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sancho panza

YourMove Estate Agency goes from 404 shops to 280.Redundancies loom.

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Some of the comments are worth reading

https://www.propertyindustryeye.com/staff-at-your-move-and-reeds-rains-brace-themselves-as-restructure-continues/

'Members of staff at the LSL Your Move and Reeds Rains brands are today facing a crucial day.

Sources tell us that employees affected by LSL’s radical restructure are expecting their third redundancy consultation today.

The firm has previously said that 308 owned branches will be cut to 144.

According to Alliance News, LSL will merge 81 neighbouring branches of Your Move and Reeds Rains, franchise off 40 existing ones, and close 43 branches. This will reduce the Your Move and Reeds Rains estate to 280 branches from 404.

The restructure will be costly, with LSL saying that it is setting aside £15m.

Staff sources say they have not been given actual numbers as to redundancies, but claim that premises have been shut and furniture removed.

We asked about redundancy numbers and which offices were closing.

A spokesperson for LSL told EYE yesterday afternoon: “The creation of keystone branches across Your Move and Reeds Rains will lead to some branches merging and others closing.

“Some staff continue to be in consultation and we remain focused on supporting them through this process.”'

 

 
smile please

It may be costley with the restructuring but i have seen the figures for 2018 trading for a number of branches, believe me this will save them money. Some of the figures i have seen a branch do in a year you would do in a month.

Robert May

Tranmsaction volumes are reducing, year on year on year. The affordability of  £ means that when couples move in together the spare property can be retained, not sold and will generate an income  greater than the cost of owning it.  When  people die it makes sense that properties are kept rather than sold and despite the changes in taxation on BTL renting out property is still a better investment than a ha’pence for every pound  lodged with building society or pension annuity.

 

Transactions are contracting at about 2% a year so 10 years on from the crash, prices might have recovered (a bit) but transactions are down about 10%. Fee erosion (which i was told I was imagining)  adds to the pressure on  sales income and then a market which many negotiators have never witnessed before all create a perfect storm.

 

Corporate and  independent agencies  are in a fight for  saleable instructions, the  surety of a salary in a difficult market might be a benefit for a short wile but ultimately it can make corporate branches feel  isolated from a recession that’s happening around them.  Sadly there comes a time when the FD’s has to act.

Himanshu took Countrywide back to basics LSL are following a similar path.

 

Independent agents  don’t have  this sort of corporate uncertainty hanging over them but they  ought to have a weather eye on good costs turning bad.'

 
 

 

 

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LSL was nuts.

Ive not fully looked as theres not a chance in hell in me investing in it - its failed model.

They were consolidating loads of 2nd rate EAs and knock down prices and .... <something>

The somethign would turn out to going bust.

Theres too much capital tied up with in secondary EA streets in every town - noone buying a house will look in a window. They only exist for old people to look and dream about.

With each bricksnmortar site you have 2/3 reception, 2 few EAs.e tc etc. The cost base is way too high.

Most EAs will end up to moving to cheaper offices on town edge trading estates.

Theyve got parking and they have a cheap ofice where the documents can be signed etc.

 

 

10 hours ago, TheNickos said:

Who actually bothers with high street EAs these days? Surely it’s all RM and then just viewings. The days of shop fronted EAs are numbered.

Not numbered. Dead.

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11 hours ago, sancho panza said:

 

Robert May

Tranmsaction volumes are reducing, year on year on year. The affordability of  £ means that when couples move in together the spare property can be retained, not sold and will generate an income  greater than the cost of owning it.  When  people die it makes sense that properties are kept rather than sold and despite the changes in taxation on BTL renting out property is still a better investment than a ha’pence for every pound  lodged with building society or pension annuity.

 

 

 

Robert May is moron.

When people move into together the -mainly under 40, they dont have spare property FFS. They days of keeping a mortgage flat/small house and letting it out are long gone.

MMR will take out existing debt servicing inc. the old mortgage and stop you using it to buy yhe live in together place.

WTF does 'The affordability of  £' mean?

Yeah - confirmed cretin - 'is still a better investment than a ha’pence for every pound  lodged with building society or pension annuity.'

You cannot leverage up on a rich or bust bet with IO BTL any more.

You need to buy a house pretty outright.  The yield is basically 3%, less in the South.

Comparing returns on a building society - cash is cash - liquid. A house is very much like tar  these days.

Sounds like some doery old fart regional EA, sta around in his cords, wondering why noone wants to buy him out after hes sunk his SIPP into the office.

 

 

 

 

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Robert given away by this:

Independent agents  don’t have  this sort of corporate uncertainty hanging over them but they  ought to have a weather eye on good costs turning bad.'

Bullshit. Independent agents dont have the ability to break free from RM. They cannot will not afford to run a simple web site.

They face a future of paying RM fees and trying to persuade people to reduce prices.

Deluded.

90% of house sales are determined by mortgage credit.

The reason why sales are dropping 2% a year is that the last 10+ years have seen older people trading away their equity.

Idits like Robert are sat in a drying out pool, wondering why there are no buyers.

 

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12 hours ago, MvR said:

Purple Bricks down 26% this morning..  ouch.

https://uk.finance.yahoo.com/quote/PURP.L?p=PURP.L

 

Looks quite bad for PB

https://www.theguardian.com/business/2019/feb/21/purplebricks-shares-plunge-on-lower-revenue-forecasts

Shares in the UK’s largest online estate agent, Purplebricks, plunged 40% after the company slashed its revenue forecasts and announced the surprise departure of both its US and UK bosses.

The company blamed slower than expected growth in its fledgling US business and “headwinds” in Australia, as it said revenue for the year was unlikely to exceed £140m compared with an earlier forecast of up to £175m.

The revenue prediction had already been downgraded once, at the time of its disappointing half-year results, from £185m.

Last year’s revenues were £93.7m, which yielded an operating loss of £19.6m. The combined £45m downgrade to this year’s full-year sales forecasts is significant given that Australia and the US, the two divisions it said were struggling, only reported revenues of £12.5m combined in the first half of the year.

Shares dropped by 40% after the news but later staged a partial recovery. However they were still down 28%, at 118p, cutting the company’s market value by £140m.

The fall is bad news for Woodford Investment Management, led by the City investment guru Neil Woodford, which is the largest shareholder in the company, with a stake of about 27%.

Purplebricks’ founder and global chief executive, Michael Bruce, is to take control of the US business with immediate effect, as its US chief executive, Eric Eckardt, leaves the business. No reason was given for his departure but revenues in the US grew less rapidly than the company had hoped, after a lacklustre response to a marketing drive that finished in January.'

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42 minutes ago, sancho panza said:

Looks quite bad for PB

https://www.theguardian.com/business/2019/feb/21/purplebricks-shares-plunge-on-lower-revenue-forecasts

Shares in the UK’s largest online estate agent, Purplebricks, plunged 40% after the company slashed its revenue forecasts and announced the surprise departure of both its US and UK bosses.

The company blamed slower than expected growth in its fledgling US business and “headwinds” in Australia, as it said revenue for the year was unlikely to exceed £140m compared with an earlier forecast of up to £175m.

The revenue prediction had already been downgraded once, at the time of its disappointing half-year results, from £185m.

Last year’s revenues were £93.7m, which yielded an operating loss of £19.6m. The combined £45m downgrade to this year’s full-year sales forecasts is significant given that Australia and the US, the two divisions it said were struggling, only reported revenues of £12.5m combined in the first half of the year.

Shares dropped by 40% after the news but later staged a partial recovery. However they were still down 28%, at 118p, cutting the company’s market value by £140m.

The fall is bad news for Woodford Investment Management, led by the City investment guru Neil Woodford, which is the largest shareholder in the company, with a stake of about 27%.

Purplebricks’ founder and global chief executive, Michael Bruce, is to take control of the US business with immediate effect, as its US chief executive, Eric Eckardt, leaves the business. No reason was given for his departure but revenues in the US grew less rapidly than the company had hoped, after a lacklustre response to a marketing drive that finished in January.'

Interesting.

Looking on Yahoo Finance their balance sheet doesn't seem too bad, or rather didn't earlier last year which is the most recent data they seem to have.  Presumably it's worse now, but they don't seem to have all that much debt... at least based on my poor understanding of company balance sheets.  What's your take?

If, as it seems to me, they're not carrying much debt, could they be a potential rubber-band stock once the housing market falls and some liquidity comes back? What they really need is an increase in the number of sales, rather than the value of those sales.

Edited by MvR

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8 hours ago, MvR said:

If, as it seems to me, they're not carrying much debt, could they be a potential rubber-band stock once the housing market falls and some liquidity comes back?  What they really need is an increase in the number of sales, rather than the value of those sales.

It's a pity estate agent's seem to think if prices drop, they won't be able to sell any houses. I suppose a large part of the problem is overvaluing for the instruction. No fee if sale is 5% or 10% lower than initial asking, might help. Trouble is, they would never want to reduce the price and then sell it. Maybe include a sell by date?

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Only seem to see the name Woodford when something he's bought loads of gets shredded. Who thought the Provvy was a good idea FFS? Nobody who's ever tried knocking on a council house door on a Friday evening.

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20 hours ago, sancho panza said:

Looks quite bad for PB

https://www.theguardian.com/business/2019/feb/21/purplebricks-shares-plunge-on-lower-revenue-forecasts

Shares in the UK’s largest online estate agent, Purplebricks, plunged 40% after the company slashed its revenue forecasts and announced the surprise departure of both its US and UK bosses.

The company blamed slower than expected growth in its fledgling US business and “headwinds” in Australia, as it said revenue for the year was unlikely to exceed £140m compared with an earlier forecast of up to £175m.

The revenue prediction had already been downgraded once, at the time of its disappointing half-year results, from £185m.

Last year’s revenues were £93.7m, which yielded an operating loss of £19.6m. The combined £45m downgrade to this year’s full-year sales forecasts is significant given that Australia and the US, the two divisions it said were struggling, only reported revenues of £12.5m combined in the first half of the year.

Shares dropped by 40% after the news but later staged a partial recovery. However they were still down 28%, at 118p, cutting the company’s market value by £140m.

The fall is bad news for Woodford Investment Management, led by the City investment guru Neil Woodford, which is the largest shareholder in the company, with a stake of about 27%.

Purplebricks’ founder and global chief executive, Michael Bruce, is to take control of the US business with immediate effect, as its US chief executive, Eric Eckardt, leaves the business. No reason was given for his departure but revenues in the US grew less rapidly than the company had hoped, after a lacklustre response to a marketing drive that finished in January.'

No reason was given?...I think it's called the sack! :-)

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22 hours ago, MvR said:

Interesting.

Looking on Yahoo Finance their balance sheet doesn't seem too bad, or rather didn't earlier last year which is the most recent data they seem to have.  Presumably it's worse now, but they don't seem to have all that much debt... at least based on my poor understanding of company balance sheets.  What's your take?

If, as it seems to me, they're not carrying much debt, could they be a potential rubber-band stock once the housing market falls and some liquidity comes back? What they really need is an increase in the number of sales, rather than the value of those sales.

total assets versus liabilities is £283mn v £137mn

However, net receviables ie money owed is £40mn (historically looks in line with previous years).The big however however is that Goodwll valued at £159mn and net intangibles at £35mn.At the end of the day,things like brand count for the square root of nothing if an industry ends up dying like High St EA's will imho and I can't imagine there's much intellectual property that's worth having.If they wanted to sell shops on,the name above the door wouldn't count for much in my mind.Ergo,I think both valuations may not meet mr marekt on equal terms.

Liabilities on the other hand are set in black and white eg accounts payable and debt.Take away goodwill and intangibles and you have £91mn v £137mn.Even then,if a few invoices don't get paid and their property palnt isn't worth what they thought,then I'm not sure it's looking that good.

Just my view.I'm not shrot this stock either,although I've think I've made a decent case.

 

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3 minutes ago, sancho panza said:

Just my view.I'm not shrot this stock either,although I've think I've made a decent case.

Awesome response SP.. thanks! 

Ouch and double ouch.  I had no ideas about the £159m goodwill valuation.  Who knew wishful thinking could be worth so much? lol. 

I reckon I'll give it a miss then!

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North south divide. Sales in volume are better in the North than the South at present. Sellers are really looking at what value an agent provides.1-2% of the sale value versus a flat rate fee that Purple Bricks offer. The days of estate agents is not over. A good broker is still invaluable. The days of multi spiv estate agents on the high street is over though.

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Woodford taking water and online EA's must be burning through their cash.

 

https://www.propertyindustryeye.com/questions-asked-after-purplebricks-sounds-profits-warning/

Yesterday’s stock market carnage wiped almost a quarter off the Purplebricks share price.

Shares finished the day at 125p, down 24%, after Purplebricks said its UK business was in good shape but that its expansion into Australia and the US would result in revenues below expectation.

Fund-manager Neil Woodford is Purplebricks’ biggest shareholder, with his funds owning some 29% of Purplebricks stock.

The Financial Times says that Woodford is nursing a £32m paper loss, but that he is declining to comment.

The FT report says that Purplebricks was “was founded by Mr Bruce in 2012 after two businesses where he was a director went into administration”. The FT also says there are questions as to how many homes Purplebricks actually sells.

The Motley Fool writer, Roland Head, says Woodford’s shareholding is too big to sell without destroying the share price “so I guess he’ll have to remain patient and hope things improve”.

 

https://www.propertyindustryeye.com/top-ten-online-agents-market-share-now-5-of-all-new-listings/

The top ten online estate agents accounted for 5% of all new listings in the last 14 days.

According to the Advisory, which tracks market share, this was a rise of 0.2% on the previous 14-day period.

Purplebricks took almost 72% of all the new listings secured by the top ten online estate agents.

Purplebricks gained 2.4% market share of the online agency sector, while Emoov squeezed back into tenth place after listing ten properties.

easyProperty failed to make the top ten.

The market as a whole contracted, with 86,376 properties brought to the market, down 3,192 from the previous period.

Purplebricks’s new listings numbered 2,931 – easily outstripping its nearest rivals Yopa and Housesimple with 407 and 395 new listings respectively.

Another large gap put Doorsteps in fourth place with 126 new listings.

This was followed by another large gap, with House Network in fifth place with 79 new listings.

The other five places in the top ten were taken by 99homes (49 new listings); OpenHouseEstateAgent (44); sellmyhome (33); settled (11); and Emoov (ten).

Taking its data from Zoopla, the Advisory observes: “easyProperty are nowhere to be seen. Zero new properties were recorded as being brought to market in the last 14 days.”

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Edited by sancho panza

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40 minutes ago, sancho panza said:

 

The other five places in the top ten were taken by 99homes (49 new listings); OpenHouseEstateAgent (44); sellmyhome (33); settled (11); and Emoov (ten).

Taking its data from Zoopla, the Advisory observes: “easyProperty are nowhere to be seen. Zero new properties were recorded as being brought to market in the last 14 days.”

These look pretty damn low.  Unless they are also dealing with rentals (which will become unprofitable in a very very near future).

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My experience of Purplebricks on the buying and selling side is that they are truly awful. Think they might have turned it into a Uber style estate agents operation ( send out a reps in a car covering vast region who does his prep work in the car). I’m not keen on the name or the branding. It’s Aim listed right ?  Bet it collapses into nothing 

Edited by Ash4781b

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23 hours ago, Democorruptcy said:

It's a pity estate agent's seem to think if prices drop, they won't be able to sell any houses. I suppose a large part of the problem is overvaluing for the instruction. No fee if sale is 5% or 10% lower than initial asking, might help. Trouble is, they would never want to reduce the price and then sell it. Maybe include a sell by date?

Its quite simple.

A houe will sell for 3 + 1 local income. Taht the mortgage epopel cna get now.

The issue for a lot of places inthe South is that all the high paying finsec jobs have gone. Its quite eye opening in some towns. Of course its not shown in the unemployment figures, tax credits and all. But Ive come across a few towns where they appear to have lost ~40% of private setcor jobs, and theyve all dropped onto delvery drivers.

The under 50s drivethe housing market.

Work out how many are empotyed and what tere pay is and youll work out what you can sell a house for.

 

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52 minutes ago, spygirl said:

Its quite simple.

A houe will sell for 3 + 1 local income. Taht the mortgage epopel cna get now.

The issue for a lot of places inthe South is that all the high paying finsec jobs have gone. Its quite eye opening in some towns. Of course its not shown in the unemployment figures, tax credits and all. But Ive come across a few towns where they appear to have lost ~40% of private setcor jobs, and theyve all dropped onto delvery drivers.

The under 50s drivethe housing market.

Work out how many are empotyed and what tere pay is and youll work out what you can sell a house for.

 

Don't you mean 8 x local salary with joint incomes? Although not convinced local means much these days as people will commute all kinds of distances. Mortgage terms of up to 40 years to help with the affordibilty (yes I know they don't make sense but people are taking out 35+ year terms already).

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On 23/02/2019 at 09:05, A_P said:

Don't you mean 8 x local salary with joint incomes? Although not convinced local means much these days as people will commute all kinds of distances. Mortgage terms of up to 40 years to help with the affordibilty (yes I know they don't make sense but people are taking out 35+ year terms already).

SOme mortgage terms are 40.

Im guessing these will be pretty rare.

The problem with EAs and booster i they go Oh, Fuckknowswhere Building Society is offering 8x mortgage for 40 years.

Bollocks.

TinyBS, doing a stupid loss leader to get its name in papers.

Look at what the big banks are lending. These make up up 80%+ of the market.

Ive started using HSBC are my comparison.

You cannot get a mortgage term beyond retirement age.

 

 

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