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Purplebricks share price slides further following Michael Bruce departure

Following yesterday's surprise news that founder Michael Bruce is leaving the business and its Australian operation is closing down, Purplebricks encountered another turbulent day of stock market trading. 

The hybrid agency's share price closed at 119p yesterday, down 16p (almost 12%) for the day.

It still remains above its December 2015 launch price of 100p, but is a shadow of the 498.5p high recorded in July 2017.


The agency has suffered a series of trading knockbacks recently, with UBS cutting its price forecast for Purplebricks shares to 100p just a few days ago. 

This follows a price forecast cut from 305p to 285p back in March. The Swiss bank predicted that the agency's business down under wouldn't break even until 2022 and that the US operation will not see a profit until 2025.

In April, Berenberg Bank reduced its price target for Purplebricks by over 80%, from 470p to 80p, saying the agency has 'flown too close to the sun'.

The period of turbulence for Purplebricks kicked off with the announcement in February that UK chief executive, Lee Wainwright, and US chief executive, Eric Eckardt, would be leaving the business.


A statement accompanying yesterday's news thanked Bruce for his 'truly remarkable contribution' to the agency. Bruce will be replaced as chief executive by Vic Darvey, a former managing director of Moneysupermarket.com who had been acting as Purplebricks' chief operating officer. 

The statement, made by non-executive chairman Paul Pindar, added that Purplebricks' rate of geographic expansion had been 'too rapid' and that the agency is hoping to learn from its errors.

Mike DelPrete, former head of strategy at the portal Trade Me in New Zealand and a long-standing analyst of portals and online estate agencies in the UK, told Estate Agent Today: "My philosophy is that if you're not failing, you're not trying hard enough. I'd hate for this news - or the media and industry reaction - to discourage future entrepreneurs from trying something new." 

"Ultimately, international expansion proved to be too much of a stretch, but full credit should go to Purplebricks for having the ambition to try something new and pushing the model to its limits."

Meanwhile, a number of industry commentators took to Twitter yesterday to comment on the news. 

Anthony Codling, a former market analyst and now chief executive of fledgling portal Rummage4Property, who has been a vocal critic of Purplebricks, tweeted: "Is this the clearest sign yet that passive intermediaries are not the best thing since sliced bread? Property is primarily a people business not a PropTech one."

And Russell Quirk, the former chief executive of Emoov who now fronts an industry PR firm, tweeted: "Michael Bruce has to be admired greatly regardless of the international issues in his business and lack of traction and premature expansion." 

"He’s a true innovator and has balls of steel for sure. Unfortunately, every founder eventually has their day at the hands of a board."

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    As a former investor with direct insight into the business, I can tell you that Michael and Kenny Bruce disrupted the business and influenced all decisions in every market, never letting their local teams lead. They only trusted incompetent friends and family hires to watch every move across all markets, providing them with positions they were not qualified. In fairness, Bruce brothers do deserve credit for the early success during the first 9 months of Purplebricks, but the Board acted 1-2 years too late to move them out. Paul Pindar, Chairman should be questioned with a poor track record including eve sleep where he is also chairman. Stock trading at 52-week low with executive turnover. Bruce brothers used the hype of international expansion to drive the stock high on speculation with investors, then personally sold million in shares timing the market before reporting to the city. They have no downside this year and already took money off the table, along with a select few to their friends and family. Most recent sale was Axel Springer for their personal gain while LPEs watched the stock drop afterwards, not able to sell give the CSOP scheme.

    Vic Darvey, new CEO does not have the respect of the team and has no estate agency experience. A Paul Pindar hire, stiff and not suited for the position. People are running for the doors and in then US and UK, resignations are daily. Losing key employees with CEO's across UK, Aus and US already exited given the Bruce brothers influence on all operations, business model and marketing initiatives (UK campaign rolled out in all markets). There are now no leaders remaining in the US and Aus is now winding down.

    We expect US to shutdown within 30-60 days with a formal announcement as they attempt to go private if they can find a naive PE firm. Shakeup needs to happen at the Board level too. It's a shame, the Board did not act faster to move the brothers out so they could keep their dignity. At least the cashed in early at the expense of the LPEs (and Axel Springer) and laughed all the way to the bank.

  • Steve James

    Hate to say it... nope I am liking to say I told you so. I predicted this in 2018. Michael Bruce is a slime ball lawyer and now he's gone it won't be long before Kenny will exit too. These pump it and dump it duo have had their fill. Pb is burning through cash and losing its team in dramatic fashion. They will certainly exit the US market, they bit off more than they could chew just like Australia. Kennys short tempered now and he will step down soon, no comment from him which says a thousand words. He will jump before he's pushed as Axel the current investors will want him gone. Pb will probably survive in the UK but not a big deal as the brothers Grimm pumped it. Still both these pumpers will walk away with a cool 20 to 40 million reach. When I saw Micheal Bruce brag about his new Bentley at the summer conference I knew pb days were numbered, hes an arrogant big headed fool.

  • Andrew Stanton PROPTECH-PR A Consultancy for Proptech Founders

    Justin as you say - Paul Pindar - ex Capita - ringing bells for anyone?, I think he parachuted out in 2014 … and 18 months later … mayhem- well as they say history often repeats itself.

    And how many directorships has Mr Bruce now had? And where are the companies he left behind now?

    On the flip side he is probably in a personal capacity the richest and largest 'disruptor' in the estate agency realm. He certainly has disrupted lots of investors, and the German communications giant Axel Springer, who has has lost 69% of their 120M plus investment - by buying shares at the wrong time. Also of course there are hundreds of LPE's whose lives have become disrupted, and finally I think 48% of all vendors who paid Purplebricks money upfront, they have definitely felt the disruptive force of Michael, as they did not even get a cake, let alone a successful sale. Maybe they should start a PPI style mis-selling campaign and ask trading standards if they can claw back their money plus interest.

    Personally I think Michael with all the millions he got from selling his shares, will be extremely glad to be out of the firing line, a bit like Cameron post the Brexit vote. Though I am not sure the PB board members will be as resilient as Mrs May though, more likely to see some industrial throwing of people under buses in the coming weeks - metatheoretically.

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    I'm mostly surprised by the....well surprise. This was clearly the Bruce brothers gambit all along, make a few million, line their pockets, stand well back and watch it burn. Pretty much the MO of the pair of them.

  • Ashley  Sorensen

    There seems to be a few people on here who subscribe to the ‘no sale, no fee’ concept.

    If we are to be supportive of the estate agency sector as a whole, I cannot see how this is possible unless fees are charged - whether a vendors house sells or not.

    We are after all providing a service and one with significant costs attached to it.

    Vendors are never going to value our services unless we value them!

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    Maybe there it is an adjustment of the perception of Estate Agency that is required. When I first came out of uni some 17 years ago and in to Agency I couldn't understand the concept of a business that does a lot of work providing not just a service but also tangible assets such as brochures, photo's, marketing material etc upfront and for no initial payment. May be there is a place to split a marketing agent from a managing agent. I.e client employs the services of a marketing agent to produce the marketing materials for the property for a cost and then chooses to employ the services of a managing agent to deal with the sale of the property. I don't know of any advertising agencies or marketing companies outside of Agency that would create an advertising or marketing campaign and only receive payment if more products were sold. Just a thought.


    In the ideal world, agents would be able to charge for ALL aspects of marketing including portals in addition to the selling fee. In thirty years I've never understood the rush to include everything in the fee be it floor plans (using external software or an external company), 3D tours, videttes, digital brochures, etc.

  • Andrew Stanton PROPTECH-PR A Consultancy for Proptech Founders

    Hi Ashley I totally agree that all vendors should pay for the service sale or no sale, but all agents would need to adhere to this for it to work.

    In that utopia - fees would actually come down, as each fee on completion covers the cost of sale of that property plus the profit on top, plus all the costs of the 48% of listings that do not get sold that the agent has to carry the cost of.

    A bit complicated but you list 10, sell 7 sstc, and complete on 5 as 2 fall through.

    So you get paid on the 5 you complete on but that fee has to cover the cost of sale, plus profit, plus the cost of marketing the other 5 you fail to sell.


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