LONDON (Alliance News) - Purplebricks Group PLC said Tuesday that Founder & Chief Executive Michael Bruce is stepping down with immediate effect.
Bruce is being replaced as CEO by former Moneysupermarket.com Group PLC Managing Director Vic Darvey. Darvey currently is chief operating officer at Purplebricks, joining only in January.
Non-Executive Chair Paul Pindar "sincerely apologised" to the online real estate agent's shareholders for the "disappointing" performance in the past 12 months.
"With hindsight, our rate of geographic expansion was too rapid and as a result the quality of execution has suffered. We have also made sub-optimal decisions in allocating capital. We will learn from these errors and will not make them again," said Pindar.
As a result, Purplebricks has decided to exit the Australian market. The company said market conditions have become "increasingly challenging", which combined with "execution errors" resulted in the division "not delivering the progress" the company expected.
Purplebricks said it "remains committed" to its current customers in Australia but the business has been put into an orderly run down.
In the US, Purplebricks has "materially" cut investment in marketing to reduce expenditure despite making "good progress". The company will begin a strategic review of its US operations shortly, saying: "Management proposes to examine the options for delivering the next phase of growth in a more effective and cost-efficient way including more closely considering the opportunities and risks associated with a materially scaled back US business."
In the UK, the property market "remains challenging" but Purplebricks continues to outperform the market, it said. "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," the company said.
The Canadian business "continued to perform well" during the year, with trading in line with management expectations. The company has "strong belief" in the future opportunities of its Canadian business.
New CEO Darvey said: "Going forward, we have a very clear understanding of the levers available to us to achieve growth. We have two outstanding businesses in the UK and Canada, both of which enjoy market-leading positions. We have also made significant progress in the US building a disruptive brand in the real estate market and our proposed strategic review will allow us to determine how we deliver the next phase of growth in a more effective and cost-efficient way."
The online real estate agent confirmed that it expects annual revenue for the financial year ended April 30 to be within the GBP130 million to GBP140 million range guided back in February. Cash balances will be "not less" than GBP62 million, the company added.
In financial 2018, Purplebricks reported a pretax loss of GBP24.7 million on revenue of GBP93.7 million.
Purplebricks is expected to release its full year results for the period ended April 30 on July 3.
FTSE 250 investment trust Woodford Patient Capital Trust PLC holds a 27% interest in Purplebricks.
Shares in Purplebricks were down 5.2% Tuesday at 128.00 pence each.
