Purplebricks’ stock nosedives over 60% as the distressed real estate agency cautions of possible cash depletion.
On Tuesday, in a trading update, Purplebricks revealed that a decline in property listings led to weaker-than-expected earnings and revenue for the year.
New listings experienced a nearly 50% drop in the final quarter of 2022, falling from 10,964 the previous year to only 5,672.
The floundering firm, which is attempting to sell itself in a salvage operation, cautioned that this situation might deplete its cash reserves.
With £9.1m in its coffers, Purplebricks’ board no longer anticipates returning to profitability in the current fiscal year.
The company also mentioned that due to its unstable financial standing, a payment provider it collaborates with has been withholding some funds.
The board is now concentrating on selling the business to avert a financial crisis.
A “small number” of potential buyers are engaged in ongoing discussions to acquire Purplebricks.
However, the real estate agency warned that the potential sale valuation is likely to be significantly lower than the company’s current share price.
On Tuesday morning, Purplebricks’ shares declined by 3.3p to 2.15p. The stock was valued at nearly £5 in 2017.
In February, the online estate agent began seeking a buyer following a tumultuous 18 months that included scandals, a profit warning, and demands from shareholders for the dismissal of its chairman, Paul Pindar.
Since the beginning of the year, Purplebricks’ value has plummeted by almost 90%.
