Activist investor Adam Smith, who has a 4.2% stake in Purplebricks Group (GB:PURP), has demanded the that the chairman of the company should resign.
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Smith invested in the company through investment vehicle Lecram Holdings.
The letter from Lecram to Purplebricks chairman Paul Pindar said that Pindar had, “presided over this highly unsatisfactory performance and… should now stand aside in favour of a replacement with the necessary experience and skills to address urgently the company’s continuing cash burn and operating performance within the estate agency sector.”
Purplebricks’ stock has lost 80% of its value in the last year, with the share price now at its lowest level ever.
Purplebricks is a technology-led real estate company operating in the UK market. German publishing giant Axel Springer SE is the major shareholder in the company with a 26.5% stake.
Increasing losses, falling market share
The company’s revenue fell by 7%, and it incurred an operating loss of £11.1 million in its results for the first half of 2022. Purplebricks’ market share of properties sold by volume was at 3.9%, down from 4.8% last year.
Last year, the company changed its field agents from self-employed to full-time employees. This has incurred higher costs for the company, hurting its profits.
New leadership, new changes
Investors are eagerly waiting to see new strategies and plans under the guidance of the new CEO, Helena Marston, to get the company’s performance on track. The company is expected to post its full-year results in August 2022.
The company recently announced it would increase its prices to support its topline and also end its money-back guarantee scheme.
Marston said, “The price increases are a necessary step, not just to strengthen our revenues, but also as a result of the additional costs our business has had to absorb over the past few years.”
Ending thoughts
The future of the housing market is uncertain, but new leadership offers hope that the company can turn things around.
