Purplebricks shares slide as founder Michael Bruce quits

BBC Business 07 May 2019 10:42
By Ian Westbrook BBC Business reporter
Michael BruceImage copyright Purplebricks

Shares in online estate agent Purplebricks have dropped more than 5%, after founder and chief executive Michael Bruce left the company.

Vic Darvey, who had been the firm's chief operating officer, will succeed Mr Bruce as chief executive.

Purplebricks also said it was pulling out of Australia and placing its US business under review.

Chairman Paul Pindar apologised to shareholders for its recent "disappointing" performance.

"With hindsight, our rate of geographic expansion was too rapid," he said.

The company has operated in Australia for two-and-a-half years, but said the prospective returns from the country were "not sufficient to justify continued investment".

Purplebricks is also cutting back investment in the US, although its Canadian business continues to flourish.

"Having established a market-leading position, there remain many opportunities for further profitable growth and this will be a key area of focus going forward."

Shares in the company fell in February after it cut its sales forecast. from between £165m and £175m to between £130m and £145m.

Mr Bruce and his brother Kenny, who grew up on a council estate in Larne, County Antrim, founded the online estate agent in 2012.

Viewings can be booked online at any time and people can arrange visits themselves, or pay the company extra to do it for them.

Speaking about Mr Bruce's departure, Mr Pindar said: "Michael's vision in creating the UK's leading hybrid estate agent has been deeply impressive, as has his relentless energy in developing the business both in the UK and internationally."

'Shock' departure

"It's a shock to the industry, although I don't know if Michael was expecting it," he said.

Image copyright Purplebricks

And data from Zoopla's 2018 State of the Property Nation report indicated that 24% of consumers used an online agent in the previous year.

"Their impact has been significant. The estate agents' sector is not prone to innovation, so when Purplebricks came along - although they were not the first online agent - they had a cleverer and more imaginative way of delivering the hybrid model."

"It's so important for people to do their research," she told the BBC. "Not all agents are the same and not all online agents are the same.

"They and others opened up the market and encouraged transparency.

"Local independent agents who are more professional in their area might be a good option for certain people."

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Michael BrucePurplebricksUKPaul PindarBBC Business
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