Good morning!

Lots of updates today, including a shocker from Purplebricks (LON:PURP).

Also, please see comment #7 in the thread below by Carcosa, who is something of an expert on Avation (LON:AVAP) and provides us with analysis of its interims. It's not worth my while studying it for you guys when he has already done the work!

Thanks for the comments - and for all your excellent contributions.

Purplebricks (LON:PURP)

  • Share price: 123p (-25%)
  • No. of shares: 303 million
  • Market cap: £373 million

Trading update and management changes

The wheels have been coming off this online estate agent's growth story for a while - see its coverage in the SCVR archives.

My point of view on this stock has been straightforward enough: the company hasn't made enough progress in the UK to justify a large international growth spree. Aside from poor numbers in black and white, there have been a few red flags:

  • the company's aggressive treatment of negative reviews and the websites which host them
  • question marks over how it accounts for revenue

Today's update indicates that the company is struggling in several geographies:

  • UK:  revenue still expected up 15-20% this year despite a challenging market. The UK CEO leaves after two years in the job.
  • Australia: revenues will miss expectations
  • USA: revenue will miss expectations. The US CEO leaves after two years in the job.
  • Canada: set to meet expectations.

In December, guidance for the year ending April 2019 was reduced. This guidance is now reduced dramatically again (bolding is mine):

As reported at the interim results, the Company updated its revenue guidance for the 2018/19 financial year to £165-175 million under IAS 18. Given the reasons noted above, the Board believes revenue for the current financial year will now be in the £130-140 million range under IFRS…

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