Purplebricks revenues to miss expectations due to pandemic
By Michele Maatouk
Date: Monday 30 Mar 2020
(Sharecast News) - Purplebricks said on Monday that full-year revenues will be below expectations due to the coronavirus outbreak, and that it will be furloughing its staff.
The company said it had seen a weakening in vendor and purchaser activity since the UK government imposed restrictions on people's movements. It also noted the government's announcement last week, in which it urged both home buyers and renters to delays their moves while plans to tackle the spread of the virus are in place. This is expected to have "a further negative impact on instruction and completion volumes," Purplebricks said.
The estate agent has moved the entire business to working from home and adopted a complete online model encapsulating video valuations, virtual viewings and connecting customers with potential purchasers via the Purplebricks online platform. Customers are also still able to list properties, providing their own photography and property details.
Given market uncertainty, it has taken "immediate and significant" measures to preserve cash. The group has instituted a number of cost-saving measures, including reducing supplier costs and overheads. In addition, all TV and radio advertising has been suspended and online marketing costs have significantly reduced.
The company also said it will be using the government's Covid-19 Job Retention Scheme to furlough its staff.
"The Covid-19 situation continues to evolve and is likely to remain uncertain for some time. However, given the recent impacts Purplebricks now expects revenues to be below expectations for the full year to April 2020," it said, adding that it is too early to predict the impact on 2021.
"Nevertheless, the company believes its flexible, digitally-led operating model leaves Purplebricks positioned for long-term success."
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