LONDON (Alliance News) - Shares in Purplebricks Group PLC dropped on Thursday as the real estate agent cut its annual guidance by GBP35 million and warned that its revenue in Australia and the US will fail to meet expectations.
Purplebricks shares were trading down 28% at 118.70 pence each, early Thursday morning. The stock is down 71% in the past 12 months.
Purplebricks now expects to post revenue of between GBP130 and GBP140 million in the year to the end of April. It previously guided for revenue to be between GBP165 million and GBP175 million.
A year ago, the real estate firm posted revenue of GBP93.7 million.
The reduction is due to both Australian and US revenue being expected to come in below the board's expectations due to "a number of headwinds".
"Although there are macro and industry headwinds across markets we are well placed to capitalise on the significant opportunity for growth that exists in each country, albeit not entirely as we would have wanted before our year end," Chief Executive Officer & Co-Founder Michael Bruce said.
In Australia, Purplebricks said it is encouraged by the "positive changes" made to address the issues.
In the US, revenue will come in lower due to a "slower than expected" response to marketing initiatives.
Meanwhile, in the UK, despite the challenging conditions of the housing market and real estate sector, Purplebricks expects to report UK revenue for the current financial year between 15% and 20% higher than the prior year.
UK revenue a year ago was GBP78.1 million.
The group expects that the UK will achieve an adjusted earnings before interest, taxes, depreciation and amortisation margin in double-digits for the year.
In Canada, Purplebrick said its business performed well and "remains on track to meet management's expectations".
Furthermore, the real estate agent said that both UK CEO Lee Wainwright and US CEO Eric Eckardt will leave the company shortly.
Wainwright will be replaced by Chief Operating Officer Vic Darvey, who joined the business last month from Moneysupermarket.com. Group PLC.
Meanwhile, group CEO Bruce will take on day-to-day management of the US business with immediate effect, the company added.
