Purplebricks helped contribute to fund supremo Neil Woodford’s “fortnight from hell,” it has been claimed, as several of the investing veteran’s top holdings declined in value.
The online agent makes up 10.9% of Woodford’s Patient Capital investment trust but investigations into its transparency and the way it operates by Radio 4′s You and Yours and BBC Watchdog last week rattled investors and made the online agent one of several holdings to impact the fund.
The investment trust was also hit by drug company AstraZeneca’s worst ever day of trading after a cancer treatment trial fell short, while tobacco company Imperial was also affected by plans to cap nicotine content. The AA and Provident Financial also saw their values decline, contributing to what The Daily Telegraph described as a “fortnight from hell” over the weekend.
Overall, the investment trust has seen its share price drop 4.15% over the past fortnight.
Purplebricks’ own share price fell 7% on the day of the BBC broadcasts last Wednesday to as low as 399p but has since recovered.
The BBC attention came just days before Woodford released an interim report on his Patient Capital investment trust that said Purplebricks had made the largest contribution to returns in his in the first six months of this year.
Woodford, who would have written the report before the Purplebricks investigation was mentioned, said he is confident there is “more significant growth” to come.
He said: “The largest contribution to returns came from hybrid real estate agency business Purplebricks, which began its association with the portfolio as an unquoted business before pursuing a stock market listing in late 2015.
“Growth throughout this period has been nothing short of exceptional, as the management team have successfully executed their ambitious plans to dominate the UK’s nascent online estate agency industry, while at the same time significantly disrupt the traditional estate agency model.
“Its rapid progress in the UK has emboldened the management team to replicate their business model in other territories, launching in Australia last year and announcing plans to establish a US presence earlier this year.
“In the period under review, shares in Purplebricks more than trebled in price, reflecting the success that the business is demonstrating in the UK and increasingly overseas.
“I am also confident there is more significant growth to come for the business in the years ahead.”
Launched in 2015, the share price of Woodford Patient Capital has increased 7% in the first half of 2017, while Purplebricks returned 221% over the same period.
Purplebricks’ shares ended last week up 1.96% at 464p, recovering from a dip amid the BBC investigations.