PEXA Faces Uncertainty as UK Market Softness and CEO Review Loom

Steady Growth in a Volatile Market

PEXA Group Limited has reported a solid third quarter for fiscal 2025, with trading volumes and revenue growth largely in line with market expectations. The Australian property exchange processed 871,000 transactions in 3Q25, marking a 4% increase over the same period last year. This growth was supported by a 13% rise in refinancing activity, which benefited from the Reserve Bank of Australia's 0.25% cash rate cut in February 2025.

Despite the broader macroeconomic uncertainties, PEXA maintained its national market penetration at 90%, underscoring the platform's entrenched position in the Australian property settlement landscape. The company also advanced its expansion efforts, completing the refinance phase rollout in Tasmania and initiating the transfer phase as scheduled. Meanwhile, the Northern Territory rollout remains on track for completion by the end of the calendar year.

Navigating UK Market Headwinds

On the international front, PEXA’s UK operations faced a mixed quarter. Remortgage volumes declined by approximately 4% compared to the prior year, reflecting ongoing softness in the UK market. Optima Legal and Smoove, PEXA’s UK conveyancing arms, saw instruction and completion volumes for remortgages fall year-on-year, although there was some improvement quarter-on-quarter.

Conversely, the UK sale and purchase segment showed robust recovery, with Smoove’s sale and purchase completions soaring 41% year-on-year. This segment’s growth signals a potential turnaround in the UK property market, which PEXA is well-positioned to capitalize on with its expanding product suite.

Strategic Progress and Regulatory Milestones

PEXA’s development pipeline remains active, with the Sale & Purchase product nearing launch later this year. The company also secured a significant regulatory milestone post-quarter, receiving approval from the UK Financial Conduct Authority to operate as an Authorised Payment Institution. This status enables PEXA to offer enhanced payment services, including acting as a Third Party Managed Account provider for UK conveyancers, broadening its service capabilities.

Digital Solutions, a key growth driver, reported strong revenue gains with an 11% increase in subscription revenue and a 78% jump in project and consulting revenue compared to 3Q24. Customer retention remains high, and the business is focusing on expanding its Automated Valuation Model and government client base.

Leadership and Outlook

Since his appointment at the end of March 2025, CEO Russell Cohen has been conducting a comprehensive review of PEXA’s operations. While the company reaffirmed its FY25 guidance, Cohen cautioned that ongoing assessments might lead to adjustments in significant items and depreciation and amortisation figures ahead of the full-year results in August.

PEXA’s FY25 guidance anticipates group business revenue growth between 13% and 19%, an operating EBITDA margin of at least 34%, and controlled net debt levels. The company remains vigilant about the uncertain macroeconomic environment in both Australia and the UK, focusing on operational improvements and customer outcomes.