Purplebricks misery as it tots up £26 million losses on expansion

More “commisery” struck shares in hybrid estate agent Purplebricks on Thursday as expansion costs plunged it deeper into the red.

Purplebricks, which coined the phrase in its advertising to capture the despair of homeowners paying far higher costs selling with traditional agents, racked up £26.1 million in pre-tax losses for the year to April.

The reverse is more than four times bigger than last year’s £6.1 million, driven by losses in newer markets in Australia and the US. This week it also unveiled a push into Canada.

But the shares fell more than 4%, or 14p, to 304.6p as the losses spooked the market, despite a doubling in revenues to £93.7 million and a big jump in underlying profits from the UK to £8.1 million. The AIM firm, whose investors include veteran stockpicker Neil Woodford, has dropped 25% since the end of May.

Purplebricks, which charges its customers up front whether or not they sell, is refusing to panic despite signs of a slowing market which has triggered profit warnings elsewhere. Chief executive Michael Bruce said: “We have always made very, very clear what we are doing and the UK has seen a considerable rise in profitability which is a good sign... The share price will ultimately be decided by how we execute our plans.”

It claims 81% of listings are completed, exchanged, or sold subject to contract within 12 months but Jefferies analyst Anthony Codling is unconvinced.

He said: “Purplebricks continues to tell us it sells lots of houses, without backing up that rhetoric with actual figures.”