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Purplebricks shares surge on strong trading

Purplebricks shares opened 16.53% higher after the group said in a trading update that it expected to beat full-year profit forecasts.

The AIM-listed firm revealed Half Year Results for the six months ended 31 October 2020, where total fee income rose 6% to £49.1m, while instructions increased 8% to 35,387, and instructions had surged 20%.

Operating profits jumped from £200,000 losses a year ago to £6.9m, whilst revenues fell 6% to £44.2m.

Vic Darvey, Chief Executive Officer of Purplebricks, commented :

“Purplebricks has delivered a strong performance in the period with instructions up 8% and total fee income growth of 6%, despite the UK housing market being disrupted through the height of COVID-19. This continued momentum demonstrates the strength of our technology-led business model and our ability to adapt quickly to a changing market.

“We are now emerging from the pandemic in a very strong competitive position. As a result of continued financial discipline and operational excellence across the business we have experienced strong growth in adjusted EBITDA, up 110%, and a significant improvement in cash generation compared to last year.

“Purplebricks focus for 2021 will be to re-accelerate the growth of our core business by continuing to enhance our digital innovation, our virtual capabilities and increasing agent productivity through automation and efficiency. This period has shown that our technology-led business model is now more relevant than ever, as customers continue to shift to being more comfortable buying and selling their homes digitally.”

Purplebricks has adjusted EBITDA for the full year to exceed the upper end of the current range of consensus.

“The business has performed strongly in the period since the market shutdown ended, with buoyant trading supported by strong market recover,” said the group in a trading update.

Shares in Purplebricks are trading 16.62% at 88.17 (1211GMT). In the year to date, shares are down from highs of 93.98.

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