Shares in British estate agency Purplebricks have dropped around 11 percent since the resignation of its CEO and the admission that it has expanded too quickly.
The online estate agent’s share price dropped 11.9 percent to 119p as the news broke that Michael Bruce was stepping down immediately to be replaced by COO Vic Darvey.
Shares continued to sink since the original announcement, falling 10.6 percent to 106.4p per share, as the company revealed in the same update that it would retreat from its international bases.
Saying it will pull out of Australia, Purplebricks warned: “Market conditions have become increasingly challenging. This, combined with some execution errors, has resulted in the business not delivering the progress the board expected.”
It will also scale back investment in America as it fights to cut expenditure, promising to rethink its expansion strategy.
Darvey said: “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.”
AJ Bell Investment Director Russ Mould told City A.M. that Purplebricks’ curtailed overseas ambitions “knocks a big hole in the investment case”.
“Some of them may just be deciding to give up on the company, especially as the latest reverse comes very soon after February’s profit warning and the departure of the heads of its British and American arms,” he added.
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