BREAKING PROPERTY NEWS – 07/12/2021
Daily bite-sized proptech and property news in partnership with Proptech-X.
Will online estate agents be consigned to the history books?
Purplebricks, the online agent listed on the Alternative Investment Market, has a share price of just 31p. In its heyday, its share price was close to £5.00.
Ben Carter, Chief Marketing Officer, arrived in November 2020 when the share price was 69p. He is now exiting this December after a 45% collapse in the value of the company over those 13 months. Not a great achievement, seeing as CMOs are meant to add value to a company.
The bigger picture here is that 31p is only 33% of the original listing price of Purplebricks stock on the AIM back in late 2015. So all of those options for those in the C-suite are looking very poor at present, not surprising really. Who had the big idea of spending all that cash on the Olympics? Did that generate a single new instruction?
Maybe the cash could have been better spent updating the digital side of the business, rather than quirky adverts with sporting titans.
Interestingly, the loss-making hybrid Yopa, which has gobbled up close to £100 million in ‘investors’ cash in recent years, has just announced another injection of capital to keep the lights on, celebrating that it has made a smaller loss than in recent years – hardly an endorsement of a working business model. The exact figure has not been made public.
Looking at this expensive vanity project, and having been an agent and set up cold start offices I am amazed at the amount of money Yopa’s stakeholders (Among whom are Savills and the Barclay brothers) have to burn, as it only costs £150k to cold start one ‘traditional’ branch, which is repaid after 24 months, with profit coming in from year three.
That £100 million could have opened 600+ cold start agencies, with that £100 million being paid back quicker.
It appears there are two clear choices: Invest in YOPA, an online agency model that makes zero profit ever; or be the proud owner of a traditional office network, with probably 20% making decent profit, 10% making zero profit and the rest making some profit. I know which one I would like to be getting dividends from each year.
But there are more dark clouds on the horizon for all estate agents – the lack of new housing stock. For online agents such as Purplebricks, which charges upfront sale or no sale model (with a returns option that is very hard to navigate) this will be extremely damaging.
Their cash at the bank will dwindle, as no new listings means no new cash, just at the time they seem set to have a costly court drama, revolving around the ‘status’ of their workforce who, until recently, were self-employed.
Federation of Independent Agents launches FIACON event in Milton Keynes
Graham Lock, CEO of the Federation of Independent Agents, will be hosting a conference of around 160 delegates in Milton Keynes. Knowing Graham and the tireless work he puts in this event, the first physical meetup for his membership since lockdown will be a showcase event with great insightful speakers, top innovative industry suppliers and of course lots of networking, advice, and content on the day.
Lock said: “It’s great to get our members back into a physical location following many months of Zoom meetings which have been a good temporary solution, but you can’t beat the real thing … We have a laser-focus on improving the perception of estate agency in the eyes of the general public and earning the respect that we deserve as an industry.
“FIACON generates so much positivity, sharing and networking opportunities between members which is only natural when top performers get together like this.
The Federation of Independent Agents is an invitation-only group, mainly utilised to ensure a high calibre of agent.
Lock added: “Our strict entry criteria and exclusivity policy has continued to strengthen our brand throughout 2021 and with the addition of several new initiatives ready for an exciting 2022 we’ll continue to attract the best independent agents from around the country to join our group.”
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