It is also another major setback for the prospects of a generation of online start-ups that threatened to upend the old-fashioned bricks and mortar estate agents.
Emoov was forced to fold despite a three-way rescue merger with Sarah Beeny’s Tepilo and Urban.co.uk. Connells, one of the UK’s largest traditional agents, shut down web venture Hatched just two years after acquiring it, and shares in Rightmove-challenger Onthemarket are a third below their float price after repeated financial challenges.
Purplebricks has also had to count the cost of failed expansion in the US and Australia, which triggered the exit of co-founder and boss Michael Bruce in 2019.
There is a catalogue of questions for chairman Paul Pindar and chief executive Vic Darvey to answer over the latest gaffe, not least whether the abrupt departure of finance chief Andy Botha in October was connected.
Botha left after just 18 months in post with no reason given, and according to the Financial Times, Helen Ogden, head of lettings, departed this month after less than a year, so how long has the company known about the issue? Given the accounts delay, were auditors Deloitte fully in the loop? Furthermore, how on earth has the company come unstuck on something so basic?
The rest of the board cannot escape scrutiny. Though audit chair Elona Mortimer-Zhika was only appointed in September 2020, she’s a qualified chartered accountant, and once told Accountancy Age magazine: “Accountants are the best advisors you can have at the table.”
It is embarrassing too for Stephanie Caspar, who serves as the eyes and ears of major investor Axel Springer, at a time when the German media giant is fighting embarrassing allegations of turning a blind eye to sexual misconduct at flagship tabloid title Bild.
With just six members, the board is underpowered and lacks independence too. Pindar was also an early backer so that leaves as few as two independent directors, according to Purplebricks’ own website
Still, the fate of Purplebricks and many of its rivals is a curious one. On the face of it, online estate agents should have been pushing at an open door. The old-fashioned type has a terrible reputation yet somehow it is a sector that is beginning to look somewhat impervious to digital disruption.
Perhaps there is more to be said for intimate local knowledge than expected. The personal touch has probably been under-estimated too. Or should the regulator be doing more to break the stranglehold that some agents have on the local market?
Incoming finance boss Steve Long must be wondering what he’s let himself in for.
