Purplebricks may have to abandon its Australian and US arms and focus on its UK business, a report from Australia quoting an investment bank says.
In substantially reducing its share price target for Purplebricks from 470p to 80p Berenberg said: “Having flown too close to the sun, with operations in five countries and cash burn of circa £7m ($12.9m) a month, we believe the group will be forced to seek additional equity at a significant discount or a doubtless expensive debt facility; or to abandon the Australian and US operations and retrench to the UK and Canada.”
In reply Vic Darvey,
Purplebricks’ Global CEO said the company was committed to the Australian
market: “Our transformation over the last six months is bearing fruit, and we
are pleased with the recent growth in instructions and sales. Recently, we have
boosted our agent numbers and expanded to new regions, bringing our proposition
to more Australians.”
Purplebricks could do little else but say it is committed to its overseas operations of course. However, even they might agree that their recent trading updates on prospects for their non-UK operations have sounded somewhat vague.