Having climbed from an opening price of £4.25 to £5.02 by the start of February, it was all looking good for the AIM stock in early 2018. However, since then its year has turned into a disaster, with the steadiness of its decline from May-onwards suggesting it has fallen foul of wider fears surrounding the housing sector.
By mid-November things had got so bad that it was trading at £1.63, its worst price in around 22 months. Purplebricks Group PLC now sits at a current trading price of £1.72.
Neither of its recent statements have been able to turn things around for the former investors favourite. In mid-October it revealed it was entering Germany through a deal with Axel Springer (LON:0NV2). Purplebricks paid €12.7 million for a 50% share in NewCo, a joint venture between it and the digital publisher which acquired a 25.9% of Homeday, the country’s market leader, with potential to up that stake in 2019. The main attraction is Germany’s higher commission rates, with the annual sales commission income estimating at €5.1 billion.
The company then gave a fuller update of its half year trading at the start of November. There it revealed it had seen year-on-year revenue growth of around 20% in the UK, despite the ‘challenging’ market backdrop, thanks to ‘double digit growth’ in instructions. Internationally, meanwhile, it said that ‘sellside lists are growing and buyside revenue is increasing’ in the US, with ‘some challenges’ in Australia and the newly launched Canada project in line with the firm’s ‘high expectations’.
With full year revenue guidance of between £165 million and £185 million, compared to £93.7 million in 2018, investors will want to see that the company is well on its way to reaching that target with Wednesday 12th December’s interim results. Updates on its international standing will also be important.
Purplebricks Group PLC (LON:PURP) has a consensus rating of ‘Buy’ alongside an average target price of £4.47.
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