TIDMPURP
RNS Number : 8899Q
Purplebricks Group PLC
05 December 2016
5 December 2016
Purplebricks Group plc
Interim results for the six months ended 31 October 2016
UK achieves maiden EBITDA profit, plans to accelerate market
share growth
Purplebricks Group plc (AIM: PURP) ("Purplebricks"), the hybrid
estate agent providing a new way to buy, sell or let property,
announces its interim results for the six months ended 31 October
2016.
Financial highlights
H1 2017 H1 2016
UK Aus Total UK Aus Total
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ------ ------ -------- ------ ----- ------
Revenue 18.3 0.4 18.7 7.2 0.0 7.2
Cost of sales (8.1) (0.2) (8.3) (3.1) 0.0 (3.1)
Gross Profit 10.2 0.2 10.4 4.1 0.0 4.1
Gross Profit Margin 55.6% 49.7% 55.5% 56.4% 0.0% 56.4%
Administrative
expenses (3.8) (1.7) (5.5) (3.8) 0.0 (3.8)
Sales and marketing
costs (6.6) (1.0) (7.7) (6.6) 0.0 (6.6)
Adjusted EBITDA
* 0.3 (2.5) (2.2) (6.0) 0.0 (6.0)
Net Cash 29.1 9.7
--------------------- ------ ------ -------- ------ ----- ------
Business highlights
-- Revenue growth of 159% to GBP18.7m, exceeding full year 2016 sales of GBP18.6m
-- Local Property Expert growth of 119% - recruited 124 LPEs in the period to reach 329
-- UK business generates maiden profit - adjusted EBITDA of GBP0.3m (H1 FY16: loss GBP6.0m)
-- H1 instructions increase by 108%
-- Average revenue per customer up 20.6% to GBP1,000
-- Sold and completed on GBP2.589bn of property in H1 2017
compared to GBP2.766bn for the full year 2016. Sales agreed subject
to contract pipeline a further GBP2.521bn
-- Successful regional launch of Australian business in
Queensland & Victoria; GBP0.57m** ($1.08m AUD) of instruction
fees in the first seven weeks to period end
-- Strong balance sheet with net cash of GBP29.1m
-- Trustpilot reviews increase to over 10,580 scoring an
'Excellent' rating of 9.4 out of 10 - over 10,000 of the reviews
are rated Excellent
* Adjusted EBITDA is defined by the Group as loss/profit before
tax, depreciation, amortisation, net finance costs and share based
payments charge
**Represents instruction orders received in the seven week
period
Commenting on the results, Michael Bruce, CEO stated:
"Our strong results are testament to the seismic shift that is
underway in the estate agency market. We continue to win over an
increasing number of customers by offering them a complete and
seamless high quality estate agency experience at an attractive
fixed fee. I am especially proud that currently we are agreeing a
sale every 16 minutes, 24 hours a day and the number of properties
sold in the first half is similar to the total number of properties
sold during the whole of the previous year. These results
demonstrate that the business model is working, with the UK
generating a maiden half-year adjusted EBITDA profit whilst growing
market share.
We have also demonstrated that our team can internationalise our
model with the successful launch of Australia which has performed
better than any of the initial regional launches in the UK.
Although we recognise that the UK market backdrop is tough, we
continue to have a confident outlook for the future. We have
momentum, a superior, low fixed cost flexible business model and a
strong balance sheet, which we will leverage further in the early
part of the busier spring market so as to build on our success to
date."
Notes
Enquiries:
Purplebricks +44 (0) 20 7457 2020
Michael Bruce, Neil Cartwright
Zeus Capital (NOMAD) +44 (0) 20 3829 5000
Nicholas How, Ben Robertson, Mike
Cuthbert
Peel Hunt (Broker) +44 (0) 20 7418 8900
Dan Webster, Adrian Trimmings George
Sellar
Investec Securities (Broker) +44 (0) 20 7597 1234
Keith Anderson, Carlton Nelson
Instinctif Partners +44 (0) 20 7457 2020
David Simonson, Mark Reed, George
Yeomans
About Purplebricks
Purplebricks is the leading next generation estate agency in the
UK that combines highly experienced and professional Local Property
Experts (LPEs) and an innovative use of technology to help make the
process of selling, buying or letting so much more convenient,
transparent and cost effective. Purplebricks is transforming the
way people perceive estate agents and estate agency.
Summary
Purplebricks is fast approaching its one year anniversary as a
listed company on AIM. Since listing, the estate agent market has
been challenging owing to the combination of structural industry
change, with the transition away from the high street, changes to
stamp duty and wider macro-economic factors. Notwithstanding this
backdrop, Purplebricks has outperformed its peers, is well placed
to win in the future and today reports further strong progress
across the business.
Sales momentum has remained strong in the half, with Group sales
growth of 159%. Not only is the UK business retaining its growth
trajectory, with sales growth of 154% but entry into Australia has
generated GBP0.57m* ($1.08mAUD) of instruction fees in its first
seven weeks. Growing awareness and understanding of the
Purplebricks offering, an increasingly local service provided by
our fast growing network of LPEs, coupled with the expanding Data
Sales Unit is driving more valuation enquiries, which is
increasingly converting to new instructions and as a result, higher
revenues.
The UK business has now achieved scale, reporting an adjusted
EBITDA profit of GBP0.3m, compared to an adjusted EBITDA loss of
GBP6.0m in the first half of last year. The move into profitability
has been achieved through a combination of strong topline growth
and operational leverage coming through the business.
It is testament to the strength and cash generation of the model
that net cash at 31 October is GBP29.1m. This compares to net cash
of circa GBP30.5m at April 16 year end and after taking into
account and including the investment made thus far in the launch of
Australia.
Whilst it was a bold decision to enter the GBP3.3bn Australian
market less than three years after launching the business in the
UK, we believed that the opportunity of first mover advantage
outweighed the risks. The launch went smoothly, on-time and within
budget and initial indications from the first seven weeks of
trading are very encouraging. Guidance for GBP10m of investment,
including start-up losses in the first two years remains
unchanged.
The Australian management team is fast building a brand and a
business which aims to replicate the success Purplebricks is
starting to achieve in the UK. We have recruited 50 Australian
based LPEs. Plans are well advanced to extend our regional coverage
into new territories.
The fast growth in the business and the launch into the
Australian market has been achieved whilst maintaining a high
quality service for customers. This is not only evidenced by well
over 10,000 reviews rated excellent on independent review site
Trustpilot, but also by our random sample land registry
verification exercise to demonstrate that we are as successful at
selling and completing transactions as we are at winning
instructions.
Strategy
At the core of our strategy is a commitment to our customers and
our people.
We will continue to offer an exceptional experience by:
-- Selling property
-- Selecting and training LPE's that enhance our culture and
core values and have the desire and motivation to build their own
business
-- Building upon our market leading technology that helps LPE's
be more productive and which delivers a much more convenient,
transparent and cost effective service for our customers
-- Creating marketing and advertising that interests, engages
and inspires consumers to want to book a free valuation from
Purplebricks and ensures that our messaging is clear and
transparent to enable consumers to swiftly instruct us to sell
their home
-- Building upon our customer service and product offering by
growing our Data Sales Unit and introducing new products and
services that are relevant to our customers' needs throughout their
journey
-- Maintaining a progressive and fun working environment where
our people care about our customers, our brand and our business and
can grow personally and professionally
-- Building a strong, sustainable and profitable business, which
is respected by all stakeholders for its professional conduct and
making good on its promises
Our strategy for growth is based upon the above core
commitments.
Purplebricks sells property
Verification exercise
We are very proud of our success in selling property on behalf
of our customers which is testament to Purplebricks being the most
positively reviewed estate agent in the UK. We recently conducted a
verification exercise on a random sample of our properties marked
on the portals as SSTC, nationally and regionally, against the Land
Registry database.
We took into account the sample size of our properties and
regions referred to in any notes published by analysts in the
market and increased them five fold. We also looked at a larger
sample of 10,000 properties spread across the UK (which did not
include any of the regional sample).
The results of the samples were as follows:
10,000 properties sampled nationally:
Confirmed as registered by the Land Registry: 91.9%
1,611 properties sampled in Southampton, Bournemouth and
Birmingham
Confirmed as registered by the Land Registry: 87.5%
For the remaining percentage in each sample that was not
confirmed as registered at the Land Registry, we obtained third
party evidence from Solicitors and thereafter from our records as
to the status of those properties which comprised of a mix of SSTC,
exchanged, completed but not yet registered at Land Registry or
back on market.
Increase our footprint of LPEs across the country
We are on course to meet our full year LPE target of 360, having
recruited 329 by 31 October, which post the period end has risen to
340. We are seeing no let-up in our ability to attract and retain
talented and highly experienced agents and indeed market conditions
are supportive of our drive to expand our national network.
As we grow our LPE network across the country, not only are we
further raising awareness of the Purplebricks brand and our hybrid
offering, but we are able to continue to provide our customers with
more and wider local coverage. This can only be to the benefit of
customers and the business.
We are aware of the recent court ruling relating to Uber, which
looks to be centred on issues such as low pay. While we will
continue to monitor developments we do not consider that this
ruling has any implications for Purplebricks and our relationship
with our LPEs. LPEs run their own independent business, engage and
employ their own people and are successful independent
entrepreneurial business people.
Build upon our market leading technology
Bringing together first class LPEs and industry leading
technology is the foundation upon which the Purplebricks business
has been created. We are very proud of our technology and indeed
the work we are doing to introduce new and innovative features that
set us apart from everyone else in the industry. The recent release
of the Purplebricks App has proven remarkably successful, the first
of its kind dedicated to sellers and the process of selling their
property. In just over six months since the launch there have been
more than 40,370 downloads by our selling customers, an increase of
nearly four times since June 2016.
We are now working on a Purplebricks App for buyers that will
make the whole process even more integrated, convenient, effective
and transparent. It will take the whole process for a buyer to a
new level of convenience. Users will be able to book valuations,
arrange viewings, give feedback, make offers, negotiate offers,
agree sales, communicate with the seller and get access to
information on the process. We have already revolutionised the way
sellers and buyers communicate throughout the process and are
building on the work we have started.
We continue to develop new ways to leverage our technology
platform and data to grow ancillary revenues. There are smarter,
more effective ways of selling some products and services with the
use of our technology platform.
We continue to increase our technology team and are starting to
become a hub of technical interest for developers across the
UK.
Create engaging marketing and advertising
Investment in marketing and advertising has always been a
central element of the Purplebricks strategy. We continue to work
hard to grow our brand and the progress in less than three years
has been outstanding. Ed Hughes, our UK Chief Marketing Officer,
has joined Purplebricks recently from Compare the Market and will
work alongside James Kydd whilst Joby Russell takes the lead in
Australia. Ed has substantial experience of marketing and creating
a brand champion in the minds of the consumer. We are due to
release new TV and radio commercials on Boxing Day and are in the
process of working on website upgrades and changes to our flows and
processes. We will be concentrating on taking our brand awareness
and more than 1.45m web visits monthly and turning them into
increased opportunities for the growth of the business.
According to the latest research by The Nursery, one of the
leading independent research and planning agencies, Purplebricks
has industry leading spontaneous brand awareness from people
looking to sell their property. Within its competitive set, which
excludes the portals, Purplebricks has the highest prompted brand
awareness, with a substantial increase since the last research
undertaken back in May 2016. In tandem with the increase in
awareness is an increase in the understanding of the Purplebricks
proposition by consumers.
Our above the line marketing is complemented by brand and
generic pay-per-click activity which is predominantly provided by
Google and Bing. We are also looking at better ways of using social
media in a targeted way to drive more activity amongst sellers. At
the start of June 2016 we commenced an intensive test marketing
campaign with Rightmove, which we hoped would raise further
awareness and engagement and drive valuation opportunities. We are
pleased with the outcome of the campaign and will further increase
our engagement with Rightmove throughout 2017.
As part of our strategy to further increase awareness and
engagement we have brought consumer PR in-house by employing an
experienced consumer PR professional, Nicola Hamilton, to focus on
securing local and national press coverage as well as writing
engaging content for social media and Search Engine Optimisation
(SEO). Nicola has proved a valuable addition to our strategy and
has taken our consumer PR message to the next level.
We continue to drive efficiencies in our valuation conversion
funnel and to analyse trends amongst our database of hundreds of
thousands of sellers and buyers in order to ensure that our key
messages are resonating with consumers. We have employed a
dedicated, first class conversion specialist who has made big
strides in simplifying process and introducing more engaging and
persuasive information to help people book a valuation. We are
working on many new features that are due to be released shortly
with the aim of taking more of our site visitors and turning them
into customers.
Email marketing will play a growing role in our wider strategy
and as a result we have a dedicated Email Marketing Manager
concentrating on how we engage with customers through email,
reports and processes and indeed how we might engage, inform and
convert people into customers and customers into taking wider
advantage of our
services. This appointment will further advance the marketing and communications strategy.
Grow our Data Sales Unit
We launched the Data Sales Unit in October 2015 with only a
handful of people and one year later it has grown to a team of 91
employees engaging with buyers, sellers and viewers. As part of our
strategy to increase valuations and drive down the cost per
acquisition, we continue to develop our Data Sales Unit. We
continue to generate thousands of data points daily as people
register with Purplebricks, arrange a viewing, make offers and
agree sales. We are now able to increase our revenue generating
opportunities from data and, as our people develop and we place
them into dedicated product and service streams, we expect to see
the unit make a significant financial contribution. There is also a
meaningful opportunity to drive additional revenue with the newly
introduced Conveyancing Sales Team. They will engage in real time
as things happen with buyers and sellers with a view to converting
them to using our conveyancing services.
Introduce new products and services
Our model of combining people and technology places us in the
best possible position to be in the right place at the right time.
As a result we want to be able to offer customers relevant
additional products and services that complement their journey of
selling, buying or letting.
We continue to look at new and smarter ways of supporting our
customers with much more convenient, easy accessible, stress free
and cost effective products and services. We will add new products
and services once we are satisfied that they add value for our
customers and will be delivered with the Purplebricks culture and
ethos. We want to create lifetime value for our customers and
everything we do as part of our strategy is working towards
this.
Growing the Purplebricks brand across Australia
The launch into the GBP3.3bn Australian market on 28 August went
smoothly. Similar to the UK, we followed a regional launch
strategy, commencing with Queensland and Victoria with a view to
extending the rollout across the country thereafter. Early
indications are very encouraging and we are growing more quickly
than the UK business at the same point in its evolution. In the
first seven weeks the business has already generated revenues of
GBP0.57m* ($1.08m AUD).
Purplebricks charges a flat sales fee of GBP2,616 ($4,500AUD)
which includes photography, marketing and advertising on platforms
Domain.com.au and RealEstate.com.au, as well as the Purplebricks
Australia website. While Australian pricing is above that of the UK
the overall percentage saving for customers is broadly similar.
Given the role of auctions in the Australian property market,
Purplebricks offers an additional auction facility with a small
top-up fee of GBP480 (Aus$825), which includes an auctioneer and
all viewings held by a Local Property Expert.
Early trading success, supported by our initial market research
into the Australian market, demonstrates that customers are very
keen to embrace the new flat fee hybrid model. The high customer
service offering, through the combination of people and technology,
for an attractive fixed fee is the same as the UK. The option to
defer payment is available through a partnership with RateSetter
Australia.
We have recruited 50 Australian based LPEs and the recruitment
of further LPEs continues at a pace as part of our continued
regional launch strategy.
Our culture is our business
Our people create our culture and our technology and our people
deliver it. As a starting point the founders wanted to create a
Purplebricks that cared about its people, that had a progressive
and fun working environment and as a consequence our people cared
about our customers, our brand and our business and they could grow
personally and professionally. We have achieved these founding
principles to date and continue to ensure that the same principles
are applied as we scale.
Following our listing over 200 of our LPEs businesses and a
number of employees have been awarded share options in Purplebricks
Group plc that will vest in part each year and in full over the
coming years. We intend to extend the awarding of share options to
more LPEs' businesses and employees with the objective of everyone
having some form of equity based reward for their efforts in
growing our business into the future in accordance with our
admission document.
We have created a strong brand advocacy within our growing
business and our customers. We work in a progressive and fun
environment where, despite a strong desire to grow their business,
our people have a tremendous degree of camaraderie, togetherness
and a collective brand advocacy that is extremely hard to
replicate. The foundations begin for everyone with the recruitment
programme and training methodology and continue throughout the
heart of the business.
Business Model
Instructions convert quickly to cash - Purplebricks has a
competitive and transparent, flat fee pricing structure of GBP849
(inc. VAT) for a sale anywhere in the UK other than certain defined
London postcodes where there is a charge of GBP1,199 (inc. VAT).
There are additional charges if the customer wants Purplebricks to
undertake the viewings on their behalf, if they require an energy
performance certificate or a Rightmove premium display. The
Company's additional sources of revenue currently comprise fees
from conveyancing, mortgage referrals and insurance.
The average Purplebricks fee including all other sources of
income is circa. GBP1,200 (inc. VAT).
Low and flexible cost base
The customer can choose to pay upfront on instruction or they
can delay the payment (at no additional cost) until the earlier of
the sale of the property or ten months from instruction. The
deferred payment is financed by Close Brothers. Purplebricks is
paid by Close Brothers the next working day. If a customer wishes
to defer payment, they are required to use Purplebricks'
conveyancing services for the sale.
Low and flexible cost base - The cost structure of the business
is different to that of a traditional estate agent. First, the
hybrid model does not require the overheads of a high street estate
agency business, with extensive, leased branches. Secondly, the
LPEs are typically self-employed (90%) with fees payable upon
instruction. As a result gross margins are substantial, reaching
55.6% in the UK for the six months ended 31 October 2016. The
marketing budget is in alignment with the strategy of consistent
presence in the media such as television, and aims not only to
build awareness but also to help maintain and extend the Company's
position as the leading next generation estate agent.
Financial review
Total revenue in the six months grew by 159% year-on-year to
GBP18.7m (H1 FY16: GBP7.2m), reflecting the further growth and
national scale in the UK, the recruitment of LPEs and the
consistent investment in the marketing programme. During the period
the average fee per instruction was GBP1,000 (exc. VAT) in the
UK.
Gross profit in the period was GBP10.4m (H1 FY16: GBP4.1m) a
year-on-year increase of 154%. Gross margin in the period was
marginally lower at 55.5% predominantly due to the launch of the
Australian business, with the inherent lag in revenue from other
services together with an increased mix of London instructions in
UK revenue. Administrative and establishment expenses were in line
with H1 2016 as the business continued to develop its operations
and leveraged scale. Sales and marketing costs remained consistent
with H1 2016 at GBP6.6m. There was no tax charge during the
period.
As at the 31 October 2016 the Group had a net cash balance of
GBP29.1m.
Current trading and outlook
For the six months to the 31(st) October 2016, instructions are
up 108% compared to the corresponding period. The second half has
started well taking into account the headwinds in the sector, with
our performance and growth trajectory largely unaffected. There is
always a seasonal slowdown towards the end of each year leading
into the busiest period which is the spring market. Current trading
is showing similar year-on-year instruction growth with no material
slow-down from Brexit.
The engagement of quality LPEs is well ahead of plan. We will
end the calendar year with just over 340 LPEs, which will place us
in our strongest ever position going into the new year, and a
spring market where we expect to see monthly instructions replicate
last year's January uptick. We see opportunities to build further
scale, density and the quality of our network. Indeed the subdued
transaction activity in the overall market continues to provide
opportunity to engage new high quality LPEs and take even more
market share from the high street.
We remain the clear market leader in the non-traditional sector,
with 63% market share in the last quarter. Furthermore an
independent brand tracking survey, taken in September 2016, places
us a close second to the UK's leading property portal and in front
of the rest of the industry for unprompted brand awareness of
people looking to sell their house. As a result we are presented
with an opportunity to strengthen and capitalise on our position
further.
Investing in marketing and advertising is a central element in
our success and we intend to launch new marketing initiatives from
Boxing Day. We plan to invest more in marketing in the coming
months to capitalise on current market conditions with the
objective of achieving a market leading position in the UK as early
as possible.
We have also demonstrated that our team can internationalise the
Purplebricks model, following a successful regional launch in the
Australian market. Activity and revenue in the first seven weeks to
the period end has tracked better than any of our UK regional
launches, despite total listings being less in Queensland and
Victoria, compared to the initial UK launch region. With
instruction fees exceeding $1m AUD during this period we are
confident that our regional rollout will continue to offer
Australian homeowners fantastic value and exceptional service.
We enter 2017 in our strongest positon ever with significantly
increased LPE capacity, substantial growth in brand awareness,
record instructions, sales and revenue together with a more
advanced infrastructure with our Data Sales Unit, Conveyancing
Sales Team and Sales Task Force. The Company is trading in line
with management expectations and we are confident that we are well
placed to capitalise on our strengths and opportunities. We will
make further strategic investments in marketing during the early
part of the busier spring market and whilst this may have an impact
on short term levels of profitability, the Board believes that it
will strengthen our growth and have a positive influence on the
remainder of the 2017 calendar year.
Consolidated Statement
of comprehensive
income
For the six months
ended 31 October
2016
Note
Six months Six months Year ended
ended 31 ended 30 April
October 31 October 2016 Audited
2016 Unaudited 2015 Unaudited
GBP GBP GBP
Revenue 18,714,260 7,184,062 18,603,679
Cost of Sales (8,332,885) (3,132,589) (8,011,976)
Gross profit 10,381,375 4,051,473 10,591,703
Administrative and
establishment
expenses (5,529,473) (3,783,022) (9,604,541)
Sales and marketing
costs (7,652,085) (6,641,302) (12,924,002)
Loss from operating
activities (2,800,183) (6,372,851) (11,936,840)
Loss from operating
activities before
adjustments in
respect of the
following: (2,264,002) (6,026,381) (9,777,815)
Amortisation of
intangibles (134,965) (34,112) (101,309)
Share based payment
charge (401,216) (312,358) (596,647)
Fund raising costs
including Initial
Public Offering - - (1,461,069)
Loss from Operating
activities (2,800,183) (6,372,851) (11,936,840)
Finance income 36,535 - 35,009
Finance expenses - (17,349) -
Loss before taxation (2,763,648) (6,390,200) (11,901,831)
Taxation - - -
Loss for the year and (2,763,648) (6,390,200) (11,901,831)
Foreign exchange loss (14,257)
Total comprehensive
loss (2,777,905)
Basic and diluted loss
per share 4 (1p) (344p) (12p)
Consolidated Statement of financial position
For the six months ended 31 October 2016
31 October 31 October 30 April
2016 Unaudited 2015 Unaudited 2016 Audited
GBP GBP GBP
Non-current assets
Property, plant and equipment 396,638 168,996 217,386
Intangible assets 917,721 174,663 370,847
1,314,359 343,659 588,233
Current assets
Trade and other receivables 2,405,285 1,445,590 2,970,258
Cash and other cash
equivalents 29,064,475 9,744,843 30,476,386
31,469,760 11,190,433 33,446,644
Current liabilities
Trade and other payables (5,471,721) (2,934,822) (5,211,353)
Deferred income (1,128,559) (282,809) (760,358)
(6,600,280) (3,217,631) (5,971,711)
Net current assets 24,869,480 7,972,802 27,474,933
Total assets less current
liabilities 26,183,839 8,316,461 28,063,166
Net assets 26,183,839 8,316,461 28,063,166
Equity
Share capital 2,467,971 19,016 2,402,591
Share premium 26,319,382 22,296,928 25,887,400
Share based payments reserve 732,184 417,374 330,968
Retained earnings (3,321,441) (14,416,857) (557,793)
Foreign exchange reserve (14,257) - -
Total Equity 26,183,839 8,316,461 28,063,166
Consolidated Statement of changes
in equity
For the six months ended 31 October
2016
Unaudited Share Share Retained Share Foreign Total
capital premium earnings based exchange equity
account payment reserve
reserve
GBP GBP GBP GBP GBP GBP
At 1 May 2016 2,402,591 25,887,400 (557,793) 330,968 - 28,063,166
Exercise of
options 60,536 403,256 - - - 463,792
Exercise of
warrants 4,844 28,726 - - - 33,570
Share based
payment
charge - - - 401,216 - 401,216
Transactions
with
owners 65,380 431,982 - 401,216 - 898,578
Loss for the
period - - (2,763,648) - - (2,763,648)
Foreign
exchange
translation - - - - (14,257) (14,257)
Total
comprehensive
loss - - (2,763,648) - (14,257) (2,777,905)
At 31 October
2016 2,467,971 26,319,382 (3,321,441) 732,184 (14,257) 26,183,839
For the period ended 31 October
2015
Unaudited Share Share Retained Share Foreign Total
capital premium earnings based exchange equity
account payment reserve
reserve
GBP GBP GBP GBP GBP GBP
At 1 May 2015 17,658 12,298,269 (8,026,657) 105,016 - 4,394,286
Issue of
shares 1,358 9,998,659 - - - 10,000,017
Share based
payment
charge - - - 312,358 - 312,358
Transactions
with
owners 1,358 9,998,659 - 312,358 - 10,312,375
Loss for the
period - - (6,390,200) - - (6,390,200)
Total
comprehensive
loss - - (6,390,200) - - (6,390,200)
At 31 October
2015 19,016 22,296,928 (14,416,857) 417,374 - 8,316,461
For the year ended 30
April 2016
Audited Share Share Retained Share Foreign Total
capital premium earnings based exchange equity
account payment reserve
reserve
GBP GBP GBP GBP GBP GBP
At 1 May 2015 17,658 12,298,268 (8,026,657) 105,016 - 4,394,285
Issue of
shares 252,051 34,748,659 - - - 35,000,710
Exercise of
options 138 25,056 - - - 25,194
Exercise of
warrants 123 91,947 - - - 92,070
Redemption of
shares (89) - - - - (89)
Share premium
cancellation - (19,000,000) 19,000,000 - - -
Costs of IPO
charged
to share
premium - (143,820) - - - (143,820)
Share based
payment
charge - - - 596,647 - 596,647
Transfer on
exercise
of options - - 370,695 (370,695) - -
Bonus share
issue 2,132,710 (2,132,710) - - - -
Transactions
with
owners 2,384,933 13,589,132 19,370,695 225,952 - 35,570,712
Loss for the
year - - (11,901,831) - - (11,901,831)
Total
comprehensive
loss - - (11,901,831) - - (11,901,831)
At 30 April
2016 2,402,591 25,887,400 (557,793) 330,968 - 28,063,166
Consolidated
Statement of
cash flows
For the six
months ended
31 October 2016
Six months Six months Year ended
ended 31 ended 31 30 April
October 2016 October 2016 Audited
Unaudited 2015 Unaudited
GBP GBP GBP
Cash flows from
Operating
activities
Loss for the
period after
taxation (2,763,648) (6,390,200) (11,901,831)
Adjustments for:
Amortisation
of
intangible
assets 134,965 34,112 101,309
Depreciation 58,352 23,719 61,159
Share based
payment
charge 401,216 312,358 596,647
Fund raising
costs - - 1,461,069
Operating cash
flow before
changes in
working capital (2,169,115) (6,020,011) (9,681,647)
Movement in trade
and other
receivables 564,973 (699,505) (2,224,175)
Movement in trade
and other
payables 246,111 1,882,083 4,158,614
Movement in
deferred income 368,201 172,879 650,428
Net cash outflow
from operating
operations (989,830) (4,664,554) (7,096,780)
Cash flow from
investing
activities
Purchase of
property, plant
and equipment (237,604) (129,509) (215,338)
Development
expenditure
capitalised (681,839) (70,882) (334,263)
Net cash outflow
from investing
activities (919,443) (200,391) (549,601)
Cash flow from
financing
activities
Issue of shares 497,362 10,000,017 35,117,885
Cost of issue of
shares - - (1,604,889)
Net cash flow
from financing
activities 497,362 10,000,017 33,512,996
Net (decrease)/
increase
in cash and cash
equivalents (1,411,911) 5,135,072 25,866,615
Cash and cash
equivalents
at beginning of
year 30,476,386 4,609,771 4,609,771
Cash and cash
equivalents
at the end of
the year 29,064,475 9,744,843 30,476,386
Notes to the financial statements
1. Basis of preparation
Purplebricks Group plc is incorporated and domiciled in the
United Kingdom.
The interim unaudited financial statements for the six month
period ended 31 October 2016 (including the unaudited comparatives
for the six month period ended 31 October 2015 and the audited
comparatives for the year ended 30 April 2016) were approved by the
board of directors on 2 December 2016. Under the Security
Regulations Act of the EU, amendments to the financial statements
are not permitted after they have been approved.
It should be noted that accounting estimates and assumptions are
used in the preparation of the interim financial information.
Although these estimates are based on management's best knowledge
and judgement of current events, actual results may ultimately
differ from those estimates. The interim financial statements have
been prepared using the accounting policies as described in the
year-end financial statements.
The interim financial information contained within this report
does not constitute statutory accounts as defined in the Companies
Act 2006, section 434. The full accounts for the year ended 30
April 2016 received an unqualified report from the auditors and did
not contain a statement under Section 498 of the Companies Act
2006.
2. Segmental reporting
The Company is managed as a single division, providing services
relating to the sale of properties. The financial information
reviewed by the board is materially the same as that reported under
IFRS. During the period, no one customer contributed greater than
10% of the Company's revenues. (six month period ended 31 October
2015: none, year ended 30 April 2016: none)
H1 2017 H1 2016
UK Aus Consolidated UK Aus Consolidated
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 18.3 0.4 18.7 7.2 0.0 7.2
Cost of sales (8.1) (0.2) (8.3) (3.1) 0.0 (3.1)
Gross Profit 10.2 0.2 10.4 4.1 0.0 4.1
Gross Profit Margin 55.6% 49.7% 55.5% 56.4% 0.0% 56.4%
Administrative expenses (3.8) (1.7) (5.5) (3.8) 0.0 (3.8)
Sales and marketing costs (6.6) (1.0) (7.7) (6.6) 0.0 (6.6)
Operating loss (0.3) (2.5) (2.8) (6.4) 0.0 (6.4)
Depreciation and Amortisation 0.2 0.0 0.2 0.1 0.0 0.1
EBITDA (0.1) (2.5) (2.6) (6.3) 0.0 (6.3)
Share based payments charge (0.4) 0.0 (0.4) (0.3) 0.0 (0.3)
Adjusted EBITDA * 0.3 (2.5) (2.2) (6.0) 0.0 (6.0)
Notes to the financial statements
3. Share-based payments
The Company operates an HMRC approved executive management
incentive plan (EMI), an employee share ownership plan (ESOP) and a
licensee share option plan (LSOP).
The vesting conditions for schemes 1, 2 and 4 are based on
length of service with 25% of the options vesting on or after the
12 month anniversary of the employee's start date and a further
6.25% vesting every three months thereafter so that options vest in
full on the 48 month anniversary of the employee's start date.
The vesting conditions for schemes 5 and 6 are based on future
service from the date of grant with 25% of the options vesting on
or after the 12 month anniversary of the grant and a further 6.25%
vesting every three months thereafter so that options vest in full
on the 48 month anniversary of the employee's or the licensee's
(where applicable) grant date.
Details of the total number of shares under option at the period
end and conditions on qualification and exercise are set out
below:
Grant Scheme Employees Number Performance Type Exercise Earliest
Date No and/or of options conditions price exercise
Licensees (P) date
entitled
Length of
09/01/2015 1 14 4,865,540 service EMI GBP0.01 09/01/2015
Length of
10/07/2015 2 11 4,904,952 service EMI GBP0.13 10/07/2015
Length of
10/08/2015 4 11 682,131 service EMI GBP0.13 10/08/2015
Length of
06/11/2015 5 8 5,709,433 service EMI GBP0.01 06/11/2016
Length of
29/06/2016 6 3 1,970,000 service ESOP GBP1.29 29/06/2018
Length of
29/06/2016 6 66 3,109,500 service ESOP/LSOP GBP1.29 29/06/2017
6,053,540 share options were exercised during the period
(31/10/15: Nil). The number and weighted average exercise price of
share options are as follows:
31/10/2016 31/10/2016 31/10/2015 31/10/2015 30/04/2016 30/04/2016
Weighted Number of Weighted Number Weighted Number
Average options (no.) Average of options Average of options
exercise exercise (no.) exercise (no.)
price price price
Outstanding at
start
of period GBP0.04 14,256,427 GBP0.01 42,637 4,454,091
Granted during
the
period GBP1.29 5,079,500 GBP0.05 120,929 GBP0.09 18,802,984
Exercised
during
the period GBP0.07 (6,053,540) - - GBP0.11 (9,000,660)
Lapsed during
the
period GBP1.29 (62,500) GBP0.13 (1,500) GBP0.13 (162,405)
Outstanding at
end
of period GBP0.56 13,219,887 GBP0.04 162,066 GBP0.04 10,952,712
Exercisable at
end
of period GBP0.23 432,165 GBP0.01 61,935 GBP0.06 3,141,298
Options outstanding at 31 October 2016 for schemes 1 and 5 have
an exercise price of GBP0.01 (31 October 2015: GBP0.01). The
weighted average remaining contractual life of the options is 8.9
years (31 October 2015: 10 years).
Options outstanding at 31 October 2016 for schemes 2 and 4 have
an exercise price of GBP0.13 (31 October 2015: GBP0.13 following
the redenomination of the shares and admission to AIM). The
weighted average remaining contractual life of the options is 8.9
years.
(31 October 2015: 10 years) Options outstanding at 31 October
2016 for scheme 6 have an exercise price of GBP1.29 (31 October
2015: nil). The weighted average remaining contractual life of the
options is 8.9 years. (31 October 2015: nil)
Fair value assumptions of share-based payments
The fair value of services received in return for share options
granted is measured by reference to the fair value of share options
granted.
The estimate of fair value is measured using the Black-Scholes
model. Details of the fair value of share options granted in the
period and the prior period, together with the assumptions used in
determining the fair value are summarised below.
31/10/2016 31/10/2015 30/04/2016
Unaudited Unaudited Audited
Weighted average share price at GBP1.29 GBP0.13 GBP0.15
the date of grant
Weighted average exercise price GBP1.29 GBP0.05 GBP0.09
Weighted average contractual life
(years) 10 10 10
Weighted average expected volatility 27% 27% 27%
Weighted average risk free interest
rate 1.50% 1.50% 1.50%
Total weighted average fair value GBP2,907,562 GBP318,372 GBP1,664,100
of options granted
The volatility assumption, measured at the standard deviation of
expected share price movements, is based on a review of volatility
used by listed companies in the same sector.
Charge to income statement
The charge to the income statement, included within
administrative expenses, comprises:
31/10/2016 31/10/2015 31/10/2016
GBP GBP GBP
Unaudited Unaudited Audited
Share-based
payment charge 401,216 312,358 596,647
Notes to the accounts - 31 October 2016
4. Loss per share
Basic and Basic and
Basic and diluted Basic and diluted Basic and
diluted (rebased)* diluted (rebased) diluted
6 months 6 months 6 months
ended 31 ended 31 ended 31
October October October Year ended Year ended
2016 2015 2015 April 2016 April 2016
Unaudited Unaudited Unaudited Audited Audited
Loss (GBP) (2,763,648) (6,390,200) (6,390,200) (11,901,831) (11,901,831)
Weighted average
number of shares 244,365,112 200,997,147 1,856,363 217,765,729 101,194,640
Loss per share
(GBP) (0.01) (0.03) (3.44) (0.05) (0.12)
* rebased reflects the effect of the bonus issue and the additional
equity raised as part of the admission to AIM
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FSIESLFMSESE
(END) Dow Jones Newswires
December 05, 2016 02:46 ET (07:46 GMT)
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