(Reuters) -Purplebricks Group said it was unlikely the firm would generate cash again in the current financial year as expected, sending its stock down to a record low as the British online estate agency explores a sale in a bid to revive its fortunes.
Shares in the AIM-listed company slumped 45% in Tuesday morning trade, as the company flagged that its current deal talks, if concluded, would deliver shareholder returns significantly below the present share price.
Purplebricks had a turbulent 2022 as it struggled with implementing a new operating model, had at least three major management reshuffles and one of its top-10 shareholders - Lecram Holdings - called for the removal of Paul Pindar as chairman.
In February, the firm said its board had recognised that the potential of the group may be better realised under an "alternative ownership structure" and had decided to conduct a strategic review. That review would include a formal sale process, the company said in March.
Stock is down nearly 45% since the review announcement.
The firm, which had sold off its international assets to focus only on the UK market, on Tuesday said it expects to have finished the financial year ended April 30 in-line with its expectations.
However, the fourth quarter did not see an increase in instruction levels, Purplebricks said, and the group's payment processor withheld a portion of remittances, which impacted its cash position.
The company estimates its cash position at about 9.1 million pounds ($11.49 million) as of April 30, compared to 43.2 million pounds a year ago.
Founded in 2012 by brothers Michael and Kenny Bruce, the firm had dazzling early success but its share price has fallen nearly 99% from its 2017 peak.
Some of its recent woes come as Britain's property sector has cooled and house prices have fallen from pandemic highs as demand suffers from higher borrowing costs and lower mortgage approvals - although there has been a slight uptick recently.
($1 = 0.7923 pounds)
(Reporting by Radhika Anilkumar and Eva Mathews in Bengaluru; Editing by Savio D'Souza, Eileen Soreng and Ed Osmond)