Purplebricks abandons US market as operating loss doubles

Purplebricks, the online estate agency, has confirmed it is pulling out of the US market – just weeks after it took the decision to leave Australia.

The company used the publication of its full-year results, which showed losses almost doubling, to formally announce the US exit after a report by Sky News on Tuesday.

It said the decision to either sell or close the operation would cost it between £4m-£6m in its current financial year and allow the company to “refocus on its flagship markets” of the UK and Canada.

Michael Bruce founded Purplebricks with his brother Kenny, who remains with the company. Pic: Purplebricks
Image: Michael Bruce founded Purplebricks with his brother Kenny, who remains with the company. Pic: Purplebricks

Purplebricks lost its co-founder and chief executive Michael Bruce in May when the move from Australia was confirmed – admitting then it had sought to expand too rapidly.

His replacement, Vic Darvey, sought to reassure investors on Wednesday that Purplebricks would now seek to build on the strong foundations it had established.

Its investment in the Australia and US helped drive a £52.3m operating loss in the year to 30 April despite a 55% leap in group revenue to £136.5m.

Gross profits – reflecting the profitability of its day-to-day operations – were 61% up at almost £80m.

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Shares, down 37% in the year to date amid the pullback plans, were 3% up in early deals on Wednesday.

Mr Darvey said: “It’s been another year of strong revenue growth and we continue to build a highly relevant disruptive brand and defensible position in the market.

“With a base of clear brand leadership in both the UK and Canada and a differentiated, technology-led proposition driving business model advantages, we now have a clear plan to unlock the next wave of growth and extend our market leadership.

“We have taken the difficult decisions to exit our businesses in both Australia and the US as it is very important that we now focus our resources on the UK and Canada, where we have a strong established presence and where there are significant opportunities to grow market share and deliver profitable growth for shareholders.

“Both exits will be conducted in an orderly manner with the expectation they will be completed by the end of 2019.”

Source: SKY NEWS

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