Purplebricks in share sale puzzle, says Sunday Times headline

The Sunday Times yesterday drew attention to what it called a ‘share sale puzzle’ at Purplebricks.

On the front page of its Business & Money supplement, its story cited the sale of 60,000 shares by lettings director Richard Jacques. He sold the shares in two tranches on July 27 and 31. The BBC broadcast two reports, in You & Yours and Watchdog, on August 2, that subsequently wiped 7% off Purplebricks’ value.

Purplebricks told the paper: “Richard [Jacques] was not made aware of the BBC feature before the shares were traded. He is not a member of the board [and] is involved in lettings only.”

The BBC programmes said the company was still claiming it could save vendors £4,158 on average, despite having been banned from making the claim by the Advertising Standards Authority last year. Purplebricks said that the claim had been removed from over 1,000 places and that it was an oversight that it had continued to have been used in a standard marketing email. It apologised for the mistake.

The Sunday Times story also cited the senior staff who have sold millions of pounds of shares in Purplebricks within recent months.

In July, Joby Russell – now marketing officer in Australia after holding the same position in England – and UK sales director Paul Vickerstaff acquired and sold options that netted them total profits of £214,820.

In April, senior non executive director Nick Discombe sold £4.8m of shares.

In March, eight staff and directors, including co-founder Kenny Bruce, and Isabel, wife of Michael Bruce, between them sold 7.9m shares worth £23.8m as part of fund-raising.

The Sunday Times continued its coverage inside the supplement, this time under the headline ‘Estate agent’s purple haze’.

Writer John Collingridge noted that Purplebricks’ shares have soared to give the firm a valuation of £1.2bn – “remarkable given that it has never made a profit”.

He goes on: “Like all estate agents, you have to take some things on trust, particularly when it refuses to say how many homes it actually sells. So let’s try to fill in the gaps.

“Take its revenue of £43.2m in the UK last year. Based on an average fee of £1,035 per customers, that’s 41,739 instructions. It claims to sell 83% of these homes, which implies it sold 34,643 properties last year.

“Yet it also says the total value of the property it sold was £5.8bn in the year ending April 2017.

“If it sold 34,643 for a total of £5.8bn that’s an average house price of £167,400 – well below the UK average and well short of the £240,000 average Purplebricks says it sells for.

“Fast forward to June and it was apparently selling a property every nine minutes 24/7 – that’s 58,400 a year.”

Collingridge notes that Countrywide, Britain’s larges agent, sold 61,314 homes last year.

Collingridge goes on to claim: “Vendors who read the small print can find that it contains nasty surprises.”

While vendors can defer the fee, the debt is sold to merchant bank Close Brothers and they must also use eZie Conveyancing, unless they pay a break fee of £360.

Collingridge claims that Purplebricks “refuses to say what commission it receives from eZie”.

The piece concludes that staff who have begun to reduce their stakes in Purplebricks may have “got the right idea. Sell.”

Separately, investor website The Motley Fool says that City analysts do not expect Purplebricks to report a profit until 2019, and that for the year ending April 30, 2019, they have pencilled in a pre-tax profit of £6.5m on revenues of £168m.

The Motley Fool says that as a low margin business, the company needs to achieve scale to boost margins and profits: “Luckily, the UK and US estate agency markets are enormous, so there’s plenty of room for the company to grow.”

On the other hand, it says, “at present levels, the shares are extremely expensive and while the company may be able to grow into its valuation, plenty could go wrong in the next few years that would send the shares crashing back to earth. Based on these factors, it looks to me as if it is a speculative play. It could make you a million, but it could also burn your fingers.”

According to the London Stock Exchange, the share prices of Purplebricks dipped 4.52% on Friday, ending the day at 444p.

The Motley Fool article is here:

Can Purplebricks Group plc make you a million?

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  1. cyberduck46

    The verdict from the Sunday Times was to sell the shares.


    Collinbridge makes some incorrect assumptions in his calculations. He uses the SSTC figure of 83% instead of the figure for completions. Also because of the time lag between listing and completion the £5.8Bn property sold in the financial year ending 2017 would not be from the instructions gained in 2017. So his sums are wrong.


    There was also a less than positive article by the FT at the weekend https://www.ft.com/content/c28c45ac-7ddf-11e7-ab01-a13271d1ee9c :
    “For Purplebricks to be a serious challenger, some things must change. It needs to slow down and get the basics right. The company has faced calls to publish the number of homes it sells. That would be a good place to start. It must also meet its promise of greater transparency swiftly — and be more open with consumers about its service. In short, it needs to make sure it does not become anything like a stereotypical estate agent at all.”


    The message being it has to be careful not to become as bad as traditional estate agents.



    1. Chris Wood

      Ahem! Mr Bruce publicly stated his company completed on 88% of everything it took on, on BBC Moneybox. Mr Bruce and his company appears to have a problem with transparency on the matter of the figures they quote and how they are calculated.

      1. cyberduck46

        >Mr Bruce publicly stated his company completed on 88% of everything it took on


        Was that for the 2017 financial year Chris? No it wasn’t. But you keep coming back to the 88% claim as a basis for every other claim being made being wrong. Along with other false impressions about market share, you are misleading people in the Estate Agency business by doing this. Little wonder they have been allowed to sneak under the radar.


        Keep up the good work 🙂



        1. Bless You

          shares down another 7% today. Motley fool says sell, growth factored in… Tides going out.

  2. Robert May

    No doubt Digital Daffy will be claiming John Collingbridge has got his numbers wrong!

    1. Robert May

      Slam dunk!!!!!!!  you couldn’t write it!

      1. cyberduck46

        Too slow Robert. He makes the same mistake as you usually do. Come on deal with my point. Do the completions in the 2017 financial year come from the instructions in the 2017 financial year? No they don’t. The sales completed figure would include instructions from 2016.

        1. Robert May

          Too slow only by checking if Collingwood had an S in the middle. I’m happy to take a silver knowing I knew you’d be sat there in a right ol’ lather whacking the keyboard how wrong he is.  Think how humiliating  your post would have been if I had dived for the line and got in a fraction of a second earlier.  LAPOLG (Like a pixie on laughing gas!)

          I don’t think you can accuse me of being slow, I posted that analysis on the day the original spin was released!

          House prices  don’t change +68% in the time frame Purplebricks have been around let alone in the 3 months average time between listing and completion.  Increasing from  £167,200 to £281,000 at a trend increase of  6.9% would take 7.86 years, are you really suggesting Purplebricks take nearly 8 years to sell a property?


          1. cyberduck46

            >I posted that analysis on the day the original spin was released!


            Quick at being wrong then.


            My point about speed was in regard to your prediction about me posting. I already had done so not the best prediction in the world 🙂


            You ignore my question. Both you and John Collingbridge use numbers covering different time periods for your calculations. You just can’t do that. Doing it knowingly is disingenuous. 


            I didn’t even read your latest calculations because you have no credibility if you don’t use the correct timeframes for your calculations. If anybody believes your spin then good luck to them.

            1. Robert May

              It is fair to assume that if a  firm is boasting about its achievement and reporting its figure the numbers covers the reporting period. Are you suggesting Purplebricks are using  listings from outside the reporting period to  bolster their performance?

              1. Traditionalist

                Sorry Robert – the thumbs down was an error (a slip of the finger) by me! Obviously – it should have been a thumbs up!!  I will be very keen to see cyberduck’s response to your comment.  Not so quick on the keyboard with a response to that comment.  I am amazed this has never been raised before.

              2. cyberduck46

                >It is fair to assume that if a  firm is boasting about its achievement and reporting its figure the numbers covers the reporting period.


                Robert stop playing dumb. You know exactly what I’m saying. Address the point.


                The completions in a financial year will not be as a result of the instructions in that financial year because of the time between instruction and completion. Something you don’t take account of in your calculations. So you are either not up to the job or you are being disingenuous.


                Which is it?


                Already there have been 2000 viewings of the thread. I wonder what they think when you repeatedly ignore my point.

            2. Eric Walker

              Cyberduck – https://www.youtube.com/watch?v=7NKPyl7A8FE


              1. SJEA


                Brilliant video – everyone should watch this – thanks !!

        2. Eric Walker

          Extracts from GetAgent research:
          We looked at 500 new listings by Purplebricks and all listings by Tepilo, Housesimple and Emoov from January 2016. We analysed the success of each of these listings from January 2016 through to February 2017, allowing 14 months. We also sent out a questionnaire to customers who have used online estate agents to help us understand their motives and their level of satisfaction. We then conducted telephone interviews with some of the respondents, which provided us with some in depth analysis.
          Our research found that around half of online agent listings hadn’t sold after the 14-month period. Purplebricks completed on just 57% of the listings from January 2016, as of February 2017. Housesimple completed on 58%, while Emoov and Tepilo were even lower with 51% and 48% completion rates.

          1. cyberduck46

            Thanks Eric. The video was interesting. I don’t agree with one of the points made in regard to PurpleBricks not being able to afford to recruit more LPE’s but that’s a minor quibble and off topic.


            My own research is showing 69% completion for a small sample of PurpleBricks listed properties. Increased from 65% last time I checked. Still some SSTC too.


            Do you know where they got the 68% conversion figure for traditional Agents from?

            1. Eric Walker

              I only act as messenger – but I assume they used a similar method.

              One of my neighbours had a PB board up from January to July with ‘Sold STC’ on it. It’s now been replaced with a High Street agent’s Sold STC board and has now completed. Good advertising for PB for over 5 months but the seller isn’t happy as they have spent an additional £1200 for nothing.

              1. cyberduck46

                Individual cases aren’t really helpful but will clearly influence opinions of that individual.


                More than twice as many neighbours of PurpleBricks listed properties will see completions as those who don’t if my sample proves representative.


                Selling with another Agent is a very small minority when looking at my data so you’re in a very small minority by the sounds of it. There are also customers who have taken the property off the market for the time being or who have sold STC. There are also some that haven’t sold with a new Agent when i last checked.


                In some cases it’s not clear whether a property has sold or not because there might be several flats for sale and you can’t match with the Land registry because you don’t have a flat number. Also, if a property is dual listed I’m not sure who you’d give the sale to.




                1. Shaun77

                  Individual addresses are readily available within the industry, as is the ability to identify the selling agent on multi listings.

                  With respect, the fact that you don’t know this basic information highlights that you’re not best placed to be commenting on such matters, let alone challenging the likes of Robert & Chris who certainly do understand it and understand the data and its sources

                  1. cyberduck46

                    >Individual addresses are readily available within the industry, as is the ability to identify the selling agent on multi listings.


                    Thanks Shaun77, that’s very interesting.


                    So what you are saying is that non-public data is being used by Chris & Robert and most probably GetAgent?


                    Well that gives them an advantage in terms of accuracy but contradicts what Chris says in his blog where he says only publicly available data is used.


                    Is there perhaps a “terms of use” issue? Are Robert May, Chris Wood and GetAgent using RightMove data in a way that isn’t allowed perhaps?


                    As far as my own estimates are concerned it’s not a problem. It will simply mean there’s a chance of underestimating the number of completions by PurpleBricks.


                    If Robert, Chris & GetAgent are using Rightmove data, what do they do if the property has been withdrawn from Rightmove by the PurpleBricks customer when an offer is received? This brings into question the accuracy of their systems.



  3. Curious george

    If the average sale is £167,400, then is a purplebricks fee with all the added costs not close the the standard commission charge of a high street agent?? Furthermore and what I have NEVER seen anyone comment on, could there not be a high percentage of sellers with lower than average house prices losing money by using Purplebricks?

    Surely this is worth a debate !

    It’s a shame none of the review sites capture sold prices of reviewers

    1. smile please

      Is it not worth debate 83% “Sell their property”


      I believe this includes sale through other agents. I have heard from a number of sources PB sell less than 50% of their instructions.

      Meaning more than 1 in 2 lose their money.

      1. Thomas Flowers

        So how can those 1000s of unsuccessful PB customers who do not complete save £1000s when they end up having to pay two estate agency fees?

        1. OllieBen57

          PB should subtract the number of instructions that cost customers money from their alleged “savings”! That would give people a clearer look at any savings

          1. g4lvo17

            Nice idea OlieBen57 but there is absolutely zero chance of them ever doing that, why would they .

            1. Chris Wood

              Simple. Fee earning event v fee earning event* v listing volumes

              *using average fee and U.K. Sale price

  4. AgentV

    TV advertising designed to incite people to call thinking that there is a chance they could sell for free, claims that the same service is provided (when it isn’t), customers ending up with loans they didn’t know about, no disclosure of commissions received from expensive Conveyancing!

    There is one thing above all else that must be true….if the sale completion to fee charged rate was anywhere near good……you wouldn’t be able to go on rightmove without a banner popping up every couple of minutes to tell you about it!

    1. marlington52

      ezie Conveyancing is Purple Bricks.   The trade mark is registered at the IPO to guess who PB


      So I guess they pay themselves all the commission for this and could possibly lead to some conflict of interest in some sales.

      Also means the figures in this article are wrong. The revenue is not solely from the fee to instruct I would assume they make the following incomes; Instruction fee, Conveyancing fee, Financial services commission , utility switching commission and insurance sales commission (life, contents, buildings, etc). I assume they do this all in house.So from one sale they could easily be making several £1000 in fees. Therefore the average fee per transaction is likely to be much higher than the advertised rate.

  5. Hillofwad71

    Although the Lettings Director doesn;t have a seat on the main  board he is responsible for “driving ” lettings which has been a car crash They are taking on FEWER instructions.Nobody will be more aware  than him of the  current state of affairs so hardly surprising he has taken an early bath with his share sales

    As of today they have a paltry  411 letting  instructions

    Certainly the elephant  in the room and responsible  for a lot of negative comments on Trustpilot

  6. Property Paddy

    The only thought I have when I see directors of PB selling their shares likes spivs down a back ally is they know the profit from this business model is as shady as their actions.

    Profit not before 2019?

    How many millions have they burnt through already?

    How are they fairing in a declining market for new resell stock?

    It’s a wonderful idea to avoid paying 1&1/2% or 1&1/4 % but I’m not sure they are delivering the volumes, the service or frankly the end result.

    It may be a grand up front, but it’s all very iffy almost spiv like you might say !

    1. g4lvo17

      Hmmmm is it just me or are the predictions of when they break into profit always moving back , now its 2019 I’m sur you chaps on here can remind me of the other clams of when they would be moving in to profit 🙂

  7. J1

    In the long run service wins against price


    If PB continue to act in the way that is claimed above, then the model will falter in time


    In the meantime it is an irritation that it gets so much air time



  8. PeeBee


    I am trying to post to you – but silly things like offers and negotiations are getting in my way.

    I will hopefully complete my post later today and would appreciate your comments.

  9. PeeBee

    SO… further to the post immediately above, I’m back with my question for ‘cyberduck46’ – but first of all let’s do some freaky stuff in the name of “fairness”…

    * Let’s take when ‘LISTINGS’ become ‘SALES’ out of the equation for a bit.

    * Let’s move awkward numbers to one side temporarily.

    * Let’s forget for a few minutes those icky percentages that Mr Bruce keeps dropping into painful conversations when he can’t find the right words.

    Let’s instead look at quotes and extracts straight from the most recent statements and releases to The City and to Investors – seeing as you like to tell people that these are the only things that mean anything. 

    (I will however have to chuck in a few of ‘todays’ figures where I Don’t have availability from June.  Those stats will be clearly labelled and if you wish to substitute more relevant ones please feel free to offer them for consideration.)

    In other words – let’s make this all a bit simpler… but also a lot more interesting.

    Here we go (Sources in bold):

    “Purplebricks’ success is down to “a higher concentration in the heart of the market rather than the top end where it has been extremely tough,” said Mr Bruce, who added that the average selling price is £240,000.” (Telegraph, 29 June 2017)

    Two things here.

    1. If their “average selling price” as of 29 June was £240,000, how come their “Average Asking Price” on the same day was £302,487 (Zoopla)? That’s a difference of £62, 487 – or 26% – isn’t it?

    Doesn’t this make it look extremely likely that PurpleBricks are NOT achieving their quoted percentage of Asking Price vs. ‘Sold’ Prices? (Average percentage of asking price achieved: 96% – ThisIsMoney, 29 June 2017)

    2. It is most recently stated by Mr Bruce that 83% of Purplebricks listings sell. As of today, 7766 of 15967 total (Zoopla) are priced at a figure in excess of £250,000.  That’s 48.64% of the total. Isn’t that quite contradictory to Mr Bruce’s reported statement above – and var-nigh impossible to compute how the publicly-stated average price is achieved when the ‘top end’ as he puts it makes up such a large proportion of his entire register?

    “In a recent Which! Report they concluded that “online agents” sell properties 38 days faster than traditional estate agents (1) and reduced the price on the properties they sold less than traditional estate agents (2).  Purplebricks was considered the best at selling for more than the asking price amongst all “online agents” and equally as successful as traditional estate agents.  Purplebricks also reduced their asking prices by 5% or more significantly fewer instances than traditional and online estate agents (3)” (Chief Executive’s Statement; Final Results publication, 29 June 2017)

    1. (a) The Which? (they can’t even get THAT right…) report was generalising, and clearly did not state that this statistic was attributable to PurpleBricks.  It should not, therefore, have been included in the publication as it is potentially misleading as to the performance of this particular Agency.

    (b) The Which? report does not clarify how it measures the stated statistic.  As PurpleBricks are an Agent who publicly confirmed that they recommended ‘Marketing Breaks’ to their vendors in order to refresh the properties on the portals and effectively create new listings with new listing dates, it is suggested that this widespread practice would skew the figures quite dramatically.

    2. Same comment as 1 (b) above in that a substantial number of properties were re-marketed – having previously been listed at higher prices – with ‘clean’ histories of the previous pricing activity.  Again I would suggest that this throws serious doubt on the Which? data unless they can prove a robust system for collecting and processing the data for publication – and should therefore not be relied upon in a statement to Investors and The City.

    3. Depends how you read this as to what it means.  Here are both possible scenarios covered:

    (a) As of today, Purplebricks are showing 3007 properties on Zoopla that have been reduced by five percent or more, out of a total of 15967 properties listed.  That is 18.83% – almost one fifth.  I will remind you that your own property was reduced by ten percent from its’ original asking price to that which it was when put ‘Under Offer’ (at which point it was removed from Zoopla).  I would suggest that the claim above of 18.83% being “significantly less” would be easily challenged successfully, should anyone wish to do what I have above.

    (b) Again as of today, Purplebricks are showing 6676 properties on Zoopla that have been reduced by any amount, out of a total of 15967 properties listed.  That is 41.81% – well over one in three of listed properties.  Again I will remind you that your own property was reduced by ten percent from its’ original asking price to that which it was when put ‘Under Offer’ (at which point it was removed from Zoopla).  I would suggest that the claim above of “this being 5% or more significantly less instances” would be easily challenged successfully, should anyone wish to do what I have above.

    “We are also enjoying continued success at selling the properties we take to the market in the UK.   The monthly run rate in May 2016 was 2,386. I am pleased to report that this monthly run rate has increased to 4,979 in May 2017. This represents an increase of 108% compared with a year ago.  Our conversion from instruction to sale is currently 83%.  We have increased our revenue per instruction to £1,035.” (Chief Executive’s Statement; Final Results publication, 29 June 2017)

    “The UK has continued to advance with £43.2m of revenue…” (Chairman’s Statement; Final Results publication, 29 June 2017)Okay… my trusty calculator tells me that £43.2m divided by the stated average revenue per customer (£1035) should equate to 41739 or thereabouts ‘listings’ – do you agree with that?

    The combined value of ‘sales’ completed (£5.8bn) and in the pipeline (£3.69bn), using the same formula, should equate to somewhere around 39,540 units.  Doesn’t that make the ‘Solds’ total 94.7% of the ‘listings’ total above – and not 83% as stated by the CEO?

    Shouldn’t these figures tally?

    “This has allowed us to significantly grow our number of positive reviews on the independent review site Trustpilot (currently with over 20,000). We have retained our rating of excellent.” (Chief Executive’s Statement; Final Results publication, 29 June 2017)

    “Most positively reviewed agent on Trustpilot in the UK with over 20,000 reviews” (‘Business Highlights’ – Final results publication, 29 June 2017)

    These people put a lot of emphasis on these ‘reviews’ – don’t they?  Lucky, then, that knowledgable Investors like your goodself take bu99er all notice of such bumph and bluster, innit?

    They should find something else – something more relevant to their Investors’ interests – to fill their statements with.

    “Sale agreed in the UK every 9 minutes 24/7” (‘Business Highlights’ – Final results publication, 29 June 2017)Interesting one, this.  You see to the untrained EYE that single bullet point – with neither hide nor hair of a note or disclaimer against it, gives the distinct impression that in a 365 day year, they will ‘sell’ something like 58,400 properties.

    Which, of course, would be a pretty amazing feat to get 58,400 sausages out of the machine when you’re only putting enough meat in the funnel for 41,739 at best – and actually telling the world that you’re putting skins on 34,643.

    Wouldn’t it?

    Oh, dear… I said “A question for…”.

    I guess there are a few questions there.

    Sorry, ducky.

    Feel free to start with the easy ones and work your way up.

    I’ll not ask any more for a bit.  at least until you’ve broken the back of this last lot.


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