Estate agent tumbles as it warns of sales shortfall
PurPlebricks yesterday warned that revenues for the year will be lower than hoped as a German media group bought a £125m stake in the online estate agent.
Shares tumbled 10pc, or 31.4p, to 280p after it said turnover was likely to be 5pc short of the £98m expected in the City for the year ending April 30.
The warning came as it agreed a deal with Axel Springer that will see the Germans receive shares worth 11.5pc of the company.
It means the German firm will become the fourth biggest shareholder after fund manager Neil Woodford, chief executive Michael Bruce, who owns 13.7pc of the company, and Old Mutual.
Purplebricks, which charges fixed fees instead of the traditional percentage of the sale price, plans to use the cash to boost its technology and to grab more of the American market.
Axel Springer is worth an estimated £6.1bn and is the owner of the German national newspapers Die Welt and Bild. Bruce said yesterday: ‘The strategic partnership with Axel Springer is ground breaking and will propel Purplebricks further towards our strategic goals and global ambition.
‘We now have the platform, funding and, through Axel Springer’s experience, as well as the appointment of four new leading nonexecutive directors, the expertise to achieve our vision.’
The online agent’s shares have fallen more than 41pc in the past two months as analysts have questioned its sales figures. Last month, Anthony Codling at Jefferies claimed just half the homes listed in November 2016 were sold within ten months. The firm claimed the real figure was closer to 88pc.
The FTse 100 ended the day down 0.48pc, or 33.25 points, at 6888.69, while the FTse 250 was off 0.69pc, or 132.39 points, at 19187.09.
An £88m deal to buy record management firm TNT Business Solutions boosted restore’s shares.
Restore, the AIM-listed business relocation and document management specialists, plans to fund £51.5m of the deal by placing 10.1m of new shares with institutional investors. The rest will be funded by Restore’s debt facilities at its banks.
The deal to buy TNT, which is owned by US courier service Fed Ex Corporation and employs 250 staff, should complete by May.
Restore’s shares spiked by 7.4pc or 35p to 507p. Antibody manufacturer bioventix increased its interim dividend by 20pc to 25p a share.
In its six-month results for the period ending December 31, the biomedicine firm reported a 36pc increase in profits and a 13pc increase in revenue. Shares jumped 19.2pc, or 395p, to 2450p.
A decent set of results pushed up the share price of market research agency You Gov. Revenue was up 10pc in the six months ending January 31, while pre-tax profits shot up 78pc.
Broker Numis has given the firm an ‘add’ rating and says You Gov’s interim results were ‘very strong’.
Shares yesterday hopped 4.1pc, or 15p, to 380p. Shares in miner bushveld Minerals dived after it tapped investors for extra cash. The AIM-listed producer of the metal vanadium raised around $22.2m (£15.7m) to increase production and pay off its debts. Shares dived 6.3pc, or 0.82p, to 12.3p.
On the small cap index, embattled High Street retailers carpetright and Mothercare were crying for mercy after yet another fall in their share prices.
Carpetright was down 6pc, or 2.4p, to 37.5p while Mothercare was down 2.9pc, or 0.5p, to 17p. It means they are down 78.3pc and 75pc, respectively, since the start of the year.
Only last week, Carpetright said it was looking to close stores as part of a turnaround plan.