Troubling times at the EA office indeed

[Austin Allegro]

On 06/04/2023 at 14:41, BoSon said:

Same as when Beeny was telling 'property developers' that they could have made a similar amount of profit if they'd not done all the work on the property due to the rising market.

Shame she's been having a battle with breast cancer recently. Wonder if the bigger baps make hers more susceptible, or just genetic lottery due to her mother dying from it when she was a kid, or a bit of both?

 Mrs Beeny is/was one of the less-bad pwwwoperty types. I heard her speak at a conference once and she came across quite well and not one of those get rich quick types.

[Lightscribe]

8 minutes ago, Austin Allegro said:

 Mrs Beeny is/was one of the less-bad pwwwoperty types. I heard her speak at a conference once and she came across quite well and not one of those get rich quick types.

Well I stood next to her on the train once and can confirm that she had a great rack.

[spygirl]

On 21/12/2022 at 16:47, Boon said:

Personally I think this is an interesting situation myself.

They have no bank debt and £31m cash. They are loss making, but this has covered up that the UK segment has been OK, every single expansion into another country has been a failure and expensive. Hence the huge destruction of shareholder value seen in the historic price.

Cash burn according to the house brokers is said to be around £6-7m for the next half year, and then positive for the next year. So not in danger of equity raise; I doubt they will be chasing overseas expansion again.

Today's note was of activist shareholding trying to throw out the chairman and replace him with Harry Hill (ex Rightmove/Countrywide), obviously much needed to balance out the inexperienced management team.

Listing volumes have fallen sharply - the number of listings on Rightmove dropped by about half in the pandemic. So you could argue Purplebricks lost half its business as well, maybe more as people switched to competitors.

I do think listing volumes will go higher in 2023 than 2022, as people are forced out due to costs, but also people wanting to bank whatever gains they have, plus those who realise that upsizing is cheaper in a falling market.

I also do think that if Hill comes in the product will become better and there may be a niche for them, especially in a market where people have lost money. Ie if you have a likely gain of £100k you may not mind paying Foxtons £10k to try and squeeze the bidders. If you have a likely loss of £50k, a £10k fee might seem to be adding insult to injury. And with the ultra-cheap ones you have to do the viewings yourself, so not suitable for many.

I think this could drop lower but end up multi-bagging.

 

 

On 21/12/2022 at 16:55, spygirl said:

The only assets PB have is, err, hers.

 

 

On 21/12/2022 at 17:22, spygirl said:

Money in a company isnt like money in your wallet.

Theyll burn through al that cash before they go bust.

Theres a high prob that the money is already promised to someelse/spent and just temporary going thru PB books.

Id be surprised if it last 12 months.

 

 

 

On 21/12/2022 at 18:23, Boon said:

Wouldn't that be shown on the balance sheet as a liability then? The latest balance sheet was at Dec 8 this month on their half-year.

In a similar vain I can't stand Uber Eats or Deliveroo, they are also burning through cash. I'd like to claim they too are going bust in the next year but they raised money when the going was good, so they will be around for some time yet.

Separating emotion from logic, at certain prices everything could be a viable investment.

If you do think (and I suspect you do) that there will be plenty of people selling up next year and plenty of people actually realising their paper gains aren't real and they are not as rich as they thought, that is going to favour cheaper estate agents.

 

On 21/12/2022 at 18:35, spygirl said:

Balance sheet look backwards.

 

Purplebricks says unlikely to generate cash in FY24, sale process ongoing

https://www.reuters.com/business/purplebricks-explore-sale-process-2023-05-09/

May 9 (Reuters) - Purplebricks Group (PURP.L) on Tuesday said its previous expectation of returning to cash generation in early financial year 2024 was unlikely, as Britain's biggest online-only estate agency explores a sale to turn its fortunes around.

Purplebricks had a turbulent 2022 as it struggled with implementing a new operating model, saw at least three major management reshuffles and one of its top-10 shareholders - Lecram Holdings - called for the removal of Paul Pindar as chairman. In February, the firm said its board had recognised that the potential of the group may be better realised under an "alternative ownership structure" and had decided to conduct a strategic review. That review would include a formal sale process, the company said in March.

The firm on Tuesday said it expects to have finished the financial year ended April 30 in-line with its expectations, and that a small number of parties remain in discussions with the group regarding the sale of some or all of its business and assets.

 

[Boon]

Yeah I was gonna write something.

https://ir.design-portfolio.co.uk/viewer/80/57373

The level of decrease in instructions is quite shocking, I can;t imagine any EA would have a near halving quarter-on-quarter.

And why would anyone list with them going forwards? Because if you pay money up front you aren't gonna be sure if they will be around to fulfil their end of the deal.

I got this wrong, I thought there might be a big boost of listings to come and save them, but that hasn't happened. Even if it happens now it is too late for them.

They clearly aren't a going concern now, so I think administration is imminent, because listings will drop even further. I can imagine the brand might survive.

[Bear Hug]

2 minutes ago, Boon said:

Yeah I was gonna write something.

https://ir.design-portfolio.co.uk/viewer/80/57373

The level of decrease in instructions is quite shocking, I can;t imagine any EA would have a near halving quarter-on-quarter.

And why would anyone list with them going forwards? Because if you pay money up front you aren't gonna be sure if they will be around to fulfil their end of the deal.

I got this wrong, I thought there might be a big boost of listings to come and save them, but that hasn't happened. Even if it happens now it is too late for them.

They clearly aren't a going concern now, so I think administration is imminent, because listings will drop even further. I can imagine the brand might survive.

 

Just now, Bear Hug said:

 

 

[JoeDavola]

Can anyone summarize to me why PurpleBricks failed?

As a 'brand' it comes across as cheaper than the faux-posh-sounding names that most EA's use, but beyond that do most people just prefer to deal with an EA who is in a physical office nearby?

[spygirl]

12 minutes ago, JoeDavola said:

Can anyone summarize to me why PurpleBricks failed?

As a 'brand' it comes across as cheaper than the faux-posh-sounding names that most EA's use, but beyond that do most people just prefer to deal with an EA who is in a physical office nearby?

Its never made any money.

A BS business.

 

[JoeDavola]

12 minutes ago, spygirl said:

Its never made any money.

A BS business typical 2020's tech startup.

Fixed for you.

Edited May 9, 2023 by JoeDavola

[spygirl]

9 minutes ago, JoeDavola said:

Fixed for you.

Ah thats a tech business built around javascript webpages .....

To be honest, most softwre intensive orgs and software products business are and always have been huge cash gushers.

The problem is is gettign the product done and out n earning.

 

 

[Funn3r]

2 hours ago, JoeDavola said:

Can anyone summarize to me why PurpleBricks failed?

As a 'brand' it comes across as cheaper than the faux-posh-sounding names that most EA's use, but beyond that do most people just prefer to deal with an EA who is in a physical office nearby?

I find just the name off-putting. I am not quite sure why it gets on my nerves but it does. 

[marceau]

18 minutes ago, Funn3r said:

I find just the name off-putting. I am not quite sure why it gets on my nerves but it does. 

I'm hoping one upside to the tech-fluff sector getting rinsed is a cobalt bomb being dropped on whimsical and 'quirky' naming conventions. Make it unusable for a thousand years, complete obliteration of soyboy influence.

[Axeman123]

3 hours ago, JoeDavola said:

Can anyone summarize to me why PurpleBricks failed?

As a 'brand' it comes across as cheaper than the faux-posh-sounding names that most EA's use, but beyond that do most people just prefer to deal with an EA who is in a physical office nearby?

It turns out that estate agents actually serve a useful function in driving deals through to offer, at least for most sellers. Most people can't handle the sales process without them, and many also seemingly resent having to deal direct with viewings or offers. It didn't help either that PB etc services were priced like any other unicorn, ie market share first profit will come later.

[spygirl]

1 hour ago, Axeman123 said:

It turns out that estate agents actually serve a useful function in driving deals through to offer, at least for most sellers. Most people can't handle the sales process without them, and many also seemingly resent having to deal direct with viewings or offers. It didn't help either that PB etc services were priced like any other unicorn, ie market share first profit will come later.

They act as itnermediaries, ensuring chains move forward

However the tempatation to fuck around and misprice fucks EA over.

Id never use an EA for pricing, at least not wihtout checkign houseprices.io first.

However, by valuing high to get business theyve dug their own hole.

 

 

[Option5]

On 09/05/2023 at 10:16, JoeDavola said:

Can anyone summarize to me why PurpleBricks failed?

As a 'brand' it comes across as cheaper than the faux-posh-sounding names that most EA's use, but beyond that do most people just prefer to deal with an EA who is in a physical office nearby?

Taking the service out of a service industry is not a valid business plan.

[Option5]

Business opportunity for other estate agents. Offer PB customers a discount of a percentage of what they've paid PB off their fee if the client lists with them.

[Andersen]

19 hours ago, spygirl said:

They act as itnermediaries, ensuring chains move forward

However the tempatation to fuck around and misprice fucks EA over.

Id never use an EA for pricing, at least not wihtout checkign houseprices.io first.

However, by valuing high to get business theyve dug their own hole.

I knew the manager at my local Pattinsons quite well, she explained their business model is to price a property high so the seller signs up with them.

Every few weeks they review it, it they've not had many enquiries they ring the seller and go into a well practiced pitch of "It's priced it too high for the current market - we need to lower the price to get a sale"

They would like their commission on a kite-flying value so try that first, if no mug bites then they keep dropping the price until it gets near market value. The downsides for the seller is it takes a lot longer and potential buyers start to ask why it's been advertised for so long and not sold yet.

 

[spygirl]

48 minutes ago, Andersen said:

I knew the manager at my local Pattinsons quite well, she explained their business model is to price a property high so the seller signs up with them.

Every few weeks they review it, it they've not had many enquiries they ring the seller and go into a well practiced pitch of "It's priced it too high for the current market - we need to lower the price to get a sale"

They would like their commission on a kite-flying value so try that first, if no mug bites then they keep dropping the price until it gets near market value. The downsides for the seller is it takes a lot longer and potential buyers start to ask why it's been advertised for so long and not sold yet.

 

Thast fine - if they only price ~10% too high.

Good luck with trying to get a price down 30%+

EAs need to be setting eopls price expectations, and with hard sales data.

 

[HousePriceMania]

Is it dead yet....

[spygirl]

10 hours ago, HousePriceMania said:

Is it dead yet....

Value heard r4 bizzyness say the SP had fallen to 1p.

Or that might have been the company market cap

Ive not looked into PB - I smell a dog a mile off.

However IM sure I heard the bizzyness woman say PB were *paying* pople to list their houses.

 

 

 

[HousePriceMania]

1 hour ago, spygirl said:

Value heard r4 bizzyness say the SP had fallen to 1p.

Or that might have been the company market cap

Ive not looked into PB - I smell a dog a mile off.

However IM sure I heard the bizzyness woman say PB were *paying* pople to list their houses.

 

Share price shot up 20% at opening, currently up 14%

You can buy a house in London or Purple Bricks at these share prices 

[spygirl]

On 21/12/2022 at 16:47, Boon said:

Personally I think this is an interesting situation myself.

They have no bank debt and £31m cash. They are loss making, but this has covered up that the UK segment has been OK, every single expansion into another country has been a failure and expensive. Hence the huge destruction of shareholder value seen in the historic price.

Cash burn according to the house brokers is said to be around £6-7m for the next half year, and then positive for the next year. So not in danger of equity raise; I doubt they will be chasing overseas expansion again.

Today's note was of activist shareholding trying to throw out the chairman and replace him with Harry Hill (ex Rightmove/Countrywide), obviously much needed to balance out the inexperienced management team.

Listing volumes have fallen sharply - the number of listings on Rightmove dropped by about half in the pandemic. So you could argue Purplebricks lost half its business as well, maybe more as people switched to competitors.

I do think listing volumes will go higher in 2023 than 2022, as people are forced out due to costs, but also people wanting to bank whatever gains they have, plus those who realise that upsizing is cheaper in a falling market.

I also do think that if Hill comes in the product will become better and there may be a niche for them, especially in a market where people have lost money. Ie if you have a likely gain of £100k you may not mind paying Foxtons £10k to try and squeeze the bidders. If you have a likely loss of £50k, a £10k fee might seem to be adding insult to injury. And with the ultra-cheap ones you have to do the viewings yourself, so not suitable for many.

I think this could drop lower but end up multi-bagging.

 

All of ... 6 months later - 

Shares in Purplebricks have collapsed by more than 60pc after the troubled estate agent warned it could soon run out of cash. In a trading update on Tuesday, Purplebricks said that falling numbers of properties on its books meant its earnings and revenue for the year were looking weaker than anticipated.3 days ago

[Option5]

Purple bricks sold to Strike for £1.

(That's £1 for the business, not per share 😏)

[spunko]

https://www.thisismoney.co.uk/money/mortgageshome/article-12093267/UK-online-estate-agent-Strike-buy-rival-Purplebricks.html

I am not sure what to make of this. The quote by the estate agent gloating that people want to use an agent is wrong. I'd love to give PurpleBricks a go, the problem with their business model is that they charge a lot up front and it puts people off.

They'd be better to switch to something like a 0.5% model paid on completion, and include free professional photographs in the price.

At the moment if you were to instruct PurpleBricks you'd have to pay a couple of grand upfront and get shitty photos.

If there was a viable alternative to using an estate agent I'd use it as they're scumbags.

[spunko]

Strike's model looks interesting. They appear to be making money from referrals to mortgage brokers, and also presumably creaming a bit off the top from those paying for Rightmove listings.

If you opt for their basic free package, it does appear to be genuinely free, though I'm sceptical if you can sell a house in 2023 without being on Rightmove.

In any case, their model looks like what PurpleBricks' model should have been.

[wherebee]

On 17/05/2023 at 23:42, spunko said:

https://www.thisismoney.co.uk/money/mortgageshome/article-12093267/UK-online-estate-agent-Strike-buy-rival-Purplebricks.html

I am not sure what to make of this. The quote by the estate agent gloating that people want to use an agent is wrong. I'd love to give PurpleBricks a go, the problem with their business model is that they charge a lot up front and it puts people off.

They'd be better to switch to something like a 0.5% model paid on completion, and include free professional photographs in the price.

At the moment if you were to instruct PurpleBricks you'd have to pay a couple of grand upfront and get shitty photos.

If there was a viable alternative to using an estate agent I'd use it as they're scumbags.

The model should have been that - 200 quid up front, with 2% commission, or 1000 quid up front with 0.5% commission, or 3,000 quid up front and 0.25% commission. Most people would have gone for the 1000 quid, thinking they had a 'bargain'. Add in a professional photographer for 250 quid - kerching.

Just goes to show almost everyone involved in the estate agency business are thick cunts.