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Will Purplebricks eight-month share price rally resume after ‘storm in a thimble’?

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Purplebricks’ woes after two BBC programmes this week have been dismissed as a “storm in a thimble”.

Peel Hunt, the company’s broker, said: “We believe the answers provided to the deferred payment question were clear and the savings example has already been rectified. We don’t believe the issues raised will hinder the group’s future progress.”

Purplebricks came under fire on You and Yours, and Watchdog, for still using a claim that it had been told to withdraw, and for allegedly being unclear over the credit arrangement that customers who choose to defer payment enter into.

Last year, the Advertising Standards Authority told Purplebricks that its claim to save vendors £4,158 could not be substantiated.

The claim was withdrawn from over 1,000 places, CEO Michael Bruce told the BBC.

He made it clear that he had not known until Tuesday night that the claim was still being repeated in emails. The template email was removed within an hour and Purplebricks yesterday apologised in a stock market statement for the oversight.

The fact that the £4,158 savings claim was still being repeated after the ban seems unlikely to land Purplebricks in any hot water with the ASA.

A spokesperson told us yesterday: “While we take a dim view on advertisers repeating banned claims, we do accept that sometimes this can happen due to human error.

“Providing the mistake is swiftly resolved, we see no need to take further action in these types of circumstances.”

Analysts are now asking whether what City A M has called Purplebricks’ “eight-month monster rally” in its share price will simply resume.

Yesterday, the shares traded between a low of 415.50p and a high of 472.75p, and finished 17.75p (4%) up on the day at 456p.

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Source:: Will Purplebricks eight-month share price rally resume after ‘storm in a thimble’?