Purplebricks sets sights on European acquisitions as global expansion continues
Chief executive and founder Michael Bruce wants to grow the brand across Europe and extend its reach in the UK.
Online estate agency Purplebricks has confirmed it is eyeing German and European firms for acquisition as it continues to expand its overseas footprint.
Chief executive Michael Bruce, who founded the firm with his brother Kenny in 2012, told the Press Association the group is hoping to replicate the success of a recent deal in Canada, which has propelled it into that market.
It has Germany and Europe in its sights following a £125 million investment boost from German publishing giant Axel Springer when it took an 11.5% stake in Purplebricks in March.
But Mr Bruce said the group is not planning to launch into a new market from scratch for the time being while it concentrates on bedding in existing operations across the UK, Australia and north America.
It also wants to grow its market share in the UK to more than 10%, from what it estimates is around 6% or 7% now.
Mr Bruce said: “We’d be more interested at this stage in an acquisition than putting some troops on the ground.”
He said the group was taking its time and waiting for the right opportunity in Europe, rather than rushing into any deals.
“We’re not directly touting, but it’s clear that people know us and the brand and what we’re trying to achieve,” he said.
“We know who’s doing OK in these markets and we’re observing them,” he added.
My vision has always been to have a long lifetime relationship with our customers Michael Bruce
He said Axel – owner of German tabloid Bild – has already been highly supportive of Purplebricks and its strategy.
Axel’s classified advertising chief Andreas Wiele has joined the Purplebricks’ board as a non-executive director and the group regularly meets with Mr Bruce and his team.
They have a “great culture” and “want us to be successful”, said Mr Bruce.
Purplebricks also secured something of a coup early on, with the backing of renowned fund manager Neil Woodford, who owns more than a quarter of shares in the group.
Having floated in late 2015 just three years after being founded, the group is now worth more than £890 million after shares had a stellar run since listing.
But the stock has had a more bumpy ride this year after a spat with Jefferies analysts in February and recent annual results showing hefty losses.
Earlier this month, the group reported pre-tax losses widening to £26.1 million for the year to April 30, against losses of £6 million the previous year as its global expansion hit the firm’s bottom line.
Revenues surged over the year though, up 101% to £93.6 million, with UK sales up 81%.
The rift with Jefferies was clearly a headache when it blew up, with Purplebricks blaming a note from the group – authored by Anthony Codling and Sam Cullen – for causing its shares to tumble.
Mr Bruce still refutes their report questioning Purplebricks data on how many houses it sells within 10 months, and claimed Jefferies was biased, given that it counts some estate agent rivals as its clients.
“They can’t really go around saying we’re the most wonderful stock in the world, when we’re competing against their own clients,” he said.
The group’s focus is firmly on the future, however, with plans to add to its 640-strong team of local agents, having already recruited up to 200 in the past year.
Mr Bruce also plans to get his new UK venture off the ground – Purplebricks Plus – by next April.
The service aims to be an online platform allowing sellers to see all their domestic suppliers on one dashboard.
It will, hopes Mr Bruce, keep Purplebricks front-of-mind with customers, who generally only use estate agents when they sell houses every seven or eight years.
“My vision has always been to have a long lifetime relationship with our customers,” he said.