Who Will Lead Purplebricks Out of the Fire?

There's infighting at UK challenger Purplebricks with stakeholders calling for the emergency appointment of a new chairman to lead the company out of its current struggles.

Lecram Holdings Limited—a stakeholder with a 5.16% stake in Purplebricks—has written to the Board calling for the removal of incumbent Paul Pindar in favour of industry veteran Harry Hill as the portal faces all-time low share prices and multiple rounds of redundancies this year.

Harry Hill is a well-known figure in the UK—he is the former Chairman and CEO of Countrywide, and a co-founder of Rightmove.

In a letter to shareholders, Adam C. Smith of Lecram highlighted continued losses of investor money at Purplebricks, and wrote:

"I believe strongly that a new Chairman is required now to restore the Company’s credibility with all its stakeholders and to support its executive management team through the challenges which they will face in the medium term.

"Harry is an extremely experienced director with an intimate understanding of the UK property market. He has an excellent and relevant track record of performance which is exactly what Purplebricks needs right now."

Purplebricks has three weeks to respond to the letter, and must hold a General Meeting by the end of 2022.

However, the company has already stated its position in its Receipt of Requisition Notice, with a strongly-worded message of support for Pindar and against Lecram Holdings:

"The Board reaffirms its support for Paul Pindar as a director of the Company and Chairman of the Board and believes that Paul has the continued support of a number of major shareholders.

"This includes Axel Springer SE, a 26.5% shareholder in the Company, which has confirmed it remains supportive of Paul and intends to vote against the proposed resolution for his removal as a director of the Company.

"The Board is firmly of the view that the Board changes proposed by the Requisition are not in the best interests of the Company or its shareholders. Within the Company’s FY22 results announcement, published on 2 August 2022, a clear plan was set out to improve business performance, return to positive cash flow and profitability, and build a scalable business model.

"The Board considers that Lecram Holdings Limited’s decision to lodge the Requisition is disruptive when the Company and its executive team are focused on delivery of this turnaround plan."

Purplebricks was founded by brothers Michael and Kenny Bruce in 2012, who would go on found the now-bust Boomin. The company's share price has tanked since a 2017 high of GBX 498.5 and currently lies at an all time low GBX 11.57.

Source: Google Finance

Purplebricks' financial results for 2022 were equally disappointing: revenue dropped 23% YoY to £70 million, and EBITDA fell from £12 million in FY2021 to a loss of £8.8 million.