PurpleBricks could have a shareholder revolt on its hands, after one activist investor called for the estate agent’s chairman to resign today.
The online-only agency has struggled to maintain its market share, despite the transition over to virtual spaces during the pandemic.
In a letter to the company, Adam Smith’s investment vehicle Lecram Holdings said that “urgent action” is needed to stifle “continuing cash burn” and “restore its credibility” among investors.
Chairman Paul Pinder has “presided over this highly unsatisfactory performance and you should now stand aside in favour of a replacement with necessary experience and skills,” the letter wrote.
The company’s share price has collapsed nearly 80 per cent over the past year, from 514p in August 2017 to 15p at close of play today.
Purplebricks has also suffered a £3.4m charge after it failed to send tenants deposit protection documents, while it also swallowed additional costs related to moving agents over to full employment contracts, instead of self-employed agreements, last year.
Newly imposed chief executive Helena Marston has been working on a turnaround plan, which was due to be unveiled tomorrow in its full-year results – but has been pushed back by auditors at Deloitte until early August.
A Purplebricks spokesperson said: “We sought to meet with Lecram Holdings to discuss their concerns. They declined. It’s disappointing that they chose to go to the media instead rather than engage with us.”
The spokesperson added that the board is “well aware of the urgent need to turn around the performance of the business and become cash flow positive in the near term. We have already implemented a number of initiatives to achieve this under the new leadership.”