Online estate agent giant suffers share price drop amid expansion spree
The share price in UK online estate agent Purplebricks tumbled nearly five per cent in early morning trading, as the firm announced widening pre-tax losses.
Final results today show that pre-tax losses rose to more than £26m in the year leading up to April 30, up from just above £6m losses the year before, due to higher costs from marketing and expansion into foreign markets, although revenues rose despite tough conditions.
Marketing costs came in at £42m as the online estate agent works to promote its six-year-old brand.
The results also come in the wake of its expansion into US markets earlier this year, after raising a £100m strategic investment from German digital publisher Axel Springer.
The firm has also grown its North American footprint by entering the Canadian market through a £29.3m takeover DuProprio/ComFree (DPCF), which owns and operates a commission-free real estate service network.
However, the online estate agent giant did post rising revenues amid its growing dominance in the property market.
The Aim-listed estate agent posted a 101 per cent rise in group revenues in the year up to 30 April, with gross profit in the UK standing at £45m.
Michael Bruce, group chief executive at Purplebricks, said: "We have doubled revenues in tough markets, taking market share as we continue to win over consumers to the modern way of buying and selling property.
Bruce added: "As the latest independent UK research by TwentyCi released July 2018 shows, we sell more of our properties and complete faster than any of the top 10 largest agencies in the country, saving consumers thousands of pounds in the process."