Category Archives: online agents

Purplebricks and its finance company have liabilities in perpetuity – Emoov collapse should sound alarm-bells for investors and business partners

“Consumer watchdog Which says 5000 sellers could be affected by the collapse of Emoov” https://www.propertyindustryeye.com/consumer-watchdog-which-says-5000-sellers-could-be-affected-by-collapse-of-emoov/ Source Property Industry Eye (PIE)

Purplebricks share price continues to nose dive
Purplebricks share price continues to nose dive

The collapse of eMoov into administration again demonstrates the fundamental flaw in the call-centre estate agency business model but, it also highlights a severe problem for Purplebricks and the few other remaining call-centre agents that has been alluded to before but, in a different context. Their contract binds the companies to deliver the contracted service in perpetuity.

As the PIE story demonstrates, Purplebricks* consumers who have paid for a service upfront or, deferred payment, are now entitled to that cost being refunded or, tfor the customers to enforce the contract for eternity. 

Given the consistent and dramatic share price fall over the past year, its continued ‘shyness’ in substantiating many of its bold claims (88% listing to sold by Michael Bruce CEO on Radio 4 MoneyBox) and, its inability to provide a shred of evidence to repudiate Anthony Codlings damning Jefferies report which stated that Purplebricks sells (completes on) at most 51%** of all of its clients that it takes circa £1,300 from on average.

This means that Purplebricks has an exponentially increasing exposure to clients who can contractually demand their money back/ enforce the marketing and support package in perpetuity (allowing for ever increasing Rightmove charges and LPE retainers etc. Either Purplebricks and its finance company must hold sufficient and ever increasing cash reserves to be able to meet this contingency or, they face a potential charge of selling services they do not have the ability to provide as contracted.

See also

https://blog.pdq-estates.co.uk/2018/05/08/are-purplebricks-set-to-repay-millions/

https://blog.pdq-estates.co.uk/2017/12/12/purplebricks-and-the-case-of-the-regulators-who-wont/

https://blog.pdq-estates.co.uk/2017/08/24/attempted-intimidation-by-a-plc-or-fair-comment/

*Stock market ticker PURP #PURP Social media @PurplebricksUK @purplebricksAUS @PurplebricksUSA

**believed to be a ‘safe’ conservative figure to keep Jefferies lawyers happy