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UK and US Chiefs quit Purplebricks amid revenue downgrades

Purplebricks Group released a statement this morning stating the UK boss Lee Wainwright and US Boss Eric Echkardt would be leaving the business.

The statement also reports updated revenue guidance figures for 2018/19 Financial year of GBP 165-175m (AUD 300-320m) has been revised down to GPB130 – 140m (AUD 240-260m), with expectations for the US markets and Australian markets similarly revised down.

Purplebricks shares on the London Stock Exchange dropped sharply by 40 per cent on the announcement but recovered to be down 24 per cent at the close of trading. 

Wainwright’s departure is for “personal reasons”; no reason was given for the departure of Echkardt.

The statement mentions the challenging UK housing market and how that has impacted the company.

Despite this, they still expect to report UK revenue of between 15-20 per cent increases on the prior year, while maintaining market share.

Similarly, the statement points to ‘headwinds’ in the Australian Market, and that the “amount of recognisable revenue would not be sufficient to meet expectations for this financial year.”

Wainwright’s responsibilities will be taken on in the interim by Vic Darvey, Purplebricks’ Group Chief Operating Officer, who joined the business in January 2019.

Group CEO and co-founder Michael Bruce will personally be taking the reins of the US business and says he is excited for the challenge.

“Although there are macro and industry headwinds across markets we are well placed to capitalise on the significant opportunity for growth that exists in each country, albeit not entirely as we would have wanted before our year-end,” said Mr Bruce.

“The UK is leading the way with continued profitable growth and a strategy to deliver greater success.

“The team in Australia are building on the changes they implemented late last year and Canada is delivering on plan and expectations.

“The Board remains confident of the long-term growth potential of the business and the opportunity to deliver substantial value for shareholders.”

Purplebricks shares closed at GPB125 from a 12 month high of GPB475.

 

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