Online estate agent Purplebricks is looking for a buyer, after issuing a profit warning

Purplebricks has revised its adjusted EBITDA loss forecast, now anticipating a loss of between £15m and £20m, which is worse than the £8.8m predicted in December.

The firm informed shareholders that its strategy to turn the business around, with emphasis on lucrative areas, had resulted in more disturbance to sales than anticipated, leading to lower-than-expected new instructions from home sellers.

As a result, shares in Purplebricks plummeted by 15% this morning to 8.3p, representing a significant drop from their worth of £4 per share five years ago.

The corporation has encountered legal challenges in the past years, with 100 estate agents claiming that they were essentially company employees, making them eligible for holiday pay and pension contributions. Additionally, the company reserved up to £9m following the noncompliance of its lettings business with the law protecting tenants’ deposits.

Purplebricks’ CEO, Helena Marston, expressed that the company’s market value does not mirror its “upside potential.” Marston stated that in the last nine months, the company has executed substantial measures to enhance its sales business, establish Purplebricks Financial Services, improve its standards, and stabilize lettings, placing the company in its best-ever position for the future.

While the initiatives caused more short-term disruption to the company’s Q3 performance than expected, Marston remains optimistic that the company will return to positive cash generation early in FY24.

Marston acknowledged that the company’s market valuation does not currently reflect its upside potential, leading the board to decide that a strategic review is in the best interest of shareholders.

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