Purplebricks (PURP) stock plunges on rental business issue
By Jenni Reid
11:56, 13 December 2021
Purplebricks (PURP) stock fell more than 20% on the London Stock Exchange on Monday morning as the online estate agent revealed it could face a multi-million pound bill due to errors in its lettings business.
PURP stock was down 20.06% to 25.26p at 11:30 GMT, taking the price down 75.52% in the year to date.
The company said that during an internal review it had found an issue in its communications with tenants on behalf of landlords over deposit registrations.
Tenants must be told their deposits will be placed in a national deposit scheme within 30 days of payment.
This could leave the company open to claims under the Housing Act, which it estimated could cost it anywhere between £2m and £9m.
Purplebricks, which also facilitates house sales and is listed on London’s junior AIM market, said it was finalising the level of provision required along with associated disclosures.
As a result it will delay its half-year results, which were due out tomorrow.
In April it reported £90.9m in revenue and £8.2m in operating profit, up from a £5.7m loss in 2020.
Current analyst consensus forecasts £78.3m revenue and a £5.9m loss in the full-year to 30 April 2022.
Read more: Purplebricks moves to fully employed model for agents