Revenue targets scaled back as international problems hit Purplebricks
Online estate agent Purplebricks will miss its revenue targets in its two largest international markets, providing further cause for concern for investors who are cautious about the long-term success of its model.
The Solihull-based group has been affected by “headwinds” in the Australian housing market and an underwhelming response to its marketing push in the USA.
Its shares – which have lost two thirds of their value in the last 18 months – are expected to fall further in early trading this morning.
Purplebricks revealed that neither its Australia or the US operations will meet revenue expectations this year. It has reduced the group’s revenue guidance for the current year by £35m and now expects it to be between £130m-£140m.
Michael Bruce, group chief executive and co-founder, is to take over running its American division, with US chief executive Eric Eckardt leaving.
Purplebricks UK chief executive Lee Wainwright
Also departing is UK chief executive Lee Wainwright, although his departure has been attributed to “personal reasons”.
Bruce sought to reassure the market, highlighting “profitable growth” in the UK and “the long-term growth potential of the business”.
He 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.”
Purplebricks expects its UK division to grow revenue by up to 20% in the current financial year, while it has retained a 75% market share of UK online instructions.
