Hybrid estate agent Purplebricks will pull out of the US and Australia to focus on the UK and Canada after reporting an overall operating loss of £52.3m for the year ending 30 April.
This loss is up from £27.8m last year. However, the group revenue was up by 55% from £87.8m in 2018 to £136.5m this year. In May the firm announced the closure of its Australian business and today it said it will withdraw from the US following a strategic review.
UK revenue was up by 21% to £90.1m, operating a UK profit £5.3m, an operating margin of 5.9%, up from 3% last year. The Canadian business, acquired in July 2018, contributed revenue of £23.7m.
Vic Darvey, group chief executive officer 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.”
On 7 May 2019, founder Michael Bruce stepped down, and Darvey was appointed as chief executive.
He said that Purplebricks’s medium term objective is to gain 10% share of the UK market.
Marc von Grundherr, director of Benham and Reeves, added: “Unfortunately for Purplebricks, today’s figures and the failure of their international escapades will have left them feeling a little blue. That’s if the colour has drained from them completely.
“A retreat from the US being announced as well as its previous admission that their Australian project has also flopped will come as a real blow to the validity of their business model and certainly raises questions about their future on a domestic level.
“While £52m in losses is eye-watering enough, they’ve actually burnt £90m which is a story all too familiar with the online model and one has to wonder when enough is enough. No wonder Neil Woodford and his investors have been having sleepless nights.”