Purplebricks on track to beat FY profit guidance, shares rally

Shares in Purplebricks surged on Tuesday after the online estate agent said it expected to beat full-year profit forecasts.

The AIM-listed firm, which has benefited from a resurgent housing market, said it now expected annual earnings before interest, tax, depreciation and amortisation to exceed the upper end of the current range of consensus.

As at 1030 GMT, shares in Purplebricks were ahead 22% at 92.0p.

The update came as Purplebricks reported first-half figures ahead of internal upgraded expectations. Total fee income in the six months to 31 October rose 6% to £49.1m, while instructions increased 8% to 35,387. Purplebricks said that in the five months since May, instructions had jumped 20% as lockdown restrictions eased and the market reopened.

Average revenue per instruction rose 3% to £1,392.

Operating profits came in at £6.9m, compared to losses of £200,000 a year previously. Group revenues declined 6% to £44.2m, because of the timing of revenue recognition, Purplebricks said.

Chief executive Vic Darvey said: "The continued momentum demonstrations the strength of our technology-led business model and our ability to adapt quickly to a changing market.

"We are now emerging from the pandemic in a very strong position. Our focus for 2021 will be re-accelerate the growth of our core business by continuing to enhance our digital innovation, our virtual capabilities and increasing agent productivity through automation and efficiency."