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Small cap movers: Cracks appear in Purplebricks as US and UK bosses exit amid profit warning

Published: 21:00 23 Feb 2019 AEDT

Purplebricks cracking

The foundations of online estate agency Purplebricks Group PLC (LON:PURP) have been shaken in more ways than one this week after a profit warning was accompanied by not one, but two prominent resignations.

On Thursday, the self-styled “proper estate agent” said its UK chief executive Lee Wainwright was stepping down after a year at the helm for personal reasons, while US CEO Eric Eckardt would also leave after two years for motives that were not disclosed.

Temporarily replacing Wainwright is chief operating officer Vic Darvey, who only joined the company last month from Moneysupermarket.com, while Purplebricks’ co-founder and group CEO Michael Bruce would take charge of the US operation.

The top-level movements come amid teething problems in the US as American home sellers haven’t responded as well as hoped to a recent marketing campaign, and as such the firm doesn’t expect the division to meet targets this year.

There are also problems down under with Purplebricks’ Australian arm on track to miss forecasts; however there was a silver lining in the form of growth from the company’s Canadian and UK markets.

Shareholders have reacted predictably to the barrage of negative news, with Purplebricks shares plunging 24%, or 40p, to 126p in the week and wiping around £100mln from its market value.

Standing on much firmer ground was stem cell therapy developer ReNeuron Group PLC (LON:RENE), which saw its shares jump 13%, or 6.5p, to 56.5p after encouraging results from clinical trials involving its treatment for retinitis pigmentosa, a disease the can cause blindness.

Skincare firm Integumen PLC (LON:SKIN) was another “high” riser this week, soaring 65%, or 0.6p, to 1.5p after its cannabinoid-infused skin creams killed over 99% of skin bacteria during lab tests, which management said provided “clear evidence” that skin-care treatments infused with Cannabidiol (a chemical found in cannabis), could help lower incidences of skin disease.

Among the oilers, shares in Enteq Upstream PLC (LON:NTQ) gushed 24%, or 5.5p, higher to 28.5p after a revival of drilling activity in the US helped generate a sharp uptick in sales for the oil well technology specialist.

As a result of the re-energised market, Enteq said full year revenue and underlying earnings were now expected to be “materially ahead of its expectations”.

Meanwhile, Reach4Entertainment Enterprises PLC (LON:R4E), owned by former BBC controller Michael Grade, rose 1.5%, or 0.02p, to 1.32p after buying advertising agency Sold Out for an initial sum of £3.94mln.

The AIM All-Share was a bit less exciting during the week, rising 0.2%, or 1.5 points, to 909 while the FTSE 100 dipped 0.6%, or 40 points, to 7,197.

The US-China trade war short-circuited shares in electric components maker Gooch & Housego PLC (LON:GHH) this week, tumbling 18%, or 273p, to 1,220p after the ongoing tariff spat resulted in a downturn in demand for its products, particularly those used in industrial lasers.

Meanwhile, Tri-Star Resources PLC (LON:TSTR) slumped 15%, or 7.5p, to 41p after news that liquid metal had been produced at its associate’s antimony and gold facility was overshadowed by a technical fault that meant it could not tap the material from the reduction furnace.

There was more misery in the miners as Patagonia Gold PLC’s (LON:PGD) shares were crushed by the closure of both of its gold operations in Argentina due to low production, sending the stock plunging 54%, or 53p, to 44.5p.

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