He is worth £160m on paper – and likely to find himself in the Rich List next year.
But, according to a glowing interview in the London Evening Standard, Purplebricks boss Michael Bruce is almost too busy to enjoy the fruits of his company’s “stratospheric rise”.
Bruce, who works 15-hour days, is “rising a £1bn unicorn with a bigger market value than rivals Countrywide, Foxtons and LSL put together”.
The interview reveals that Bruce has just bought a house in California – where Purplebricks is to start its launch across America.
One investor described him in the interview as a “visionary” who is also across the detail: “You send him an email and the reply comes straight back. He realises he’s got first mover advantage now and he’s determined to ram it home. Unlike a lot of these tech guys he’s basically got no ego.
“Every hour he spends promoting himself rather than the business he would see as a waste of time.”
The interview does touch on detractors: “Online rivals grudgingly admire from afar but warn against over-expansion. ‘They’ve done a ****** good job and a lot of the traditional guys don’t like them,’ said one, adding: ‘What they have proved is that there is an inherent demand for fixed-price estate agency.
‘But there are plenty of tombstones in the US with a UK company’s name on them.’”
Bruce also dismisses another criticism that Purplebricks has created a race to the bottom for fees as ‘sour grapes’.
As for that awkward analyst Anthony Codling who keeps pointing out that Purplebricks doesn’t say how many homes it actually sells, Bruce confirms that 83% of instructions “end in a sale” and promises more numbers “at the right time, when it would be more reflective of the performance of the business”.
Just how far Purplebricks has come in a little over three years is – without doubt – a stunning achievement as EYE’s first report on the venture shows. It attracted just three comments back in March 2014:
https://www.propertyindustryeye.com/former-burchell-edward-brothers-return-to-estate-agency/
83% doesn’t tie in with land registry.
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Simple online check
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Think they are using listings that also sell through other agents.
E.g..
10 properties pay £1000 to list with PB
3 sell through PB
5 get fed up waiting and sell through a full service agent.
2 Get fed up and stay put.
= 80% of instructions end in a sale.
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Okay. Time for another check over figures.
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A check and measure for you…using their own stats and totally accurate figures as taken from their end of year report to the city and the Stock Market. This way all will make sense and help you in your hour of angst! There should be no doubt this way….or is there?
They sell or agree a sale every 9 minutes 24/7. There are approximately 525948 minutes in a year. This means they sell or agree the sale on 58,438 properties annually. The average spend per client or should I say customer is £1,035, meaning a gross theoretic revenue of £60.484. Group revenue is £46.7m and UK is £43.2m. OK, that one doesn’t add up. Lets try this one…
They have sold & completed £5.8bn of property in the last year and have a pipeline of £3.69 bn Lets use the Land Registry data as it is a national database and looking at averages stated at various points this year, lets say for the purposes of this, the average house price is £220,000 and working from the sold numbers…clients will definitely have paid their fee = 26,772 houses sold producing £27.7m revenue….oh what happened there. Lets add the pipeline of £3.68bn which using the same calculation gives £17.37 m makes £45m ish. That sounds more like it, although aren’t they being paid whether they sell or not?
Great, let’s do the check and measure, gross revenue £46.7m from an average fee of £1035 = 45,120 houses sold, but using the gross value of sales, this appears it should be closer to 58,438 houses if they sell every 9 minutes…
The monthly run rate of instructions is 4979 according to the Chairmans report, which should produce 59,748 instructions a year..£61.84m of revenue. Oh! But they report that they sell 83% of instructions, lets work out what 83% of the theoretic instructions produces = £51.33m! Hang on a minute, there seems to be a big gap between the number of gross clients being listed and those who are actually paying!!!!!!!!
This is why PURP should disclose how many they actually sell, it cuts down doubt when reporting to the city and markets, protecting the investors and pensions who have bought into a story. It really should be that easy, but my musings above show the confusion that rages….why would they want to allow that? And on that bombshell….Essential if a company wants to justify its value at £1.18 bn on todays price and real time loss of £6m. Don’t get me wrong they have proved what stripping out costs and using online and TV and radio advertising is doing to get a message out there. Their savings on fees are not as good now there is a full on commission war and the best nugget I have found in my investigations at the weekend is the employment of Ed Hughes! Who…well he came from Compare the market and his claim to success there was ‘compare the meerkat’ and his new one is ‘%commisery’. Made me laugh, he makes more and more money the shorter his strap lines get!
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“There are lies, damn lies and Purplebristatistics” Mark Twain
I think that’s the correct quote (correct me if I’m wrong please Ed’.)
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83% is absolute nonsense and the fact he’s prepared to say this publicly, to the press, speaks volumes.
It also highlights how the unsuspecting press and public can easily be manipulated through the use of language pertaining to a process they think they understand but don’t.
Is a “sale” a “sale for purplebricks” or simply just a “sale agreed” rather than a completion or is it a “sale agreed” five months after listing by which time it’s value has eroded and impacted on the price achieved or is it a “sale agreed” after several price reductions?
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Sales completed start to finish by PB is the only number we are interested to know. It is a simple question every online lister and full service agent should know the answer to. How many times do they hand the keys over to the new owners?
I do not understand why they are not just willing to declare it!
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Oh, I think we all understand it (except joe public and a great many gullible investors)
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As of todays date, in the past 12 months in postcode areas*
Purplebricks marked as ‘sold’ just 39% of properties that were removed from marketing with them**
For comparison, my own company, using the same methodology**, showed 77% as sold on removal.
*TR3 TR3 6 TR3 7
TR11 TR11 2 TR11 3 TR11 4 TR11 5 TR11 9
TR12 TR12 6 TR12 7
TR13 TR13 0 TR13 3 TR13 8 TR13 9
TR14 TR14 0 TR14 7 TR14 8 TR14 9
TR17 TR17 0
TR18 TR18 2 TR18 3 TR18 4 TR18 5 TR18 9
TR19 TR19 6 TR19 7
TR20 TR20 8 TR20 9
TR26 TR26 1 TR26 2 TR26 3 TR26 9
TR27 TR27 4 TR27 5 TR27 6 TR27 9
**The dataset used only shows properties that have been withdrawn from marketing and the last advertised status. My own companies listed to sstc to sold figure in this period using data from our CRM system, Jupix, is 94% so, it is also perfectly possible that PBs’ figures are also out by a similar margin in either direction.
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I cant see old Brucie boy actually fessing up on the real stats for the simple reason his £160m would drop a little……
to
£1.60p
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‘I’ll give out more sales numbers when they actually exist’ – Purplebricks boss says
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“He adds that 83% of instructions end in a sale”
NOTE, that is NOT the same as we sell 83% of all of our instructions, just that they end up in a sale. ‘Careful’ wording by Mr Bruce.
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If you were a prospective investor would you not want to know the number of completed sales actually carried out by who you are investing in, when it is apparent it will be a factor affecting share price at some point?.
If you were a prospective customer trying to make an ‘informed decision’ should this information, as a proportion of listings, not be freely available for you to see?
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From an investors point of view they won’t care how many of their listings end in a sale as the money is paid at instruction so as long as they keep on listing properties and banking money then the investors will be happy for now.
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Until the 50%* or so of customers who don’t sell but have still paid/ been saddled with a close brothers loan agreement believing they had an 83/ 88% chance of selling start becoming vocal via consumer programs.
*GetAgent data – remembered not quoted.
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Success breeds jealousy.
At any point is anyone who posts on PIE going to have anything positive to say about PB. To any outsider to the industry stumbling across this site the constant flow of negative rhetoric simply comes across as jealousy, sour grapes & fear.
An article only has to mention PB and it’s guaranteed 20+ postings from a host of agents who’s time would probably be better spent having a decent morning meeting rather than taking an hour to compose a rant about the competition.
Competition is a good thing and one golden rule I was taught from my first day in the business was that you don’t slag off the competition……something that regular posters on this site don’t seem to get. Honestly guys, it looks awful. Firstly that you all seem to know better than the people who run and invest in PB (you don’t, you can’t possibly) and secondly, it has a jealous school bully feel to it.
Anyone who thinks the PB bubble is going to burst and it’s all going to go t*ts up is hopeful,deluded and doesn’t have a very good knowledge of business and investment. PB are hear to stay…just like Connells, CW and LSL. Purple Bricks will continue to do all the things that you would love to do….expand their business, increase their market share, take business from the competition and market themselves effectively. And while they’re doing this you’ll spend an hour pondering over your next anti-PB post and wondering why your’re not selling enough houses.
Success breeds jealousy.
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The only part of this I didn’t agree with is the …just like Connells, CW and LSL.
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Sadly, as has ben alluded to previously and on the post about CIELA, PBs’ lawyers become rather twitchty when certain statements are made which makes replying to, on what would otherwise be a fair comment on negative posts about competition, rather difficult.
Suffice to say, if you see someone who is taking money from people using statements you honestly believe to be EASY NOW or data that is CAREFUL and that their model uses people who are not complying with THAT’S OVERSTEPPING THE MARK NOW CHRISSY BOY, you can either stand up and try and do something about it or, you can watch whilst they continue.
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only takes me 5 mins to pick holes in PB. Im not even an estate agent !.
Lemmings. Undercutting, hemorging money, unsustainable.
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I rest my case.
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rest one’s case definition
phrase of rest
1. to conclude one’s presentation of evidence and arguments in a lawsuit.
Hi ‘FromTheHip64,
Slander is not my style. Pointing out common sense however, now that is a favourite past time of mine, so please sit back and grab some popcorn.
Firstly, let’s deal with your own retort. As you can see above, I have provided the definition of resting a case. In order for a case to be rested you must have concluded and proved your point through evidence. As ‘seenitall’ is not an estate agent and your initial comments were directed towards ‘sour grapes’ agents, you can understand why you have not have not rested your case. In fact, you have actually undermined your own.
Then that brings us to purple bricks. As I mentioned slander is not my style, but pointing out the obvious is. The bottom line of selling houses is actually selling houses – keys in the back pockets of buyers. If a company will not let me know this information, then I would ask questions as to why they haven’t. Then we have a look at their profits, wait, there are no profits they are actually running at a loss of 6 million. Then I ask this question – why, if they haven’t made any profit, are they going to try and break into two new markets? Maybe one market could be understandable, but two….At the same time? I know if I had a business I would not risk losing it by branching into another market when I have yet to make profit in my own.
This also answers your original statement of why agents are being ‘sour grapes’ and providing the most comments on PBs posts. It’s because they can see when looking at the facts and responses that it doesn’t really add up. These are the most interesting posts on PIE because of this exact reason. Agents want to know what’s behind the curtain. It’s the same reason people are so interested in North Korea, because it is so wrapped in mystery that you know something dodgy is going on.
But, I digress; the fact is there’s a market for PBs. It’s the same in every industry; there is always space for a cheaper option. Poundland is still going strong, and it’s because of this.
So, what conclusion do I bring from these points; no profit in 5 years, not giving out information on conversions, taking the business to another country to start again…. I can’t help but feel they know the conversions aren’t good and to release the data now would be suicide for their international expansion, ruining stock prices and with it the integrity of the company.
Or, we can pretend the company doesn’t have a big ego and they just don’t like to boast about how well they are doing – an equally detrimental policy for a growing business.
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Roarsome,
What a great read that was, and I couldn’t agree with you more. If PB for one moment believed their actual conversion rate from listing to completed sale was really good, why wouldn’t they be singing it from the treetops and their adverts…..and especially to their investors to build confidence in their ‘model’.
The fact that they are not doing that must mean quite a lot.
I equally want to launch ‘Collective Active Intelligent Marketing’ for independents to compete properly, and I am just in the throes of trying to raise money to develop and market this.
I am not a lover of attention……but I know one thing, if it is successful I will be spouting the truth about it everywhere I possibly can.
😉
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So why aren’t PB doing this?
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From the Hip,
I have time and again congratulated them on a successful floatation, they are good at raising money.
But the fact is they are not offering the public anything that they do not get better from full service agents.
No innovation, no service, no increased exposure …. I could go on but you get the picture.
They cannot even break even after almost 5 years. They will not get repeat business.
I wonder why you feel they are a success in the property industry?
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FromTheHip64 – I promise forevermore to be really nice about Purplebricks, on here and social media, if you can just explain to me how their performance differs in any way from a Pyramid Scheme.
Go.
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It just proves you can make money by not making a profit. It has not fat, therefore it is at a very high risk of falling from grace when something goes pear shaped …. such as investors waking up and pulling the plug on one of the biggest losers of the century. The only winners are the fat cat salaries but Bruce may have over stepped the mark going to the USA. They know how to play big time and he isn’t one of them. The media and a law suit there would wind PB up in seconds. They don’t like conmiseray.
What is interesting to miss is that fund managers who are going along with the spin will have a time line to see results based on future performance. Even they will be asking if they will ever see a return for their investments and pull the plug as they have to answer to the clients. Some are putting more money in to try and hide their failings … wishful hoping for a return. The figures todate can never ever be repayed ……. how much longer will the honeymoon go on for, before the divorce?
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We all remember the tech bubble & crash, how do pension fund managers not learn by their mistakes? PB is a crash waiting to happen, anyone with shares should get out now while the going is good before it’s gone!
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With good old PB the only way you can choose the “pay later/within 12 months” option is if you take out their conveyancing service. If you then decide not to use their conveyancing services (as it will cost you approx £200 more per transaction) your bill becomes immediately payable.
Is this discrimination against certain customers actually legal??
I thought you cannot discriminate against customers if they decide not to use certain services you offer, in the same way you cannot discriminate against someone who won’t use your mortgage adviser..?
Anyone else thought of this or am I wrong..?
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Do you mean ‘conditional selling’?
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Yes
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“One investor described him in the interview as a “visionary” who is also across the detail: “You send him an email and the reply comes straight back. He realises he’s got first mover advantage now and he’s determined to ram it home. Unlike a lot of these tech guys he’s basically got no ego”
Yes he certainly is ramming home his first mover advantage, because he needs to while there is a honeymoon period with investors, Jam tomorrow promise won’t last for ever with big investors who will want to see real profits that can be distributed to shareholders, they will remain happy for a while as the share price keeps climbing making their investment look good on paper, but watch the stampede for the exit if the price falls in any significant way.
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All I see here are bitter old estate agents, with no real idea how to advance their own businesses.
Purplebricks will achieve number one status in the UK. (This year)
Watch this space.
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Well of course that’s what you see – you’re looking through purple-tinted testicles.
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D’OH!! – I meant spectacles.
Bl00dy autocorrect.
See – that’s the problem with ‘progress’ – it takes ‘advances’ and chuffs them all up so that eventually we revert to the tried and tested.
Stick around young buck – you’ll learn… eventually.
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Not with this % of unhappy customers!!
https://uk.trustpilot.com/review/purplebricks.com?stars=1
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And those are the ones who so far survived the well-used “Purplebricks UK reported this review for breach of Trustpilot guidelines. We are currently assessing the review in accordance with our reporting processes” tactic!
You’ll never know the true numbers…
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Number one as measured in biggest loss to turnover ratio?
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