By using this website, you agree to our use of cookies to enhance your experience.


Purplebricks’ shares crash to new low after cash warning

Investors were licking their wounds yesterday after the Purplebricks’ share price plummeted by 60% off the back of warnings that it risked running out of cash if a strategic review and takeover talks aren’t concluded soon.

A trading update from the beleaguered online agent this morning revealed that its payment processor for ‘pay now’ instructions has withheld some remittances owed due to the brand’s current financial position.

It said this has impacted its cash positions, which stood at around £9.1m at the end of last month.


The update also warned that should the group not be able to agree revised terms for the financing to support its pay later offering, which ended last month, or should those terms be disadvantageous to the group or its customers, “this would accelerate the group's utilisation of its remaining cash reserves.”

Its share price fell to a low of 1.88p yesterday and closed at 2.04p, down 63%.

The Purplebricks share price is now down 77% so far this year. 

Adam Smith of Purplebricks activist shareholder Lecram Holdings, wich has a 5% stake in the business, said in response to the update: "This is exactly what we feared would happen without a change in leadership.”

Lecram Holdings has been calling for Purplebricks chairman Paul Pindar to resign but lost a crunch vote on the issue last year.

He also queried why Purplebricks said in its statement that it had ruled out an equity raise, adding: “I question how the company can say that there is no support for an equity raise when neither Lecram nor other significant shareholders have to my knowledge been consulted. 

“I can only conclude that the board has granted Axel Springer a de facto veto over strategy, which is likely to be at the expense of other shareholders.”

  • icon

    Aside from people trying to make a quick buck from volatile penny shares, their business model relies on customers paying cash upfront. Two things - who in their right mind would give them money when their future s under threat and secondly, if they take money in the knowledge they may go bust then there will be consequences.

  • icon

    Thousands gave them money up front, taken in by their massive hated commisery advertising campaign. This flawed business model had to spend millions on advertising because it has no High Street fascia advertising. Now that cash is low, all is doomed. Doomed i tell you, ha ha ha. But feel sorry for the clueless who worked for them. They should now apply to proper Estate Agents for jobs quickly.


Please login to comment

MovePal MovePal MovePal
sign up