Purplebricks considers putting itself up for sale, cuts guidance

17th Feb 2023 07:57

(Sharecast News) - Purplebricks downgraded its full-year expectations on Friday as it pointed to disruption from its new go-to-market strategy, and said it was considering putting itself up for sale.

The online estate agent said that since its interim results in December last year, disruption from its turnaround plan had caused instruction numbers in Q3 FY23 to be lower than expected.

A key component of the company's turnaround plan is the implementation of its revised go-to-market strategy, which aims to focus resource and investment into the most profitable regions where there remain the largest opportunities for market share growth.

Purplebricks said implementation of the plan has involved more disruption to the sales field than originally expected in order to achieve the required cost savings and efficiency improvements. This has resulted in around £1.2m of one-off exceptional costs being incurred in H2 FY23 to date.

As a result, it now expects to deliver FY23 revenue of between £60m and £65m and an adjusted EBITDA loss of between £15m and £20m. The company had previously guided to revenues of £67.5m to £72.5m and an EBITDA loss of £4m to £11m.

The company also said it was kicking off a strategic review that may or may not result in a sale of the whole business or some of the business and assets.

Chief executive officer Helena Marston said: "We have undertaken a huge amount of work in the last nine months to improve our sales business, raise standards, establish Purplebricks Financial Services, and stabilise lettings, all of which means the company has never been in better shape for the future.

"Yes, the actions we have taken have caused more short-term disruption to our Q3 performance than anticipated, but we remain confident in returning to positive cash generation in early FY24. We recognise that our upside potential is not currently reflected in our market valuation, which is why the entire board has therefore concluded that a strategic review is now in the best interests of all shareholders."

Purplebricks said it is not in talks with any potential suitor and is not in receipt of any approach with regard to a possible offer.

At 0840 GMT, the shares were down 12.5% at 8.66p.