Purplebricks Group PLC (AIM:PURP) has put itself up for sale and issued a profit warning after it failed to win as many instructions from people selling their houses amid the recent housing market dip.
The online estate agency said it has realised that the group may be better off under an alternative ownership structure and has decided to conduct a strategic review of the business, in a statement.
As such, it said an offer period has begun, although it is not in talks with any potential offeror, nor has it been approached with regard to a possible offer.
“We recognise that our upside potential is not currently reflected in our market valuation, which is why the entire board has therefore concluded that a strategic review is now in the best interests of all shareholders,” said chief executive Helena Marston.
The decision comes alongside a trading update in which it said full-year revenues will come in lower than previously expected, while losses will be higher than forecast.
Purplebricks now expects to deliver revenue between £60mln and £65mln, compared to previous estimates of between £67.5 and £72.5mln, and an adjusted EBITDA loss of between £15mln to £20mln, compared with the previously guided loss range of £4mln-£11.3mln.
This, it said, was the result of lower-than-predicted instruction levels. An instruction-level refers to a property that an agent has been instructed to put on the market.
Purplebricks said the implementation of its go-to-market strategy caused more disruption to the sales field than originally expected. Additionally, the disruption also resulted in a £1.2mln one-off exceptional cost.
“Yes, the actions we have taken have caused more short-term disruption to our third-quarter performance than anticipated, but we remain confident in returning to positive cash generation in early fiscal year 2024,” Marston added.
Purplebricks shares plunged 12.99% to 8.61p in morning trade.