Activist investor Adam Smith has urged Purplebricks to take appropriate action after losing the battle to oust Purplebricks chairman Paul Pindar and replace him with industry veteran Harry Hill.
Pindar received the backing of 71% of shareholders at a general meeting yesterday to keep him in place, but a significant 29% of investors voted for his removal after Smith’s Lecram Holdings called a General Meeting to vote on the boardroom shake-up.
Lecram proposed the removals of Pindar as chairman and the appointment of Harry Hill, formerly of Countrywide and Rightmove, to the board of directors. But this was rejected by the company’s shareholders, although there was a significant split in the votes.
Following yesterday’s general meeting, Lecram, beneficial owner of a 5.16%% stake in Purplebricks, issued this statement: “Nearly 30% of shareholders that voted, and a majority of independent shareholders not represented on the board, have supported our motion to remove Paul Pindar as chairman.
“We note the company has recognised the level of feeling among investors and it should draw the appropriate conclusion. There is also considerable support for bringing Harry Hill, who is both experienced in the sector and independent, onto the board.”
After yesterday’s vote, Helena Marston, Purplebricks’ chief executive, said she wanted to “reassure all shareholders that we understand their concerns”.
Without making reference to Pindar’s future, she said: “Our past performance has not been good enough. But we have a new team, with an agreed plan that is being delivered at pace.”
Marston herself only took the reins in April, following lengthy due diligence checks which revealed she had voluntarily declared herself bankrupt in September 2014 owing £103,000 to creditors. Her debts were discharged in September 2015.
In October, the company announced finance boss Steve Long would be replaced by Dominique Highfield, who had worked at Sainsbury’s, Amazon and Speedo owner Pentland Brands. And in September, it appointed property industry veterans Adrian Gill and Gareth Helm to the board.
After the company’s full-year results in August, Marston set out her plan which would see costs cut by £13m per year and fees increased.
Yesterday she said recent changes at the company will have a positive impact on the business.
However, the significant votes against Pindar suggest Purplebricks may struggle to win over disgruntled shareholders.
Purplebricks’ share price hit a record low of 9.02p yesterday, before recovering slightly to close at 9.27p.
EYE NEWSFLASH: Significant proportion of shareholders vote against Purplebricks chairman – CEO issues statement
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