Real Estate

Purplebricks shakes up management as it cuts revenue forecasts


Shares in online estate agency Purplebricks fell by more than 30 per cent on Thursday after it said it was parting company with the bosses of its UK and US businesses and had cut its revenue forecasts for the year.

UK chief executive Lee Wainwright is leaving Purplebricks after two years in his role for personal reasons. US CEO Eric Eckardt, meanwhile, is leaving for reasons that the estate agency did not disclose.

Group chief executive Michael Bruce will take on day-to-day management of the US business with immediate effect, the company said.

The group also said that its revenue for the 2018-2019 financial year would be between £130m and £140m. When it published interim results in December, Purplebricks said it would post full-year revenues of £165m to £175m.

Shares in Purplebricks, whose biggest shareholder is well known fund manager Neil Woodford, have fallen from 300p six months ago to 165p as investors became concerned about the strength of the UK housing market and the group came under continued scrutiny from analysts over how many homes it actually sells. Purplebricks charges sellers an upfront fee for advertising their homes for sale and arranging viewings, meaning its agents are not motivated to close deals in the traditional way of earning commissions when transactions complete.

Purplebricks based its revenue forecast downgrade on the “challenging” UK housing market, “headwinds” in Australia and a “slower then expected response” to its marketing initiatives in the US. “The board does not expect the amount of US revenue to be sufficient to meet its expectations in this financial year,” the group said.

Investment bank Jefferies issued a note last year querying a claim made by Purplebricks last year that it sold 88 per cent of the homes listed on its website within ten months. Jefferies’ own research suggested that Purplebricks had in fact sold just over half the homes it had listed in November 2016 within ten months, similar to the rest of the market.



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