Online estate agent Purplebricks has suffered major losses as its global expansion strategy weighs heavily on profitability.
The real estate agency disruptor revealed that it had incurred an £11.8 million ($21.2m) loss in Australia.
The company reported an overall pre-tax loss of £26.1 million ($AU$47m) for the year.
Purplebricks has been aggressive in its expansion into international markets, establishing its business in Canada earlier this year after launching in the United States in September.
Its £153 million “war chest” for global growth has been hit to the tune of £24.7 million in the 2018 financial year, compared to a 6 million loss in 2017.
In Australia, the company reported it had sold 3,600 properties since its launch, representing more than $2 billion of house sales.
“We believe we are firmly on the path to creating a market leading, profitable business in Australia,” Purplebricks Australia chief executive Ryan Dinsdale said.
“Our investment to date and our plans to continue to invest in growing market share reflects our long-term commitment to the Australian market and customers who deserve more choice when buying and selling property.”
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Purplebricks Australia to reach profitability 'within 12 months'
Purplebricks chairman Paul Pindar remained positive about Purplebricks’ Australian prospects saying he expected its business in Australia to reach “monthly profitability within 12 months”.
“Australia continues to track the UK performance at the same time in its development. Growth has continued into the current year, despite the tough market backdrop,” Pindar said.
On whether Purplebricks had expanded too quickly its founder and chief executive Michael Bruce told the BBC’s Today programme that its UK business is considerably more profitable than the year earlier and it had “grown considerably”.
"We've recently launched into places like Australia and the US and they are earlier in their evolution, but as far as the business is concerned it is very, very well positioned for future growth.”
In a statement, Purplebricks said that it will invest more in advertising, technology and the advancement of its service in Australia.
“While the Australian market overall is challenging for the industry there remains a big opportunity for Purplebricks to capitalise on the significant sea-change in consumer thinking, as they move away from high cost traditional estate agency.”
