Purplebricks implements radical cost cutting measures and moves to online-only adverts with ‘virtual viewings’ to keep itself afloat
- Total house sales are predicted to plummet considerably in the coming months
- All of the company’s staff are now working from home due to the coronavirus
- The government said buyers and renters should delay moving to a new home
- Coronavirus symptoms: what are they and should you see a doctor?
Online estate agent Purplebricks has announced it has suspended all television and radio advertising and cut supplier overheads to radically reduce costs.
The AIM-listed company expects revenues to be below expectations in the twelve months to April 2020 and has not given guidance for the upcoming financial year due to the impacts of the coronavirus.
Despite this, the company is in a relatively stable financial position, with no debts on its balance sheet and £35million cash in reserves.
Purplebricks has taken a hit in recent years due to a failed attempt to successfully penetrate the American and Australian markets, which saw them incur heavy losses
In its last published financial results covering the first half of the fiscal year, its revenues were up 1.9 per cent compared to the first six months of 2019. Gross profit was £39.4million meanwhile, virtually identical to the same period last year.
Purplebricks has taken a hit in recent years due to a failed attempt to successfully penetrate the American and Australian markets, which saw them incur heavy losses.
To keep business operating, Purplebricks says it has radically adapted to the government’s growing restrictions about socialising and movement resulting from the Covid-19 pandemic.
‘In light of the changing environment, the Company’s first priority has been the health and safety of its people and customers, and Purplebricks has been adapting to this by capitalising on its strong digital capabilities,’ it writes.
The number of house sales is predicted to plummet considerably over the coming months because of the new restrictions on movement due to the coronavirus
The company has moved entirely online, while all of the company’s staff are now working from home, and potential buyers can make virtual house viewings.
Customers wishing to sell their home can still advertise their homes on the Purplebricks online platform and supply their own photography and home details.
The number of house sales is predicted to plummet considerably over the coming months because of the new restrictions on movement due to the coronavirus.
The government has not banned property transactions, but they warned last week that homebuyers and renters should postpone moving to a new house while the constraints remain in place.
They give the following advice: ‘There is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others at all times.’
They added: ‘Where the property being moved into is vacant, then you can continue with this transaction although you should follow the guidance in this document on home removals.
Purplebricks’ shares were 8.7 per cent higher this afternoon at 41p.