Purplebricks shareholder calls for chairman to be replaced
Activist investor Lecram has called for Purplebricks chairman Paul Pindar to be replaced as it increases the pressure on the property group’s board.
Lecram has called for a general meeting weeks after its stake in Purplebricks went above 5%, which enables it to move its criticism from the sidelines and into direct action.
It is demanding that Rightmove and Countrywide founder Harry Hill joins the board and is then made chairman.
Lecram, which is the investment vehicle of Adam Smith, has been a longstanding critic of Pindar and the Purplebricks leadership.
In a statement last month, reacting the the departure of Purplebricks chief financial officer after less than a year, Smith said: “Under Paul Pindar’s stewardship, Purplebricks has gone through four chief executives and five chief financial officers, which is a factor in why it has underperformed so badly.
“How long are shareholders prepared to wait for the chairman to accept responsibility and step down so we can end this circus and stabilise the company?”
Solihull-based Purplebricks was the pioneer of online estate agents, and offered a cheaper model to people selling their homes.
It invested heavily in its brand and gaining market share but found that it needed to maintain much higher levels of marketing spend than expected over time. Overseas expansions proved to be expensive and unsuccessful distractions.
Purplebricks’ share price has fallen 90% in the last 18 months, which was already a long way from the highs of 2018 when the group was valued at more than £1bn. Its market value is now just £35m.
In a statement, the Purplebricks board said the proposed changes “are not in the best interests of the company”.
It added: “Within the company’s FY22 results announcement, published on 2 August 2022, a clear plan was set out to improve business performance, return to positive cash flow and profitability, and build a scalable business model.
“The board considers that Lecram Holdings Limited’s decision to lodge the requisition is disruptive when the company and its executive team are focused on delivery of this turnaround plan.”
The largest shareholder Axel Springer, which has a 26.5% stake, intends to vote in support of Pindar, the company said.
Purplebricks said it is reviewing the “legal validity” of the requisition request. It must respond within three weeks, then if the request is valid, hold a general meeting within a further two to four weeks – which would mean a conclusion to this stage of Lecram’s battle with Purplebricks before Christmas.
