Purplebricks chairman under pressure from ‘activist investor’ to step down

Reports reveal that City figure is keen to change the hybrid agency's direction and return the firm to growth - without its chairman.

pindar purplebricks

City ‘activist investor’ Adam Smith has called for Purplebricks’ chairman and early investor Paul Pindar to step down amid calls for urgent action at the gaffe-prone estate agency, it has been reported.

Smith, who owns a 4% stake in the hybrid estate agency via his investment vehicle Lecram Holdings, says the company needs to take a new direction as its share price wanders dangerously close to junk status, hitting a second-lowest ever price last week.

In a letter published in part by The Independent, Smith says investors want the firm to ‘restore credibility’ to its operation and has therefore called for Pindar to step down.

Highly unsatisfactory

The letter says Pindar has “presided over this highly unsatisfactory performance and you should now stand aside in favour of a replacement with necessary experience and skills to address urgently the company’s continuing cash burn and operating performance within the estate agency sector”.

Such investor agitation is likely to be a reason behind Purplebricks’ recent changes to its business model, which it implemented on the firm’s customer-facing website yesterday.

Vendors selling a property outside London will now pay a standard fixed-fee of £1,199 and 1,999 in the capital.

The company is still offering its money-back guarantee, but this is due to be taken away from the deals it offers on 25 July.

Its ‘Pro Package’ increases from £1,399 to £1,599. The higher-priced regions ‘Classic Package’ goes up from £1,499 to £1,999, and the higher-priced regions Pro Package rises from £1,999 to £2,499.

Necessary step

New CEO Helena Marston said this was a “necessary step, not just to strengthen our revenues, but also as a result of the additional costs our business has had to absorb over the past few years.”

Last week, the firm’s share price slumped to 14.34p, its second lowest level ever. In May it revealed instructions were down 31% year-on-year.

The company is planning to publish its annual results in early August, when Marston is expected to outline how she will turn its fortunes around.

Marston, who was the COO, replaced former chief executive Vic Darvey (pictured) in April, after he quit due to personal reasons.

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