Purplebricks shares slide as founder Michael Bruce quits

Shares in estate agents Purplebricks dropped more than 8% in early trading, after founder and chief executive Michael Bruce left the online company.

Vic Darvey, who had been the firm’s chief operating officer, will succeed Mr Bruce as chief executive.

Purplebricks also said it was pulling out of Australia and placing its US business under review.

Non-executive chairman Paul Pindar apologised to shareholders for its recent “disappointing” performance.

He said: “With hindsight, our rate of geographic expansion was too rapid.”

The company has operated in Australia for two-and-a-half years, but said the prospective returns from the country were “not sufficient to justify continued investment”.

Purplebricks is also cutting back investment in the US, although its Canadian business continues to flourish.

However, the firm is optimistic about its UK performance, saying in a statement: “Whilst the UK property market remains challenging, the company continues to outperform the market and the board remains confident about the future of the business.

“Having established a market-leading position, there remain many opportunities for further profitable growth and this will be a key area of focus going forward.”

Shares in the company fell in February after it cut its sales forecast. from between £165m and £175m to between £130m and £145m.

It confirmed these figures in Tuesday’s trading update, adding that cash balances at 30 April 2019 would not be less than £62m.

Mr Bruce and his brother Kenny founded the online estate agents in 2012.

The company charges a flat rate to market a property, with fees differing around the country. For example, homeowners in London and surrounding postcodes are charged £1,399 and elsewhere £899.

Viewings can be booked online at any time and people can arrange visits themselves, or pay the company extra to do it for them.

Speaking about Mr Bruce’s departure, Mr Pindar said: “Michael’s vision in creating the UK’s leading hybrid estate agent has been deeply impressive, as has his relentless energy in developing the business both in the UK and internationally.”

Mr Darvey said: “Going forward, we have a very clear understanding of the levers available to us to achieve growth.”