Neil Woodford loves this company -- and you should too!

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Neil Woodford

Following Philip Hammond's announcement that tenant fees are banned, shares in property agents such as Foxtons, Countrywide and LSL Property Services have all sunk in the past few weeks. In sharp contrast, those of online peer Purplebricks(LSE: PURP) have soared over 20% today. Why? It's all down to its cracking set of interim results.

Maiden Profit

Overall, Purplebricks sold and completed on almost £2.59bn of property in the first half of this financial year compared to almost £2.77bn in the entire previous year. Given this, it should come as no surprise that revenue grew by a stunning 159% to £18.7m, exceeding last year's full-year figure of £18.6m. A maiden profit of £300,000 before interest and tax for the UK business may not sound massive but it does compare favourably to a loss of £6m over the same period in 2015.  

In addition to a 108% rise in instructions, the average revenue received per customer jumped almost 21% to £1,000. There was also positive news regarding the company's successful launch in Australia with Purplebricks confirming that it had generated £570,000 of instructions in the first seven weeks to the period end. 

Commenting on these figures, an understandably buoyant CEO, Michael Bruce, reflected that Purplebricks was continuing to "win over an increasing number of customers" and that today's results provided proof that the company's low-fixed-cost and flexible business model was delivering the goods. While hinting that the UK market backdrop remained "tough" in the wake of Brexit, Bruce went on to highlight that the company's robust balance sheet, including net cash of £29.1m, allows the business to have "a confident outlook for the future."

After a difficult six months in which shares in Purplebricks have slumped almost 40% from the 175p high achieved in May, these comments will have been warmly received by investors, including star fund manager Neil Woodford. After all, the Solihull-based company remains the seventh largest holding in his Patient Capital Trust(LSE: WPCT)

The question investors now need to ask themselves is whether this kind of momentum can be sustained.

First-mover advantage

Despite the highly competitive industry in which it operates, I think Purplebricks will go from strength to strength thanks to its 'first-mover' status and disruptive strategy. As more of us migrate online to shop and pay bills, it seems only a matter of time before the most of us shun traditional agents and choose to sell properties through cheaper alternatives like Purplebricks, especially given the favourable reviews left on sites like Trust Pilot. Although some investors give a wide berth to such businesses, it does seem like the majority of their clients are more than satisfied with the service they receive. It will be interesting to see whether this continues as it gets bigger.

But there are other things I like about the company. The fact that Purplebricks has now successfully entered a market on the other side of the world further emphasises just how quickly it could grow as a business. There's also something to be said for it having a degree of geographical diversity, even if our forthcoming departure from the EU doesn't turn out to be the nightmare that some are predicting.

While unlikely to appeal to those who desire a relatively smooth ride from their holdings, today's results suggest that Purplebricks should feature high on the watchlists of patient, risk-tolerant investors. 

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Paul Summers owns shares in Purplebricks and Woodford Patient Capital Trust. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.