Crisis-stricken Purplebricks reveals cash reserves are under threat

Online estate agency Purplebricks has warned that its cash reserves are compromised whilst it continues to look for a takeover deal.

The firm says instruction levels did not increase as anticipated, meaning its cash position, which stood at £9.1m at the end of April, has been impacted.

It does not expect to be able to generate cash in 2024, due to the trading performance of the group as well as the uncertainty surrounding its future ownership.

In light of its current financial position, Purplebricks’ payment processor for ‘pay now’ instructions has exercised its right to withhold a portion of remittances to the group.

The Solihull-based company put itself up for sale in February, to see if new ownership could steer the struggling firm in the right direction. It’s since been undergoing a strategic review, which may result in a sale of the whole company or part of the business.

Purplebricks says that a “small number of parties remain in discussions” concerning the sale of the company or some or all of the group’s business and assets.

In a statement on the stock market, Purplebricks says that: “Negotiations are ongoing, however, at the current time, the transactions being contemplated, if concluded, would be expected to deliver returns to shareholders materially below the Company’s current share price”.