Purplebricks is considering an alternative ownership structure to ‘better realise the potential of the group.’
The beleaguered online agent launched a strategic review in a trading update this morning.
It said this “may or may not result in a sale of the company or some or all of the group's business and assets.”
Purplebricks said its turnaround plan - including job cuts and fee increases - has continued at pace but "implementation has involved more disruption to the sales field than originally envisaged."
This has resulted in approximately £1.2m of one-off exceptional costs being incurred for its full-year results ending April 2023.
As a result of this disruption, instruction numbers achieved in the third quarter were lower than expected, Purplebricks said.
In response to the lower instruction levels, the board said it has identified £4m of further annualised cost savings that it said will be achieved by "streamlining the lettings business and more conservative investment in the ramp up of the mortgages business."
The mortgage arm was only launched in December 2022.
The impact of lower instruction levels during the third quarter has resulted in the board revising its expectations for full year performance.
The group now expects to deliver revenue for FY23 of between £60m and £65m, and an adjusted loss of between £15m and £20m
As a result of its turnaround plan, the group said it continues to expect positive cash generation in early FY24.
Its chief executive Helena Marston 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.”
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Trusting your biggest financial asset to someone that does not care how much you get for that asset should always have rung alarm bells but the financial pundits seemed to love talking only about one end of the sum.
Save, save, save money they said! Well p/bricks don’t need saving.
a
It's only a matter of time...... administration looms large.
dream................on
waffle waffle waffle, corporate gibberish, excuses and back covering.
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