Purplebricks issues profit warning and puts itself on the market
Purplebricks has put a new asset on the market: itself. The online estate agent issued a profit warning and said a strategic review could result in the sale of the company.
The company said on Friday its efforts to cut costs had “involved more disruption to the sales field than originally envisaged”, adding £1.2m in costs and pushing down the number of people who signed up to sell their houses using the website.
It is not in talks with any potential buyers, but said it was open to “a sale of the company or some or all of the group’s business and assets”, in an announcement to the stock market.
Purplebricks was once seen as one of the vanguard of companies that would shake up the property industry with digital technology. It launched in 2014 and listed at a float price of 100p. By the summer of 2017 it had risen to more than £5 a share, valuing the company at £1.3bn. However, it had slumped to less than £25m on Friday.
The company charges a flat fee for every property, and has no branches. Initially it also used self-employed agents, but was forced to make them employees after some threatened legal action. It was eventually forced to scale back a planned expansion, and has also suffered a series of costly errors, including failing to follow the law on tenants’ deposits.
The company, which is listed on London’s alternative investment market, said it expects to deliver revenue for the financial year to the end of April of between £60m and £65m, and a loss of between £15m and £20m after its own adjustments.
It will also make cuts to its business letting properties, and will cut planned investment in a business offering mortgages.
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