Purplebricks puts up ‘for sale’ sign
Online estate agency Purplebricks has put itself up for sale as it looks to see if new ownership could steer the struggling firm in the right direction.
The Solihull-based agency will now undergo a strategic review, which may result in a sale of the whole company or part of the business.
The board says whilst the business and brand has “significant value” the firm’s full potential “may be realised” under new ownership.
It has appointed Zeus as its financial adviser to deliver the review and an offer period has now commenced. Purplebricks says it is currently not in talks with any potential buyers.
It also announced a profit warning this morning as it expects an EBITDA loss of between £15m to £20m. It predicts revenues of between £60m to £65m this year.
Purplebricks’ share price dropped 12% in early trading, and the company’s market value is below £30m – a long way below the £1bn-plus value it had five years ago.
In August, Purplebricks revealed a £13m recovery plan. Since then, it says it has identified £4m of annual cost savings which will be achieved through a streamline of the lettings business and a more conservative investment in the ramp up of the mortgages business.
The implementation of its turnaround plan however has hit the sales field resulting in £1.2m of one-off exceptional costs being incurred in the first half of the year.
Helena Marston, CEO said: “We have undertaken a huge amount of work in the last 9 months to improve our sales business, raise standards, establish Purplebricks Financial Services, and stabilise lettings, all of which means the Company has never been in better shape for the future.
“Yes, the actions we have taken have caused more short-term disruption to our Q3 performance than anticipated, but we remain confident in returning to positive cash generation in early FY24.
“We recognise that our upside potential is not currently reflected in our market valuation, which is why the entire Board has therefore concluded that a strategic review is now in the best interests of all shareholders.”
