Purplebricks Group plc
Annual Report
2016
CONTENTS
Company information
Highlights
Chairman’s statement
Strategic report
Local Property Experts case studies and productivity
Directors’ report
Directors’ remuneration report
Independent auditor’s report to the members of Purplebricks Group plc
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
05
06
08
10
18
26
31
32
33
34
35
36
37
Purplebricks Group plc Annual Report 2016 / 3
COMPANY INFORMATION
Directors
M P D Bruce
N R Cartwright
W E Whitehorn
P R M Pindar
N S Discombe
Registered company number
08047368
Registered and head office
Suite 7
Cranmore Place
Cranmore Drive
Shirley
West Midlands
B90 4RZ
Solicitor to the Company
Norton Rose Fulbright LLP
3 More London Riverside
London
SE1 2AQ
Auditor to the Company
Grant Thornton UK LLP
Chartered Accountants and Statutory Auditor
Colmore Plaza
20 Colmore Circus
Birmingham
B4 6AT
Nomad/Broker
Zeus Capital Ltd
41 Conduit Street
London
W1S 2YQ
I would like to thank our shareholders for the
support and encouragement we receive from
them. They have invested in creating a strong
and thriving business that is changing the estate
agency industry forever and for the better.
Michael Bruce
CEO
4 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 5
HIGHLIGHTS
HIGHLIGHTS
Financials
Revenue growth
+448%
to £18.6m
(2015: £3.4m)
Gross profit
+427%
to £10.6m
(2015: £2.0m)
£30.5 m
cash
(2015: £4.6m)
Average revenue
per instruction
£901
(2015: £703)
Adjusted EBITDA1
(£9.7m)
(2015: (£5.3m))
Adjusted EBITDA1
pre marketing costs
£3.2m
Loss before tax
increased to
(£11.9m)
(2015: (£1.8m))
(2015: (£5.4m))
The basic and diluted loss
per share increased to
(£0.12)
(2015: (£0.03))
Operationals
Local Property Experts
increased by
159%
to 205 (2015: 79)
Every Local Property
Expert to be granted
share options
on a long term
incentive scheme
Sold and
completed on
£2.766 bn
(2015: £832m)
Current SSTC
pipeline
£1.697 bn
Ended year with
2,827
instructions
in April 2016
Current monthly rate
of sales agreed
2,386
(May 2016)
Conversion from
instruction to sale
agreed over
77%
2
Average period
to exchange of
contracts
56 days3
Online market share
increased to
62%
(2015: 41%)
4
Most reviewed estate
agent in the UK with over
5,7005
reviews on Trustpilot
Currently over
1.23 m
monthly visits to our
website (2015: 0.4m)
Intention to launch
Purplebricks in
Australia
a £3.3bn market
1Defined by the Group as (loss)/profit before tax, depreciation, amortisation, net non recurring fund raising / IPO costs and share based payment charges.
2Percentage against all instructed properties April 2015 - March 2016. This may represent the minimum conversion assuming those properties still on the market sell hereafter.
3Source - My Home Move (the largest conveyancing firm in the UK) Period from contracts issued to exchange of contracts.
4Period week ending 5 June 2016.
5Period ending 12 June 2016.
Financial Highlights
• Revenue increased to £18.6m (2015:£3.4m) by 448%
• Gross profit increased to £10.6m (2015:£2.0m) by 427%
• The cash balance increased to £30.5m (2015:£4.6m)
• Average revenue per instruction was £901 (2015:£703)
• Adjusted EBITDA1 losses narrowed in the second half of the year by 38%
• Adjusted EBITDA1 pre marketing costs increased to £3.2m (2015:£1.8m loss)
• The loss before tax increased to £11.9m (2015:£5.4m)
• The basic and diluted loss per share increased to £0.12 (2015 rebased2:£0.03)
• The loss before tax as a percentage of revenue reduced to 64% (2015:160%)
• The rebased adjusted EBITDA loss per share increased to £0.10 (2015:£0.03)
Operational Highlights
• The number of Local Property Experts grew by 159% to 205 (2015:79) at the year end
• Every Local Property Expert’s business to be granted share options on a long term incentive scheme
• The value of property sold and completed by Purplebricks Group plc in the year was £2.766bn (2015:£0.832bn)
• The pipeline of property sold subject to contract stood at £1.697bn
• The Company recorded 2,827 instructions in April 2016 (April 2015:972)
• The monthly run rate of sales agreed increased to 2,386 in May 2016
• Conversion from instruction to sale was 77%
• Average period from contracts issued to exchange of contracts was 56 days (Source: My Home Move)
• Online market share increased to 62% (2015:41%)
• Most reviewed estate agent in the UK with over 5,700 Trustpilot reviews
• Monthly website visits has increased to 1.23m in April 2016 (April 2015:0.4m)
• Announced intention to launch Purplebricks in Australia
• Successful flotation on AIM on 17 December 2015
• Launched Data Sales and Customer Support Unit in October 2015
Revenue
Gross profit
Gross profit %
Loss before interest & tax
Depreciation and amortisation
Share based payment
Fundraising costs
Adjusted Earnings before interest, tax,
depreciation and amortisation
2016
2015
£m
H1
7.2
4.1
56%
(6.4)
0.1
0.3
-
£m
H2
11.4
6.5
57%
(5.5)
-
0.3
1.5
£m
H1
0.8
0.4
54%
(2.5)
-
-
-
£m
H2
2.6
1.6
62%
(2.9)
-
0.1
-
2016
£m
FY
18.6
10.6
57%
(11.9)
0.1
0.6
1.5
2015
£m
FY
3.4
2.0
59%
(5.4)
-
0.1
-
(6.0)
(3.7)
(2.5)
(2.8)
(9.7)
(5.3)
6 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 7
CHAIRMAN’S STATEMENT
Paul Pindar
CHAIRMAN’S STATEMENT
Paul Pindar
Whilst we are at the start of our
journey as a Company listed on AIM,
we can already see the evidence
that our flotation has significantly
raised the profile of our Company.
Summary
Our admission to the Alternative Investment Market in
December 2015 marked the next chapter in Purplebricks’
development and growth.
Whilst we are at the start of our journey as an AIM listed
Company, we can already see the evidence that our
flotation has significantly raised the profile of our Company,
and the new money raised has enabled us to make
important investments across all areas of our business.
During the year, we evolved from a regional footprint to a
full national presence across the UK. Our strategy is
focussed upon deepening this coverage across the UK to
ensure we have an ‘ultra local’ presence through the
recruitment of more Local Property Experts (LPEs). In this
regard, I am delighted to report that we are ahead of our
recruitment plan, closing our financial year with 205 LPEs,
an increase of 159% over the corresponding year. This
additional expertise will provide essential capacity to
meet the burgeoning demand from our customers. More
and more highly skilled estate agents are choosing
Purplebricks Group plc because of our strong customer
centric culture and full service offering.
We have continued to invest in high impact marketing
and, as a consequence, we have built a national brand in
just two years. Brand awareness is high and growing and
we have sustained our reputation for ‘best in class’
customer service, notwithstanding our rapid growth. We
actively encourage feedback from all of our customers
and we are the most reviewed estate agency business in
the UK as measured by independent review site
Trustpilot. We are proud that we have sustained our
rating of ‘Excellent’ with an average score of 9.4 out of 10,
from over 5,700 customer reviews. The number of brand
advocates is growing due entirely to the service that our
customers are receiving, the number of sales we are
achieving and as a result of the commitment and support
we provide, right up until that important moving day.
Financials
Trading momentum has been strong throughout the year,
with revenues of £18.6m representing an increase of
448% on the prior year. This is a pleasing result given
Purplebricks Group plc was a national agency for only the
last 6 months of the year. As anticipated, we are reporting
a loss for the full year, as a consequence of the considerable
investment we have made across the business and the
uplift in marketing costs when we moved to a national
operation. However, the operating leverage of our low
fixed cost business model is now becoming apparent with
a 38% reduction in adjusted EBITDA losses in the second
half of the year, compared to the first half.
Net cash at the year end was £30.5m as a result of the
fundraising activities undertaken and also the marked
step up in revenue generation in our 4th quarter.
Net assets at 30 April 2016 were £28.0m (2015: £4.4m),
with net current assets standing at £27.4m (2015: £4.2m).
business whilst maintaining our strong culture of
customer service.
The Company intends to use the proceeds of the
fundraising to accelerate growth wherever possible as it
seeks to be the market leader in what it sees as a
transforming estate agency landscape.
All our operations are currently UK based and there is
therefore no exposure to foreign currencies and
associated exchange rate fluctuations.
Australia
We have announced today our intention to launch the
Purplebricks proposition in Australia, a £3.3bn market*.
Our market research indicates that our compelling
proposition of high quality customer service coupled with
a competitive flat fee structure will appeal in a market
where sellers are currently charged £5,900 (Aus $12,000)
in addition to an average of £2,450 (Aus $5,000) for the
cost of listing on portals and other related advertising.
We have recruited an Australian management team who
will execute on our plans and report directly to our UK
board. Similarly to the UK, we will launch regionally and
adapt our offering should the need arise. Our maximum
planned investment of £10m will be funded from existing
cash resources over the next two years. We are very
excited by the size of the market opportunity.
The Purplebricks Group plc Board has seen some
changes this year as we restructured ahead of our IPO,
with me becoming the Non-Executive Chairman, taking
over from Nick Discombe who became Senior Non-
Executive Director. Our Board is supported by a very
strong management team.
Dividend
As a young and fast growing Company with a substantial
market opportunity, we intend to focus our financial
resources on realising our potential in full. As we progress
our strategy and our financial performance, we will look
to move to a progressive dividend policy in future years.
The year ahead
The current year will be our first full year as a national
operator, with all of the benefits of our investment in
technology, marketing and our expanding LPE network
which will flow through our operationally geared business
model. We are ahead of plan on LPE recruitment, excited
about the launch of our new marketing campaign and
encouraged by the traction we are gaining from our new
Data Sales Unit as a lead enquiry generator. The year has
started well, our customers are enthused by our full
service hybrid agency model, and we view the future with
considerable optimism.
Board and people
Our strong results would not have been possible without
the enthusiasm and commitment shown by our
colleagues this year. On behalf of the Board, I would like
to thank them sincerely for their hard work in growing our
Paul Pindar
Chairman
15 June 2016
8 / Purplebricks Group plc Annual Report 2016
*Source - IBIS Real Estate Services in Australia Industry Report - Industry composition.
Purplebricks Group plc Annual Report 2016 / 9
STRATEGIC REPORT
Principal activity and strategy
The principal activity of the business is estate agency.
At the core of our strategy is a commitment to our
customers and our people.
We will continue to offer an exceptional experience by:
• selecting and training Local Property Experts that
enhance our culture and core values and have the
desire and motivation to build their own business
• building upon our market leading technology that helps
Local Property Experts be more productive and which
delivers a much more convenient, transparent and cost
effective service for our customers
• creating marketing and advertising that interests,
engages and inspires consumers to want to book a free
valuation from Purplebricks and ensures that our
messaging is clear and transparent to enable
consumers to swiftly instruct us to sell their home;
• building upon our customer service and product
offering by growing our Data Sales Unit and introducing
new products and services that are relevant to our
customers’ needs throughout their journey;
• maintaining a progressive and fun working environment
where our people care about our customers, our brand
and our business and can grow personally and
professionally, and
• building a strong, sustainable and profitable business,
which is respected by all stakeholders for its
professional conduct and making good on its promises
Our strategy for growth is based upon the above core
commitments.
Increase our footprint of Local Property Experts
We are extremely privileged to have secured some of the
best people in our industry who have a strong desire to
be part of a business that is changing the way people
think about estate agents and estate agency. They are
passionate about customer experience, giving customers
that “light bulb moment” where they have met an estate
agent who has promised a service, delivered on that
service, been available when they needed them, sold
their house, supported them until they have moved out
and saved them lots of money.
Our Local Property Experts are entrepreneurial, ambitious
to grow their territory and to meet the demand which
continues to grow for our hybrid offering. As a result we
are accelerating our recruitment programme and
increasing our footprint of experts across the UK in order
to win significantly more share of instructions in local
markets. We are finding that more and more talented,
professional estate agents want to be part of what
Purplebricks is seeking to achieve. The pool of applicants
continues to grow and as a result the number of people
suitable to represent the Purplebricks brand is getting
bigger and bigger. Our main focus though is on
maintaining that first class, culture driven quality of
individual. We are pleased to report that the industry has
a large number of high quality people to choose from.
Build upon our market leading technology
Bringing together first class Local Property Experts and
industry leading technology is the foundation upon which
the Purplebricks business has been created. We are very
proud of our technology and indeed the work we are
doing to introduce new and innovative features that set
us apart from anyone else in the industry. The recent
release of the Purplebricks App has proven remarkably
successful. In only two months there have been more
than 11,000 downloads by our selling customers. We are
now working on a Purplebricks App for buyers that will
make the whole process even more integrated,
convenient, effective and transparent. We have already
revolutionised the way sellers and buyers communicate
throughout the process and continue to build on the
work we have started.
In addition to over 10,000 advanced changes to our
technology this year and 2,900 new features we are
working on new, engaging, informative, supportive and
integrated methods of enhancing the customer
experience and making our Local Property Experts more
productive. We are also focused on engaging ways of
increasing revenue with targeted and timely technology
driven cross sales opportunities. There are smarter, more
effective ways of selling some products and services with
the use of our technology platform.
We have increased our technology team and are starting
to become a hub of technical interest for developers
across the UK.
Create engaging marketing and advertising
Advertising has always been a central element of the
Purplebricks Group plc strategy. We continue to work
hard to grow our brand and the progress in just two years
has been outstanding. Purplebricks Group plc is currently
leading front of mind awareness (amongst all estate
agents) for people thinking of selling their home
STRATEGIC REPORT
Continued
according to The Nursery, one of the UK’s leading
independent research and planning agencies*.
product and service streams, we will start to see the unit
make a significant financial contribution.
We continue to grow brand recognition across all TV and
radio advertising compared with a year ago. We are
confident that the team has built upon their early success
with the introduction of their new campaign, due to
launch in June 2016. Our messaging will continue to
focus upon the popularity and professionalism of our
Local Property Experts and will present a humorously
engaging portrayal of our model.
Our above the line marketing is complemented by brand
and generic pay-per-click activity which is predominantly
provided by Google and Bing. We are also looking at
better ways of using social media in a targeted way to
drive more activity amongst sellers. At the start of June
2016 we commenced an intensive test marketing
campaign with Rightmove, which we hope will raise
further awareness and engagement and drive valuation
opportunities.
In addition to paid activities we continue to drive
efficiencies in our valuation conversion funnel and to
analyse trends amongst our database of hundreds of
thousands of sellers and buyers in order to ensure that
our key messages are resonating with consumers. As part
of our strategy to increase awareness we have recently
employed an experienced consumer PR professional to
focus on securing local and national press coverage as
well as writing engaging content for social media and
Search Engine Optimisation (SEO).
We will continue to create marketing and advertising that
interests, engages and inspires consumers to want to
book a free valuation from Purplebricks and ensure that
our messaging is clear and transparent to enable
consumers to swiftly instruct us to sell their home.
Grow our Data Sales unit
We started the Data Sales Unit in October 2015 with only
a handful of people and in just a few months have grown
it to a team of over 70 employees engaging with buyers,
sellers and viewers. As part of our strategy to increase
valuations and drive down the cost per acquisition we
continue to grow our Data Sales Unit. Every day we
generate thousands of data points from people
registering with Purplebricks, arranging a viewing direct,
online or via the property portals and from buyers making
offers and agreeing sales. We are steadily increasing
revenue generating opportunities from data and as our
people develop and we place them into dedicated
Introduce new products and services
We believe that a major part of selling is being in the right
place at the right time. Our model of combining people
and technology places us in the best possible position to
be in the right place at the right time. As a result we want
to be able to offer customers relevant additional products
and services that complement their journey of selling,
buying or letting. We continue to look at new and smarter
ways of supporting our customers with much more
convenient, easy, accessible, stress free and cost effective
products and services. We will add new products and
services once we are satisfied that they add value for our
customers and will be delivered with the Purplebricks
culture and ethos. We want to create lifetime value for
our customers and everything we do as part of our
strategy is working towards this.
Our culture is our business
Our people create our culture and our technology and
our people deliver it. As a starting point the founders
wanted to create a Purplebricks that cared about its
people, that had a progressive and fun working
environment and as a consequence our people cared
about our customers, our brand and our business and
they could grow personally and professionally. We have
achieved these founding principles to date and continue
to ensure that the same principles are applied as we scale.
Following our listing, the businesses of our founding
Local Property Experts and a number of employees have
been awarded share options in Purplebricks Group plc
that will vest in part each year and in full over the coming
years. We intend to extend awarding of share options to
more Local Property Experts’ businesses and employees
with the objective of everyone having some form of
reward for their efforts in growing our business into the
future in accordance with our admission document.
We have created a strong brand advocacy within our
growing business and our customers. We work in a
progressive and fun environment where, despite a strong
desire to grow their business, our people have a
tremendous degree of camaraderie, togetherness and a
collective brand advocacy that is extremely hard to
replicate. The foundations begin for everyone with the
recruitment programme and training methodology and
continue through the heart of the business.
10 / Purplebricks Group plc Annual Report 2016
*Based on 1,131 respondents in a survey
Purplebricks Group plc Annual Report 2016 / 11
STRATEGIC REPORT
Chief Executive’s Statement
STRATEGIC REPORT
Chief Executive’s Statement continued
We have continued to strengthen our
position across the UK, buoyed by
our national footprint and our strong
and growing brand awareness.
Purplebricks App
more than
11,000
downloads since
launch in April 2016
Review of the year
This has been a significant year of development for
Purplebricks Group plc, culminating in our admission to
AIM in December 2015. We have continued to strengthen
our position across the UK, buoyed by our national
footprint and our strong and growing brand awareness
and reputation for delivering customers a more
convenient, transparent and cost effective service.
Customers are responding to our hybrid model and in just
our second full financial year we sold properties worth
nearly £2.8bn. We have over £1.697bn of property in our
pipeline where sales have been agreed and they are
going through the legal process. Our Company is doing an
exceptional job of selling properties.
The average number of monthly instructions continues to
grow. If we compare the second half of 2015 where the
monthly average was just 578 to the same period in 2016,
the monthly average has grown to 2,033 instructions, an
increase of 252%. In April 2016, a month where most
traditional operators were reporting a slowdown in
activity levels, we achieved 2,827 instructions.
We are winning share from the traditional estate agents
and sustaining our 62% share of total instructions of the
non-traditional market. However, any estate agent is only
as good as their sales conversion and I am delighted to state
that in the year we achieved an instruction to completed
sale rate of 77% which we believe to be industry leading.
The on-going strength in our trading is only made
possible by our success in continuing to secure first class,
professional, experienced and highly motivated Local
Property Experts. They are attracted to our customer
focused culture coupled with a personal and professional
desire to run their own business in an environment that
assists them to quickly build a scalable, profitable, local
business. We are ahead of plan in our recruitment,
finishing the year with 205 Local Property Experts, an
increase of 159% on the prior year.
To maintain the high quality of our Local Property Experts
and the rate of recruitment, we have invested in more
infrastructure and support, including an additional
Training and Recruitment Director and a further three
Regional Training and Recruitment Managers. Our three
stage recruitment process, including our 11 day intensive
training programme, continues to provide the necessary
skills, culture and customer focus, to help transition
traditional agents to fast becoming successful Local
Property Experts.
The growth of Local Property Experts has been one key
element that has contributed to increased revenues. We
have also invested in our in-house marketing team and
developed our marketing strategy, resulting in significant
growth in brand awareness with new engaging and
informative television and radio campaigns that have
taken the “Bruce brothers” out of the studio and onto the
streets of the UK. We continue to evolve our marketing
strategy and are confident that our new campaign, which
is due to air from 18 June 2016 will take brand awareness,
messaging and customer engagement to the next level.
Website visits continue to grow as activity levels increase
amongst sellers, buyers, landlords and tenants browsing,
booking valuations, arranging viewings, making offers or
agreeing sales. This presents unique opportunities to
offer further products and services. In the year our website
visitors rose by 208% to over 1.23m per month and page
views rose by 339% to over 7.0m per month. Unique
visitors also increased by 366% to more than 616k per
month and funnel conversion (measured as the number
of people who come to instruct) has increased by over 50%.
Culturally we have a strong focus on customer support
which is testament to the number of houses we are
selling, the speed at which they are transacting through
the legal process and the level of concentrated help
customers receive where issues arise with any aspect of
their sale. We provide dedicated, focused support
whenever it is required. I have seen first-hand, running
law firms in the past, how estate agents can inadvertently
be an obstacle to progress with a sale. This is why we
have an extremely experienced conveyancing lawyer
managing our post sales process. There are over 300
people (LPEs and customer support team) helping and
supporting customers with their sale, within the confines
of a progressive, supportive customer centric culture. It is
the distinct advantage for the customer and the process
that we are focused on a completion and not a commission.
In October we launched a Data Sales Unit and brought all
of our Central Property Experts in-house. We now have
over 70 people, contributing significantly to the success
of our marketing strategy through the use of data and
speaking to more and more people who have a house to
sell, require a mortgage, conveyancing, insurance or any
of the other products or services we have to offer. Our
strategy is to grow this team as activity levels increase
and to introduce new and complementary revenue
streams for our customers.
Our advancement with technology continues at pace. We
launched the Purplebricks App at the beginning of April
2016, taking everything we do to a whole new level of
convenience, speed and simplicity. We believe it to be
the first truly sales process driven App in the industry.
We continue to add new features and develop our App
for buyers.
Lettings remains an important element of our future
strategy. During the course of the year we made some
good progress. We have to date been predominantly
growing lettings organically through the growth in sales
and investor registration. Landlords who buy through
Purplebricks tend to want to continue their experience
12 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 13
STRATEGIC REPORT
Chief Executive’s Statement continued
STRATEGIC REPORT
Chief Executive’s Statement continued
Annual estate agents’ fees in Australia total in excess of
£3.3bn
and use our services for lettings. Valuations were 521% up
in the year, instructions were 492% up, applications 535%
up, move-ins 479% up and we increased our occupied
portfolio by 400%. Whilst lettings remains a smaller part
of our revenues and overall activity we are seeking to
grow the department through the strategic acquisition of
managed properties and increased organic activity.
Customer reviews
We continue to be the most customer reviewed estate
agent in the UK on independent review site Trustpilot.
We are very proud of the feedback we receive which is
testament to the culture, commitment and widespread
appeal of our full service hybrid model, demonstrating
that we offer not just a competitive flat fee but also
superior customer service. We are rated Excellent,
averaging 9.4 out of 10 from over 5,700 customer reviews.
We recognise that from time to time we will receive a
small proportion of negative reviews and as a result we
ensure that every customer is contacted and we do
everything we can to provide them with a swift resolution
and an excellent customer experience thereafter.
We request a review from a customer once a sale is
agreed but they are free to choose to leave reviews at any
stage of the selling process. This is carried out via a link
with Trustpilot. We do not offer any form of incentive, we
merely provide a link and request the customer
completes a review. We receive 8.9 times more reviews
than any other estate agent (traditional, online or hybrid)
because we give our customers the opportunity to share
their experience publicly and immediately. I am
extremely grateful to everyone in the business for this
fantastic achievement and for the brand advocacy they
are creating.
Growing the Purplebricks brand across Australia
We have always been open in our desire to investigate
international markets but only when we believe a
sufficiently attractive opportunity exists, which we have
confidence in realising. Planning and execution has
enabled the UK business to scale quickly and that is why
we put in place a first class management team who will
continue to concentrate their efforts on the UK growth
strategy. We have implemented a similar local team and
structure for Australia, where we believe market dynamics
are similar and well suited for the Purplebricks model.
The size of the market opportunity is similar to that of the
UK despite the number of transactions being around half.
Annual real estate agents fees total in excess of £3.3bn
($6.7bn AUD), with an average customer paying over
£5,900 ($12,000 AUD) plus marketing fees of £2,450
($5,000 AUD). The marketing fees are usually payable on
instruction. We see this as a perfect opportunity for the
Purplebricks hybrid model to readdress the balance for
the consumer and to build a strong sustainable business
with significant market share. Purplebricks Group plc has
undertaken considerable research on the Australian
market and has completed independent market research
with sellers and those intending to sell in the near future.
The worries, concerns, needs and requirements of the
seller and landlords are very much aligned with the UK.
Our research tells us that finding an agent who will work
for the seller rather than serve their own interests can be
tough. Only a few people feel in control of the process
whilst many more felt at the mercy of the agent. The
Purplebricks proposition was very appealing to the vast
majority of Australian consumers that took part in the
research. Once they understood the offering they were
even more vocal than those in the UK about embracing a
new way and found the cost-effective flat fee very
attractive.
We have engaged a Chief Executive Officer in Australia
and together we have recruited a strong management
team who we are confident can grow the Purplebricks
brand and market share alongside a strong UK
management team who will build upon our success to
date in the UK.
Thank you
I would like to thank all of our people for their hard work,
dedication, commitment and absolute belief in our
customers and our brand. They have created thousands
of brand advocates in an industry that is often talked
about, criticised and disliked. I would also like to thank
our customers who have embraced what we are trying to
achieve and have actively helped and supported us in our
journey to date. Without your belief in what we promise
to deliver (and do deliver) we could not grow our business
in quite the same way. Your advocacy of our products,
services and brand is truly remarkable.
for the better. We are working tirelessly to deliver
enduring returns for our shareholders.
The future
There has been a significant amount of debate around
the property market and what the future holds with
uncertainty over BREXIT, a lack of supply of sellers and tax
changes impacting the higher end of the market and
second home buyers. Whilst we continue to monitor
trends in the market we have seen no slowdown in
activity and our strategy is predicated on winning market
share rather than market growth. However, our business
model was purposely built with low fixed overheads and
a focus on variable costs to provide greater flexibility and
agility to protect against any changes in the market.
During the year we invested in all areas of the business,
providing us with strong foundations to continue to build
upon what has been an extraordinary journey for our
young, fast growing business. We have established a
national agency, increased the number of our Local
Property Experts, introduced new product innovation
through our on-going focus on technology and further
raised our brand profile and customer satisfaction scores.
We approach the future with confidence.
Finally I would like to thank our shareholders for the
support and encouragement we receive from them. They
have invested in creating a strong and thriving business
that is changing the estate agency industry forever and
Michael Bruce
Chief Executive Officer
15 June 2016
14 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 15
STRATEGIC REPORT
Continued
Key performance indicators (KPIs)
The following KPIs are the tools used by management to
monitor the performance of the Company, in addition to
the more traditional income statement, statement of
financial position and cash flow analysis reviewed at
regular Board meetings.
Financial KPIs
Revenue growth
Operating loss* as a percentage
of revenue
Non financial KPIs
Number of Local Property Experts
Monthly website visits
2016
2015
448%
28,283%
(52%)
(155%)
205
1.23m
79
0.4m
*pre amortisation of intangibles and share based payment charges
Revenue growth is closely monitored to ensure we grow
so as to cover our fixed costs as quickly and as efficiently
as possible and consume as little capital as possible,
whilst pursuing a high growth strategy.
The regular monitoring of the operating margin
percentage helps us ensure that the focus on growth is
not at the expense of profitability in the short and
medium term.
Principal risks and uncertainties
Risk management is an important part of the
management process for the Company. Regular reviews
are undertaken to assess the nature of risks faced, the
magnitude of the risk presented to business performance
and the manner in which the risk may be mitigated. Where
controls are in place, their adequacy is regularly monitored.
The risks considered to be particularly important at the
current time are set out below:
Economic
Potential impact: As an estate agency the Company’s
fortunes are closely intertwined with those of the housing
market and the broader economy as a whole.
flexible and able to react quickly and effectively to
changes in market conditions.
People
Potential impact: An experienced and knowledgeable
workforce is required to service clients’ needs. The market
for skilled staff remains competitive and a failure to
recruit and retain experienced staff could impact on the
Company’s ability to develop and deliver solutions.
Mitigation: Providing existing staff with relevant training,
great rewards, effective marketing and an effective
software platform is a key priority for the business.
Recruiting and developing new employees, when
required, is undertaken by experienced staff to ensure the
correct calibre of individual is identified.
Reputational and quality
Potential impact: The quality of references obtained from
existing users of Purplebricks’ platform is an important
part of the decision making process for a potential client
seeking to instruct the Company.
Mitigation: The Company strives to maintain its
reputation as the best estate agency combined with great
value for money and monitors its Trustpilot reviews on a
real time daily basis.
Availability of funding
Potential impact: In order to grow the business and
become profitable the Company needs access to funding.
Without sufficient capital the Company will be unable to
meet its ambitious targets.
Mitigation: The Company has continued fundraising
activities as a result of the flotation and prior investment
rounds and has sufficient headroom in respect of its
working capital requirements and its forecasts, even
when applying lower case sensitivities to the forecast.
Financial
Potential impact: Inaccurate financial information may
result in sub-optimal decisions being taken by
management and staff. Inadequate internal controls may
fail to prevent the Company suffering a financial loss.
Mitigation: The Company keeps a close eye on market
conditions and the broader economy. Our cost base is
Mitigation: The systems of internal controls deployed
within the Company are designed to prevent financial loss.
STRATEGIC REPORT
Continued
Controls are strongest in areas where management
considers the potential exposure to the Company of
material loss or misstatement to be at its greatest, such
as revenue recognition and cash collection. The
adequacy and effectiveness of internal controls are
reviewed regularly.
New entrants to market
Potential impact: The Company operates in a sector
where there are a number of competitors.
Mitigation: To counter the threat of competitors seeking
to win business from us the Company aims to invest in
the development of technology and branding to ensure
that the Company becomes the market leader in the
estate agency sector.
Future developments
We expect future developments in estate agency to see a
migration away from the high street as a highly
fragmented market consolidates by virtue of the ease and
simplicity that Purplebricks and its technology brings. We
expect Purplebricks Group plc to remain at the forefront
of this change in the industry landscape, creating and
building on a market leadership position.
Today we have announced our intention to launch the
Purplebricks proposition in Australia, a £3.3bn market.
Our market research suggests that our compelling
customer proposition of high quality service and a
competitive flat fee structure will appeal in a market
205 Local Property Experts recruited and trained since launch
where sellers are currently charged £5,900 ($12,000
Australian Dollars) in addition to an average of £2,450
($5,000) for the cost of listing on portals and other related
advertising.
We have recruited an Australian management team who
will execute on our plans and report directly into the UK
Board. Similarly to the UK we will launch regionally and
adapt our offering should the need arise. The
conservatively estimated maximum investment will take
place over the next two years of £10m, to be funded from
current cash resources, provides an attractive entry,
where the downside/risk is managed whilst the
opportunity is compelling compared to the size of the
market opportunity.
Approved and signed on behalf of the Board
Michael Patrick
Douglas Bruce
Director
15 June 2016
Neil Richard
Cartwright
Director
Purplebricks Group plc, Suite 7, Cranmore Place,
Cranmore Drive, Shirley, Solihull, B90 4RZ
16 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 17
CASE STUDY 1
James Humphries-Stone - Territory Owner and Local Property Expert, Basingstoke and surrounding area
CASE STUDY 2
Daren Cridge - Territory Owner and Local Property Expert, SW and SM postcodes
For the last 10 months I have
consistently been the No. 1 estate
agent in Basingstoke and I now
have five members in my team.
The technology and the
infrastructure is amazing and
permits me to concentrate on my
customers, helping and supporting
them with things that matter.
I joined Purplebricks on the very first training
course. I was on the Southampton course run
by Michael, while Kenny was running the course
for the other group in Brighton.
It was really positive for me to see two founders taking
such an interest in our progression and mindset when
they had such enormous expectations for Purplebricks.
Looking back though that was the foundation that set
Purplebricks on the road to the growth it has experienced
to date. We thought we knew everything about what was
important to sellers but learned so much more on the
course.
Prior to joining Purplebricks I was a Senior Branch
Manager for the then No. 1 independent estate agent in
Basingstoke, earning around £50,000 per annum
including commission. At that time I had amassed 10
years of experience, five of which was as a branch
manager. I had done every aspect of estate agency.
The reason I chose to leave the high street estate agent
was entirely down to the fact that I believed the “single
minded, get as much as you can at any cost, culture” was
not the environment I wanted to work in. I knew I could
build a great business off the back of my dedication to
people, my detailed knowledge of the area and working
in an environment that promoted a better customer
experience. I made the right choice with Purplebricks.
After only six months in the Basingstoke area I became
the No. 3 estate agent and for the last 10 months I have
consistently been No.1. I was one of the first to engage more
people in my business. I now have five members in my team,
two Local Property Experts, two focused on viewings and
an administrator. As a result of valuations having doubled
this year I am recruiting a third Local Property Expert and
planning to have five by the end of the year.
I am earning considerably more than I did when I was a
high street estate agent and I am genuinely giving a more
dedicated and productive service to my customers. I am
selling more houses and I have a better balance in my life.
I couldn’t be more pleased that I took the plunge to join
Purplebricks. It is a breath of fresh air in an uncertain
traditional estate agency market.
No. 1
for new listings
out of 79 agents
in Basingstoke
I have been in the property industry for over 27
years and have worked for two of the three
largest estate agents in the UK. I was one of the
first Local Property Experts in London. I was
trained by Andrew Vass although Kenny and
Michael did play a part and were always
involved throughout.
What has amazed me about the Purplebricks proposition
is how much more productive I can be as opposed to how
I operated on the high street. The technology and the
infrastructure is amazing and permits me to concentrate
on my customers, helping and supporting them with
things that matter to them. I am very proud how successful
we have become selling properties and the amount of
excellent reviews and feedback we get from customers.
When you attend the training course you can, after 27
years, think you have seen and heard it all before. You can
think that there is not much Purplebricks can teach you, I
was pleasantly surprised. Their methodology is very
deliberate and creates a camaraderie amongst everyone
that I have never witnessed before in a training
environment. It puts in place the foundations for a strong
culture and how we don’t push the Purplebricks
proposition in a traditional estate agency sales way. I
learned a lot over that 11 day period.
I was able to hit the ground running the moment that I
came off the training programme. I have built my territory
and we are now number 2 for new listings out of 855
estate agents operating in the SW postcodes of London.
We are 4th for new listings out of 158 agents in the SM
postcodes. I have now recruited three Local Property
Experts and two viewings assistants to help build upon
our early success. I suspect I will require a further four
Local Property Experts over the next year.
I am earning more money than I did on the high street,
running my own business, without having to do some of
the more difficult aspects like creating technology and
producing interesting marketing. It leaves me free to do
what I am good at.
No. 2
for new listings
out of 855 agents
in SW postcode
18 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 19
CASE STUDY 3
Roxsamme Wilson - Data Sales Manager
CASE STUDY 4
Shirein Famili - Sub-licencee for Daren Cridge
Because we all take part in
recruitment events and in the
selection process we have a
strong connection and culture
from day one.
Prior to joining Purplebricks I had been in estate
agency for a number of years. I joined
Purplebricks because it represents for me a new
start for the industry, a way of demonstrating
that there are great people out there who want
to do a fantastic job for customers.
These are not just words spoken by management at
Purplebricks, it is ingrained in the culture. We are all on
the same page.
Being given the opportunity to manage part of the Data
Sales Unit was amazing for me because I am able to
shape how people interact with the customer and ensure
that the experience they get fits our ethos and creates a
brand advocate.
Our team speak to buyers, sellers, landlords and tenants
to help and support them and to introduce them to
Purplebricks and the services we have to offer.
I was one of the first people to join the unit and due to
demand we are growing every month. I work alongside
the team with Stephanie and Rebecca who are the senior
management.
The team work well together and because we all take
part in recruitment events and in the selection process
we have a strong connection and culture from day one.
I am confident that we are adding to the overall
Purplebricks experience and we will continue to play
a large part in supporting customers and the business.
I look forward to an exciting future with Purplebricks.
“I received a call from a lovely gentleman called
Lewis. He assisted me to book a viewing and
explained everything fully.
He didn’t pressure me when I wasn’t ready yet
which made me feel more comfortable and I
feel like I would definitely use them if I do sell
my property.”
Sabrina Patel
I have a more balanced lifestyle
and I tend to have contact with
customers when it is more
convenient for them, rather than
during rigid office hours.
I have had the pleasure of working as an estate
agent for more than 10 years in the London
area. I have worked for some of the strongest
estate agents in the capital and I believe that
the Purplebricks ethos and culture is having an
enormously positive impact on sellers and
buyers in our territory.
The Purplebricks proposition enables me to be part of a
new and exciting business, grow our market share, and
increase our profile in the local market and to be
successful through selling our customers’ homes and
saving them thousands in London. I have a personal pride
that we are achieving this and it is nice that I am also
earning considerably more than I did in my previous
management role.
Working with Daren and the team is a privilege. We are all
highly motivated to deliver an excellent customer
experience across all areas of our local business. I am
excited to be given the opportunity to represent
Purplebricks as they build awareness for what is a
fantastic service.
I find that I am much more productive at Purplebricks
because of the technology and the way in which we work.
I am not travelling to an office in the morning during rush
hour, I am not sat in an unproductive morning meeting
and part of a rigid corporate structure. I have a more
balanced lifestyle although I do tend to have contact with
customers when it is more convenient for them rather
than during office hours.
I am a firm believer that success breeds success and the
rate of growth that Purplebricks has experienced shows
no sign of abating. When I am out on valuations, more
and more people are saying “This is the way forward for
estate agency”, a sentiment I totally agree with.
“Shirein was our Expert and offered an amazing
service - extremely helpful, extensive knowledge
of the market and area, and took time to
understand our needs. The whole process was
easy and affordable and encourages both buyer
and seller to communicate. The platform is
straightforward and user friendly, and email
updates are very useful.”
Stephen
20 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 21
CASE STUDY 5
Paul Brown - Territory Owner and Local Property Expert, Sheffield and Doncaster
CASE STUDY 5
Paul Brown - Territory Owner and Local Property Expert, Sheffield and Doncaster
“The help and advice provided by Paul Brown
is second to none and nothing seems to be too
much trouble. Paul has provided me with
guidance on the online sales process and a
rapid response to all of my questions.”
Michelle Boughton
Paul Brown
Age: 47
Area: Sheffield and Doncaster
Previously: 14 years at Countrywide
My growing, profitable estate agency territory
Joining Purplebricks has been one of the best decisions I
have ever made. It has given me the opportunity to build
an amazing business in a short space of time. I have
recruited a further two Local Property Experts due to the
demand and this enables me to concentrate on building
a substantial lettings side to our business. I am recruiting
a Local Lettings Expert presently.
Paul’s Territory Team
Jemma Harris
Age: 29
Joined: May 2016
Previously: William H Brown (Sequence)
Industry experience: 9 years
Josh Carline
Age: 27
Joined: July 2015
Previously: William H Brown (Sequence)
Industry experience: 5 years
Chris Evans
Age: 29
Joined: April 2016
Previously: Independent agent
Industry experience: 7 years
Paul Salkeld
Age: 48
Joined: February 2016
Previously: Independent agent
Industry experience: 16 years
Kerry Neal
Age: 32
Joined: April 2016
Previously: Haart
Industry experience: 11 years
James Williams
Age: 28
Joined: May 2016
Previously: Countrywide
Industry experience: 4 years
Paul Brown’s Instructions in 2016
120
100
80
60
40
20
0
No. 1
for new listings
out of 564 agents
for all ‘S’ postcodes
1. Purplebricks
2. Wilkins Vardy Residential
3. 2Roost
4. emoov
5. William H Brown
January
February
March
April
May
Source: Rightmove Plus, period 15/05/16 to 18/06/16
Our Local Property Experts are much more productive:
No commute to work
No morning meeting
No corporate structure
No canvassing
No booking valuations
No registering applicants
No arranging viewings
No chasing instructions
No chasing approval of property
particulars
No getting properties live onto the
internet
No ordering boards or EPCs
No seeking feedback or distributing
feedback after viewings
No impact from high industry staff
turnover rates
No sending property particulars
No window dressing
A Local Property Expert and technology makes for
the perfect estate agency experience
22 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 23
SAMPLE INDEPENDENT SOLD SIGN ANALYSIS
SAMPLE INDEPENDENT SOLD SIGN ANALYSIS
Research independently produced by For Sale Sign Analysis.
24 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 25
DIRECTORS’ REPORT
The directors present their report and the audited financial statements for the year ended 30 April 2016
DIRECTORS’ REPORT
Continued
Business review
A comprehensive analysis of the Company’s
development, performance and KPIs is contained in the
Strategic report. Information on the financial risk
management strategy of the Company and of the
exposure of the Company to currency risk, interest rate
risk, credit risk, capital risk and liquidity risk is set out in
note 17 to the accounts.
The company reregistered as a plc on 10 December 2015.
On 19 November 2015, the Company reduced its share
premium account from £22,296,928 to £3,296,928 by the
cancellation of £19,000,000 of the amount standing to the
credit of such account, in order to create distributable
reserves to ensure that the Company satisfied the net
asset requirement for a public Company that its nets
assets are more than its paid up share capital and
non-distributable reserves. The Company listed on the
Alternative Investment Market on 17 December 2015.
Post Balance Sheet events
There were no post Balance Sheet events.
Dividend
No dividends were paid in the year and there are none
recommended. (2015: £nil)
Employees
The Company’s policy of providing employees with
information about the Company has continued and regular
meetings are held between management and employees
to allow exchanges of information and ideas. The Company
continues to consider ways to encourage the involvement
of employees in the Company’s performance.
The Company gives every consideration to applications
for employment by disabled persons where the
requirements of the job may be adequately filled by a
disabled person. Where existing employees become
disabled, it is the Company’s policy wherever practicable
to provide continuing employment under similar terms
and conditions and to provide training, career
development and promotion wherever appropriate.
been notified of the following interests amounting to 3%
or more of the voting rights in the issued share capital of
the Company.
Shareholder name
Number of shares % holding
Woodford Investment
Management LLP
72,065,887
29.99%
M P D Bruce and wife
43,851,843
18.25%
Old Mutual Global
Investors (UK) Ltd
K F C Bruce
P R M Pindar and wife
19,359,878
12,137,303
7,939,865
8.06%
5.05%
3.3%
Paul Pindar purchased 300,000 Ordinary shares in the
Company on 26 January 2016 at 78.16p per share and
Michael Bruce purchased 320,000 Ordinary shares in the
Company on 26 January 2016 at 78.00p per share.
In addition to this, the following Directors held shares in
the Company:
Shareholder name
Number of shares % holding
Nick Discombe and wife
Will Whitehorn
6,412,788
1,088,269
2.67%
0.45%
Directors and directors’ interests
The directors who held office during the financial year are
set out below:
M P D Bruce
N R Cartwright
W E Whitehorn*
P R M Pindar*
N S Discombe*
K F C Bruce (resigned 19 November 2015)
J R Kydd (resigned 19 November 2015)
M J Farrow (resigned 19 November 2015)
N J Marovac* (resigned 5 November 2015)
*Denotes non-executive directors
Substantial shareholdings
Founder & Chief Executive Officer - Michael Bruce
At 13 June 2016, being the latest practicable date prior to
the publication of this annual report, the Company had
Michael has been the driving force behind the
development of Purplebricks alongside his brother
while working for 3i Group plc. When he joined Capita, it
had 33 employees and annual revenue of £1.3 million.
When he left the business in February 2014, Capita had
more than 62,000 employees and a market capitalisation
of £7.5 billion. Since July 2012, Paul has served as
Chairman of Integrated Dental Holdings, the UK’s largest
chain of dental surgeries, which is owned by Carlyle.
Since June 2014 he has served as Chairman of
Independent Clinical Services following its acquisition by
TowerBrook. He backed the MBO of International Travel
Connections, a luxury travel business, and became
Chairman in August 2014, a role he continues in. Paul has
also been a non-executive director of retailer Debenhams
Plc, Chairman of the NSPCC’s Corporate Development
Board and Chairman of Great Ormond Street Hospital’s
Corporate Partnerships Board. Paul was also an early
investor in Purplebricks.
Senior Non-Executive Director - Nick Discombe
Nick acts as Chairman/advisor with portfolio companies
for a small number of private equity or growth capital
backed businesses around the world. His current
commitments include portfolio companies for Hg Capital
and Towergate. Nick’s last executive position was as Chief
Executive Officer of Witness Systems Inc (NASDAQ – WITS)
which was sold for just over US$1 billion in cash in June
2007. Since this time, he has, as Chairman, worked with
seven companies leading them to successful exits. Prior
to his role at Witness Systems, Nick spent five years with
Apax backed Eyretel which in 2003 was merged with
Witness Systems. At Eyretel as Chief Executive Officer,
Nick led the expansion of the global organisation and in
2000 the successful initial public offering on the London
Stock Exchange. He has been an investor in Purplebricks
Group plc since early 2014. Nick acted as chairman of
Purplebricks Group plc from October 2014 but, with effect
from Admission, he became the Senior Non-Executive
Director of the Company.
Kenny. He is a qualified solicitor who has owned and run
his own law firms before acquiring Burchell Edwards
Estate Agents in 2006. The business was grown to include
estate agency, lettings, mortgages and their own
dedicated law firm. Michael was Chief Executive until
2010 whereupon he became Chairman of the business.
The business, including the law firm, was sold to Connells
Group (part of Skipton Building Society) in November
2011 as a result of Michael and Kenny Bruce, his brother,
wishing to pursue the Purplebricks Group plc model. As
founder of the business and initial major investor, Michael
has been the Chief Executive Officer of Purplebricks
Group plc since its inception, working alongside Kenny
who, as Sales Director, heads the Company’s sales efforts.
Chief Financial Officer - Neil Cartwright
Neil joined Purplebricks Group plc in January 2015 from
Capita Plc, having been Chief Financial Officer at a division
of Capita Plc for eight years. A Chartered Accountant, Neil
has previously held a number of senior financial positions
at Anite Plc, Transco and Albright & Wilson Plc. In August
1999 he was involved in the AIM admission of IFTE Plc and
a year later the reverse takeover of Symtron Systems Inc
based in Fairlawn, New Jersey.
Independent Non-Executive Director - William
Whitehorn
Will is a highly experienced director. For many years he
held a number of senior board roles within the Virgin
Group. For over 20 years he was the Brand Development
and Corporate Affairs Director and helped grow the Virgin
brand globally, acting as spokesman for Sir Richard
Branson and co-ordinating branding, marketing PR and
current affairs across the whole group of investments and
businesses. He was also President of Virgin Galactic for
nearly five years. He is currently Chairman of Speed
Communications (a PR Company), and Deputy Chairman
of Stagecoach Group plc having been a Non-Executive
Director for the previous 4 years. He has been an investor
in and Non-Executive Director of Purplebricks since
March 2013.
Non-executive Chairman - Paul Pindar
Paul joined Capita plc in 1987, initially as Finance
Director, then Managing Director in 1991 and Chief
Executive in 1999. He was the third-longest serving FTSE
100 CEO when he stood down in 2014. He joined Capita
after advising on the £0.3m management buyout (MBO)
26 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 27
DIRECTORS’ REPORT
Continued
Details of options to purchase Ordinary shares in the Company granted to the executive directors are set out below.
M P D Bruce
N R Cartwright
Class of
share
Ordinary
Ordinary
Interest at
end of year
2,430,551
2,858,994
Class of
share
Interest at
start of year
A Ordinary
A Ordinary
-
14,128
Details of share based payments are included in the notes to the accounts. During the year, the Company issued bonus
shares prior to admission to the Alternative Investment Market on a one for 108.2747 basis.
Scheme interests and Outstanding Share awards
Date of
grant
Interest
1 May
2015
Restated
Interest
at the
start of
the year
Bonus
issue
effect
Director name Description
M P D Bruce
EMI and unapproved
options
06/11/2015
M P D Bruce
EMI Options
07/08/2015
-
-
-
-
-
-
Options
Options
granted
the year
during during the
exercised Outstanding
interest at
year 30 April 2016
2,430,551
-
2,430,551
4,041,678
(4,041,678)
N R Cartwright EMI Options
09/01/2015
14,128 1,515,577 1,529,705
-
(833,715)
N R Cartwright EMI Options
10/07/2015
N R Cartwright EMI and unapproved
Options
06/11/2015
-
-
-
-
-
-
1,245,159
917,845
-
-
-
695,990
1,245,159
917,845
The share price was 172.50p on 30 April 2016.
Research and development
The Company undertakes a continuous programme of
development expenditure, as part of its commitment to
lead change in estate agency. Development expenditure
is capitalised only when the end product is technically
and commercially feasible and when sufficient resource is
available to complete the development, as disclosed in
note 11 to the accounts. All other development
expenditure is recognised in the Statement of
Comprehensive Income as an expense as disclosed in
note 7 to the accounts.
The Company has a qualifying indemnity insurance policy
in respect of Directors’ and Officers’ liability.
Statement of directors’ responsibilities
The directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have elected to prepare the financial statements
in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs).
Under Company law the directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs and profit or
loss of the Company for the period. In preparing these
financial statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgments and accounting estimates that are
reasonable and prudent;
• state whether applicable IFRSs have been followed,
subject to any material departures disclosed and
explained in the financial statements; and
DIRECTORS’ REPORT
Continued
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors confirm that:
• so far as each director is aware, there is no relevant
audit information of which the Company’s auditor is
unaware; and
• the directors have taken all steps that they ought to
have taken as directors in order to make themselves
aware of any relevant audit information and to establish
that the Company’s auditor is aware of that information.
The directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website. Legislation in the
United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Auditor
Grant Thornton UK LLP were appointed as auditors on
the 13 May 2015 and are willing to continue in office. In
accordance with s489(4) of the Companies Act 2006 a
resolution for their reappointment will be proposed at the
forthcoming Annual General Meeting.
Corporate Governance
The Board is committed to achieving high standards of
corporate governance, integrity and business ethics.
Under the AIM Rules the Company is not required to
comply and has not complied with the provisions of the
new edition of UK Corporate Governance Code issued by
the Financial Reporting Council in 2014 (the Code).
Whilst the Code has not been applied, the Board has
taken into consideration the QCA Corporate Governance
Code for Small and Mid-Size Quoted Companies
produced by the Quoted Companies Alliance, and taken
steps to apply the principles of the Code in so far as it can
be applied practically, given the size of the Company and
the nature of its operations.
The Board has established an audit committee (the Audit
Committee), a remuneration committee (the
Remuneration Committee) and a nomination committee
(the Nomination Committee).
The Audit Committee is chaired by Paul Pindar, its other
member is Nick Discombe. Neil Cartwright will be entitled
to attend and observe meetings of the Audit Committee.
The Audit Committee has primary responsibility for
monitoring the quality of internal controls and ensuring
that the financial performance of the Company is
properly measured and reported on. It receives and
reviews reports from the Company’s management and
auditors relating to the interim and annual accounts and
the accounting and internal control systems in use
throughout the Company. The Audit Committee meets at
least three times a year and has unrestricted access to the
Company’s auditors.
The Remuneration Committee is chaired by Nick
Discombe, its other member is William Whitehorn. The
Remuneration Committee reviews the performance of the
Executive Directors and makes recommendations to the
Board on matters relating to their remuneration and
terms of employment. The Remuneration Committee
also makes recommendations to the Board on proposals
for the granting of share options and other equity
incentives pursuant to any share option scheme or equity
incentive scheme in operation from time to time. The
remuneration and terms and conditions of appointment
of the Non-executive Directors of the Company are set by
the Board.
The Nomination Committee is chaired by Paul Pindar, its
other member is Nick Discombe. Michael Bruce is entitled
to attend and observe meetings of that committee. The
Nomination Committee assists the Board in discharging
its responsibilities relating to the composition of the
Board, performance of Board members, induction of new
directors, appointment of committee members and
succession planning for senior management. The
Nomination Committee is responsible for evaluating the
28 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 29
DIRECTORS’ REPORT
Continued
balance of skills, knowledge, diversity and experience on
the Board, the size, structure and composition of the
Board, retirements and appointments of additional and
replacement directors and makes appropriate
recommendations to the Board on such matters. The
Nomination Committee prepares a description of the role
and capabilities required for a particular appointment.
The Nomination Committee meets formally at least twice
a year and otherwise as required.
Corporate Social Responsibility
Equality, Diversity and Rights
Purplebricks Group plc maintains a strong commitment
to equality and opportunity in our employment policies
and practices in the workplace. Through our recruitment
and selection processes we seek to attract and retain a
diverse and talented workforce. As prescribed by law, we
commit that no existing or potential employee will
receive less favourable treatment due to their race, creed,
nationality, colour, ethnic origin, sexual orientation,
gender, gender reassignment, marital status, membership
of a trade union, disability, or any other criteria. Whilst the
Company does not have a specific human rights policy, it
does have policies such as Equal Opportunities and
Anti-bribery that adhere to internationally agreed human
rights principles.
Environment
Purplebricks Group plc is committed to minimising the
environmental impact of its business operations and
seeks to actively manage its carbon footprint. As an
online business with very limited physical infrastructure
and a marketing model that is largely paperless, the
Company has a much reduced environmental impact as
compared to traditional real estate agencies. As a
relatively new and fast-growing Company we will be
constantly reviewing our business model and operations
to limit the impact we and our customers make in the
course of our business in areas such as energy efficiency,
waste, recycling, emissions, transport and printing.
Health and Safety
The effective management of health and safety across our
business is an integral part of our broader business
administration requirements. As the business grows we
are committed to ensuring appropriate assessment and
suitable control of the health and safety risks arising from
our work activities for our employees, our customers and
our partners.
Charitable and Philanthropic activity
An important part of the Purplebricks Group plc culture
and ethos is to give back to the public and local
communities through the commitment of time, resources
and fundraising activities. Our employees are active in
raising money or supporting fundraising activities for a
wide range of causes both local and national.
During 2016 we will set up the Purplebricks Foundation.
The purpose of the foundation is to consolidate all our
charitable activity in one place and provide top up funds
where appropriate for local community projects.
Any member of staff can nominate a local project for the
foundation to support. The final projects will be chosen
by the Foundation Committee, made up of members of
the management team and chaired by James Kydd. The
Foundation Committee will meet periodically.
Approved and signed on behalf of the Board
Michael Patrick
Douglas Bruce
Director
15 June 2016
Neil Richard
Cartwright
Director
Purplebricks Group plc, Suite 7, Cranmore Place,
Cranmore Drive, Shirley, Solihull, B90 4RZ
DIRECTORS’ REMUNERATION REPORT
The Directors present their first Directors’ Remuneration Report (the “Remuneration Report”) for the
financial year ended 30 April 2016
Service contracts and letters of appointment
The Company’s policy is for all of the Executive Directors
to have twelve month rolling service contracts. All
Non-Executive Directors are salaried and are appointed
for an initial term of three years from Admission to AIM
which took place on 17 December 2015. They are not
eligible for bonuses, pension benefits, share options or
other benefits, save where compulsory by law. The
Directors are indemnified to the full extent permitted by
statute. Executive and Non-Executive Directors
Remuneration is detailed in note 8 to these financial
statements.
Long term equity incentive plan
It is expected that some grants shall be made to the
Executive Directors, staff, and a number of Local Property
Experts’ companies in the coming year to align theirs and
shareholders’ interests ever more closely.
Approval
The Directors’ Remuneration Report was approved by the
Board on 15 June 2016 and signed on its behalf by
Nick Discombe
Chair of the Remuneration Committee
15 June 2016
As an AIM listed Company, Purplebricks Group plc is not
required to prepare this Remuneration Report in
accordance with the Directors’ Remuneration Report
Regulations 2002 or the recently enacted Large and
Medium-sized companies and Group (Accounts and
Reports) (Amendment) Regulations 2013 (together the
Regulations). However, the Directors recognise the
importance, and support the principles, of the
Regulations and will seek to follow them to the extent
considered relevant for an AIM listed Company. The
Remuneration Committee will continue to monitor
market practice to ensure that, in future, this report will
include disclosures for at least as good as market practice
for AIM companies. The Auditor is not required to report
to the Shareholders on the Directors’ Remuneration Report.
Remuneration Committee
Nick Discombe chairs the Remuneration Committee
which also comprises William Whitehorn. The committee
held two meetings before the end of the financial year,
primarily to ratify awards and sanction invitations made
prior to the AIM admission under the share options
schemes.
The Non-Executive directors do not have any personal
interest in the matters to be decided by the committee, or
any potential conflicts of interest arising from cross-
directorships or day to day involvement in the running of
the Company. The Executive directors and other senior
personnel may be invited to attend meetings when
appropriate to provide advice. However, no director will
be present or take part in discussions concerning their
remuneration.
Remuneration policy
The Company’s policy is that the remuneration package
of the Executive Directors should be sufficiently
competitive to attract, retain and motivate those directors
to achieve the Company’s objectives without making
excessive payments. The Board determines the terms and
conditions of the Non-Executive directors.
Basic salary and benefits
Base salaries will be reviewed annually by the
Remuneration Committee, and adjusted where appropriate
to reflect performance, changed responsibilities and/or
market conditions.
30 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 31
INDEPENDENT AUDITOR’S REPORT
to the members of Purplebricks Group plc
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 April 2016
• have been prepared in accordance with the
requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies
Act 2006
In our opinion the information given in the Strategic
report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent
with the financial statements.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following
matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
• the financial statements are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified
by law are not made; or
• we have not received all the information and
explanations we require for our audit.
David White
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants, Birmingham
15 June 2016
We have audited the financial statements of Purplebricks
Group plc for the year ended 30 April 2016 which
comprise the statement of comprehensive income,
statement of financial position, statement of changes in
equity, statement of cash flows and the related notes.
The financial reporting framework that has been applied
in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the
European Union.
This report is made solely to the Company’s members, as
a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company
and the Company’s members, as a body, for our audit
work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of directors’
responsibilities set out on page 20, the directors are
responsible for the preparation of the financial
statements and for being satisfied that they give a true
and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with
applicable law and International Standards on Auditing
(UK and Ireland). Those standards require us to comply
with the Auditing Practices Board’s Ethical Standards for
Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial
statements is provided on the Financial Reporting
Council’s website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s
affairs as at 30 April 2016 and of its loss for the year then
ended;
• have been properly prepared in accordance with IFRSs
as adopted by the European Union; and
Revenue
Cost of sales
Gross profit
Note
2016
£
2015
£
18,603,679
3,394,464
(8,011,976)
(1,383,337)
10,591,703
2,011,127
Administrative and establishment expenses
Sales and marketing costs
7
(9,604,541)
(3,965,412)
(12,924,002)
(3,473,028)
Loss from operating activities
(11,936,840)
(5,427,313)
Loss from operating activities before adjustments:
(9,777,815)
(5,282,234)
Amortisation of intangibles
Share based payment charge
Fund raising costs including Initial Public Offering
Loss from operating activities
Finance income
Finance expenses
Loss before taxation
Taxation
11
6
(101,309)
(40,063)
(596,647)
(105,016)
(1,461,069)
-
(11,936,840)
(5,427,313)
35,009
-
-
(8,467)
(11,901,831)
(5,435,780)
9
-
-
Loss for the year and total comprehensive loss
(11,901,831)
(5,435,780)
Basic and diluted EPS Loss per share
21
(12p)
(357p)
All operations are continuing.
The accompanying accounting policies and notes form an integral part of these financial statements.
32 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 33
STATEMENT OF FINANCIAL POSITION
at 30 April 2016
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 April 2016
Non-current assets
Property, plant and equipment
Intangible assets
Current assets
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Deferred income
Net current assets
Total assets less current liabilities
Net assets
Equity
Share capital
Share premium account
Share based payment reserve
Retained earnings
Total equity
Notes
10
11
2016
£
217,386
370,847
2015
£
63,207
137,893
588,233
201,100
13
2,970,258
746,083
30,476,386
4,609,771
33,446,644
5,355,854
14
14
(5,211,353)
(1,052,739)
(760,358)
(109,930)
(5,971,711)
(1,162,669)
27,474,933
4,193,185
28,063,166
4,394,285
28,063,166
4,394,285
Share
capital
£
Share
premium
account
£
Retained
earnings
£
Share
based
payment
reserve
£
Total
equity
£
17,658
12,298,268
(8,026,657)
105,016
4,394,285
At 1 May 2015
Issue of shares
Exercise of options
Exercise of warrants
Redemption of shares
Share premium cancellation
Costs of IPO charged to share premium
Share-based payment charge
Transfer on exercise of options
252,051
34,748,659
138
123
(89)
-
-
-
-
25,056
91,947
-
(143,820)
-
-
(19,000,000)
19,000,000
-
-
-
-
-
-
35,000,710
25,194
92,070
(89)
-
(143,820)
596,647
596,647
Bonus share issue
2,132,710
(2,132,710)
-
-
Transactions with owners
2,384,933
13,589,132
19,370,695
225,952
35,570,712
Loss for the year
Total comprehensive loss
-
-
-
-
(11,901,831)
(11,901,831)
-
-
(11,901,831)
(11,901,831)
At 30 April 2016
2,402,591
25,887,400
(557,793)
330,968
28,063,166
370,695
(370,695)
-
-
-
-
-
-
-
-
-
-
-
15
2,402,591
17,658
for the year ended 30 April 2015
25,887,400
12,298,268
330,968
105,016
(557,793)
(8,026,657)
28,063,166
4,394,285
At 1 May 2014
Issue of shares
Share
capital
£
10,350
Share
premium
account
£
Retained
earnings
£
4,163,618
(2,590,877)
7,308
8,134,650
Share
based
payments
reserve
£
-
-
105,016
105,016
Total
equity
£
1,583,091
8,141,958
105,016
8,246,974
These financial statements were approved and authorised for issue by the Board of directors on the 15 June 2016 and were
signed on its behalf by:
Share-based payment charge
-
-
Transactions with owners
7,308
8,134,650
Michael Patrick Douglas Bruce
Director
Company Registration Number 08047368
Neil Richard Cartwright
Director
Loss for the year
Total comprehensive loss
-
-
-
-
(5,435,780)
(5,435,780)
-
-
(5,435,780)
(5,435,780)
At 30 April 2015
17,658
12,298,268
(8,026,657)
105,016
4,394,285
The accompanying accounting policies and notes form an integral part of these financial statements.
The accompanying accounting policies and notes form an integral part of these financial statements.
34 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 35
STATEMENT OF CASH FLOWS
for the year ended 30 April 2016
NOTES TO THE FINANCIAL STATEMENTS
forming part of the financial statements
Cash flows from operating activities
Loss for the year after taxation
Adjustments for:
Amortisation of intangible assets
Depreciation
Share-based payment charge
Fund raising costs
Tax refund
Operating cash outflow before changes in working capital
Movement in trade and other receivables
Movement in trade and other payables
Movement in deferred income
Net cash outflow from operating activities
Cash flow from investing activities
Purchase of property, plant and equipment
Development expenditure capitalised
Net cash outflow from investing activities
Cash flow from financing activities
Issue of shares
Cost of issue of shares
Net cash flow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at the end of the year
2016
£
2015
£
(11,901,831)
(5,435,780)
101,309
61,159
596,647
1,461,069
40,063
15,757
105,016
-
-
265,884
(9,681,647)
(5,009,060)
(2,224,175)
(205,271)
4,158,614
650,428
368,640
109,930
(7,096,780)
(4,735,761)
(215,338)
(334,263)
(42,650)
(123,229)
(549,601)
(165,879)
35,117,885
8,141,958
(1,604,889)
-
33,512,996
8,141,958
25,866,615
4,609,771
3,240,318
1,369,453
30,476,386
4,609,771
The accompanying accounting policies and notes form an integral part of these financial statements.
1. Reporting entity
Purplebricks Group plc is a Company domiciled in the United Kingdom. The address of the Company’s registered office is
Purplebricks Group plc, Suite 7, First Floor, Cranmore Place, Cranmore Drive, Shirley, Solihull, West Midlands, B90 4RZ. The
Company is primarily involved in the estate agency business.
2. Basis of preparation
The Company’s financial statements have been prepared and approved by the directors in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union and those parts of the Companies Act 2006 that
apply to companies reporting under IFRS.
On 29 March 2016 Purplebricks Group plc incorporated a wholly owned subsidiary, Purple B PTY Ltd, a Company registered
in Australia. This Company is dormant with share capital of AUD $1. A consolidated set of financial statements has not been
prepared on the grounds that this is immaterial to the Group.
Going concern
The financial statements have been prepared on a going concern basis. The Company’s forecasts and projections, taking
account of reasonably possible changes in trading performance that may arise as a result of current economic conditions
and other risks faced by the Company show that the UK Company is likely to become profitable and cash generative during
the year ended April 2017. The Company achieving profitability and cash generation is likely to be delayed by virtue of
international expansion in Australia but this will not adversely affect the UK Company. At the financial year-end the
Company reported cash balances of £30.5 million. The directors have performed sufficient sensitivity analysis to be satisfied
that the going concern basis of preparation is appropriate. The operational gearing of the Company is such that it only
reinforces the confidence of the directors.
The directors have prepared a monthly forecast to 30 April 2018 on the basis that the growth aspirations are achieved which
show that the Company can operate with its existing resources.
Accordingly, the directors believe that it is appropriate to adopt the going concern basis of accounting in preparing the
financial statements.
Basis of measurement
The financial statements have been prepared under the historical cost convention.
Functional and presentation currency
The financial statements are presented in Sterling, which is the functional and presentational currency of the Company.
Use of estimates and judgments
The preparation of the financial statements requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the estimate is revised. Information about significant areas of
estimation and critical judgments that have the most significant impact on the financial statements are described in the
following notes:
Estimates
Note 11: Measurement of intangible assets: In testing for impairment of intangible assets, management has made certain
36 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 37
NOTES TO THE FINANCIAL STATEMENTS
continued
NOTES TO THE FINANCIAL STATEMENTS
continued
assumptions concerning the future development of the business that are consistent with the annual budget and business
plan. Should these assumptions regarding the growth in profitability be unfounded then it is possible that intangible assets
included in the statement of financial position could be impaired. Management is confident that this will not be the case
and conservatively amortises the intangible asset over three years, a realistic timescale for software code to become
superseded by future releases. Accordingly, when assessing the recoverable value attributable to intangible assets,
management has estimated cash flows attributable to existing businesses and extrapolated forward budgets for the
financial year ending 30 April 2018.
Note 13: Measurement of trade receivables: Management assess the likely recoverability of amounts invoiced to customers
on the creditworthiness of its credit partners and the age of debts at the period end. The directors consider the carrying
amount of trade receivables approximates to their fair value.
Note 6: Share based payments: The fair value of services received in return for share options granted is measured by
reference to the fair value of share options granted. The estimate of fair value is measured using the Black-Scholes model.
The use of a valuation model such as this involves making certain assumptions around the inputs into the model. There is
also uncertainty around the number of shares likely to vest and the model therefore takes into accounts management’s best
estimate of this.
Judgments
Note 11: Intangible assets: Development expenditure is recognised on the statement of financial position when certain
criteria are met, as described more fully in the accounting policy on the treatment of research and development
expenditure. Management uses its judgment in assessing development against the criteria. After capitalisation,
management monitors whether the recognition requirements continue to be met and whether there are any indicators that
the asset may be impaired, as discussed above.
Note 12: Deferred tax: The extent to which deferred tax assets can be recognised is based on an assessment of the
probability of the Company’s future taxable income against which the deferred tax assets can be utilised. In addition,
significant judgment is required in assessing the impact of any legal or economic limits or uncertainties. The Company has
significant tax losses but does not anticipate sufficient taxable profits to arise in the foreseeable future in order to utilise
these losses, and as a result the directors’ judgment is that no deferred tax asset should be recognised.
3. Accounting policies
Adopted IFRS not yet applied
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to
existing standards have been issued but are not yet effective and have not been applied early by the Company. Management
anticipates that the following pronouncements relevant to the Company’s operations will be adopted in the Company’s
accounting policies for the first period beginning after the effective date of the pronouncement, once adopted by the EU:
• IFRS 9 Financial Instruments (IASB effective date 1 January 2018)
• IFRS 15 Revenue from Contracts with Customers (effective 1 January 2018)
• IFRS 16 Leases (effective 1 January 2019)
• Clarification of Acceptable Methods of Depreciation and Amortisation – Amendments to IAS 16 and IAS 38 (IASB effective
date 1 January 2016) (Endorsed)
• Amendments to IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying the Consolidation Exception (effective
1 January 2016)
• Disclosure Initiative: Amendments to IAS 1 Presentation of Financial Statements (effective 1 January 2016) (Endorsed)
• Disclosure Initiative: Amendments to IAS 7 Statement of Cash Flows (effective 1 January 2017)
• Amendments to IAS 12: Recognition of Deferred Tax assets for Unrealised Losses (effective 1 January 2017)
There are other standards in issue which are not considered applicable and are not expected to have an impact on the
Company and have therefore not been included in the list above. The directors anticipate that the adoption of these
Standards and Interpretations in future periods will have no material impact on the financial statements of the Company.
Property, plant and equipment
Property, plant and equipment is held at cost less accumulated depreciation and impairment charges.
Depreciation is calculated to write off the cost of property, plant and equipment less the estimated residual value on a
straight-line basis over the expected useful economic life of the assets concerned. Estimated residual values are revised
annually.
The annual rates used are:
• computer equipment – over 3 years
• fixtures and fittings – over 5 years
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its
liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. The
only equity instrument applicable to the Company is its issued share capital.
Accounting for financial assets
The Company has financial assets in the loans and receivables category. Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are not quoted in an active market. After initial recognition these are
measured at amortised cost using the effective interest method, less provision for impairment. Any change in their value is
recognised in profit or loss. The Company’s trade and other receivables fall into this category of financial instruments.
Receivables are considered for impairment on a case-by-case basis when they are past due at the year-end date or when
objective evidence is received that a credit partner will default or that a receivable will be impaired.
Accounting for financial liabilities
The Company’s financial liabilities include trade and other payables which, subsequent to initial recognition at fair value, are
measured at amortised cost using the effective interest rate method.
Dividends
Dividends are recorded in the Company’s financial statements in the period in which they are approved or paid.
• Annual Improvements to IFRSs 2010-2012 Cycle (IASB effective date generally 1 July 2014) (Endorsed)
Revenue
• Annual Improvements to IFRSs 2012-2014 Cycle (effective 1 January 2016) (Endorsed)
• Amendments to IAS 27: Equity Method in Separate Financial Statements (effective 1 January 2016) (Endorsed)
Revenue comprises the fair value of consideration received or receivable in respect of services provided relating to the sale
of property, net of discounts, rebates and any sales taxes.
38 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 39
NOTES TO THE FINANCIAL STATEMENTS
continued
NOTES TO THE FINANCIAL STATEMENTS
continued
Revenues are recognised on the basis of the performance of contractual obligations and to the extent that the right to
consideration has been earned and the flow of economic resources is probable.
Fees earned on instruction of residential property are accounted for at the point of publication of advert to property portals,
the point at which the Company’s obligations are complete. Where property particulars have not yet been published to
property portals, the fees are recognised as deferred income and presented within liabilities.
Conveyancing fees are accounted for on completion of the service being provided, being legal completion of the transaction.
This may lead to the recognition of accrued income.
Fees earned under lettings contracts are recognised on a straight-line basis over the term of the agreement and/or at the
point of delivery of the service as appropriate.
Accompanied viewings revenue is recognised when its receipt is assured over the period in which the Company fulfils its
obligations.
Internally developed intangible assets
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Impairment
The carrying amount of the Company’s assets is reviewed at each year end date to determine whether there is any indication
of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in profit or loss. Where an impairment loss subsequently reverses,
the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but
so that the increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is
recognised in profit or loss where it relates to an amount charged to profit or loss.
Share based payments
The equity settled share option programme allows employees to acquire shares of the Company. The fair value of options
granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured using the
Black-Scholes model at grant date and spread over the period during which the employees become unconditionally entitled
to the options. The expense is allocated over the vesting period based on the best available estimate of the number of share
options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are
expected to become exercisable. Deferred taxation is recognised over the vesting period.
An internally generated intangible asset arising from the Company’s development activity is recognised in the statement of
financial position when the Company can demonstrate the following:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale
Share based payments reserve
This comprises the cumulative share-based payment charge recognised in the Statement of Comprehensive Income in
relation to equity-settled options and share rights issued but not yet exercised.
• its intention to complete the intangible asset and use or sell it
• its ability to use or sell the intangible asset
• how the intangible asset will generate probable future economic benefits
• the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset
• its ability to measure reliably the expenditure attributable to the intangible asset during its development
Internally generated intangible assets are amortised over their useful economic life, on a straight line basis over three years.
Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in
the period in which it is incurred.
Leases
In accordance with IAS 17, the economic ownership of a leased asset is transferred to the lessee if the lessee bears
substantially all the risks and rewards related to the ownership of the leased asset. The related asset is recognised at the
time of the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus
incidental payments, if any to be borne by the lessee.
All other leases are treated as operating leases. Payments under operating lease agreements are recognised as an expense
on a straight line basis over the period of the lease. Associated costs, such as maintenance and insurance, are expensed as
incurred. The Company does not act as a lessor.
Taxation
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other
comprehensive income or directly in equity. Current income tax assets and liabilities comprise those obligations to, or
claims from, fiscal authorities relating to the current or prior reporting periods that remain unpaid at the reporting date.
Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax
is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of
assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the
initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting
profit. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their
respective period of realisation, provided those rates are enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss or deductible temporary
difference will be able to be utilised against future taxable income. This is assessed based on the Company’s forecast of
future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any
unused tax loss or credit. Deferred tax liabilities are always provided for in full, deferred tax assets and liabilities are offset
only when the Company has a right and intention to set off current tax assets and liabilities from the same taxation
authority. Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or
loss, except where they relate to items that are recognised in other comprehensive income or directly in equity, in which
case the related deferred tax is also recognised in other comprehensive income or equity, respectively.
Pension benefits
The Company does not operate a pension scheme nor is it required to implement a contributory pension scheme under
auto enrolment until April 2017.
4. Segmental reporting
The Company is managed as a single division, providing services relating to the sale of properties. The financial information
reviewed by the board is materially the same as that reported under IFRS. The Company only operates in the United Kingdom.
40 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 41
NOTES TO THE FINANCIAL STATEMENTS
continued
NOTES TO THE FINANCIAL STATEMENTS
continued
During the year, no one customer contributed greater than 10% of the Company’s revenues. (2015: none)
9,000,660 share options were exercised during the year (2015:Nil). The number and weighted average exercise price of share
options are as follows:
5. Related party transactions
There were no related party transactions in the year (2015: nil).
Directors’ remuneration and key management personnel disclosures can be found in note 8.
Paul Pindar purchased 300,000 Ordinary shares in the Company on 26 January 2016 at 78.16p per share and Michael Bruce
purchased 320,000 Ordinary shares in the Company on 26 January 2016 at 78.00p per share.
6. Share based payments
During the year, the Company made a bonus issue of shares prior to admission to the Alternative Investment Market
whereby each existing class of share became 108.2747 new Ordinary shares.
2016
Weighted average
exercise price
2016
2015
Number of options Weighted average Number of options
exercise price
(number)
(number)
2015
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding at end of the year
Exercisable at end of the year
£0.09
£0.11
£0.13
£0.04
£0.06
18,802,984
(9,000,660)
(162,405)
10,952,712
3,141,298
£0.01p
-
£0.01p
£0.01p
£0.01p
44,937
-
(2,300)
42,637
13,800
The Company operates a number of HMRC approved executive management incentive plans (EMI).
The weighted average remaining contractual life of the options is 9.2 years (2015: 10 years).
The vesting conditions are based on length of service with 25% of the options vesting on or after the 12 month anniversary
of the employee’s start date and a further 6.25% vesting every three months thereafter so that options vest in full on the 48
month anniversary of the employee’s start date.
Details of the total number of shares under option at the year end and conditions on qualification and exercise under EMI
are set out below:
Grant
Date
Employees
entitled
Number of
options
Performance
conditions
Exercise
price (p)
Earliest
exercise date
Expiry
date
09/01/2015
10/07/2015
07/08/2015
10/08/2015
14
11
2
11
4,616,510
4,742,542
7,506,471
Length of service
Length of service
Length of service
682,131
Length of service
£0.01
£0.13
£0.13
£0.13
09/01/2015
10/07/2015
07/08/2015
23/09/2015
09/01/2025
10/07/2025
07/08/2025
10/08/2025
The Company operates an unapproved executive incentive plan. The vesting conditions are based on length of service with
25% of the options vesting on or after the 12 month anniversary of the employee’s start date and a further 6.25% vesting
every three months thereafter so that options vest in full on the 48 month anniversary of the employee’s start date. Details of
the total number of shares under option at the year end and conditions on qualification and exercise under unapproved
rules are set out below and on the following page:
Grant
Date
Employees
entitled
Number of
options
Performance
conditions
Exercise
price (p)
Earliest
exercise date
Expiry
date
06/11/2015
8
5,709,435
Length of service
£0.01
06/11/2016
06/11/2025
Fair value assumptions of share based payments
The fair value of services received in return for share options granted is measured by reference to the fair value of share
options granted. The estimate of fair value is measured using the Black-Scholes model. Details of the fair value of share
options granted in the period and the prior period, together with the assumptions used in determining the fair value are
summarised below:
Weighted average share price at date of grant
Weighted average exercise price
Weighted average contractual life (years)
Weighted average expected volatility
Weighted average risk free interest rate
30 April 2016
£0.15
£0.09
10
27%
1.5%
30 April 2015
£14.00
£0.01
10
27%
1.5%
Total weighted average fair value of options granted
£1,664,100
£596,510
The volatility assumption, measured at the standard deviation of expected share price movements, is based on a review of
volatility used by listed companies in the same sector.
Charge to the income statement
The charge to the income statement, included with administrative expenses, comprises:
Share-based payment charges
2016
£
2015
£
596,647
105,016
42 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 43
NOTES TO THE FINANCIAL STATEMENTS
continued
NOTES TO THE FINANCIAL STATEMENTS
continued
7. Expenses and auditor’s remuneration
Included in the income statement are the following items:
Auditor’s remuneration:
Audit of these financial statements
Amounts received by auditors and their associates in respect of:
Taxation compliance
Taxation advisory services
Depreciation and other amounts written off property, plant & equipment:
Owned, in respect of continuing activities
Amortisation of development costs
Aggregate charge against income in respect of research and development
costs not eligible for capitalisation
Rentals payable under plant and machinery operating leases
Leasehold property rentals
2016
£
2015
£
32,000
12,000
2,500
97,825
61,159
101,309
520,786
15,108
74,209
2,000
-
15,757
40,063
352,083
1,093
49,328
The following table provides details of remuneration paid to directors:
Salaries or fees, including bonuses
Employer’s national insurance
Share based payment charge
2016
£
625,791
80,959
468,135
1,174,885
2015
£
538,379
74,296
-
612,675
The highest paid director received remuneration of £383,188 (2015:£182,712) during the year.
No director had a material interest in any contract in relation to the business of the Company.
In addition to the 5 directors (2015: 9), 6 senior management (2015: 2) are also considered to be key management personnel.
The following table provides details of remuneration paid to key management personnel, being 11 individuals (2015: 11
individuals).
2016
£
1,105,412
596,647
1,702,059
2015
£
697,347
105,016
802,363
The aggregate charge in respect of research and development represents the total cost incurred during the year, less
amounts capitalised in accordance with IAS38: Intangible Assets.
Salaries or fees, including bonuses and employer’s national insurance
Share based payment charge
8. Personnel expenses
The average number of persons employed by the Company during the period was as follows:
The remuneration of the Directors for the years ended 2016 and 2015 was as follows:
Sales and marketing
Technical
Administration
The aggregate payroll costs of the persons employed, including directors, were as follows:
Wages and salaries
Social security costs
Share based payment charge
2016
No.
81
18
4
103
2016
£
2015
No.
38
8
2
48
2015
£
3,983,829
435,478
596,647
5,015,954
2,059,983
211,189
105,016
2,376,188
Salary
and fees
2016
£000s
Taxable
benefits
2016
£000s
Annual
bonuses
2016
£000s
Long term
incentives
2016
£000s
Pension
2016
£000s
Total
2016
£000s
163
125
59
40
52
18
18
36
511
-
-
-
-
-
-
-
-
-
75
-
7
32
-
-
-
-
145
133
102
6
82
-
-
-
114
468
-
-
-
-
-
-
-
-
-
383
258
168
78
134
18
18
36
1,093
Executive directors
M P D Bruce
N R Cartwright
K F C Bruce
J R Kydd
M J Farrow
Non-executive directors
P R M Pindar
N S Discombe
W E Whitehorn
Total
44 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 45
NOTES TO THE FINANCIAL STATEMENTS
continued
NOTES TO THE FINANCIAL STATEMENTS
continued
Salary
and fees
2015
£000s
Taxable
benefits
2015
£000s
Annual
bonuses
2015
£000s
Long term
incentives
2015
£000s
Pension
2015
£000s
Total
2015
£000s
Loss before taxation from continuing operations
2016
£
(11,901,831)
2015
£
(5,435,780)
Tax using the average UK Corporation tax rate of 20.00% (2015: 20.92%)
(2,380,366)
(1,137,165)
Executive directors
M P D Bruce
N R Cartwright
K F C Bruce
J R Kydd
M J Farrow
Non-executive directors
P R M Pindar
N S Discombe
W E Whitehorn
Total
9. Taxation
Current tax expense
UK corporation tax for the current year
Total current tax
Deferred tax
Deferred tax for the current year
Total deferred tax
Taxation charged to the income statement
Reconciliation of effective tax rate
93
42
83
58
48
6
6
27
363
-
-
-
-
-
-
-
-
-
75
-
100
-
-
-
-
-
175
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2016
£
-
-
-
-
-
168
42
183
58
48
6
6
27
538
2015
£
-
-
-
-
-
The current tax charge for the period is higher than (2015: higher than) than the average standard rate of corporation tax in
the UK during the period of 20.00% (2015: 20.92%). The differences are explained on the next page.
Effects of:
Expenses not deductible for tax purposes
Tax losses for which no deferred tax asset was recognised
Other permanent differences
Total tax in income statement
10. Property, plant and equipment
Cost
Balance at 1 May 2014
Additions
Balance at 30 April 2015
Additions
Disposals
Balance at 30 April 2016
Depreciation
Balance at 1 May 2014
Charge for the year
Balance at 30 April 2015
Charge for the year
Accumulated depreciation on disposal
498,144
1,882,222
-
-
66,024
1,070,991
150
-
Computer Furniture and
fittings
equipment
£
41,264
40,486
81,750
£
-
2,164
2,164
Total
£
41,264
42,650
83,914
130,673
84,665
215,338
(63)
-
(63)
212,360
86,829
299,189
(4,950)
(15,558)
(20,508)
(48,927)
63
-
(4,950)
(199)
(199)
(15,757)
(20,707)
(12,232)
(61,159)
-
63
Balance at 30 April 2016
(69,372)
(12,431)
(81,803)
Net book value
At 30 April 2016
At 30 April 2015
142,988
74,398
217,386
61,242
1,965
63,207
46 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 47
NOTES TO THE FINANCIAL STATEMENTS
continued
NOTES TO THE FINANCIAL STATEMENTS
continued
11. Intangible assets
Cost
Balance at 1 May 2014
Internally developed
Balance at 30 April 2015
Internally developed
Balance at 30 April 2016
Amortisation and impairment
Balance at 1 May 2014
Amortisation for the year
Balance at 30 April 2015
Amortisation for the year
Balance at 30 April 2016
Net carrying value
Balance at 30 April 2016
Balance at 30 April 2015
Internally generated
intangible asset
£
12. Deferred tax assets and liabilities
Movement in unprovided deferred tax for the year ended 30 April 2016
Share-based payment expense
Tax losses
As at 1 May
2015
£
21,003
1,411,119
Movement in
the year
£
119,329
1,882,222
As at 30 April
2016
£
140,332
3,293,341
1,432,122
2,001,551
3,433,673
56,291
123,229
179,520
334,263
513,783
(1,564)
(40,063)
(41,627)
(101,309)
(142,936)
370,847
137,893
The gross value of losses in respect of which the unrecognised deferred tax asset relates is £16,632,846 (2015: £7,055,596).
The provision of a deferred tax asset is based on the future trading forecasts for the Company. A deferred tax asset has not
been recognised in respect of trading losses and other temporary differences as the Company does not anticipate sufficient
taxable profits to arise within the foreseeable future.
13. Trade and other receivables
Trade receivables
Prepayments
Accrued income
Accrued interest
2016
£
1,016,815
1,555,644
362,790
35,009
2,970,258
2015
£
238,059
450,006
58,018
-
746,083
All trade and other receivables are short-term and due in less than one month. The directors consider that the carrying
amount of trade receivables approximates to their fair value. All trade and other receivables have been reviewed for
indications of impairment.
Of the total trade receivables shown above, no amounts (2015: £nil) are past due and none are impaired.
The internally generated intangible asset relates to capitalised development costs in respect of the customer facing
Purplebricks software platform.
The amortisation charges are recognised in the following line items in the income statement:
Administrative and establishment expenses
Amortisation and impairment
2016
£
101,309
2015
£
40,063
Intangible assets are amortised over their useful economic lives. In the case of the internally developed intangible asset,
amortisation is charged on a straight line basis over three years.
14. Trade and other payables
Trade payables
Other taxation and social security
Accruals
Deferred income
2016
£
2,728,709
427,514
2,055,130
5,211,353
760,358
5,971,711
2015
£
552,862
48,278
451,599
1,052,739
109,930
1,162,669
48 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 49
All trade and other payables are short-term. The directors consider that the carrying amount of trade and other payables
approximates to their fair value.
NOTES TO THE FINANCIAL STATEMENTS
continued
NOTES TO THE FINANCIAL STATEMENTS
continued
15. Share capital
Allotted, issued and fully paid:
Class:
Ordinary shares
A Ordinary
B Ordinary
C Ordinary
Series Seed shares
Number
Nominal Value:
240,259,152
656,537
255,930
141,120
712,261
£0.01p
£0.01p
£0.01p
£0.01p
£0.01p
2016
£
2,402,591
-
-
-
-
2015
£
-
6,565
2,559
1,411
7,123
2,402,591
17,658
The table below summarises the movements in the number of the shares at the beginning and end of the period:
Ordinary
shares
Deferred
shares
D Ordinary
shares
A Ordinary
shares
B Ordinary C Ordinary Series Seed
shares
shares
shares
656,537
255,930
141,120
712,261
-
-
60,363
-
-
13,800
12,276
-
-
-
-
-
-
-
-
-
-
-
-
-
-
135,796
-
-
-
-
-
-
-
-
69,328
(60,363)
(8,965)
-
-
-
-
-
-
-
Ordinary shares
at 1 May 2015
Series Seed Shares allotted
D Shares allotted
Conversion to A shares
Conversion of deferred shares
Redemption of deferred shares
Exercise of options
Exercise of warrants
Shares prior to bonus issue
Bonus issue effect
Post bonus issue
Conversion to A shares
Conversion to Ordinary
shares
Shares allotted on
admission
Ordinary shares at
30 April 2016
215,259,152
25,000,000
240,259,152
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,965
(8,965)
-
-
-
-
-
-
-
-
-
The following fully paid shares were allotted during the year at a premium as shown below:
On 8 July 2015, 135,796 Series Seed Shares of £0.01 each were allotted with £73.64 paid up on each Series Seed Share.
On 6 November 2015, 69,328 D Ordinary shares were allotted following exercise of options over D Ordinary shares; and on
19 November 2015, the Company reduced its share premium account from £22,296,928 to £3,296,928 by the cancellation
of £19,000,000 of the amount standing to the credit of such account, in order to create distributable reserves to ensure that
the Company satisfied the net asset requirement for a public Company that its nets assets are more than its paid up share
capital and non-distributable reserves.
The Company issued 213,271,069 bonus shares on 9 December 2015 to meet the minimum nominal share capital
requirements in order for it to be re-registered as a public Company and to reduce the value of an individual share to £1.
Prior to the bonus issue, the 69,328 D Ordinary shares were converted into 60,363 A Ordinary shares and 8,965 deferred
shares of £0.01 each, which were subsequently redeemed and cancelled by the Company. At the same time, 13,800 options
over A Ordinary shares were exercised and 12,276 Company warrants over A Ordinary shares were exercised.
The Company was re-registered as a public limited Company on 10 December 2015 and by a special resolution changed its
name from New Broom Limited to Purplebricks Group plc.
Immediately prior to Admission, all shares in the Company will automatically convert into A Ordinary shares in accordance
with Article 8 of the Company’s articles of association in force at the relevant time. The A Ordinary shares were re-designated
as Ordinary shares on 9 December 2015. Following the conversion and re-designation, the issued share capital of the
Company was 215,259,152 Ordinary shares.
The Company’s issued share capital prior to admission to AIM was 215,259,152 Ordinary shares (with an aggregate nominal
value of £2,152,591.52) and became 240,259,152 Ordinary shares (with an aggregate nominal value of £2,402,591.52) by
virtue of the £25,000,000 of the new placing shares.
All shares carry the same rights.
16. Capital and reserves
742,976
255,930
141,120
848,057
Reconciliation of movements in capital and reserves
79,702,551
27,454,822
15,138,610
90,975,086
Movements in capital and reserves are set out in the statement of changes in equity on page 35.
80,445,527
27,710,752
15,279,730
91,823,143
Share capital
134,813,625
(27,710,752)
(15,279,730)
(91,823,143)
Share capital represents the nominal value of shares that have been issued.
-
(215,259,152)
-
-
-
-
-
-
-
-
-
-
-
-
-
Share premium
Share premium represents the excess of consideration received for shares over the nominal value.
Share based payment reserve
Share based payment reserve represents all current and prior period share based payment charges less the effect of the
exercise of share options.
Retained earnings
Retained earnings includes all current and prior period retained profit and losses.
50 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 51
NOTES TO THE FINANCIAL STATEMENTS
continued
NOTES TO THE FINANCIAL STATEMENTS
continued
17. Financial instruments disclosure
Capital risk management
Capital management objectives are to ensure the Company’s ability to continue as a going concern and to provide a return
to shareholders.
The capital structure of the Company currently consists of cash and equity attributable to equity holders of the Company,
comprising issued capital, reserves and retained earnings as disclosed in the statement of changes in equity. The Company’s
Audit Committee reviews the capital structure as part of its risk analysis. As part of this review, the Committee considers the
cost of capital and the risks associated with each class of capital.
Interest rate sensitivity analysis
At the year end date there was no material exposure to movements in interest rates as the Company has no borrowings or
other financial assets or liabilities linked to interest rates.
Other financial assets and liabilities
There are no financial assets or liabilities measured at fair value.
Foreign currency risk management
The Company has no material currency exposure. The Company’s financial instruments are denominated in Sterling.
The Company is not subject to externally imposed capital requirements.
Credit risk management
Categories of financial assets and financial liabilities
The Company held the following categories of financial instruments:
The Company’s credit risk is primarily attributable to its trade receivables. Credit risk is managed by monitoring the
aggregate amount and duration of exposure to any one customer depending upon their credit rating. The Company has an
excellent history with no trade receivables written off as irrecoverable.
2016
£
2015
£
The credit risk on liquid funds is minimised because the counterparties are UK banks with high credit-ratings assigned by
international credit-rating agencies.
Financial assets
Loans and receivables (including trade and other receivables,
cash and cash equivalents)
Financial liabilities held at amortised cost
Trade payables and accruals
31,528,210
4,847,830
4,783,839
1,004,459
18. Contingent liabilities
The Company has no contingent liabilities (2015: £nil).
19. Commitments
Capital commitments, approved by the Board and existing at 30 April 2016 amounted to £ nil (2015: £nil).
The fair value of the financial instruments set out above is not materially different to the book value.
Total commitments under non-cancellable operating leases are as follows:
Liquidity risk management
The Company manages liquidity risk by maintaining adequate cash reserves and by continuously monitoring both forecast
as well as actual cash flows to enable matching of the maturity profiles of financial assets and liabilities. Sufficient cash
is retained to service short-term financing needs. Liquidity risk is managed through regular senior review of performance
versus an integrated profit and loss, balance sheet and cash flow model. Sensitivities are applied to this model to ensure the
Company has early warning of any manifestation of liquidity risk and communicate any such risk to investors in a timely and
accurate manner so as to manage liquidity risk comprehensively and effectively.
The following is an analysis of the contractual undiscounted cash flows payable under financial liabilities. The table includes
principal only cash flows in respect of trade and other payables.
Payable:
Within one year
In the second to fifth years inclusive
Land and
buildings
£
100,700
302,742
403,442
2016
2015
Other
£
20,237
28,246
48,483
Land and
buildings
£
12,709
-
Other
£
4,373
8,382
12,709
12,755
Trade payables and accruals due within one month
Trade payables and accruals due within three months
2016
£
3,826,803
1,384,550
2015
£
824,195
228,544
Operating leases relate to land, buildings and other assets, such as IT equipment, used to support the operational
requirements of the Company.
20. Ultimate controlling party
Trade and other payables
5,211,353
1,052,739
There is no ultimate controlling party as no one investor has a majority shareholding.
52 / Purplebricks Group plc Annual Report 2016
Purplebricks Group plc Annual Report 2016 / 53
NOTES TO THE FINANCIAL STATEMENTS
continued
21. Loss per share
Loss £
Weighted average number of shares
Loss per share (£)
Basic and
diluted
2016
(11,901,831)
101,194,640
Basic and
diluted (rebased)
2015
Basic and
diluted
2015
(5,435,780)
(5,435,780)
164,817,806
1,522,219
(0.12)
(0.03)
(3.57)
During the year the Company issued bonus shares prior to its admission to the Alternative Investment Market (AIM) on a
108.2747 for 1 basis. Rebased loss per share reflects the effect of the bonus issue and the additional equity raised as part of
the admission to AIM and is provided in the interests of further and better disclosure.
Diluted loss per share is equal to the basic loss per share as a result of the Company recording a loss for the period, which
cannot be diluted.
54 / Purplebricks Group plc Annual Report 2016
Purplebricks Group Plc
Registered number 08047368
Cranmore Place, Cranmore Drive, Shirley, Solihull, West Midlands, B90 4RZ
Head office: 0121 296 4848
www.purplebricks.com