Purplebricks has consistently delivered according to plan and it now operates across three continents. We believe its management will continue to create meaningful shareholder value as it successfully implements the company’s growth strategy.8 November 2017
A ‘hybrid’ property agent which, by combining an online platform that allows people to upload details of their properties with a team of flesh-and-blood agents, provides a low-cost approach to buy, sell or let property. It operates 24/7 and is well-placed to significantly disrupt the UK’s traditional estate agency business model – indeed it is already doing so.
Purplebricks is now replicating its domestic success overseas, having launched in Australia in August 2016 and California in September 2017. The company has subsequently announced plans to launch in New York, Las Vegas, Phoenix and Florida, and has also acquired a presence in Canada and Germany.
Investment case summary
Following a comprehensive due diligence process, we first invested in the business in August 2014, initially as an unquoted position. The business was in its very early-stages, but we formed a positive view of an ambitious management team with a significant long-term opportunity to deliver growth through technologically-driven disruption.
With the company delivering results ahead of its business plan, we supported a further fundraising in July 2015. The business floated on the London Stock Exchange in December 2015 at a price of 100p per share, already a meaningfully higher valuation than our initial investments.
Throughout our relationship with this business, we have been impressed with management’s ability to consistently deliver positive financial and operational progress. In the context of the long-term growth that lies ahead for this business in the UK and abroad, we believe the business is very attractively valued. The strategic investment by Axel Springer, announced in March 2018, further strengthens the balance sheet to capitalise on the opportunities that lie ahead.
|Income Focus Fund||2.56%|
|Equity Income Fund||2.14%|
|Patient Capital Trust||1.96%|
As at 30 November 2018
|Themes||UK domestic exposure|
We were intrigued by its novel and disruptive approach for improving the experience of buying and selling a house in the UK by significantly reducing the transaction costs via a technology-led solution.1 April 2016