Purplebricks’ week goes from bad to worse as class action prepares launch

After a downbeat trading update and business forecast saw its share price slump, Contractors for Justice say legal move is just days away.

Purplebricks’ week has gone from bad to worse after its share price plummeted by 35% yesterday following the company’s latest trading update, which revealed a 23% slump in instructions.

Its share price started out at 52p but closed trading at around 33p a share.

Although the company blamed the downturn on the ongoing supply problems within the housing market, its own City advisor predicted that revenues over the next six months will fall by 17% to £80m along with a 29% drop in gross profit to £43 million and a £2 million rise in overheads.

Published by Zeus Capital, the figures also reveal that bringing its self-employed staff in-house has cost £4 million so far.

But if that’s not enough bad news one day, the legal firm organising a ‘class action’ lawsuit against Purplebricks, Yopa and the other self-employment model estate agencies says it is only days away from announcing that it will ‘pursue litigation against Purplebricks’.

‘Class action’

“The response from former and current Local Property Experts and Territory Owners has been nothing short of phenomenal and to the extent that we have had to recruit more staff to deal with the inbound enquiries,” says a spokesperson from Contractors for Justice.

“The number of Purplebricks agents that have signed up with us now is well into the hundreds and we will be providing a more detailed update in the coming weeks at which point it will be clearer as to when the action itself will formally commence.”

In response to the launch of the class action group last month, Purplebricks said: “All Territory Operators entered into a commercial licence agreement and this was clearly set out in their contract with Purplebricks.

“We have always taken legal advice in regard to our licensing model – and the advice is very clear that these individuals were operating as limited companies, running their own business and with full control over their own staff.

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