Property group’s share price halved in seven months
The market value of property group Purplebricks has halved in seven months as investors’ nervousness grows over the ability of the company to justify its valuation.
The company was close to a £1.5bn valuation in January with its shares at a 490p high, but last night its share price closed at 238p.
Purplebricks’ share price has fallen more than 10% in two days after the Solihull-based business delayed its trading update until after next month’s AGM.
It said: “Given the proximity of the AGM to the company’s 31 October half year period end, Purplebricks will issue one trading update covering the first six months of its financial year on 6 November 2018.”
It plans to announce its interim results on December 13. They will be closely scrutinised by the market to judge how much momentum is in UK profit growth and to assess the progress of its expansion into USA and Australia.
Last week, business newspaper The Australian Financial Review reported that the state consumer regulator in Western Australia was investigating “suspected contraventions” by Purplebricks. It follows a fine by the Queensland Office of Fair Trading in March.
Purplebricks continues to invest heavily in marketing, investing 46% of its revenues last year on promoting the brand. It recorded an EBITDA loss of £19.6m for the group in the year to April.
The company has been criticised previously for a lack of transparency, especially around its success rate in selling properties, and whether its high marketing spend is needed to gain significant market share or will be a permanent feature of its business model.