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Purplebricks’ FY17
Annual Results:
5 Key Observations
6 July 2017
Mike DelPrete
U.K. revenues increased
by £24.6 million while
sales and marketing
expenses increased by
£1.5 million – now
that’s scaling...
£0
£100
£200
£300
£400
£500
£600
£700
FY16 FY17
Customer Acquisition Costs
www.mikedp.com
Customer acquisition costs
– a v...
£0
£100
£200
£300
£400
£500
£0
£4,000,000
£8,000,000
£12,000,000
£16,000,000
£20,000,000
FY16 FY17
Cost of Sales Per Instr...
0
50
100
150
200
250
300
350
400
450
500
FY16 FY17
Instructions per LPE
LPEs Instructions/LPE
www.mikedp.com
While the ove...
In FY17, the average
revenue and cost per
instruction is equal. A
big improvement from
FY16.
The result is the U.K.
busine...
www.mikedp.com
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Purplebricks' FY17 Annual Results: 5 Key Observations

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An analysis of Purplebricks' FY17 results, showing key observations, insights, and trends. Useful for anyone in real estate, real estate tech, proptech, or online agencies around the world.

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Purplebricks' FY17 Annual Results: 5 Key Observations

  1. 1. Purplebricks’ FY17 Annual Results: 5 Key Observations 6 July 2017 Mike DelPrete
  2. 2. U.K. revenues increased by £24.6 million while sales and marketing expenses increased by £1.5 million – now that’s scaling! £0 £10,000,000 £20,000,000 £30,000,000 £40,000,000 £50,000,000 FY16 FY17 Revenue and Sales and Marketing Expense Growth Revenue Sales and Marketing www.mikedp.com
  3. 3. £0 £100 £200 £300 £400 £500 £600 £700 FY16 FY17 Customer Acquisition Costs www.mikedp.com Customer acquisition costs – a very important metric for online agencies – dropped significantly, from over £600 per instruction to less than £350 per instruction in the U.K. Purplebricks’ sales and marketing spend is becoming more efficient.
  4. 4. £0 £100 £200 £300 £400 £500 £0 £4,000,000 £8,000,000 £12,000,000 £16,000,000 £20,000,000 FY16 FY17 Cost of Sales Per Instruction Cost of Sales Per Instruction www.mikedp.com The Cost of Sales line has risen from £380 to £452 per instruction, a significant jump. This most likely means Purplebricks is paying its local property experts (LPEs) more per instruction in the U.K.
  5. 5. 0 50 100 150 200 250 300 350 400 450 500 FY16 FY17 Instructions per LPE LPEs Instructions/LPE www.mikedp.com While the overall number of local property experts (LPEs) in the U.K. has increased, the average number of instructions per LPE has dipped to 93 per annum. Assuming each LPE earns £450 per instruction (the current cost of sales), that’s an average LPE “salary” of £41,925.
  6. 6. In FY17, the average revenue and cost per instruction is equal. A big improvement from FY16. The result is the U.K. business running at breakeven (or a very small profit, which it is). But! This is still a business with very slim margins. £0 £200 £400 £600 £800 £1,000 £1,200 £1,400 £1,600 FY16 FY17 Average Revenue and Cost per Transaction Average Cost per Instruction Average Revenue per Instruction www.mikedp.com
  7. 7. www.mikedp.com

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