Online estate agency Purplebricks reported an annual loss on Tuesday and a fall in revenue after a difficult period which Purplebricks states was compounded by supply issues in the housing market.
Just a few excuses.
The company reported full-year revenue of just £70 million, down 23% from £90.9 million a year ago.
Furthermore, Purplebricks reported gross profit tumbled 27% to £42.1 million compared to the prior year. In addition, the estate agency reported a total loss of £42 million.
The firm changed its business model in 2021 by making its sales agents permanent employees. Meanwhile, its Money Back Guarantee pricing scheme was also launched last year but has since been removed.
However, CEO Helena Marston stated its results were “significantly impacted by the challenges resulting from the implementation of our new operating model and investment in marketing that did not deliver the expected results, alongside a housing market which played against us.”
Marston concluded that its performance was “not good enough.”
I think the market agrees, as the stock has fallen 6.67% following the report.
The housing market fared strongly during Covid due to government support measures. However, it is facing challenges from soaring costs and labour shortages.
The company provided its guidance for the first quarter, with volumes and revenue showing an improved trajectory compared to the second half of FY22. As a result, Purplebricks expects to deliver FY23 revenue in the range of £67.5 million and £72.5 million.
Current organic traffic has remained still for Purplebricks. There has been no significant change in 2022. However, there has been an immense decline from 2021, and this has led to a fall in profits. Inflation issues and consumer spending is still an issue and this may likely impact its share price further.
The stock has fallen 41% so far this year. Do you believe the stock can recover soon?