Purplebricks's UK CEO to leave

Joe Giddens  PA Wire  PA ImagesMore

Joe Giddens PA Wire PA ImagesMore

Purplebricks also said that it expects to post revenue between £130m-£140m in its upcoming results, marking a 20 per cent drop from a previous guidance of £165m-£175m.

Shares plunged in early trading to £1 before recovering to around 120p.

Purplebricks, which has used a low-fee model to win business from more bigger, established estate agents, said Britain's housing market remained challenging but it still expected United Kingdom revenue to be 15-20 percent higher in the year ending April 30.

Shares in Purplebricks tumbled by more than 30% after the online estate agency cut its annual revenue guidance and announced the departure of the bosses of its United Kingdom and USA units. This morning's guidance says that the United Kingdom business is expected to achieve an adjusted EBITDA margin in double digits.

It said revenue in the United States of America and Australia would not meet its expectations, with a U.S. marketing initiative not as successful as hoped.

Although the Australian housing market has experienced a number of headwinds, the Board is encouraged by the new leadership team, the positive changes made in the model towards the end of 2018 and the current level and quality of activity. However, revenue will not meet expectations.

In the US, Purplebricks said it is making better than expected progress, with a recent change in the business model to payment on completion. "As a result of this, the Board does not expect the amount of U.S. revenue to be sufficient to meet its expectations in this financial year".

The business in Canada has performed well and remains on track to meet management's expectations.

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Cash balances at the end of January were £71.0 million. However, in its interim results for the six months ending October 31 past year, it stated that net cash was £103m.

The Company announces that Lee Wainwright, UK CEO, and Eric Eckardt, US CEO, will shortly be leaving the business.

The statement said that United Kingdom boss Lee Wainwright is leaving for "personal reasons".

Given those issues, Purplebricks doesn't expect its USA business to meet expectations this year.

The company expects to bring in revenue of 130 million pounds to 140 million pounds this year, or $170 million to $183 million.

Group CEO and founder Michael Bruce is taking over as day-to-day leader of the United States business with immediate effect.

Replacing Wainwright on a temporary basis is chief operating officer Vic Darvey, who only joined the company last month from Moneysupermarket.com Group PLC (LON:MONY).

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