Purplebricks’ share price has hit its lowest-ever level, dropping to below 20p yesterday for the first time ever, before recovering slightly to end the day down 5.9% at 20.32p.
The online estate agency has seen its share price, which hit a record low of 19.92p yesterday morning, plummet in recent weeks as pressure continues to pile up on the company after it recently warned it could face costs of up to £9m after failing to follow basic tenancy law.
Recent regulatory failings have had a negative impact on the business and pushed its share price to new lows.
Shares in the AIM-listed firm have dropped from 103p at the start of January 2021, while the company floated at 95p in December 2015.
Purplebricks was forced last month to delay the publication of its first half results to provide for any potential future claims which could arise under the Housing Act in relation to this regulatory process issue.
The move followed speculation that the online estate agency could potentially face a bill of up to £30m after it allegedly put thousands of landlords at risk of being because it failed to follow basic tenancy law.
EYE revealed in November that Purplebricks had failed to properly serve legally required documents to tenants explaining their deposits have been put into a national protection scheme.
The agency accepts that there could be future claims against the firm, and provisionally estimates a potential financial risk in the range of £2m-9m.
Purplebricks, which recently said the six-month period to October 31 had been “challenging”, is currently being investigated by Propertymark for potential tenancy law breaches.
A statement from David Oliver, head of Propertymark Compliance, said: “It is important that any allegation made against an agent be substantiated with viable evidence.
“As a representative body we take any allegations against our members incredibly seriously and we will be investigating the claims of failure to properly register tenancy deposits by Purplebricks.
“Legal procedures exist to protect both agents and their clients. Performing them properly not only protects agencies but is paramount for consumer confidence, providing transparency between businesses and their customers.
“Agents fight against a stigma and ensuring processes are in keeping with legal and professional standards is a key part in changing our reputation.”
OPINION: Could we be seeing the death knell of Purplebricks?
Comments (21)
This is circulating today, an agent sent it to me ….. As the saying goes ‘have the rats been jumping a sinking ship’.
I work in the Talent Acquisition team at Purplebricks and would love to speak to you regarding a Local Property Partner role in XXX. We are going through an exciting growth period here at Purplebricks expanding our teams across the UK. We are looking for experienced Real Estate Sales professionals who are looking to work for a market disrupting, fearlessly progressive company. You will be part of a dynamic, driven team with amazing central support and industry leading marketing & tech provided. Would any of the above be of interest to you?
At 0810 this morning, the SP hit a new all-time low of 18.67p… which I think would drive the market cap dangerously close to – if not below – below £60m. It’s sinking quicker than their “cash reserve”, which stood at £58m end October – but has no doubt taken a heavy battering since due to woeful listings performance and could well be teetering on a £50m cliffedge.
And that’s before any fines and potential damages costs that are lurking in the background sink their teeth into PB’s tommy (credit: Hillofwad71)..
As folk in Yorkshire would say, “there’s trouble at t’mill” – York-based Hunters’ recruitment drive for their thirteen year-old ‘new’ franchise scheme may not have come at a better time…
No doubt Tosca Fund and all the other wise “investors” will be lining up with their chequebooks ready to “bung”.
Share value has dropped to unsustainable level for investors. All will walk away with massive losses’ or lose everything. The market is not going to get better anytime soon, so will continue to spiral down into bankruptcy? Investors were foolish to have joined an enterprise that they were warned would go this way, hyped out of all proportion with seemingly little care of due diligence. The world of PB has demonstrated many were right it would fail from day one, Sadlife and Ducky must be cringing.
Looks like Darvey is already planning to jump. That should be a wake up call for investors of what may be ahead?
Be interesting to see where the C4J case goes
And the countdown begins to Paul Smith’s latest ‘opinion’ piece……
…or The Quirkster’s – claiming ‘bricks downfall is down exclusively to him…
Well, he does have form doesn’t he!
Best say no more
I think the market is even more spooked about delays in providing interim figures that were due 14th December.
Having a quick look on Companies House, I see a new company (Purplebricks Services Ltd) was set up two weeks ago with Darvey as sole Director. Nature of business is real estate agency. What’s that about!
Surely nobody would set up a new company and plan their escape while assuring staff, investors, customers and suppliers that everything was fine ?!?!
Probably not the first that that has been done.
Maybe, once the likely liability becomes clearer, PB senior management are preparing to put Bricks into liquidation and immediately buy it out of liquidation in a pre-pack deal so that they can retain all the assets, walk away from the liabilities and continue trading seamlessly without the public and their customers being any the wiser, apart from their landlords, who are already on the hook for fines for non compliance.
(I keep wanting to type PB as shorthand for Bricks but don’t want to risk incurring the wrath of our very own PB for confusing him with Bricks!)
There would be no wrath on my part, Rnr – as far as I am concerned I am the original ‘PB’ here on EYE (and down the other pub before it).
Any claim to being ‘the original and best PB’ would no doubt raise the comment count – so I won’t go anywhere near there…
;o)
We love you PB but not the colour purple.
For private companies, but public?
I wonder if they are looking to transfer “bad/toxic assets” away from the main company.
Maybe the rumour of paring off Lettings was not a sale, as they denied, but a move to a standalone Limited Liability Company. Because they have amply demonstrated what a liability it could be if done farcically.
The entire stock market is in bits, so are we expecting articles for Zoopla and other property shares as well?
Hard to believe.
Unless you look at their website and see that they are still handing out property advice that is 2 years behind statutory compliance.
Everyone in property knew the PB model was doomed from the outset but the city wasn’t listening.
If you think compliance is expensive, try non-compliance!
Fines and claims for any wrongdoing should follow into the hands of the individuals in control. As charges on their houses etc.