Purplebricks Shares Edge Higher Despite Losses Widening

Purplebricks (LON: PURP) shares are up around 4% in early Thursday trading after the company reported its half-year results, revealing wider losses, despite the company's turnaround plans.

The online estate agent posted revenue of £34.5 million in the six months to the end of October, representing a 16% decline year-over-year, with gross profit tumbling to £16.2 million, declining 38%.

Operating losses grew 5% to £11.7 million, while its adjusted EBITDA loss was £8.4 million from £800,000 in the prior year period. 

Despite the widening loss, Purplebricks CEO Helena Marston said the turnaround plan is “working and is being delivered at pace,” while the financial benefits are “starting to come through in the second half of the year.”

“Our plan to diversify revenue streams and build a more scalable, balanced business, with less reliance on instructions is gaining momentum,” said Marston. “I am confident that the progress we are making and the initiatives we are implementing to drive better performance in the field, together with the additional cost actions to ensure we are a leaner, more efficient organisation, underpin our full-year expectations including a return to positive cash generation in early FY24.”

Looking ahead, Purplebricks reiterated its FY23 revenue guidance between £67.5 million and £72.5 million, with EBITDA for the period seen in line with market consensus expectations. In addition, the company said it expects positive cash generation in FY24.

Purplebricks shares are up over 3% at the time of writing, trading around the 10.3p mark. However, the stock is trading near its all-time lows after declining over 68% in the last 12 months.

With the housing market under pressure and prices falling, Purplebricks shares could feel more pain in the near term.