Real estate agent online in a row on the sales claim

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Online estate agency Purplebricks has defended its activities, after the critical comments from analysts.

Thursday, stockbrokers Jefferies issued a research note questioning his statement that it has sold more than three-quarters of the listed companies.

Jefferies said Purplebricks’ sales success rate was just over 51% and close to the center of the pack of study of 7,000 agents.

But Purplebricks said it sold 78% of the houses listed.’Currency’

Purplebricks charges a flat fee rather than a percentage of the sale price and use a combination of online and local agents.

The company, the most recent results, published in December, reported that its average revenue per customer to £1,138.

Jefferies sales call with Purplebricks a “£1,000 launch of the coin”, saying that, unlike traditional agents, customers had to pay the fee, regardless of the fact that the property sold.

The broker said that the business model had not been sufficiently tested and that its shares were at the price of “perfection”.

The note by Jefferies said: “Purplebricks does not disclose how many houses you sell. Our research sample that had sold 51.6% of the homes listed in the month of November 2016 in the range of 10 months, with a similar rate of success for the global market, but below the company’s claim of 88% [made in an interview with the BBC Moneybox programme].

“Our concern is that the group has expanded rapidly through three continents before the model was demonstrated and that, therefore, the shares are priced for perfection. Our research is not able to replicate the point of view of the sales success expressed by the company.”Share hit

In a statement, Purplebricks, said: “Purplebricks firmly rejects the criticism research note of its policy of revenue recognition and is behind both fully checked the results and the accounting of the same policy”.

It added that the estimated completion rate in the Jefferies research note was based on one month of data, and does not cover business that have yet to be included in the land Register.

The company said that its newest publication, sales conversion rate was 78%, which says that “more accurately reflects its sales performance”.

Actions Purplebricks are down 7% on Thursday, and dropped a further 3% on Friday to around 440p. However, this is still well above the value in the Jefferies note, which said that the true value of the shares was between 94-158p.

Purplebricks, which operates in Australia, the UNITED kingdom and moves in US, has come in for criticism in the past. The Advertising Standards Authority has upheld a number of complaints about its marketing.

The BBC 5 live Investigates is taking a deeper look into the world of online real estate agency Sunday, February 4, from 11:00 am.

Have you used Purplebricks? What was your experience? Get in touch by sending an email to [email protected]

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