Former City analyst Anthony Codling has said that Purplebricks founder and CEO Michael Bruce was pushed from his job. Bruce’s departure, announced yesterday morning, prompted a 12% fall in Purplebricks’ share price.
On Sky News yesterday, Codling was asked by presenter Ian King if he was sure that Bruce had been shown the door.
Codling said that when someone is said to be leaving with immediate effect, this is City speak for being asked to leave.
Codling, who was with Jefferies Bank and is now CEO of Rummage4Property, said that he had never met a CEO more driven than Bruce.
He said Bruce’s departure will have been “a tough blow for him”.
But he said that he and Bruce had never seen eye to eye on the Purplebricks business model, which requires sellers to pay upfront.
Codling said that Purplebricks talked about the number of homes it had sold, but by ‘sold’ it meant ‘sold subject to contract’. That, said Codling, was not the same as being actually sold.
Codling claimed that customers believed they had a better chance of selling with Purplebricks than they did have.
At Jefferies, he had produced a report which claimed that only 50% of Purplebricks properties did actually sell.
Querying whether the business model was sustainable, Codling told Sky News: “There is a big question about asking people to pay whether or not they sell.”
Elsewhere Russell Quirk, former CEO of online agent Emoov which went into administration in December, said that Purplebricks’ ‘flawed’ decision to enter the Australian and US markets had come home to roost.
He was less sure than Codling about the nature of Bruce’s departure.
Quirk told Business Cloud: “I’m very surprised that Michael has left the business – whether he was asked to leave or if he felt he’d taken it as far as he could.
“He’s an incredibly impressive individual. He looked at the things eMoov hadn’t done right. He nailed the marketing and created a brand. In the UK he executed superbly.”
The Guardian, however, seems to be in no doubt that departure was not Bruce’s choice.
It says he was pushed out of the company, “the victim of a boardroom coup carried out by the chairman Paul Pindar with the blessing of major shareholders”.
The new boss at Purplebricks is Vic Darvey, 45, who joined in January when he was handed a golden hello worth £1.1m in share options. He was former managing director of MoneySupermarket, and previously at Lastminute which bought Online Travel Corporation, the firm he co-founded.
He says on his LinkedIn page that he is “passionate about building highly-engaged teams and am very focused on creating a culture of innovation and customer-centricity throughout an organisation”.
Michael Bruce had only recently taken charge of the US business, as well as being CEO of the Purplebricks group. He still owns 11% of the shares in Purplebricks. Yesterday, the share price tumbled nearly 12% to a low of about 121p, finishing the day at about 119p.
The big question in Australia now is will Purplebricks lose their shirts? It’s not a metaphorical question – Purplebricks had not long become this year’s sponsor of ‘disruptive’ rugby league club Melbourne Storm.