Purplebricks Group interims prompt Zeus Capital upgrades

Purplebricks Group plc (LON:PURP) interims to 31 October, confirm the 8% rise in instructions to 35,387 (1H last year: 32,850) and net cash of over £75m (as set out in the recent trading update). The full interim results for Purplebricks reveal:

  • 6% rise in UK fee income to £49.1m (1H20: £46.3m) with Average Revenue Per Instruction “ARPI”, rising 3% to £1,392 (1H20: £1,353);
  • “Deferral of fee income over the service period under IFRS15” reduced reported revenue 6% to £44.2m(1H20: £47.1m)
  • 1% fall in UK gross profit to £29.6m (1H20: £30.0m) reflecting deferral of revenue, offset by rise in gross profit margin to 67% (1H20: 64%);
  • £8.4m 1H adjusted EBITDA (110% above 1H20 comparative of £4.0m including central costs, and 53% above 1H20 UK division only: £5.5m);
  • £75.8m net cash at end October 2020 (15 July: £66m; 30 April: £31m);

Full year guidance on EBITDA: “Whilst there are reasons to remain cautious on the economic outlook, … expect adj EBITDA for the full year to exceed the upper end of current range of consensus” (i.e. £10.6m, source RNS).

Outlook: Vic Darvey, CEO said ““Our focus for 2021 will be to 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. This period has shown that our technology-led business model is now more relevant than ever, as customers continue to shift to being more comfortable buying and selling their homes digitally.”

Zeus view: These interims enable us to raise our EBITDA forecast for FY(Apr)21 by 83%. We will set our FY(Apr)22 forecasts after the analysts’ presentation.

With 1H ARPI up 3%, we expect FY21 ARPI to rise 4% to £1,450 (our previous estimate was £1,370). We leave our forecast for 2H instructions unchanged, and we expect “fee income” to rise 7.5% to £80.4m (previous estimate was £77.0m). After reversing the revenue deferral in 2H, we expect the full year gross margin to be similar to last year (i.e. 64%; our previous forecast was 63%). Overall we raise our revenue forecast 5.7% to £86.7m and gross profit by 7.8% to £55.5m.

We leave our forecast overheads unchanged at £25.5m (1H: £12.2m; 2HE: £13.3m), and trim our marketing spend by £1m to £19m (1H: £9m; 2H: £10m). Overall, we raise our adj EBITDA forecast by 83% to £11m (previously: £6m).

Valuation: At 75p, Purplebricks Group has an enterprise value of £161m (net of £71m of net cash: 23p a share), which is 1.86x UK revenue and only 2.90x gross profit.

Click to view all articles for the EPIC: ,
Or click to view the full company profile:
    Share on facebook
    Facebook
    Share on twitter
    Twitter
    Share on linkedin
    LinkedIn
    Purplebricks plc

    More articles like this

    AFC Energy

    AFC Energy: Feedback post Capital Markets Event

    AFC Energy plc (LON:AFC) hosted its maiden Capital Markets Event yesterday, giving an excellent summary of its progress in the last year and its prospects. The company is making good progress in commercialising its EV charging product alongside

    boohoo Plc

    Boohoo Group: FY21 Results

    Boohoo Group plc (LON:BOO) has announced results for the 12 months ended 28 February 2021, reporting a strong finish to the year, with performance ahead of ZC’s forecasts, driven by strong momentum in both the UK and USA

    AFC Energy

    AFC Energy hosting virtual Capital Markets event today

    AFC Energy plc (LON:AFC), a leading provider of hydrogen power generation technologies, will today host a virtual Capital Markets Event for investors and analysts at 2pm BST. To view the webcast, investors should join using the following link:

    boohoo Plc

    Boohoo Group revenue up 41% to £1.745 billion

    Boohoo Group plc (LON:BOO) has announced its final results for the year ended 28 February 2021.   2021 2020 Change   £ million £ million   Revenue 1,745.3 1,234.9 +41% Gross profit 945.2 666.3 +42% Gross margin 54.2%

    Inchcape

    Inchcape: Update to forecasts

    Inchcape plc (LON:INCH) delivered better than expected Q1 results last week and is showing signs of a broad-based recovery across a number of geographies. The Group recently announced its decision to right-size its Russian retail operations with a

    Inchcape

    Inchcape results ahead of expectations

    Inchcape plc (LON:INCH), the leading independent global automotive distributor, today released its Q1 Trading Update covering the period from 1st January to 31st March 2021. ·    Group revenue £1.9bn: up 2% on an organic basis, and down 3% reported ·    Continued