Shares in Purplebricks plummeted 37.26% on Thursday as the company issued a profit warning following a ‘challenging’ period.
The company said yesterday that strong demand across the housing market had outstripped demand. The imbalance meant new instructions coming to market were around 23% below the comparative period last year.
It now expects to instruct on 22,000 property sales in the six months to 31 October, down almost 40% on the 35,387 it instructed on last year.
Shares in the company dropped to 33p yesterday and are down 66% in the year to date.
“New instructions have slowed significantly in recent months, given continued strong demand across the housing market is not being met by sufficient supply of instructions,” the trading update from the online estate agent said.
Its cash position as at 31 October was approximately £58m, compared to £75.8m at 31 Octoebr 2020.
Anthony Codling, CEO of Twindig, commented: “Purplebricks latest trading update sent shockwaves through its share price. Coming just one week after a confident, front footed trading update from Foxtons, Purplebrick’s statement was barely on its back foot.
“This leads to the question is Purplebrick’s model being challenged by changes in the wider housing market or is it just challenged?”