Fewer properties came onto the UK housing market in the last six months than at any point in a decade, online estate agent Purplebricks said as it blamed a declining market for crashing profits.
Operating profit dropped to £1.6 million on an adjusted basis, down 74%. The company swung into a £1.2 million operating loss from a £4.8 million profit in its statutory results.
It comes as the company has been winding down in the US and Australia. The closures are on target to be finalised by the end of the financial year, with costs between £10 million and £14 million, as signalled earlier, the company confirmed.
Analysts at Peel Hunt said that the results were in line with what management had already told the market to expect.
“Revenues (were) ahead, but profits lower. This reflected ongoing softness in the UK market and targeted investment in the core businesses in the UK and Canada,” they said.
In Canada it has rebranded DuProprio/ComFree, which it acquired in July last year to enter the market, to Purplebricks. Here it “modestly outperformed expectations” with strong growth in the English-speaking parts of Canada.
But in the UK the business has battled tough conditions with the number of new properties on the market hitting its lowest level in a decade. Customers have been taking a “risk off” mentality, the company said.
Though the company still saw performance as resilient in its main market.
“It’s been a tough couple of years for Purplebricks as new CEO Vic Darvey attempts to turn the business around,” said Michael Hewson at CMC Markets.
Mr Darvey said he is “very pleased” that the company has been able to make progress despite the market backdrop.
“We end the first half having now stabilised the business and the significant losses incurred last year have now been reversed with the Group enjoying profitable trading,” he said.
The chief executive added: “We remain confident of meeting our medium-term objective to gain a 10% share of the UK market.”