The battle for Purplebricks hots up as investors vie for control

Purplebricks shareholders are heading for a clash today over the future of the beleaguered online agency.

Chairman Paul Pindar, who was responsible for growing Capita into a FTSE100 outsourcing giant, is under pressure from activist investor Lecram Holdings Limited, beneficial owner of a 5.16%% stake in Purplebricks. They want him replaced with Rightmove co-founder Harry Hill.

The general meeting will be held this morning, with following two ordinary resolutions will be proposed to shareholders for consideration at the general meeting: 

 ·      A resolution to remove Paul Pindar as a director of the Company; and

 ·      A resolution to appoint Harry Hill as a director of the Company.

Purplebricks, which has struggled in recent years, unveiled its plan to return to profit earlier this month, but Lecram Holdings Limited is not impressed.

Purplebricks says it intends to increase its annual cost savings target from £13m to £17m and make redundancies across the business.

The online agency also plans to diversify its revenue streams after recording a £42m loss in the year to 30 April, compared to a £7m profit the year before.

The new strategy, part of the “turnaround plan”, includes the launch of an in-house mortgage advice arm “five months ahead of plan”. But it has so far failed to provide the desired boost to the company’s fortunes. Shares in the loss-making firm are currently worth just 9.55p – way off their over more than £5 in 2017.

Lecram Holdings Limited issued this statement last week: “Purplebricks’ figures – showing higher operating losses and the company burning £2m of cash per month – confirm our worst fears that nothing is improving. We are entering one of the worst housing market conditions in a generation, yet the leadership seems to have an overly optimistic view of prospects. Shareholders can’t afford to wait any longer while this business runs out of money, they need to act and act quickly to change the chairman if there is any hope of salvaging value for all investors.”

A general meeting at which Lecram proposes the removal of Paul Pindar as chairman and the appointment of Harry Hill, founder of Countrywide and Rightmove, as a director, takes place today at 10am in London. 



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