Purplebricks shares tumble on revenue warning
Shares in Purplebricks tumbled by more than 30% after the online estate agency cut its annual revenue guidance and announced the departure of the bosses of its UK and US units.
The company revised down its guidance for the 2019 financial year to between £130 million and £140 million, compared with its initial forecast range of £165 million to £175 million, citing challenges in the US and Australia businesses.
Lee Wainwright, chief executive of the UK business, is to leave after two years with Purplebricks due to “personal reasons”, and will be replaced in the interim by Vic Darvey, the group’s chief operating officer who joined the business in January from MoneySuperMarket.com.
Eric Eckardt, chief executive of the US business, will also leave the company after two years, with group chief executive and co-founder Michael Bruce taking on his responsibilities.
Purplebricks said there are a number of headwinds in the Australian housing and it does not expect to meet revenue forecasts for the year.
In the US, the company said there has been a “slower-than-expected response” to its marketing initiative and it does not expect US revenue to meet expectations.
However, its core UK business is expected to report a 15% to 20% increase in revenue despite a challenging housing market.
Mr Bruce said: “Although there are macro and industry headwinds across markets, we are well placed to capitalise on the significant opportunity for growth that exists in each country, albeit not entirely as we would have wanted before our year end.
“The UK is leading the way with continued profitable growth and a strategy to deliver greater success. I am also excited to be taking the reins of the US business. The team in Australia are building on the changes they implemented late last year and Canada is delivering on plan and expectations.
“The board remains confident of the long-term growth potential of the business and the opportunity to deliver substantial value for shareholders.”