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Purplebricks in trouble? UK chief quits and warning about overseas expansion

Purplebricks has this morning warned investors its foreign activities are not going as well as predicted - although it insists it is still in good shape in the UK.

However, the agency also admits that UK chief executive Lee Wainwright is quitting the firm after two years “for personal reasons.”

The UK operation will now be led by Vic Darvey who joined the firm only last month.


An unscheduled statement to shareholders and the City issued at 7am today says that it remains strong in the UK despite the challenging market - it expects to maintain a 75 per cent share of the online sector and expects to report a revenue increase of up to 20 per cent more than a year ago.

But there are problems overseas - it warns its shareholders that revenue from its Australian and US expansion “will not be sufficient to meet expectations for this financial year.” 

In Australia, where Purplebricks launched a new PR campaign only last month, the agency had to change its charging structure to ensure vendors pay only a proportion upfront with the rest of the fixed fee payable when a sale completes.

In the US, Purplebricks has ditched its country-wide flat fee structure and instead varies charges by location and offers a payment option for when a property is sold, rather than upfront - more in line with traditional operators in the US real estate sector.

This morning’s full statement reads:


Purplebricks Group plc, a world leading hybrid real estate agency, provides an update in relation to current trading and changes to its non-Board leadership team.

Whilst the UK housing market has continued to be challenging for the estate agency industry, the Board still expects to report UK revenue for the current financial year of approximately 15-20% above the prior year. The Company also expects to maintain its 75% share of UK online instructions and for Purplebricks to continue to be the clear market leader in UK hybrid estate agency.

Although the Australian housing market has experienced a number of headwinds, the Board is encouraged by the new leadership team, the positive changes made in the model towards the end of 2018 and the current level and quality of activity. However, the anticipated amount of recognisable revenue will not be sufficient to meet expectations for this financial year. 

In the US, the Company is making better than expected progress with conversion from opportunity to listing, listing to sale and sale to ancillary revenue, receiving positive reviews and feedback from customers. However, there has been a slower than expected response to the second US marketing initiative that concluded towards the end of January. There are some early positive signs from the third US marketing initiative and a recent change in business model to payment on completion. The vast majority of short-term investment will be focused on the Los Angeles and Florida markets. As a result of this, the Board does not expect the amount of US revenue to be sufficient to meet its expectations in this financial year. 

The business in Canada has performed well and remains on track to meet management's expectations. The Board continues to be encouraged by current and future opportunities in this market.

The Company announces that Lee Wainwright, UK CEO, and Eric Eckardt, US CEO, will shortly be leaving the business.

After two years with Purplebricks, Lee Wainwright will leave the business for personal reasons. Lee played an important role in helping Purplebricks become the UK’s largest estate agent. His responsibilities will be taken on in the interim by Vic Darvey, Purplebricks’ Group Chief Operating Officer, who joined the business in January 2019 from MoneySuperMarket.com. Vic has extensive experience of leading strong tech-focused, customer-centric businesses and will play a key role in the future direction and next stage of growth for Purplebricks.

Eric Eckardt will also be leaving the Company after two years. Michael Bruce, Group CEO and co-founder who was instrumental in the growth of the Purplebricks business in the UK and has proven experience in bringing together marketing, technology and customer centric estate agency operations will take on day-to-day management of the US business with immediate effect.

  • Carl Smales

    We all need to be highlighting the fact the Purple Bricks are allowing the Australian vendors to not pay all of their fee upfront.
    If that happens over here how long can they sustain their business model, if the alleged allegations of they only sell 51% of there listed properties. They will not receive their current revenue on the other 49%, that has got to hurt any business.

  • Mike Riley

    I wonder how many agents are fighting for an instruction against Purplebricks today, who will be printing this and telling the owner its only a matter of time before they run out of money like Emoov and you will lose your 900 quid.

    Have you got 900 to throw away Mrs Homeowner? Shares are down 35% today you know?.....

    I can picture it now.

    The only thing that keeps the PB pantomime going is their revenue. As soon as sellers are panicked that they may lose their money, that will slow down rapidly and the city will turn on them quicker than you can say... "I told you so".


    Perhaps agents will now also stop obsessing about competing with the call-centre listers. Has there ever been anything more absurd than; 'High Street service at online prices', as used by numerous agents?

  • icon

    Here we go.........:)

  • Charlie Lamdin

    “Give us a thousand quid and we might sell your home.”

    A PB shareholder close to the Bruce Brothers has told me “there’s just no way it can work.” They’ve done nothing but harm. Will be so glad to see the back of them. I’ve called them out on their unacceptable conduct from the start. If you take money off people without a commitment to sell, you are not an agent, you are an advertising service. Proper estate agents? It would be funny if it hadn’t caused so many people to lose out.

    Reconfigure My Home

    I agree Charlie... I couldn't make it pay when I set up the 1st regulated online estate agent in 1999 and after 14 years of trading we closed the company. As you know we charged 1/2% on completion and a £200 upfront to
    Cover digital media costs. I am glad they are failing in USA and AUS... and if the remaining 'hybrid' agents start to charge on completion they will only have to change their pricing(again) whether it's even more upfront or more on completion ( doubt they will not do this as they don't complete on anymore than 35-40% of their total marketed properties). No doubt more city money will be plunged into expensive TV /radio advertising which they will have to continue or else consumers will either (easily) forget the brand. Just loving their share price falling (again)! I wonder if the Bruce's will go back in (again) and buy up more shares this time . All the best - James Cronk

  • icon

    Price them out Guys.
    Here in Scotland we cant demand large fees as there are Agents up here with Fees of £500 to sell(Cheapskates)
    PB are the scurdge of our Great Trade
    Keep up the good work Guys.

    Reconfigure My Home

    I was shocked to see purplepricks sponsor the Scottish rfu team.... so that marketing obvs isn't working!

  • Andrew Hill

    When the smoke clears springs to mind...

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    • 21 February 2019 17:04 PM

    Michael and Kenny Bruce are running this company in the ground. Need to bring in adults to run the business and they've already sold shares over the past few years, while holding their employees hostage with their ESOP scheme. Each time the Bruce brothers sold, drove the shares lower without consideration for the estate agents or employees. I wouldn't be surprised if more top executives run for the doors! These guys are out of their league and only looking out for their best interest.

  • Andrew Stanton PROPTECH-PR A Consultancy for Proptech Founders

    Well, I am surprised that it has taken this long for the poor investors in PB to realise that despite increasing revenue every year, a company that does not make profit, can never generate a dividend. The true cost of a sale for any estate agent, be it a corporate, a person trading out of their bedroom, or an online agent is the same - over £2,000. So if you let vendors have the service for less than this, you never make profit. After years of being in the wilderness, explaining to everyone that PB do not 'sell' 81% of the stock they take on - and only convert about 48%, maybe someone will ask the company to publish their true instructions to completions ratio, and maybe refund the poor vendors who paid up front and got nothing extra. Thoughts?

    Reconfigure My Home

    There is no way they can show their hand as to true conversion rates. Purely guesstimating that probably 30 odd % leave disgruntled as they never hear from PB once they money is taken, and with self employed valuers guesstimating values they probably are misleading on most valuations. Their model is wrong and it's laughable to think Michael Bruce can turn around the USA model. Why is he doing this after selling a load of his and his brothers shares. They have bought the sellers and will never make a penny .. I give them six months... anyone want to offer a spread on the time scale to folding?

  • Steve James

    Like I've said Purplebricks in the USA is nearly finished. There's very little chance anyone had deep enough pockets to sustain a business plan there, too big and way to much competition and the Americans are too smart. In AUS they are shrewd too and the media are against them. They will blame the world economy and Michael Bruce will probably blame Brexit. In the UK they are burning through lpes at an amazing rate and they will stick around but nothing like 20% share as they predict. Poor Lee Wainwright is a great guy but he was toothless in that role. Paul Vickerstaff was constantly behind his back complaining to the Bruce's about him

    • 05 March 2019 14:20 PM

    Paul Vickerstaff a long time Bruce brothers friend they protect. He is one of many in the plc. Heard he was just sent to Germany with the JV while Kenny Bruce stumbles back to the UK to help Vic Darvey try to learn estate agency and improve his people skills. Kenny can also watch his racehorses and football team easier from the UK. Bruce brothers have a number of friends on staff in all markets, including family. Some show up, others do not walk in the building. If only investors knew what really goes on behind closed doors with Kenny and Michael. Two blokes who's time is running out and need to be taken out of the business poisoning all markets. Where is the Board?

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    We need to be careful what we wish for. If PB were to crash it could send the wrong message to the consumer that the market could crash – whether the news be welcomed by the traditional agent of not!
    Stuart Forsdike
    PCS Legal


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