Shares in Purplebricks, the UK’s largest online estate agent, fell by 40% after it reduced its sales forecast and announced the departure of two chief executives.
Forecast revenue fell from £165-175m to £130-140m owing to slower than expected growth in the US business and ‘a number of headwinds’ in Australia.
Last year the business made £93.7m, posting an operating loss of £19.6m in the process.
The UK CEO Lee Wainwright is leaving for ‘personal reasons’, while the US chief executive Eric Eckardt is leaving without an explanation.
The founder Michael Bruce will now take control of the US business with immediate effect.
Despite the problems, the UK business saw 15-20% revenue growth compared to last year, while the firm is said to be performing well in Canada.
Purplebricks was launched in 2014, with the idea of creating a low-cost estate agent.
The business isn’t the only agent having a troubled time, as rival Emoov went into administration last year and is now relaunching under peer-to-peer lending platform, Mashroom.
Anthony Codling, city analyst at financial services group Jefferies, said: “Purplebricks continues to tell us it sells lots of houses, without backing up that rhetoric with actual figures. Sold Subject to Contract does not mean sold.
“Perhaps more telling is that the number of UK LPEs (local property experts) is now lower than it was six months ago. If the model is the lifeboat for a sinking high street does the lifeboat itself have a leak?”