There’s plenty to pick through in a mid-morning update from online estate agent Purplebricks (PURP:AIM).
The company trails its announcement with the revelation that European digital publisher Axel Springer has agreed a strategic investment of £125m to help accelerate roll-out in the US, support expansion into new geographies and upgrade technology and services.
The bad news is a warning that revenue for the 12 months to 30 April is expected fall around 5% short of the consensus forecast of 98% thanks to a weak UK market. This explains why the shares are down 6.2% to 292p following the trading update.
Since we signalled our caution on the stock in June 2017 the shares managed another month or two of gains before enduring increasing volatility as analysts and the media questioned its success rate, the business model and its accounting.
Axel, which owns popular German tabloid Bild, is subscribing for £100m of new shares at 360p, a material premium to the market price. This offers something of a riposte to the criticisms levelled at the company.
This investment will result in Axel owning 11.5% of Purplebricks.
Purplebricks’ full year results will be published on 5 July.
