PEXA acquires stake in Landchecker, upgrades profit forecast

PEXA acquires stake in Landchecker, upgrades profit forecast

PEXA chairman Mark Joiner.

PEXA (ASX: PXA) continues to reap benefits from Australia’s national obsession with the property market after reporting higher than expected results for 1H22.

The leading online property exchange network announced revenue increased by almost 50 per cent to $145.4 million, as it undertook 2.1 million PEXA Exchange transactions - more than 60 per cent of predicted FY22 volumes.

Shares in the digital property settlements platform increased by almost 14 per cent during day trading, with the results accompanied by confirmation the business had committed to acquiring a 38 per cent interest in fellow Australian property tech company Landchecker.

Investing alongside the emergency roadside assistance, transport and financial services organisation RACV, which will retain 51 per cent equity, PEXA expects the acquisition to help enrich its PEXA Insight database in creating new products and services that generate value for consumers, government and industry.

“Landchecker is PEXA Insights’ first strategic investment. Like PEXA Insights, Landchecker’s data is trusted and used by thousands of property professionals every day,” PEXA’s chief data and analytics officer Scott Butterworth said.

“We aim to provide a richer service offering to our customers, and we believe that the synergies between the two companies will enhance PEXA’s position as the trusted resource for robust, real-time data.”

Since launching, PEXA has facilitated more than 10 million property transactions worth more than $2 trillion, and the Exchange is now supporting more than 9,600 practitioners, 160 financial institutions and 1.1 million consumers.

Favourable market conditions, coupled with further growth in transfer market penetration in Australia, helped PEXA’s EBITDA rise 76 per cent to $83.2 million. These conditions included an increase in multi-party transactions, together with stable costs of sale and a managed cost base – all contributing to an 87 per cent gross margin improvement.

In Queensland alone, PEXA Transfer penetration grew to 76 per cent in December 2021, resulting in an 84 per cent increase in PEXA Exchange volumes.

“Our strategy to build on PEXA’s position as the operator of Australia’s leading digital property settlements platform is delivering attractive results,” PEXA group managing director and CEO Glenn King said.

“We now expect to materially exceed previous prospectus guidance across FY22 and have increased guidance across all key earnings metrics.

“In addition to our current strong operating performance, we have made meaningful progress on our growth initiatives. Following successful Bank of England payments solution testing with seven lenders in January, we have signed up the first lenders onto our platform in the UK, making PEXA the UK’s 7th net settlement payment system to clear through the Bank of England.”

The business is on track to ‘go live’ in the UK later in 2022 after signing agreements with the Bank of England and Her Majesty’s Land Registry. The first UK lenders have already signed up to the platform, and many others are currently undergoing due diligence.

PEXA updated its revenue forecast from $246.9 million up to $275 million due to the half-yearly results.

Landchecker founder and director Will Leaf is excited about the acquisition, with the remaining interests held by the founders and CEO.   

“The founders, Adam Gandolfo and the entire Landchecker team are all very excited about this transaction with PEXA and RACV,” he said.

“Working alongside these successful organisations will ensure Landchecker continues to successfully develop its offerings in pursuit of its aim, to become the most current and accurate property information business, trusted by businesses and consumers for property insights and data-driven decision making.”

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