Despite setting out plans to return to profit, the Purplebricks share price has dropped further, while activist Lecram Holdings Limited, beneficial owner of a 5.16%% stake in the company, has once again called for Paul Pindar to be removed as chairman of the online estate agent.
The firm revealed yesterday that it intends to increase its annual cost savings target from £13m to £17m and make redundancies across the business.
The online agency also plans to diversify its revenue streams after recording a £42m loss in the year to 30 April, compared to a £7m profit the year before.
The new strategy, part of the “turnaround plan”, includes the launch of an in-house mortgage advice arm “five months ahead of plan”. But it has so far failed to provide the desired boost to the company’s fortunes. The group’s share price was down more than 7% yesterday, hitting a low of 9.10p, before closing at 9.26p.
In the six months to October 2022, losses widened. They totalled £20m, compared with £15m in the six months to October 2021.
Revenues were also down 16%, from £41m last year to £34m this year.
The turnaround plan, according to chief executive Helena Marston, is to return to positive cash generation in early 2024, but some investors, including Lecram Holdings Limited, are not impressed.
Lecram Holdings Limited issued this statement: “Purplebricks’ figures – showing higher operating losses and the company burning £2m of cash per month – confirm our worst fears that nothing is improving. We are entering one of the worst housing market conditions in a generation, yet the leadership seems to have an overly optimistic view of prospects. Shareholders can’t afford to wait any longer while this business runs out of money, they need to act and act quickly to change the chairman if there is any hope of salvaging value for all investors.”
A general meeting at which Lecram proposes the removal of Paul Pindar as chairman and the appointment of Harry Hill, founder of Countrywide and Rightmove, as a director, takes place on 19 December.
Hi Marc,
Could you please explain what you mean by “Return to Profit”.
I don’t recall them ever making a profit, so please correct me if I’m wrong.
Kind regards,
IHeartRE 🙂
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So rather than answer my question, you delete my post?
Ok, it’s your sand pit, but did I do any of the following:
Defame an individual or entity or bring them into disrepute.
Promote a business or contain hyperlinks to other websites.
No, I don’t believe I did. I questioned when PurpleBricks made the profit you referred to.
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I did some sums the other day, the technology and infrastructure is currently worth about 3 times their market cap, but not as a passive intermediary internet listing firm trying to compete with a shoal of m small #local agencies.
With the correct awareness of what they need to do there is an opportunity for Axel Springer and the other passengers to change the fortune of their investment.
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The Question Is :
Is Marc Da Silva – (Batman) – aka – Russell Quirk?
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https://propertyindustryeye.com/shares-in-purplebricks-storm-up-after-online-firm-reports-its-first-profit/
https://propertyindustryeye.com/eye-newsflash-purplebricks-reports-sales-of-43m-in-uk/
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From the story in the first link:
“However, despite the EBITDA figure, it posted a pre-tax loss of £2.8m, the Telegraph reported.”
From the story in the second link:
“Purplebricks revealed operating profits of £3.2m against a loss of £0.3m in the same period last year”
and also:
“At group level, Purplebricks reported an operating loss of £8.2m, up from £2.8mm last year”
My knowledge of accounting is pretty sketchy but while these figures seem to show a “paper” profit as a result of income exceeding operating costs, still a loss when you compare income against ALL costs, ie includng borrowing, taxation, premises costs etc, all things that real world businsesses need to cover before getting to a REAL, distributable, spendable amount of profit.
Apologies to those who understand accountacy better than I, if my assessment is fundamentally wrong
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Hi Nick,
I miss Rosalind!
I appreciate the two articles from “Back in the day”, but they do seem like just a bit of creative accounting for media spin at the time to increase the share price, not solid or real profits.
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The relevant point is that the UK operation was at one time profitable. It was the adventures abroad that drained the company.
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Have they ever made a real profit?
Have they ever paid a dividend to investors?
Are current investors suffering a massive loss in real time investment?
Is the housing market volatile and risk of going down hill next year and for the foreseeable future?
Are they cutting staff to save money?
Are they ‘spoofing’ the real situation, that today they are a high risk business that could fail and any wonder investors are unhappy?
If you can’t make at least 40% profit …. you are a failure and teetering on the edge of bankruptcy. Bye, Bye PB!
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more pb stuff who cares
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You! Because you read the articles luv, and comment!
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Who cares if they managed to make a profit once -the issue is the here and now and Woodentop is correct -the market next year will be smaller in size so assume they hold their market share even then the results will be worse-as they are cutting staff -how will they hold market share ?
I’m sure many large and the largest agencies will already have a plan to launch in the New Year in terms of cost control -shutting branches etc is natural -who would want a thousand or so high street offices right now -that’s a strange thing in a changing world as much as total online was
I feat a huge mistake made here and having read the piece in the times it’s obvious and shocking
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