Woodford raises £16m with Purplebricks share sale

Crisis-hit fund manager Neil Woodford has raised £16m by selling nearly one-fifth of his stake in online estate agent Purplebricks.

Woodford Investment Management sold a 5% stake in the Solihull-based business as part of its efforts to raise funds.

Woodford suspended trading in his equity income fund on Monday, preventing investors from withdrawing money. Around £560m had been pulled out in the last month before Kent County Council sought to withdraw its £263m investment.

Purplebricks is facing its own turning point after founder Michael Bruce stood down as chief executive last month before selling his £33m stake earlier this week.

The business had expanded into Australia and the USA but progress was slow, while its UK business – which was operationally profitable – had been forced to maintain much higher advertising costs than had been expected.

German publishing group Axel Springer, which invested heavily last year, has increased its stake in Purplebricks amid speculation it may seek to take the business private.

Woodford still owns 23.9% of Purplebricks – a stake worth around £80m, although the sharp fall in the company’s share price over the last year may make an exit now undesirable.