The chief executive of Purplebricks, who eight weeks ago claimed to have “a plan to grow our lettings business”, is now poised to slash the size of the division.
Helena Marston - whose appointment to the chief executive role last year was delayed after it was discovered that in 2014 she voluntarily declared herself bankrupt - made this latest U-turn in a trading statement at the start of the weekend.
In it she says: ”The board has proactively identified £4 million of further annualised cost savings in addition to those communicated at the time of the Interim Results. These additional savings will be achieved by streamlining the lettings business and more conservative investment in the ramp up of the mortgages business.”
The mortgages business was launched just two months ago.
The statement continues: “The board recognise that the potential of the Group may be better realised under an alternative ownership structure, and has, therefore, decided to conduct a strategic review of the Group’s business with the aim of delivering maximum value for shareholders.”
Marston personally is quoted in the statement saying: “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.”
The agency’s lettings division has been in the eye of the many storms surrounding Purplebricks in recent years.
Late in 2021 the Daily Telegraph broke the news that Purplebricks had - for an unspecified period of time - failed to properly serve legally-required documents to tenants explaining their deposits had been put into a national protection scheme.
At the same time its then-head of lettings quit with immediate effect.
Purplebricks at the time put the financial liability of the error at between £3m and £9m but the Telegraph said it could be up to £30m.
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They are already selling off parts of their portfolio.
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