New blow for Woodford as Purplebricks tumbles

WIDENING losses at online estate agent Purplebricks have sent shares tumbling – dealing yet another blow to fund manager Neil Woodford.

The group, which markets itself on not charging commission to people who are selling their homes, saw revenue climb 75pc over the six months ending in October, to £70.1m.

But its operating loss widened from £11.4m last year to £25.6m, as it spent a hefty £39m on marketing. Shares slid 12.3pc, or 18.5p, to 131.5p.

This came as a blow to investors in Woodford’s funds. His 29.2pc stake had £16.4m wiped off its value yesterday.

Despite widening losses, Purplebricks’ chief executive Michael Bruce was chipper, saying: ‘We remain confident our UK success will be replicated internationally and that we will deliver substantial value for our shareholders.’

Though pushing into the US and Australia is proving expensive – it generated revenue of £5.9m in the US but spent a massive £16.2m there on sales and marketing – it is doing well in the UK.

It helped sell £5.4bn worth of property here over the six months, up 39pc from the year before.

But broker Peel Hunt cut its price target for the shares by more than a quarter to 320p, and lowered its revenue forecast due to a ‘mixed trading backdrop’.

Outsourcer Serco, on the other hand, was on the rise. It works on services from air traffic control to hospital cleaning, and said underlying profit for 2018 will be 30pc to 40pc higher than the previous year, at £90m to £95m.

Meanwhile debt at the year-end will be lower than expected at around £200m, a stark contrast to Interserve, the outsourcer whose shares are floundering as it attempts to reduce its debt pile.

Analysts at Liberum raised their recommendation on the stock from ‘sell’ to ‘hold’, but were cautious. While the US market is strong, they warned that the UK and Middle East are tough and Australia is mixed. Shares rose 9.4pc, or 8.4p, to 97.8p.

G4S, which competes with Serco to work on contracts such as immigration detention centres, also climbed after announcing it would consider spinning off its cash-handling arm.

Known for its dark blue armoured vans, G4S Cash Solutions transports, processes and secures cash for businesses and banks. According to RBC Capital, it could be worth £1.6bn.

But G4S has been looking to minimise its exposure to the business, which employs roughly 30,000 people, as shoppers shun paper money for online and card payments. Chief executive Ashley Almanza said he is not looking to sell the cash arm, but could either float it on the stock market through an initial public offering or give G4S shareholders new shares in the cash business, so they own it separately.

Shares rose yesterday by 6.8pc, or 12.45p, to 195.8p.

The FTSE 100 ended almost flat, down 0.04pc, or 2.69 points, at 6877.50, as investors waited for more news on Brexit.

Among smaller companies, tool rental firm Speedy Hire edged up as it bought construction training company Geason Holdings from its owners Ian and Robert Kilpatrick. It paid £9m, and will stump up another £26m if the business performs well over the next three years. Shares climbed 2.2pc, or 1.2p, to 57p. Video game retailer Game

Digital dropped 5.3pc, or 1.4p, to 25p as it said it was planning to move from London’s main stock market to its junior peer, AIM.

Game, which is 25.4pc- owned by Mike Ashley’s Sports Direct, said that AIM would be ‘ more appropriate’.