Let me explain in detail what I mean. The Conservative party has been in office 12 years, and Truss has been a leading member of it for much of that time. Most recently she has been the women and equality minister since September 2019 and held the role of international trade secretary from the same period, until Boris Johnson appointed her as foreign secretary in September last year.
Yet, in a breathtaking display of double-think, she has lambasted her own government over the past three weeks, saying: “We currently have the highest tax burden that we’ve had for 70 years…We have anaemic growth in this country. we’ve got the lowest growth projected in the G7…I’m afraid some of our hospitals are falling apart … [and, on government economic policy] It is cutting back on growth. It is preventing companies from investing and it’s taking money out of people’s pockets. That is no way to get the economy going during a recession.”
Fast forward to this week and the first full trading statement from Purplebricks under new chief executive Helena Marston and long-standing chairman Paul Pindar - and perhaps a little more double-think.
Marston joined Purplebricks in May 2020 as Chief People Officer and took over the role of Chief Operating Officer at the end of 2021. Then in May this year she was - after a delay caused by due diligence checks - appointed as Chief Executive, taking over from Vic Darvey, who resigned.
Meanwhile Pindar, an early investor in Purplebricks when it was promising to change the face of estate agency, has been non-executive chairman since 2015.
It was perhaps a tough break that Marston’s first major trading statement as CEO contained such a disastrous snapshot of corporate performance. At almost exactly the same second as the Nationwide released its house price index showing a remarkably buoyant market with 12 successive months of capital appreciation, Purplebricks’ statement was unadulterated misery at failing to capitalise on the buoyant market.
Instead of booming as most agencies have done, Purplebricks contrived to turn a £6.8m profit in 2021 into a crashing £42m loss in the year to April 2022, with turnover down 23 per cent to £70m and instructions down 31 per cent to 40,141.
But here’s where the Liz Truss tactic kicks in.
Look through the 34 pages of results (written by the company leadership) and it appears the company’s shockingly poor performance was the fault of…poor leadership decisions. In case you didn’t realise, that’s the very same leadership that the new chief executive and long-standing chairman have been part of.
Helena Marston’s and Paul Pindar’s comments to shareholders pull no punches in criticising the company which they have helped lead for some time.
In Marston’s opening paragraphs she says: “It has been incredibly frustrating to look back at a series of missteps that have meant we have so far failed to capitalise on the strength of this platform.”
On field sales she comments: “Last year our sales execution was inconsistent, with variable levels of performance and insufficient thought given to targeting customers where our proposition would be most successful. We were also too slow to adjust our field force to align with the fall in instructions which saw us carry unnecessary costs in the year.”
And on marketing she is damning, saying: “Although the budget for marketing grew significantly last year, its effectiveness was poor. We moved away from shouting about our low fixed fee and launched the ‘SOLD’ national advertising campaign. We missed the opportunity of communicating our key differentiator in a market that was seeing significant rises in house prices, and where our model could have saved consumers thousands in commission.”
Here is Marston’s take on the money back guarantee initiative: “The impact of MBG was far below what the early trials had indicated. When it was introduced, its objective was to inspire confidence among customers that we would deliver for them, and if we did not, they had the opportunity to get their money back. However, we have not seen the anticipated increase in instruction volumes and it has added complexity and cost to our operating model. As a result, in July 2022, we removed MBG from our customer offering.”
On the well-publicised compliance failure in Purplebricks’ lettings division, the results document says: “We were disappointed to discover a process issue in our lettings business in December 2021 relating to how we had been communicating with tenants on behalf of landlords about deposit registrations and prescribed information. We acted quickly to assess the extent of any potential claims and made a provision of £3.6m accordingly. We are satisfied that this amount remains appropriate.”
Now of course Marston’s and Pindar’s recovery plan - slashing £13m in costs, growing and diversifying revenue, better targeting to win more instructions, and raising standards through a new “high-performance culture” - may well change Purplebricks’ fortunes for the better. Or, if past recovery plans are anything to go by, it may not.
But either way it is based substantially on criticising the past management for failure, while being led now by members of that self-same past management. An interesting approach, to say the least.
Let’s end with another similarity with Liz Truss.
On the day of the Purplebricks statement, Truss’ campaign tweeted her words: “I know there will be tough times. But I also know that I can deal with difficult situations. I can get the job done. And I am completely determined and resolute.”
Helena Marston makes a similar statement in the results document, saying: “I have looked closely at our proposition, the issues we faced, what was working, what was not, and what we need to do to turn things around. I am in no doubt of the significant challenges that lie ahead of us. I believe that we now have the right plan in place: one which will change the direction of travel and deliver significant improvements, with a return to growth.”
Will Purplebricks’ double-think work?
Not if the shareholders are anything to go by. Before the recovery plan was released, Purplebricks’ share price was a paltry 15p (a shadow of its one-time record high of over 500p in 2017). As I write this, some days later, the share price remains hovering around 15p.
Many people would say this was a cool and possibly hostile reception to the plan: in double-think, of course, it’s a triumph.
*Editor of Letting Agent Today and Landlord Today, Graham can be found tweeting about all things property at @PropertyJourn