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After leading property transaction powerhouse PEXA (ASX: PXA) through its public listing in 2021 and expanding its presence in Australia and the UK, group managing director and chief executive officer (CEO) is set to retire at the end of this financial year.
"Mr King has transformed the PEXA Group over the past five years, with a singular purpose and a successful strategy to deliver solid outcomes for our customers and set up the company to deliver its future growth ambitions," says PEXA group chair Mark Joiner.
The news comes as the Melbourne-headquartered company reports a 20.7 per cent lift in revenue to $340.1 million for FY24, alongside a 16 per cent lift in operating earnings to $114.9 million.
The group is still technically loss-making in statutory terms with a result that is $18 million in the red, but this is a $3.8 million improvement on the prior year and is primarily due to $55.8 million worth of historical acquired amortisation rates on assets following a change in ownership in 2019.
King highlights several factors that led to PEXA's improved operational performance with an EBITDA margin of 36.5 per cent, representing a 1.7 percentage-point jump on FY23.
"Our FY24 results demonstrate our team’s dedication to progressing PEXA’s strategy and our purpose of ‘connecting people to place’," the outgoing CEO says.
"Improved revenues reflect the strength of the exchange, with higher transfer volumes and CPI-linked repricing, and growth within our digital solutions business.
"Operating costs across the group have benefited from the efficiencies generated through our productivity enhancement program (PEP). While we continued with disciplined investments in developing our business, cashflows increased, and the group’s balance sheet settings improved."
The productivity enhancement program led to $11 million in redundancy and restructuring costs in the financial year, while earnings were also brought down by merger and acquisition costs of $9.6 million in relation to the integration of UK businesses Smoove and Optima Legal.
Unlike PEXA's Australian business which had operating EBITDA up 13 per cent at $159.1 million, the international division recorded an operational EBITDA loss of $37.2 million. PEXA attributed this to investments in the PEXAGo platform, business integration activities, lower revenues from Optima Legal, and the impact of acquiring Smoove.
"Our international expansion, starting with the UK, continues. Development of the PEXAGo platform, which is designed to be used across jurisdictions, proceeded to schedule," says King.
"NatWest and another bank have verbally committed to using the platform, and we are working with them on their onboarding programs.
"Whilst we have completed the underlying integration of PEXA’s platform with Optima Legal’s processes, we did not transition Optima Legal’s flows onto the platform as we expected. However we have received requests from two large and four smaller banks to test PEXAGo’s payment capabilities through the Bank of England."
He adds that Optima Legal had a challenging year due to subdued remortgage market activity and other matters, but improved its productivity significantly.
For the year ahead, PEXA plans to maintain its focus on customer service, and expand into Tasmania and grow in the Northern Territory, as well as building further integrations into the property market.
Internationally, it will "cautiously explore opportunities in other international markets, including Canada and New Zealand."
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