Belvoir and Purplebricks shares both enjoyed uplifts yesterday.
Purplebricks shares rose over 4% after it posted a positive trading update.
It said it had maintained its 4% market share and expected to report an improvement in its marketing-to-revenue ratio.
While it expects revenues for the six months to the end of October to be broadly flat, it said that the group had enjoyed profitable trading.
An unimpressed writer on shares website The Motley Fool said that Purplebricks’ share price was nevertheless down 70% measured over two years, helped by the fire sale by former major shareholder and fund manager Neil Woodford.
Motley Fool analyst Harvey Jones said that despite yesterday’s upbeat trading statement, he remained wary: “Purplebricks was supposed to be a game changer, sweeping away the traditional high street estate agency model, rather than a company where flat revenues are seen as good news.
“You have to strip away all the early aura before deciding whether to invest, as well as examine underlying issues, such as how its flat fee system of payment works in practice.
“The group has stabilised, but it’s real attraction was rapid growth, and I don’t see that coming.”
Belvoir shares were also boosted by its announcement that it would be providing financial services to Yorkshire firm Dacre, Son & Hartley.
Belvoir described its own diversification into financial services as a win-win.
Belvoir said that following its acquisitions of Brook Financial Services and MAB (Gloucester), Belvoir now had 160 advisers, and that in the ten months to October it had written almost 8,000 mortgages.
CEO Dorian Gonsalves said: “We are really excited to be taking on the financial services for Dacres. Our financial services team based in Barnsley is well placed to support their network and is looking forward to working closely with their offices to build up the level of mortgage sales delivered to their clients.”
Patrick McCutcheon, residential managing director of Dacres, said: “Following a strategic review of our financial services offering undertaken in the spring of this year, we identified the financial services arm of Belvoir as being a service provider with whom we would be very keen to work.
“We believe that their management share our values on customer service and growth, and can deliver what we require to satisfy our own internal needs as well as those of our valued customers.”
The deal will add £100,000 of operating profit to Belvoir in the first year of operation.
Purplebricks shares finished yesterday at about 113p, while Belvoir shares ended 3% up at 121.5p.
“Purple fools and their money are easily parted”.
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Flat revenues, but in a tough market. How’s everyone else finding the market?
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Unfortunately where Purplebricks are today is not the journey mapped out to investors .The milestones have not been reached .Where do they go to from here ? New regime? The lettings side has been a total damp squib
Maintaining 4% share in a market with falling instructions is not the place they were meant to be .With a number of their peer group competiton falling off the cliff you would have thought vendors would be running to Bricks for cover
In the gushing Hardmans report of December 2015 .
This was the forecast
Our core model is for income to reach £130m, with £51m PBT by 2020.6 months ahead !
Actual UK revenue in the UK for 2019 was £90m and it’s indicated that it will be broadly flat
so they will be missing this by a country mile
Despite cutting costs and recent increase in fee you can safely say that £51m PBT for UK is not within reach !
NUMBER OF INSTRUCTIONS
Year end April 2015 (Actual) 4330
2016 (Estimated ) 19,200
2017 43.000
2018 57 000
2019 76 000
2020 100000
It seems like growth started tailing off for Bricks during 2018. The number of instructions unlikely to be more than 66k for year end April 2020
Furthermore On Zoopla they have been carrying over 20k instructions for sometime. Today’s figure is18,9412
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Hillofwad is absolutely on the money here. In fact, if anything he was being kind in respect of their Zoopla ‘Scores on the Doors’ when he said they had been carrying over 20k instructions.
PBs listings figures were actually over 22k on Zoopla for all but the last day of October 2018.
The highest figure I recorded was 22222 on the 15th.
Today’s total is 3280 – 14.8% – down on that figure.
It may interest you to know also that I recorded just under 7000 #RElistings on Zoopla in their H1 period – and amost 12200 since 1/1/19. And that’s just the ones I recorded – goodness knows how many more came and went through each day!
Arent’t statistics great?
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What is absolutely self evident and above all else is becoming PBs (and similar businesses) Achilles heel, is the sustainability of their self employed LPEs. The stark reality for a very large number is that the lifestyle and earnings are simply not attractive or sustainable, especially with growth now stalled. The recent increase in fees is only going to make this worse. Trying to sell £1300 upfront (including viewings) whether there is a sale or not, is a very tough sell. Check out the relentless recruitment and replacement on Linked In, says it all.
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“Check out the relentless recruitment and replacement on Linked In, says it all.”
You don’t have to leave this site – check out the number of LPE jobs on EYE’s jobs board!
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Trading may have looked encouraging yesterday – but today I think reality has hit home.
At the time of posting this, only ELEVEN transactions have taken place. It looks like the first was a ‘stage setter’ – a 115p trade (against the previous day’s close of 113p) of ONE share!
Looks like the market saw through that trick – and subsequent deals have brought the price back down below yesterday’s end price.
Gross listings according to Zoopla (including #RElistings) down 10.8% for the 6-month period YoY. Only 5.4% higher than H1 2017.
I can’t see any way on earth for the UK revenue to be anything other than down 7-10% – but let’s see what happens when statistical and numerical *********** (credit: Jonnie) takes over…
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Revenue will be momentarily inflated for H1 by USA .
Literally only got up a head of steam in New York and Floria before a decision was made to pull.
They had also only recently changed tack to a pay on completion model too in some locations and some of this sales revenue would have appeared in H1.
H2 should see revenue shrink considerably as Oz dwindles to a complete halt and then a further sting in the tail with final closure costs
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Well it might have taken off yesterday after PB’s attempt of a spin doctor but it didn’t last long it has now dropped ALL DAY including 4 steep dives. Someone might have had a flutter yesterday but it would seem everyone else stayed sober and kept away from the party today. It is still valued as over weight or neutral by some of the best investments banks. Another issue of poor results is forecast and still we wait to hear about the hinted litigation by PB, against them and we all know what’s going to happen with the fall out from the HMRC investigations?
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I seem to have missed the Purplebricks ‘positive trading update’ ?
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**Figures update**
According to PBs 2019 Interim Results, H1 “new instructions” total was 38600.
According to my records, 2020 H1 “new instructions” will be somewhere around 31500.
That’s down some 18.4% YoY if my figures are anything to go by.
I guess we will find out in about a month…
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