Purple Bricks looks for recovery after bruising financial year with big losses and revenue drop
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Estate agency Purple Bricks has set out a recovery plan following a bruising financial year, with instructions, profit and revenue all way down on 2021.
The tech-led housing group suffered due to a mixture of supply chain problems as a turbulent property market, and “a year of transformation”.
It registered a loss of £42m in the financial year up to April, down from a £6.8m profit in 2021, while its group revenue was down 23 per cent to £70m and its gross profit fell 27 per cent.
While its total fee income fell by 28 per cent and instructions were down over 30 per cent, its average revenue per instruction rose by four per cent.
Purple Bricks announced adjusted EBITDA(earnings before interest, taxes, depreciation, and amortization) loss of £8.8m, which it says was driven by lower activity and a move t a new operating model.
“Last year’s financial performance was 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”, said Helena Marston, CEO.
She said the poor performance coincided “alongside a housing market which played against us. Nevertheless, our performance was not good enough.”
Setting out a plan for the future Marston said Purple Bricks would “expect to drive higher instructions, grow revenues, reset our cost base and raise standards”, with the firm already having “taken decisive action.”
It will introduce a cost reduction programme to make £13m in savings, while implementing performance management programmes, sales and marketing initiatives and price changes. It will also remove the Money Back Guarantee, which it said “failed to deliver the expected increase in instructions”.
“We have completed a substantial cost-reduction programme, re-trained all our field agents to raise standards and improve conversion”. She added: “We are also assessing additional revenue streams including our new mortgage proposition which we expect to launch by the end of this financial year.”