Analyst: Purplebricks CEO ‘turning ship around’ despite share price drops
David Hill of Vox Markets says media headlines have merely spooked investors and that underlying business has a bright future.
David Hill of Vox Markets says media headlines about Purplebricks have merely spooked investors and that underlying business has a bright future.
High-profile shares analyst Paul Hill has backed Purplebricks and told investors to ignore its nose-diving share price, saying that recent claims in the Telegraph that it could be exposed to a £30m risk over its tenant deposit protection communications glitch had merely ‘spooked’ investors.
Purplebricks subsequently revealed that it believed the risk to be £9 million, but later downgraded this to £3.6 million along with £2.7 million of ‘lost goodwill’.
Hill, who said he has talked with Purplebricks CEO Vic Darvey about the firm’s performance, told subscribers to his YouTube account over the weekend that problems at the company are ‘overblown’ and that the share price does not reflect its underlying performance and 4% slice of the overall property sales market.
“Darvey has already implemented the changes required to turn the ship around,” he said.
“Namely greatly enhancing the customer experience by moving to a fully-employed, far more localised, tech-enabled, consistent and service-rich business model. A winning formula in my opinion.
“Sure, things will take a little time to bed down and these improvements properly filter through the property sector.”
What Hill doesn’t mention in his video is that its most recent results, covering 2021, revealed how revenue dropped by 7% to £41.3 million and profits by 11% to £26.2 million and, more worrying, given the housing boom most agents have reported, instructions fell 38% to 21,131 and total fee income dropped by 29% to £34.7 million.
I’m not an analyst but I do provide data and sector domain knowledge to analysts. I have quite long chats with people who have become reliant on my advice.
I called Purplebricks’ fortunes very early on. I knew what they were up against and the challenges they would face. Every prediction was correct.
Purplebricks as non geographic, full service estate agents attempting to compete with #local agents will always be a challenge.
Purplebricks as a FSBO/ passive intermediary stands a chance of dominating that sector 2-3% of the market
If David Hill has”talked to Vic Darvey”, he’s likely been spun the same story that everyone else hears.
The “winning formula” Hill refers to isn’t exclusive to PurpleBricks – it’s available on the High Street and from hybrids, if the consumer asks the right questions.
Here’s a question for David Hill. Has he backed the company with his own money?