the total number of “sales” they are referring to fell through or still, five months later, have not exchanged or completed?
* and what ‘overlap’ period has been factored in?
IF the claim of “81% of listings” actually refers to the latter, then they should also be required to release details of what percentage of that 81% were existing listings and that which fell into the specified period.
IF, on the other hand, the stated “81% of listings” refers to sales of genuine first-time marketed unique properties between 1/4/17 and 30/4/18 – then they must be obligated to reveal what percentage have actually completed/exchanged of that figure – and what percentage refers to fall-through sales rather than ongoing.
IN ALL INSTANCES, clarification must be given that 100% of the stated “listings sold (completed, exchanged or SSTC) within 12 months to April 2018” are directly and unequivocally attributable to negotiations conducted and concluded by PurpleBricks.
I look forward to seeing this happen.
Having posted this before I still cannot work out PBs figures, I took these directly from their own website today. their total instruction are 38695 with 17235 SSTC thats 44.54%, how does that equate to 81% of instructions. Again based on their own website lets assume a 30% fall through rate that leaves a completion rate of 31%.
Please can some explain to me where they get their figures from as I just cant see it. I have no real reason to bash them, I have a good friend who works as a LPE but surely if they were selling 81% of all instructions that would leave a completion rate of around 50%ish then they wouldn’t constantly have the need for cash injections or am I missing something.
“They are passionate about customer experience, giving customers that ‘light bulb moment’ where they have met an estate agent who has promised a service, delivered on that service, sold their house and saved them money.”
Really, so what do LPE’s feel when they must knowingly refer users to an appalling conveyancing service, based on many of these reviews, which appear to make their move a real misery?
Interesting how many later five star reviews appear to cluster together?
https://www.solicitor.info/solicitors/premier-property-laywers/3444/1
Even based on this amazingly high 81% conversion rate (see Room 101 comment above) this means that 19% of users pay on average £1,168 for not moving and may end up paying two agency fees?
So if an online-only computer manufacturer sold cheaper products and 19% of their computers did not work, would regulators regard that as tough luck?
Probably, as long as the computer seller declared that the computer may or may not work. Which is what PB do.
People have a right to freedom of choice and if they are stupid enough to go down the PB route and not sell, there is no sympathy for them. If there are 100/1000’s of people being told it is no sale no fee then being made to pay, surely it would have been in the press a lot. Sellers are going into it with their eyes open.
I think the lines a very blurred on here with regards to people complaining about the consumers getting ripped off. I’m not sure people actually do care, what they care about is missing out on the instruction.
A lot of the posters on here get unbelievably upset by any PB articles but then state that ‘I’ve never even seen one of their boards’ and ‘They have less than 1% of the market in my area’. It really does baffle me where the anger comes from if that really is the case and they aren’t affecting their businesses.
“It really does baffle me where the anger comes from if that really is the case and they aren’t affecting their businesses.”
Have you never been in a chain with a PB link?
“It really does baffle me where the anger comes from if that really is the case and they aren’t affecting their businesses.”
Juat proves that you’re NotAnEstateAgentEither, then…
The reality is that it is 68 pages of word soup to hide the important part – blink and you miss it – still losing money, share price halved and NO DIVIDENDS.
Is there someone on here who could look into that claim that Mr Bruce has made, perhaps @RobertMay?
This is going beyond being misleading now.
This is what the auditors say:
“The Directors are responsible for the other information. The other
information comprises the information included in the annual report
set out on pages 3 to 66, other than the financial statements and our
auditor’s report thereon. Our opinion on the financial statements does
not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance
conclusion thereon. In connection with our audit of the financial
statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we
are required to determine whether there is a material misstatement
in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.”
If you notice this notice you will notice it is not worth noticing.
Even cyberduck46 now appreciates what utter tosh he has previously supported.
I think you’ve misunderstood Room101.
The auditors are saying that they have audited the financial statements and see no material inconsistency between the other statements and the financial statement or the knowledge obtained during the audit.
So their statement supports things like the number of instructions and average revenue per instruction and any conclusions that can be arrived at from those figures.
So all that stuff about doppelgangers and the like made no material difference so was misleading if anybody was suggesting this by innuendo or anonymously making the claims. I’m pretty sure these were the comments on here that I was claiming were misleading but I’m happy for you to point me to whatever you mean when you say “previously supported”. Of course it’s possible that my views have changed over time but I doubt I’ve ever supported “utter tosh”.
For me, as an investor, my main interest has always been the financial statement and what they now list as KPI and the auditors comments do support these numbers in regard to there being no material inconsistency.
FYI, I also do my own research and came to the same conclusion.
I posted the auditors comment as I though it might be helpful to MarkRowe when he says “going beyond being misleading now” but obviously it depends on which statement from Mr. Bruce it is that he’s concerned about as to whether the Auditors comments support it or not. He can make his own mind up as to whether anything else said is supported by the KPIs or would have been supported by the information the auditors would have had access to like the company books, bank statements and other records they required.
cyberduck46.
> So their statement supports things like the number of instructions and average revenue per instruction and any conclusions that can be arrived at from those figures.
No one gives a hoot about the stats you support here. None of which give anyone any reassurance that the period of time in question is the same.
They give a clear fixed statement for the listing KPI period, but the language is ambiguous thereafter.
Any jack a s s could look at their accounts and work out they correlate to their listing figures when they are paid to list. The bit no one can or will report is their listing to completion ratio for a given period and the metrics used to formulate that calculation.
There is no misunderstanding. You PURPosely swerve the pertinent points in the same way PURP do.
Of course there was a misunderstanding, you thought I was saying I understood what I had previously supported was utter tosh which isn’t the case. Let me quote you:
>Even cyberduck46 now appreciates what utter tosh he has previously supported.
No, zero misunderstanding.
Your faith is worrying.
Yet someone has amended the UK KPI’s for 2017 on P18 of the Report.
It still leaves the 2018 basic instruction income at £ 799 (inc. VAT) which is less than the PB minimum charge and (using the amended 2017 figure) down from £ 869 (inc. VAT).
As the figure as been amended for 2017 – Grant Thornton must be aware of it.
You would expect them to flag the drop in instruction income as this is a clear “canary” signal to any investor, that all is not well with current UK instruction income.
EDIT – Note the figure reported when results were announced on the 5th July has been changed for 2017.
Cyberduck. Part of some thoughts Warren Buffett has about EBITDA reporting.
I have posted the full quote previously on Pie. ”People who use EBITDA are either trying to con you or they’re conning themselves.”
Do their accountants understand that if you report ”81% of its listings (completed, exchanged or SSTC) in the 12 months to the end of April this year” for a balanced report you need to include their fall-through rates to get a true reflection or else you run the risk of allegations that this 81% statistic may have been dressed up?
By including their fall through rate in these statistics could this 81% published rate fall closer to the circa 50% completion statistic that Jefferies published previously?
Are fall through and actual completion rates (through them) material information? If so, why have these statistics been omitted as it may help those many uninformed users better understand the chances of having to pay regardless of moving and that some of them are likely to end up paying two estate agency fees?
Unusual for Michael Bruce to not mention the word ‘T’ word in the article above (transparency). Perhaps all those ASA and other rulings are getting him down?
Mr Lawson, I would draw your attention to the ASA report and the statement made by Zoopla to the ASA in the complaint you made to the ASA about my blog.
I’m paraphrasing but Zoopla made it very clear that Purplebricks PLC had reported many property status’ to them, that materially differed from the status for the same properties, as registered to or published by Rightmove, Purplebricks own website and HMLR.
E.g. Property ‘a’ could be reported to Zoopla as ‘for sale’ as ‘withdrawn’ on Rightmove, ‘SOLD’ on Purplebricks website etc.
At some point, the full truth will out.
This statement plus the news of moving into Florida has arrested their share price and given it a slight boost the last 2 days.
Very clever (a strategy they have used many times before when their share price is in free fall). You can only play this trick a number of times though…
An attempt to recover the share price which will no doubt work for now but will go south again and sub £2 IMO.
88% list to sold “completed” Michael Bruce on BBC Radio4 MoneyBox on the 21st of October 2016.
Now “81% including STC.” Mr Bruce did you make a genuine mistake you have repeatedly chosen to refuse to correct despite requests?
Judging by the personal financials I think he probably doesn’t give a £&@*
Previous answer deleted by the editorial team.
You can target a lie to the people that are most suseptible. Just not here.
81% SSTC / exchange / completed in 12 months to April 2018?
Someone who once worked for me miscalculated this ratio.
What they did was take our listings for a period, say April 2017 to April 2018.
And then the idiot counted EVERYTHING that SSTC / exchanges and completed inside that timeframe.
i.e – everything that sold pre April 2017 yet exchanges after April 2017 is counted for that period and counted again when it completes inside that period. Even if it falls through, SSTC / exchanges or completes the muppet counted it again.
A bit dim, but nice fella.
Well, we have seen a number of LPE.s leaving Bricks and joining Emoov maybe encouraged to move with the exciting prospects on offer.Some of those have already moved on from there .The grass isn’t always greener and Tim Dyke has rejoined Bricks.from Emoov It’s difficult to keep up.
They seem to be a migratory lot easily enticed by the prospect of filthy luchre .
What is apparent is that those who joined Bricks at the beginning , cherry picking the best areas are probably doing pretty well and willl be holding on to these with clenched teeth
New recruitment to the sub-areas or non peripheral areas where LPE’s are likely to have a tough time of it might prove troublesome
Perhaps this might suit part timers or those with family commitments?
What has happened this financial year is that growth of fresh new instructions is currently running at about 10% in the UK So its clear with rapidly slowing growth Bricks will have to try and squeeze every last drop out of instructions
We are seeing about 15% of those SSTC returning to the portals as”just added”.It’s unfortunate that Bricks aren’ t paid twice!
Its difficult to see at this stage that they can mirror the smart change in fee structure in Oz to half up front and half on completion .This would strike a bell here with many vendors who are concerned that the LPE’s’ aren’t sufficentally motivated to get deals home and hosed. However it would mean a reduction in revenue
Already vendors are up in arms about the expensive conveyancers foisted on those who seek to defer payment as this recent poster illustrates
https://uk.trustpilot.com/reviews/5bab741b8c83fd03a05d03b6
This should find some favourwithe publicwhodonthink the LPES are sufficnetally incentivisedto gethe ebst deal
However it might meantahtheexpeonsive conveyancerswont get foistedon vendor buut Nbricks needsto referral feesasthis psoteron Trustpilot illustrates
https://uk.trustpilot.com/reviews/5bab741b8c83fd03a05d03b6
Edit Function disappeared!!!
Furthermore, it sold 81% of its listings (completed, exchanged or SSTC) in the 12 months to the end of April this year
Still no individual figure for ‘completed’, the only really important metric, then?
BSOS23PC
No way in a million years do they agree sales on 81% on their listings. More like a sale agreed, exchange and then completion counts as 300% on one property.
This 81% figure is completely misleading in my view.
Purplebricks cannot be allowed to continually issue what can be generously described as”misleading” statistics
Time for ASA Complaint.
Go straight to Warwick Trading Standards, The CMA and FCA.
Thank You Chris, if I mention your name will they file my complaint in a Special DFA File?
best not to mention my name 😉
Frankly I’d rather become a Beta Max video salesman than an ‘LPE’ for PB……..
Far brighter future in the latter!
LPE’s are the mugs. Couple of hundred quid for a deal. Waste of time. They’ll go back to selling double glazing in no time…
Tick, Tock, Tick, Tock Purplebricks ……stormy property seas ahead, let’s see if you stay afloat.
Same for Countrywide.
I struggle to see how these EA chains wiht huge head offices to maintain will survive the next few years.Local EA’s can cut one or two shops,run on a lower cost base pretty quickly.
PurpleBricks has a pretty impressive burn rate for cash.It jsut has more than Countrywide.
If Bruce is praising LPE’s which would indicate they are planning on leaving and is trying to do whatever to keep them on board. No LPE’s no PB.
Anyway, the Vendor DIY models like PB, Emoov etc days are numbered.
It was only yesterday that the kid from Doorsteps was cap in hand again.
Still the only people who include SSTC in their sales figures.
I’m not an estate agent but isn’t the local High St cost base just going to be too much to carry without lettings fees and on lower transactions firgures ?
It seems to make sense that local EA’s will reduce their High St footprint.
Dutchy, from my own experience our high street office premises represent a very small % of our operating costs. Employing and retaining top quality staff who genuinely have the clients best interests at heart, from initial valuation through to agreeing and ensuring the completion of the sale, that is and always will be where the main costs are. I’m sure this is true of the vast majority of quality, full service agents. The fact that this message is often bandied about by agents that operate from their bedroom or garage is purely smoke & mirrors.
dutchy
‘Estate Agents’ sell property. It’s ‘Lettings Agents’ that deal with rentals – but some Agents do both (generally as separate entities and often with separate branches).
Tenant Fees form a big part of Lettings income. All or as big a part as possible of that income will be made in other ways. Unfortunately that is likely to cost the tenant more in the long run – but by the time they start seeing that it will be too late.
That said, the ‘fair-weather golfers’ will almost certainly depart for greener-looking fairways with less hazards and sand-traps.
It’s the way of the industry.