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Purplebricks share price smashes the £5 mark to hit new record

ON THE MARKET

Purplebricks’ share price smashed the £5 barrier on Friday to reach a new record high of 514p.

That would have brought in enormous profit to early investors back in December 2015 who paid £1 – and particularly to those who held off a few weeks, when the price went down to 75p.

Today, the shares resume trading at a touch under £5, at 498.5p, with the company valued at over £1.3bn.

Purplebricks is worth way over that of any other UK estate agency, although it is still trailing Rightmove which ended Friday valued at almost £4bn (£3.96bn). However, Purplebricks’ valuation is chasing that of ZPG, at £1.62bn, with ZPG’s offering to investors including far more than the Zoopla portal.

There were interesting posts on the London Stock Exchange website on Friday as the Purplebricks shares soared.

One said: “There is no doubt that PURP [its handle for trading purposes] have changed the home selling process in a significant way, allowing sellers the opportunity to sell their homes at a fraction of high street agent charges. The issue here is will the company ever make the profits necessary to justify the current SP?”

Another remarked: “I always knew there would be some magic about it . . . Hope is that PURP will completely change the way we buy and sell houses, make it cheaper and easier. High street agents will be victims of the change, of course.”

By contrast, shares in Countrywide dipped 1.49% on Friday, finishing at 164.75p and valuing the UK’s largest estate agent at £357.39m – trailing heavily in Purplebricks’ wake.

Countrywide reported a pre-tax profit of £19.5m for 2016 after closing 200 branches – about one-fifth of its network.

Purplebricks, with its much higher market valuation, has reported a £200,000 profit in the UK for its last financial year, but reported losses overall given its launch in Australia.

There appeared to be no reason for its latest bounce on Friday – other than that investors simply seem to like it.

Meanwhile Purplebricks is recruiting hundreds more Local Property Experts, with the Sun reporting on the vacancies, saying new recruits can expect to earn £45,000 and that “applicants will ideally have experience in an estate agency or a property company but will also receive plenty of on-the-job training”.

Purplebricks has said its ambition is to the the UK’s biggest agent for both listings and sales.

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