A major article on Purplebricks at the weekend in the Daily Mail said that its “meteoric rise” could be running out of steam.
The Investment Extra article by Paul Thomas is headlined: “Is Purplebricks’ stunning rise built on dodgy foundations?”
The piece said that in just four years, Purplebricks has become one of the sector’s “slickest and most recognisable brands”. Its shares soared more than 450% between stock market flotation in December 2015 and August last year.
But the article says that a concern is that it is pushing into overseas markets “before the UK model is proven”, with shares now down more than 38% from their peak.
The article says that analysts are beginning to ask whether Purplebricks is better at selling homes than other agents, referring to the radio interview where CEO Michael Bruce claimed it sold 88% of its listings.
The Mail article also references the research by Jefferies which claimed in February that Purplebricks sold only 51.6% of listings on its site in November 2016 within ten months.
Thomas adds: “Purplebricks refuses to reveal its actual sales figures, making it difficult to know how many homes it really sells.”
Purplebricks has recently funded expansion by selling 11.5% of its shares to German digital publisher Axel Springer. But, says Thomas, some analysts have queried whether the time is right for a US expansion when “question marks hang over its ability to flog properties here and in Australia”.
Purplebricks told the Mail that it is the only listed estate agency offering substantial sales growth, and that revenue at Countrywide, Foxtons and LSL is flat or falling.
Separately, an analyst has queried whether OnTheMarket is generating enough cash.
Blake Harford, writing on Simply Wall St, has looked at OTM’s free cashflow (FCF) which is what is left after it pays off its expenses.
He concludes that currently OTM “is not able to generate positive FCF”.
However, he said that over the next three years, this is likely to change to an “extremely uplifting” picture.
Well OTM might be struggling with cash and CWD struggling with a debt mountain . Love or loathe Bricks you have to hand it to the Bruces for raising £125m from Springer ,personally trousering £25m with A.N other even with a profits warning.
That’s a nice piece of business . I think the answer is in the leader I don’t think Bricks going liquid in a challenging market means a major rollout in the US yet maybe they have bigger disruptive ideas in mind back in Blighty
Maybe Springing Springett with Springer cash taking over OTM with Axel Springer adding all the bells and whistles to the portal
They certainly have some serious form in mergers& acquistions
http://www.axelspringer.de/en/presse/Axel-Springer-plans-take-over-of-French-real-estate-portal-Logic-Immo_31626781.html?mkt_tok=eyJpIjoiTm1FNU9XVTNOMlEzWmpFdyIsInQiOiJIS1Fta243VmVHXC93T0ZQMUhzNk
Bricks Saving themselves a handful of cash migrating from RM and Zoopla to OTM.Maybe the £125m was the sweetener
That would be the greatest irony with an umbilical cord tieing Bricks in with their arch enemies
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For a takeover to happen the shareholders would have to agree. Corrrect me if I’m wrong but arent a lot of the shareholders you and I types?
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Beano
All it needs is 51% .If one thing is for certain the camraradarie amongst agents is only skin deep .Fully illustrated by the fact that OTM set up by agents to tackle the mighty beast of RM but failed to gain traction unfortunately proves .Plenty of other non agent investors too
The stakes are high -The market capitalisations are RM – £3.97 billion, Zoopla £1.48bn with OTM coming in at £62m!!! .Third by a country mile Plenty of scope to chip away at the leaders
The prize is high Axel could easily offer £150m +,petty cash for them double banco which might be too hard too resist for some Springett will no doubt be first up at the table
Just take a look at their European operations .They are a company in expansive mood
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I have to admit all this jargon goes over my head. All I know is what I have personally experienced of Purplebricks and that is they do not protect the vendors’ interest and the property I looked at was undervalued so of course it sold quickly. The vendors I spoke to didn’t really know what was going on. They thought it was usual for the vendor to have to conduct the viewings and thought other estate agents charged thousands of pounds. This is indicated by Purplebricks advertising when for example Hobsons Estate Agents in Newton le Willows, Merseyside charge a flat fee of £995. This includes viewings, photos, marketing everything.
Purplebricks are slick sales people who do not deliver the product.
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In about 3 years time PAYANYWAY will be made illegal.. pity our govt and regulators will only do something when the public /media demand it… its worrying that these organisations cant police anything themselves.
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Illegal for charging an upfront payment, you really are delusional!
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Upfront payment with risk of getting no product if your property doesnt sell.?? ..ok prickch watchdog this space.
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EGeorge79
While the effort is appreciated, your example of a worthy alternative to PB is not, I would suggest, the head shot you would hope it to be.
Their offering fails in my opinion on several basic counts – which I am not going to post here, as it will only feed the trolls – but I also cannot let the industry seem to accept flawed logic as actual logic.
There are many, many Agencies whose selling rates make online only Agencies appear no better than or even an expensive option by comparison. They just don’t have the best part of a million quid a month to chuck at the TV to spread their #Alternative_Fact message to homeowners that fail to do their own Due
Diligence prior to giving over their card details or signing into a NOT loan agreement for what is a £1000 coin toss.
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Purplebricks are slick sales people who do not deliver the product……Another sweeping statement from someone who clearly knows nothing about how they operate.
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I think we all know how they operate.
1 in 2 spend just over £1000 and do not get a buyer.
They have a place in the market, they will never be an Amazon of the industry.
They are gambling with other peoples money. The entire online community has just 5% market share.
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The entire online community has just 5% market share.
Yet you donate your precious hours moaning and whinging constantly about them, it really is pure comedy gold.
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Think of it as an investment. Online business only have trustpilot to help their #fake propaganda . When potential sellers dig a little deeper the web is full of reasons why PAYANYWAY stinks.
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Yet you donate your precious hours trying to defend them, it really is pure comedy gold.
The lack of self awareness is quite surprising from an intelligent guy like yourself Dom.
I have left a few posts for you and Ducky but unfortunately you both seem to keep missing them. Below is the latest.
“I dont trust estate agents any more or less than anybody else. I just find it hard to believe that anybody with more than half a brain cell would base investment decisions on this forum and i cant believe you or Dom think that anyone would which makes me wonder why you both defend Purplebricks but no other companies (that I am aware of)?If you are crusaders for the truth and objectivity in order to inform potential investors I haven’t seen you challenge any of Purplebricks claims or their lack of transparency. Both yourself and Dom seem to be as Pro Purplebricks ad the vast majority of posters are anti. I can see the motivation in the posters being Anti PB but i cant for the life of me understand why you and Dom invest so much time and effort in supporting PB ?”
Genuinely interested in both your motivation.
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AgentQ73
>I can see the motivation in the posters being Anti PB but i cant for the life of me understand why you and Dom invest so much time and effort in supporting PB ?”
I generally support PB when it comes to the service that they offer because as a customer i had a good experience with them and the common theme here is in my opinion biased in that respect and comes from a lack of understanding of their service.
Apart from the above and the fact that I like their offering, I don’t really think I do support PB. I like to think on all other matters I just state facts and correct other misleading posts so as to add balance. This probably comes across as support but I don’t accept that. On the whole I won’t comment to agree with what others have already said. I just post to add a different perspective. If I stick to that then the overall picture is a better balance in my opinion.
I won’t be coming back today so if you want to post any future questions do so as you have above, on a new thread.
PS, there’s another forum I post on and believe it or not investors on there accuse me of being an Estate Agent and posting negative things about PB. Take a look over on http://www.lse.co.uk/ShareChat.asp?ShareTicker=PURP&share=Purplebricks
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Thanks for the response and explanation. Why PB though ? I am sure you have lots of positive experiences with other companies, I am guessing you dont invest as much time and effort into them?
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Hi Dom,
I spend in total about 20 mins per day on Eye, Not a great deal out my day.
Considering i am at my desk 8-7 most days and we do not take an hour lunch unlike my solicitor friends its not too much time on here.
– Also the advantage of being self employed, i do what i like when i like!
I certainly do not have enough time on my hands to make up reviews unlike your mates at PB, still that’s going to be stopping soon ….. Watch this space …..
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MrLister
“Another sweeping statement from someone who clearly knows nothing about how they operate.”
Don’t you mean “Another sweeping statement about a company that have built a business on making sweeping statements – many of which they have been made to retract.”?
Come on – you can’t ignore fact.
Or Alternative fact, as the case has proven to be on many, many occasions…
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Cyberduck46 (@ cyberbird001) said “as a customer i had a good experience with them and the common theme here is in my opinion biased in that respect and comes from a lack of understanding of their service.”
I would question how on earth you could possibly class the selling service you received as good. Bearing in mind this isn’t a share trading platform or the comments section of a story on the Daily Mail, this is an industry forum for the property industry and those who supply them; people who know the subject enough to know what is good and what is rubbish. People who know the difference between an estate agency service and a passive intermediary service.
To be classed as good, from listing in January February last year, you would have sold your home for about £630,000- £640-000 late March and completed end of April. That didn’t happen. Although you were relieved to get a sale it is only your circumstance of trading down market that allows you to be satisfied with the service of taking 10 months to achieve about 5% less than your property was worth.
At the appraisal stage yours would have been an instruction I wouldn’t have wanted, from the outset you triggered my agent’s senses which said you would have been quoted full fee, no discount and I’d have only taken you on once you’d agreed on an asking price of no more than £659k.
You achieved a sale and its reasonable to say you were satisfied/ relieved with that but you can’t claim it was a good sale, you can’t claim you achieved a good price. It certainly wasn’t quick and compared even to the 1.8% plus vat I’d’ve charge you to get £630,000 you did not save any money; instead of netting £616,000 you were about £15,000 light of that.
I’m grateful you allowed us all to see the Purplebrick system in action from start to finish; its rare to get such transparency and such a great example why other people should be wary of using an internet listing firm. There is no lacking of understanding, you’ve show us what it is all about.
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#duckshoot
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Your forgetting how much “cash buyer” Toiletduck(and his LPE) managed to negotiate off the purchase price of his new nest ;-).
After all, as someone once said “you don’t make money selling houses – you make money buying houses”
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I didn’t forget it, it wasn’t really relevant till you mentioned it but as you have……it looks like the proper, proper #local estate agent who sold to Cyberduck got the full asking price. No sign of a haggle or any negotiation at all.
The property went on the market at about the same time as Ducky’s, was taken off the market for 3 weeks then was re-marketed 1.65% more than it had been on for. I guess the extra 1.65% went a long way to cover the fee for doing proper, proper, experienced #local estate agency.
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#2nd_Barrel
Right up the kazoo!
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The irony of PB biggest fan “saving” money by not paying commission on his sale and then paying the 1.65% commission to the sellers agent on his purchase gives a frisson of schadenfreude.
Perhaps the sellers agent applies this surcharge to all PB buyers – it could catch on.
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I think the responsibility lies with the ‘proper agents’ educating the public as to what the proposition is with PB. They only have the dishonest ads on TV, radio and YouTube to go by which is only part of the story. The public need to know how many properties PB sell within the first 10 months (the charging period) and whether they are happy to gamble £849 upwards on broadly a 50/50 bet? They need to look at the AllAgents reviews and be aware of the watchdog programme and the ASA prosecutions for misleading the public, only then will the public be aware of the PB scam and be able to make a proper informed decision.
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