(Reuters) - Shares in Britain’s Purplebricks plunged as much as 40 percent on Thursday after the online estate agent cut revenue forecasts, saying it expected slower growth abroad, and as it announced senior management changes.
The stock was down 27.5 percent at 119.5 pence by 0833 GMT, off a low of 98.3 pence but still headed for the worst day on record. At its lowest point, the firm was valued at 300 million pounds.
The online estate agent said it expected to report revenue for fiscal 2018/19 between £130 million and £140 million, below an earlier forecast of between £165 million and £175 million.
The company said the chief executive for the British business, Lee Wainwright, and U.S. boss Eric Eckardt would leave. It said Wainwright was leaving for personal reasons, but made no further comment about the departures.
Purplebricks founder and CEO Michael Bruce would take on day-to-day management of the U.S. business, the company said. The British business would be temporarily taken over by the company’s chief operating officer, it added.
The revenue warning and management shake-up comes two months after Purplebricks trimmed the upper end of its revenue forecast, citing a challenging UK property market in the run up to Britain’s planned departure from the European Union.
Purplebricks trails Britain's big incumbent operators after guidance cut: tmsnrt.rs/2V9Lnva
Purplebricks said on Thursday it had made positive changes in its operating model in Australia towards the end of 2018, with a new leadership team in place, but said anticipated recognisable revenue would not meet expectations.
It also said there was a slower-than-expected response to a marketing plan in the United States and most of its short-term investment would be focused on Los Angeles and Florida.
“While there will be a tighter focus on capital allocation and advertising spend in the near term, we expect (fiscal year 2019) group losses to be higher than previously forecast,” Peel Hunt analysts said.
“Given the tough trading backdrop in its key regions and the recent changes to customer propositions in the U.S. and Australia, revenue visibility is low and the near-term growth outlook has weakened,” the analysts said, placing their forecasts and recommendation under review.
Purplebricks, which has used a low-fee model to win business from more bigger, established estate agents, said Britain’s housing market remained challenging but it still expected UK revenue to be 15-20 percent higher in the year ending April 30.
The company, whose biggest investor is British fund manager Neil Woodford, has recently set up a Germany joint venture with publisher Axel Springer, its third biggest investor.
Reporting by Samantha Machado and Noor Zainab Hussain in Bengaluru; Editing by Arun Koyyur and Edmund Blair