Purplebricks has been told that it has until the early part of next month to dismiss chairman Paul Pindar or face an emergency general meeting (EGM) of investors to remove him.
Activist investor Adam Smith, who earlier this week increased his stake in Purplebricks to 4.2%, is stepping up his efforts to oust the chairman of the online estate agency, by threatening to call an EGM in early August if Pindar does not go.
Smith is unhappy that the company’s share price, which this week hit an all-time low, is performing so poorly, and wants Pindar to leave in order to “restore the credibility of the company with investors”.
Shares in Purplebricks have dropped sharply since it listed on Aim in 2015, after a series of profit warnings and operational blunders, causing market value to shrink to just over £45m, from £240m.
Shares in the AIM-listed firm currently stand at a near record-low of just 15p, which is down significantly from 103p at the start of last year.
Shares in the online estate agent have plummeted since its all-time high in 2017 of 525p, with recent regulatory failings, contributing to that decline. The significant fall in the firm’s share price has caused many investors to sell up, concerned that Purplebricks might be vulnerable to a takeover.
Smith’s banking advisor Glenn Cooper, who is chairman of Harrier Partners, told Property Week that Smith will demand that the online estate agency group must have a chairman with “a strong background in residential real estate as well as real leadership skills”.
Cooper said: “Purplebricks has delayed its results until the first week in August, so we will wait until the to look at those figures and if the board has not agreed to replace Pindar we should be in a position to call and emergency meeting to allow investors to decide on his future.”
Smith has, so far, built a stake of 4.18% in Purplebricks and it continuing to buy up stock. An investor requires a minimum of 5% of the shares in a listed company before it can demand an emergency general meeting (EGM) of shareholders.
Cooper added: “We’re not in a panting hurry on all of this. We’d like to give the chairman and the board the opportunity of making the right decision.
“But if they don’t then, obviously, an EGM is the way to go. There’s no need for us to be galloping at this stage.”
Once an EGM has been demanded, Purplebricks would have ten days to respond, and 21 days in which to arrange the meeting to decide Pindar’s fate.
Cooper continued: “You have a board here on which there are no estate agents and no residential property expertise. It seems to us that you’ve got to have an understanding of the fundamental business, which you’re trying to interrupt. You can’t just rely on the technology.”
EYE has approached Purplebricks to ask what the situation is with Pindar, and whether the former chief executive of outsourcing group Capita, who has been in place at Purplebricks since 2015, is planning to resign. The company declined to comment beyond a statement issued earlier this week.
A Purplebricks spokesperson told EYE on Monday: “We sought to meet with Lecram Holdings to discuss their concerns. They declined. Its’ disappointing that they chose to go to the media instead, rather than engage with us.
“The board is well aware of the urgent need to turn around the performance of the business and become cash flow positive in the near term. We have already implemented a number of initiatives to achieve this under the new leadership of Helena Marston and look forward to setting out our plans in detail as part of our results announcement in early August.”
Comments (6)
Purple bricks performance is going down and Pindar has no customer relations sense. I’m a customer and I’m in dispute with them and untill now they are not in gd contact with me and soon going to escalate it. Agents however are bills can’t fault them but management is ***** excuse my language.
if he goes, I’d like to throw my hat in to the ring for the position………………………………………….whoo whoo all aboard the gravy train
If EYE removes a comment or part of a comment we usually put an explanation in its place.
The author of a comment may delete it for themselves, as in this instance.
Interesting that Robert May’s comment got removed!
What was the problem with it Marc Da Silva?
Anyway, it’s pretty obvious what Adam Smith is trying to do to line his pockets with some easy money.
Any muppet that buys them now or when Adam gets his way is investing VERY speculatively. People do love to gamble though so it’ll be fun to watch.
Sorry, that was me! I read the stories each morning, think about them and post as I have done for the whole time Eye has been live. It is a way of me giving thought to the articles. Where my opinion doesn’t matter I delete them.
Mr. Pindar should remain in place and the investors ought to find the help he needs to stabilise what has been built.
There is a future for Purplebricjks but that will be much harder if Mr. Pindar is replaced
Cooper continued: “You have a board here on which there are no estate agents and no residential property expertise. It seems to us that you’ve got to have an understanding of the fundamental business, which you’re trying to interrupt. You can’t just you can’t just rely on the technology.”
Summed up in one single paragraph…