The new boss of online estate agency Purplebricks has admitted the firm’s annual results were “not good enough” as it slumped to a loss and warned over tough property market conditions.
The embattled group reported pre-tax losses of £34.8 million for the year to April 30, against profits of £3.6 million the previous year.
Chief executive Helena Marston – who took over after former boss Vic Darvey stepped down in March – said the figures were “very disappointing”, but assured she was taking “decisive action” to turn the business around.
Investors are frustrated; I'm frustrated. We've been too slow to action in the pastHelena Marston, Purplebricks chief executive
The figures follow a tough year for the firm, which has seen its share price plunge after losing market share to rivals and after failings were uncovered in its lettings arm.
The firm recently revealed a £3.6 million hit from claims related to failings in how it communicated with tenants in the lettings division, while results also suffered from higher staff costs due to switching field agents from self-employed status to full employment last year.
It came under further pressure recently from activist investor Adam Smith’s investment vehicle, Lecram Holdings, for chairman Paul Pindar to resign.
Purplebricks’ share price has fallen by more than 97% from nearly 514p in August 2017 to 15p at market close on Monday, with the stock also falling another 2% on Tuesday after the results.
Ms Marston said: “Last year’s financial performance was significantly impacted by the challenges resulting from the implementation of our new operating model and investment in marketing that did not deliver the expected results, alongside a housing market which played against us. Nevertheless, our performance was not good enough.”
She told the PA news agency her turnaround plans would work and were already starting to bear fruit.
She said: “Investors are frustrated; I’m frustrated. We’ve been too slow to action in the past.”
“But my job is to give investors confidence that I’m getting the core engine of Purplebricks working again,” she added.
She said the plan will see costs slashed, improved training for managers and agents, new sales and marketing initiatives and price changes.
The group is already seeing improvements in revenues over the first quarter of the new financial year, with around 11,000 net instructions and turnover of about £16 million.
Purplebricks said revenues should reach between £62.5 million and £72.5 million over the full-year, having crashed by 23% to £70 million in the year to April.
But Ms Marston cautioned that house market conditions will continue to be challenging, with the cost-of-living crisis and interest rate rises compounding a lack of properties coming onto the market.
The group is focusing on boosting its lettings business, which tends to do well when property sales slow.
Ms Marston also revealed she is set to meet with investor Lecram following the results and will outline her overhaul plans.
But she dismissed its calls for the chairman to stand down.
“Further instability and removing the chairman is not what this business needs right now,” she said.