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By Scott Kanowsky
Investing.com -- Real estate agent Purplebricks Group PLC (LON:PURP) has laid out a plan to cut costs and increase prices as part of a broader push to recover from a full-year loss.
The company now expects to deliver £13M in savings in its next fiscal year, amounting to a 16% reduction in its operating cost base. Chief executive Helena Marston also backed hiking fees by an average of 20% to boost revenues and mitigate the impact of a recent surge in inflation.
In a statement, Marston said these actions, along with "targeted" marketing investments and a scheme to offer new mortgages to customers, will help deliver revenue of between £67.5M - £72.5M in FY2023. Purplebricks also aims to return to positive cash generation early in its fiscal year 2024.
"The path ahead is challenging but our clear recovery plan to improve business performance and cash generation is well under way," Marston added.
The announcement comes as Purplebricks slumped to an annual loss stemming from the halting adaptation of a new business model that turned sales agents into permanent positions. The group's Money Back Guarantee pricing campaign also proved unsuccessful in its ability to lift new housing instructions.
Both of these factors, as well as higher input costs, combined to weigh on profitability, revenue, and cash flow during the year.
Shares in Purplebricks initially slumped by more than 10% on Tuesday but pared back those losses to trade up by over 3% as the close of U.K. deal-making approached. Over the past one-year period, shares have tumbled by nearly 80%.
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