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NEWSFLASH: Purplebricks upgrades its UK expectations as it agrees a sale every nine minutes

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Purplebricks this morning announced UK revenues of £43.2m for the year to the end of April and an operating profit of £200,000.

Revenues were way over double achieved in the same period the previous year, which stood at £18.6m.

In Australia, Purplebricks had revenue of £3.5m but made an operating loss of £6.1m.

Altogether, Purplebricks lost £6m across both operations, which brought in £46.7m.

Average income per instruction in the UK stood at £1,035, and Purplebricks claimed it sold and completed on over £5.8bn worth of UK property, with a sale agreed every nine minutes, 24/7. It did not say how many properties it sold, but claimed its current conversion from instruction to sale is 83%.

This morning, City analyst Anthony Codling of Jefferies was sceptical.

He said: “Purplebricks is not, in our view, a shy and retiring company, until it comes to disclosing how many homes it sells.

“However, whilst we do not know the number of homes it has helped to sell, a key performance indicator in our mind, we do know that it delivered losses of £6m in FY2017 against our estimate of a loss of £4m. We hope that at the results presentation we can coax the shy company to reveal the number of homes it has helped to sell.

“Marketing spend in FY16 was £12.9m rising to £18.2m in FY17 and it will start with a ‘2′ in FY18. The digital model may not have to fund a branch network, but it appears to us that the virtual high street is not as cheap as one might imagine.”

Purplebricks chief executive Michael Bruce said: “This has been a very successful year in the early development of the Purplebricks model and brand.

“We have materially grown our national footprint and have built a growing brand awareness and reputation for delivering customers a more convenient, transparent and cost effective service. In tandem with our growth we have invested in the business and strengthened the management team.

“This has allowed us to significantly grow our number of positive reviews on the independent review site Trustpilot (currently with over 20,000). We have retained our rating of excellent.

“Purplebricks is now in a strong position to become the no.1 estate agent in the UK for both listings and sales.

“With the UK business now in profit it is encouraging to see Australia following a similar growth trajectory. Just eight months in and Purplebricks already operates in five key states, which represent 85% of all Australian property transactions. The launch of our Commisery campaign in Australia from May 2017 will further accelerate progress.

“All of this bodes well for the US, where plans to launch, first in California, in the second half of the calendar year are progressing at pace.”

Purplebricks also said it is confident about its prospects and of meeting the board’s “increased expectations”.

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