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UPDATE 2-Purplebricks pays price for rapid expansion with U.S. exit

Samantha Machado and Noor Zainab Hussain

* Purplebricks also exiting Australia by 2019 end

* Annual operating loss doubles

* Scales back to reduce cash burn (Adds details on U.S., Canada operations, background)

July 3 (Reuters) - Purplebricks Group Plc said on Wednesday it would pull out of the U.S. market in the latest setback for the British online estate agent, which is preparing to exit Australia after admitting it had chased international growth too aggressively.

Purplebricks, which also operates in Canada, entered the United States in 2017, confident it could replicate its performance in Britain. But in May, it apologized to shareholders for its disappointing performance and said it had slashed U.S. marketing and other expenses and was reviewing whether it can run a "materially scaled back U.S. business."

The company, which said it would either sell or close the U.S. business, also reported nearly doubling its total annual operating loss to 52.3 million pounds, while revenue rose 55% to 136.5 million pounds.

Founded by Michael Bruce in 2014, Purplebricks was one of the fastest growing British companies, using a low-fee model to win business from more bigger, established estate agents, such as Countrywide and Foxtons.

Hoping to repeat that success in the United States, Purplebricks expanded into seven states in just a year, racking up high marketing costs.

But U.S. earnings have not matched the estate agent's expectations.

While U.S. revenue for the year ended April 30 grew more than 600%, operating losses more than doubled to 34.1 million pounds ($42.86 million), reflecting a substantial increase in marketing spending and the establishment of an East Coast office, Purplebricks said.

"We have taken the difficult decisions to exit our businesses in both Australia and the US as it is very important that we now focus our resources on the UK and Canada, where we have a strong established presence," Chief Executive Officer Vic Darvey said in a statement.

The company, whose founder and chief executive quit in May, said it would wind down both its Australian and U.S. operations by the end of 2019.

Purplebricks said the exit was expected to "significantly" reduce cash burn in the future.

The company's shares were 3.2% higher at 95.3 pence in early trade.

Purplebricks entered Australia two and a half years ago and market conditions have since worsened, the company has said.

The AIM-listed company is backed by German publisher Axel Springer. British money manager Neil Woodford, one of Purplebricks' longest-standing investors, recently had to suspend his flagship fund and has cut his stake in the estate agent. ($1 = 0.7956 pounds) (Reporting by Samantha Machado and Noor Zainab Hussain in Bengaluru Editing by Tomasz Janowski and and Louise Heavens)