UK’s Purplebricks says housing supply to stay challenging; posts FY loss

(Reuters) -Britain’s biggest online-only estate agency Purplebricks reported an annual loss on Tuesday, mainly hurt by hurdles in implementing a new operating model and said it expects supply in the housing market to remain challenging.

Purplebricks changed its business model in 2021 by making its sales agents permanent employees, while a Money Back Guarantee pricing scheme — also launched last year — had failed to lift the instructions as expected and has now been removed.

“Last year’s financial performance was significantly impacted by the challenges resulting from the implementation of our new operating model and investment in marketing that did not deliver the expected results, alongside a housing market which played against us,” said Chief Executive Officer Helena Marston.

The UK housing industry, which fared strongly during COVID-19 due to government support measures and strong demand, is facing fresh challenges with surging costs, labour shortage and pandemic-related supply chain issues hurting housebuilders’ output.

The AIM-listed company also said volumes and revenue in the first quarter of the current fiscal improved, compared with the second half of fiscal 2022. It now expects to deliver revenue in the range of 67.5 million pounds-72.5 million pounds ($82.5 million-$88.6 million) in 2023 financial year.

The company, which has sold off its international assets to focus only on the UK market, said adjusted core loss for the year ended April 30 was 8.8 million pounds, compared with a profit of 12 million pounds reported a year earlier. The firm’s annual instructions fell 31% to 40,141.

Shares of the company were trading more than 10% lower in early trade.

($1 = 0.8186 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; editing by Uttaresh.V)