Purplebricks’ share price smashed the £5 barrier on Friday to reach a new record high of 514p.
That would have brought in enormous profit to early investors back in December 2015 who paid £1 – and particularly to those who held off a few weeks, when the price went down to 75p.
Today, the shares resume trading at a touch under £5, at 498.5p, with the company valued at over £1.3bn.
Purplebricks is worth way over that of any other UK estate agency, although it is still trailing Rightmove which ended Friday valued at almost £4bn (£3.96bn). However, Purplebricks’ valuation is chasing that of ZPG, at £1.62bn, with ZPG’s offering to investors including far more than the Zoopla portal.
There were interesting posts on the London Stock Exchange website on Friday as the Purplebricks shares soared.
One said: “There is no doubt that PURP [its handle for trading purposes] have changed the home selling process in a significant way, allowing sellers the opportunity to sell their homes at a fraction of high street agent charges. The issue here is will the company ever make the profits necessary to justify the current SP?”
Another remarked: “I always knew there would be some magic about it . . . Hope is that PURP will completely change the way we buy and sell houses, make it cheaper and easier. High street agents will be victims of the change, of course.”
By contrast, shares in Countrywide dipped 1.49% on Friday, finishing at 164.75p and valuing the UK’s largest estate agent at £357.39m – trailing heavily in Purplebricks’ wake.
Countrywide reported a pre-tax profit of £19.5m for 2016 after closing 200 branches – about one-fifth of its network.
Purplebricks, with its much higher market valuation, has reported a £200,000 profit in the UK for its last financial year, but reported losses overall given its launch in Australia.
There appeared to be no reason for its latest bounce on Friday – other than that investors simply seem to like it.
Meanwhile Purplebricks is recruiting hundreds more Local Property Experts, with the Sun reporting on the vacancies, saying new recruits can expect to earn £45,000 and that “applicants will ideally have experience in an estate agency or a property company but will also receive plenty of on-the-job training”.
Purplebricks has said its ambition is to the the UK’s biggest agent for both listings and sales.
What is concerning is that the best territories have already been cherry picked . Scrolling down the availability list most are sparsely populated towns with rural hinterlands where the fresh LPE will have to up the ante over 6 fold to meet OTE £45k
Some areas are covered by an “Emperor LPE” who will effectively be sub-letting Lkely that the fresh recruit will be struggling to meet target and we all know when that happens is the customer who bears the brunt as the LPE thrashes around desperate to get instructions
The UK side ofthings have moved up to circa 5,000 instructions pcm swhich just about puts it into operational profit.Critical point?
The frothy SP indicates that the market moves into USA will be a resounding suceess However that could be just the case of California Dreaming with all the barriers they are likely to meet
Ceratinly the comapny will be under the shorter’s eye at this level
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I booked a meal last night at a restaurant. The lady answered the phone so i gave them 5* on trustpilot…… Until this distortion on review sites is stopped Purplebricks wont be,. #asa #which? #rightmove #trading standards…..why you no care about standards. Why you no do your job….why i speaking Spanish??
This is trading standards website….where do i make a complaint….iam going to complain to the trading standards for trading standards. i ve had enough ;|)http://www.nationaltradingstandards.uk/work-areas/estate-agency-team/
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Imagine if you went into a shop to buy a toaster and upon payment, after they gave you the box, they asked you to give them a five star rating on noTP.
Imagine then if you got home, plugged in the toaster only to find out it didn’t work, and upon ringing the shop they said that it was your problem to sort out…..as they had done their bit!
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That analogy doesn’t hold up though does it…
They are asking for a review of the service they provided;
You wanted a toaster, they sold you a toaster.
You then decide whether or not to review that experience as good or bad.
They are also the ones you go to under consumer law to get a replacement toaster.
If they failed in this regard, you could of course then edit your review on TrustPilot.
As always it is up to the end user to provide details in all peer to peer review systems. It is both the strength and the weakness of trial by public.
There is nothing stopping every agent getting buyers to review their service for showing them around a home…
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Hmmm….but on the PB website it says;
‘Instruct us to sell for £849’
It doesn’t say ‘Instruct us to try and sell for £849’ or ‘Instruct us to market for £849’ which is what they actually do.
So if you pay your £849 don’t you expect to end up with a completed sale, the same as if you buy a toaster you expect it to actually work?
In both scenarios you are asked to review at a point in the process that is to a large extent irrelevant, because in both situations you end up with an end situation that you didn’t want when you first started along the path. And in both scenarios you didn’t expect to end up in the situation of having paid for something you didn’t get!
So I suggest my analogy does work….and I did say in my story ‘imagine if’ ….I was not actually saying what truly happens when you buy a toaster that doesn’t work.
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Last time I checked on 26th May there were 507 LPE’s. There are now 633. No real signs of the number of instructions or market share following suit yet.
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Speaks volumes…
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they will have 10% in 6 months…unless the BBC gets hold of them and does a foxtons.
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And despite the warnings from NTSEAT they are still showing the TV adverts leading consumers into thinking it’s free to sell, and the service is exactly the same as that of Full Service Estate Agents.
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So are LPE employees or self-employed?
Uber case to be decided would be key to Pbricks I would imagine. If classed as employees how will this affect Pbrick?
The share price feels like a very big pyamid scheem – sucking in more “investors” but at a price that has no real world foundations. The key business made £200k on what? whats the spend to get that £200k?
I still beleive its unsustainable – but boy does it have a lot of cash behind it. One day that will run out perhaps when their share prices stop growing, or their are held to be empoyers of the LPE.
Its going to be one heck of a car crash.
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From memory, the most recent PB figure was that 89% were “operating under licence”.
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Bricks SP currently at 515 p this morning which is a whisker off £1.4bn.Valued more than Bovis!!!
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Prepare to safegaurd your profit or be prepared to lose your profit. PB is likely to take a lot of your stock but you can still increase your profits by simply completing on the one third of your pipeline which agents normally lose as fall throughs when in the hands of their conveyancers. An extra 28% profit is right in front of you right now to collect. Grab it. Use your conveyancer in a better way and help yourself by helping them reduce your abortive rate. Use that otherwise wasted profit to invest, change and prepare for the rainy day which will come.
The fact is that PB’s £1.3 billion value has made PB too big to fail or to be seen as a passing fad. It’s even making a uk profit a lot earlier than anticipated.
If the stock exchange are exchanging comments such as it will “completely change the way we buy and sell houses…cheaper … easier (and that) high street agents will be victims of the change”. its a good handle of what consumers feel about their estate agents charges
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Truly impressive that a good conveyancing firm can stamp out abortive sales all together. You guys can have all of my work if you can reverse down valuations, persuade underwriters to lend, knock up favourable structural surveys and even bring people back from the dead.
What’s the referral fee?
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You should read the original “article”, wardy – figures by Diane Abbott…
… and all additional wording by Lou Costello, I would suggest.
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Its all deception and utter BS. I think we should all play by the same rules as no action seems to be taken against them. Im proud my estate agents does’t have ANY fall throughs (we can them not proceeding sales). We have 100% viewing to sale ratio (views who buy are called viewers, everyone else is classed as lookers) and most importantly we do not charge ANY commission for doing this ( just a fat marketing fee payable in advance). They have thrown the rulebook right out of the window.
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Went on a valuation last week where the owners had had a quote from PB;
Base Cost; £849
Viewings; £300
Conveyancing – selling cost £1,164
– buying cost £1,441
Don’t know about other people, but by my reckoning that’s £1,149 plus at least £750 over the odds on the conveyancing side, total £1,899…..more than I am charging for a No Sale No Fee Full Service Independent offering, including arranged and accompanied viewings, fully negotiated offers and follow up services until completion………plus no risk of losing any money if no sale.
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Exactly. One quick mention of the finance agreement vendors have to sign if they don’t pay up front and they can’t cancel their valuation appointment quick enough.
I have lost one instruction to PB in 2 years and the vendor finally, after 18 months with them accepted an offer from one of my vendors £13k below the initial asking price. It’s a great story to tell, especially on a house that sold for £152k
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