Purplebricks finance director Matthew Farrow has quit the agency just a few months after netting £1 million in cash from a share sell-off.
Farrow has joined managed service provider Timico as its chief financial officer, with a remit to deliver on its long term objective to be the “go-to transformation partner” for UK mid-market businesses.
Farrow helped grow Purplebricks from a start-up to a market cap of over £1 billion.
At the end of last year, Farrow joined a number of senior Purplebricks directors in cashing in hefty chunks of their ownership in the firm.
Farrow netted £1 million in the co-ordinated sell-off.
Head honcho Michael Bruce cashed in the most, selling 3.6 million shares for an eye-watering £11 million.
His brother Kenny also got in on the act, selling 2.1 million shares and netting himself a cool £6.4 million.
Purplebricks’ chief financial officer, chief information officer and director of marketing also participated, selling shares for £3 million, £900,000 and £420,000 respectively.
Farrow is considered to be a key driver behind Purplebricks’ rapid growth, having joined the company in 2014 with more than 20 years’ experience in the IT industry.
Farrow trained at one of the Big Five accounting firms, Arthur Andersen, and previously held longstanding roles at Phoenix IT Group and its subsidiary Servo Computer Services – acquired within Daisy. He has also consulted for various companies in the private equity technology sector.
Farrow said: “I’m very excited to be joining Timico at such a pivotal time, working alongside an exceptional leadership team. The business is in a solid position as it sets out to achieve ambitious growth and I look forward to bringing my deep sector experience to the table, implementing winning strategies that will help to achieve superior financial performance.”
Ben Marnham, chief executive at Timico, added: “Today’s Timico is all about transforming our client’s digital agendas, striving for service excellence and being a great place to work. 2018 has started strongly for the business and Matthew’s appointment will play a huge part in continuing our expansion and helping us deliver on our ambitious business goals.”
DealMakerz notes that Farrow’s departure comes at a challenging time for Purplebricks.
The hybrid agency’s share price has plummeted since the start of the year after broker Jefferies questioned its sales figures.
Purplebricks charges a flat fee rather than taking a cut of the eventual sale price, meaning the customer must pay the fee regardless of whether the property is sold. Jefferies said using the platform was the equivalent of a “£1,000 coin-toss”, and that the business model had not yet been proved.
In March, popular investor site The Motley Fool recommended selling the stock, primarily because of its valuation. At the time, the shares were trading on 14.5 times sales and a huge 247 times 2018/19 forecast earnings.
The Motley Fool also pointed out that the costs of rolling out Purplebricks’ business model are considerable. Administrative costs in the UK rose by 144% during the first half of last year, even though sales only rose by 118%.
Purplebricks is now focusing on speeding up its overseas expansion, after receiving a £125 million investment from Axel Springer, the German publisher and property portal owner.