Purplebricks boss moves out as expansion scaled back | Business News
Purplebricks has announced the departure of its co-founder and chief executive Michael Bruce while confirming its overseas expansion is being scaled back.
The low cost online estate agency said it was to leave its Australia business behind and review its operations in the US, admitting it had attempted to grow the firm too quickly and made a series of mistakes.
It said that Mr Bruce, who founded Purplebricks with his brother Kenny in 2014, was to be replaced by chief operating officer Vic Darvey with immediate effect.
A company source suggested that Mr Bruce was leaving as he had taken the firm as far as he could. He retains an 11% shareholding.
His decision was announced just two months after Purplebricks shares fell sharply when it cut its annual revenue guidance and announced the departure of the bosses of its UK and US units – with Mr Bruce taking sole charge.
It said on Tuesday that while its UK business continued to perform well despite “challenging” conditions in the country’s property market, the same could not be said for the US and Australia.
It highlighted “increasingly challenging” conditions in Australia and confessed to “execution errors”, adding that returns from the nation were “not sufficient to justify continued investment”.
The company added: “Whilst good progress has been made in launching our brand across the US, the board has materially cut investment in marketing and other overheads to reduce expenditure to sustainable levels and begun a strategic review.”
It maintained its lower outlook for the current year but chairman, Paul Pindar, said: “We are very conscious that the group’s performance has been disappointing over the last 12 months and we sincerely apologise to shareholders for that.
“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.”
Shares were more than 7% lower in early trading.