Hybrid estate agency is expected to record an adj EBITDA profit for the full year
Companies: Purplebricks Group Plc
Hybrid Estate Agency Purplebricks released a decent trading update on Thursday with revenues in line with full-year forecasts and Local Property Experts numbers ahead of broker forecasts (Zeus Capital), as it announced that CFO Neil Cartwright was stepping down as of June.
The AIM-listed firm said trading had been strong in the UK, with year-on-year instruction growth in H2 up 83%. Progress is also being made in Australia, with launches in Perth and Adelaide, and average revenue per listing exceeding A$5k.
Building on its H1 £300k adj EBITDA profit, PURP confirmed that it now expects to record an adj EBITDA profit for the full year, too. Brokers expect FY17 revenues to hit £43m with a net loss of £8.6m.
LPE numbers, central to PURP's strategy, hit 525 by the end of April, with 448 in the UK and 77 in Australia. This is 46% higher than the 360 target set at the start of 2016, and ahead of Zeus Capital's forecast of 410, of which 360 were forecast in the UK and 50 in Australia.
Zeus analyst Robin Savage said the launch of Purplebricks Australia and the USA reinforced Zeus Capital's view that investors should value Purplebricks on a revenue multiple reflecting its growth and business model:
"Using the number of LPEs as a proxy for “revenue run-rate”, we now introduce the metric EV/LPE."
Zeus also provided a useful chart showing consensus expectations for EBITDA:
The company also announced on Wednesday that Mr Cartwright was resigning due to ill health. It has appointed James Davies, the former CFO of William Hill Online, as chief financial officer with immediate effect.
Shares in PURP rose 1.3% to 322p on Thursday, having increased significantly in 2017 so far.
