Online or hybrid estate agent as it likes to style itself, Purplebricks (PURP:AIM) falls 5.2% to 128p on today’s latest update.

In the last 12 months the shares have more than halved and they now trade at around a quarter of their all-time highs above 470p.

The business enjoyed a heady ascent after its December 2015 IPO and secured a place in the public consciousness.

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However, it appears that like the mythical Icarus the company just soared too close to the sun. Or in the more prosaic words of chairman Paul Pindar: ‘With hindsight, our rate of geographic expansion was too rapid.’

Overseas markets were pursued before the company had even fully proved up its model in the UK. Now these international ambitions are in ruins and the company’s founder and CEO Michael Bruce has exited stage left. He will be succeeded by chief operating officer Vic Darvey.

NO WIZARD IN OZ

The company is quitting Australia entirely after two-and-a-half years, and while its Canadian business is doing well the company is scaling back its US operations.

What probably saves the company from a larger share price decline this morning is an already weak run for the stock and that sales guidance, cut from £165m to £175m down to a range between £130m to £145m in February, is being reiterated.

AJ Bell investment director Russ Mould says: ‘The decision to exit Australia after less than three years and indicating it may materially scale back its US operations is catastrophic for Purplebricks’ reputation.

‘These two regions were the main engines of its overseas growth plan and today’s announcement is effectively an admission of failure.

‘Fast-growth, supposedly-disruptive businesses have been in vogue for the past five years or so, as investors flock to companies trying to either change existing industries or create ones. There has been a lot of promise and little profit as many of these companies adopt aggressive roll-out plans.

‘The proof is always in the execution and failure to deliver on growth promises will result in share price pain - as Purplebricks has found out.’

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Issue Date: 07 May 2019