Online estate agent Purplebricks to list with $360 mln valuation
LONDON: Purplebricks Group Plc, a British online estate agency backed by fund manager Neil Woodford, said it expects to list on London's junior Alternative Investment Market with a market value of 240 million pounds ($360 million).
The company, which was founded in 2014 by brothers Michael and Kenny Bruce, said it had conditionally raised 58.1 million pounds ($87 million) ahead of its debut, as it looks to expand its national presence.
It will issue new shares to the value of about 25 million pounds, Chief Executive Michael Bruce told reporters, while existing investors will sell holdings worth 33 million pounds.
Purplebricks is the first online estate agent to list in Britain, Bruce said on Thursday, and the move comes only 19 months after it launched.
He said buyers were using online sites like Rightmove and Zoopla to search for homes, so there was no longer any need for agents to have a high street presence.
"The days of people going up and down the high street going into high street estate agency offices are fundamentally gone."
The company uses a hybrid model of local property experts, who provide valuations and other services, and online systems that handle selling, buying and letting properties, he said.
Bruce said the business was loss-making, but its business model had been designed to be cash generative and "over the short to medium term would be making significant inroads to profitability".
It charges a flat fee, averaging 1,080 pounds - around a quarter of the average cost of a traditional agents whose fees usually range from 1 percent to 3 percent of a property's value.
Bruce said the company was investing heavily in TV, radio and online advertising to establish its brand, and based on the recent monthly run-rate of fee-paying customers, it was already the fourth largest estate agent in Britain.
Purple Bricks is the second estate agent to list this year, following Hunters Property Plc.
Shares in Hunters, the UK's sixth-largest estate agent, have risen 21.6 percent since it listed in July.
Trading in Purplebricks' shares is expected to start on December 17, the company said. Zeus Capital is acting as the company's nominated adviser and broker.
($1 = 0.6695 pounds)