Purplebricks warns shareholders of possible litigation following downgrade

Purplebricks shareholders warned of potential risk of legal action

In its new annual report, listing principal risks and uncertainties, it says: “The group has experienced significant change in leadership, structure and geographical footprint over the course of the last calendar year.

“As a result the group faces an increased risk of loss of talent, knowledge and experience, and also potentially litigation.”

In the last few months would-be estate agency disruptor Purplebricks has experienced considerable disruption itself, including the departures of Founders Michael and Kenny Bruce, and the decision to pull out of Australia and the US.

There has also been the sale of the Bruce family’s shares in Purplebricks to Axel Springer, giving it a 26.6% holding in Purplebricks.

However, the bulk of the annual report, which covers the 12 months to the end of this April although it also references events since, sounds an upbeat note.

There is still “considerable headroom to further disrupt the traditional real estate agency markets in both the UK and Canada,” Purplebricks Chairman Paul Pindar writes.

He says that exiting the US and Australian markets will “significantly reduce cash burn”.

Pindar says that Purplebricks’ focus will now be on “our profitable UK business” and its Canadian operation.

New Chief Executive Vic Darvey says that Purplebricks has a “strong and differentiated business model that is hard to replicate”.

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