By Aby Jose Koilparambil
(Reuters) – British estate agent Purplebricks Group Plc has started a strategic review after a recently implemented turnaround plan disrupted sales more than expected, and warned this would lead to a bigger annual loss than previously forecast.
In a statement on Friday it said its board had recognised that the potential of the group may be better realised under an “alternative ownership structure” and had decided to conduct a strategic review, with the aim of delivering maximum value for shareholders.
It gave no further detail beyond saying it was not in talks with any potential bidder for the company and had not received any possible offers.
Britain’s biggest online-only estate agency had to navigate a tumultuous 2022 after one of its top-10 shareholders – Lecram Holdings – called for the removal of Chairman Paul Pindar, and the company replaced its finance chief after just nine months in the role.
The company’s shareholders rejected the proposal for the chairman’s ouster, but about 30% of members who voted were in favour of the removal, forcing Purplebricks to acknowledge “the level of feeling among investors”.
Responding to the strategic review announcement, Lecram urged a swift conclusion of the plan and again called for the immediate resignation of Pindar as chairman in case the process did not lead to an acceptable offer.
Shares in the AIM-listed company, which have slumped more than 98% from its peak levels in mid-2017, plunged as much as 20% to 8 pence in morning trade.
In December, The Times had reported that Purplebricks would cut more than 10% of its workforce as part of a cost-cutting programme, but the company has yet to confirm this.
Purplebricks posted a loss in the 2022 fiscal year, hurt by the failure of an ambitious international expansion and a change in its business model to make sales agents permanent employees. A Money Back Guarantee pricing scheme also failed to lift new housing instructions.
Purplebricks now expects an adjusted core loss of between 15 million pounds and 20 million for the year ending April 30, compared with an earlier outlook range of a loss between 8.8 million and 11.3 million, hurt by lower instruction numbers in the third quarter.
($1 = 0.8378 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Janane Venkatraman and David Holmes)
