PHOTO: Purplebricks
U.K. estate agent Purplebricks Group Plc is heading for its biggest share drop on record after a profit warning that cast further doubt about its unusual business model.
The Solihull, England-based company, which charges a flat fee whether a property is sold or not, fell as much as 38% after warning of a drop in business as a tax break for buyers came to an end.
“Supply in the market has fallen as we slowly adjust to a below normal level of activity following a period of successive lockdowns and the end of the stamp duty holiday,” Chief Executive Officer Vic Darvey said in a statement.
Analysts including Jefferies LLC had previously raised concerns that the model may hurt the company more during a downturn than traditional estate agents that charge sales-based commissions.
New instructions in the six months through Oct. 31 fell 23% compared with the same period last year, Purplebricks said Thursday.
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