Purplebricks (AIM:PURP) Group PLC issued a profit warning as it said new instructions slowed “significantly” in recent months and the housing market is hampered by an imbalance in supply and demand.
Given disruption caused by its business transformation, the online estate agent said it expects the imbalance to continue into the second half of the financial year, impacting new instructions for the full year.
Although cost guidance is unchanged, the lower sales means underlying earnings (EBITDA) are expected to be below previous guidance, it warned.
Chief executive Vic Darvey said: "Following a stronger period for instructions last year, supply in the market has fallen as we slowly adjust to a below normal level of activity following a period of successive lockdowns and the end of the stamp duty holiday.”
He said properties had been selling quickly, but the reduced amount of stock coming to the market is “proving challenging”.
He said there were encouraging signs from the transition to the new operating model announced previously and “while they are not yet reflected in the overall group performance, we are confident in the strategy and that we have developed a strong platform for growth as activity levels pick-up”.
Shares in the company were down over 33% to 34.95p.