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UPDATE 1-Purplebricks says to pull out of U.S. business as loss widens

Published 03/07/2019, 04:19 pm
Updated 03/07/2019, 04:20 pm
© Reuters.  UPDATE 1-Purplebricks says to pull out of U.S. business as loss widens

(Adds CEO quote, details on U.S. business, results)

July 3 (Reuters) - Purplebricks Group Plc PURP.L said it would pull out of the U.S. market in the latest setback for the struggling British online estate agent which is already preparing to exit Australia.

The company, whose founder and chief executive quit in May after Purplebricks admitted it had lowered its standards while chasing rapid international growth, said both exits would be completed by the end of 2019. have taken the difficult decisions to exit our businesses in both Australia and the US as it is very important that we now focus our resources on the UK and Canada, where we have a strong established presence," Chief Executive Officer Vic Darvey said in a statement.

Founded by Michael Bruce in Britain in 2014, Purplebricks was one of the fastest growing British companies thanks to its policy of not charging traditional moving fees, which helped it challenge traditional operators such as Countrywide CWD.L and Foxtons FOXT.L .

Purplebricks said on Wednesday the exit from Australia and the United States was expected to "significantly" reduce cash burn in the future.

The company, which said it would either sell or close the U.S. business, also reported nearly doubling its annual operating loss to 52.3 million pounds for the year ended April 30 from 27.8 million pounds a year earlier.

Purplebricks, which also operates in Canada, entered the United States in 2017 confident of replicating its performance in Britain. But in May, the company apologised to shareholders for its disappointing performance and said it had slashed U.S. marketing and other expenses and was reviewing whether it can run a "materially scaled back U.S. business" there. AIM-listed company is backed by German publisher Axel Springer SPRGn.DE . British money manager Neil Woodford, one of Purplebricks' longest-standing backers, recently had to suspend his flagship fund and has cut his stake in the online estate agent.

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