Purplebricks’ share price plunged to an all-time low on Friday, falling 21% in a single day to just 7.86p.
The share price collapse followed an announcement by the struggling online estate agency that it was putting itself up for sale and warned of deepening losses.
The company said that a recent turnaround plan aimed at focusing investment in key regions where it is still profitable ended up costing it more than it expected, and disrupting sales instead of boosting them.
The company has been further hampered by the downturn in the property market in recent months, driven by the sharp rise in mortgage rates deterring purchasers and vendors.
Purplebricks said full-year adjusted underlying loss would come in between £15m and £20m – larger than the previously expected loss of between £8.8m and £11.3m.
Alongside the lowered guidance, Purplebricks announced a strategic review which it said ‘may or may not result in a sale of the company’ or some of its divisions and assets.
The online estate agency has seen its share price drop sharply over the past couple of years following a series of woes.
Regulatory failings have had an adverse impact on the company, contributing to the fall. Shares in the AIM-listed firm have fallen from 103p at the start of January 2021, while the company floated at 95p in December 2015.
Shares in the online estate agent have plummeted since its all-time high in 2017 of 525p.
Lecram Holdings Limited, beneficial owner of a 5.16%% stake in Purplebricks, has once again called for Paul Pindar, chairman of Purplebricks, to be removed from the role.
The activist investor has long called for Harry Hill, former chairman and CEO of Countrywide and co-founder of Rightmove, to be appointed to the Board.
Hill was among a number of industry professionals to post a comment on EYE last week regarding the current situation at Purplebricks.
Purplebricks chairman faces fresh calls to resign after major company announcement
If this was your pet dog you’d be doing the right thing and putting it down now
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I do feel sorry for the staff at PB. What a mess. Doubtless some very good people are struggling right now & I hope they’ll have better futures ahead.
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According to our latest Property & Homemover report the market share of Hybrid/ Online Agents overall was 7.3 per cent in 2022, down from the peak of 8.2 in 2019. Share of market is just 1.1 per cent in properties being sold for £1m or more and 5.3 per cent for homes within the £350k-£1m bracket. Entering into a market where achieving a sale will be more challenging it remains to be seen what will happen to market share in 2023 and what will happen to PurpleBricks.
Colin Bradshaw, TwentyCi
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