PEXA profit guidance reaches a possible $6m loss as transfers weaken

FY27 earnings guidance reset

PEXA Group Limited (ASX:PXA) has cut its FY27 financial targets after a steep deterioration in Australian property activity, with core net profit after tax now expected to range from a $6 million loss to a $6 million profit. Revenue guidance has been reduced to $355 million-$380 million, from $385 million-$415 million, while the target Group EBITDA margin has been lowered to 29.0%-31.5%, from 31.5%-33.5%.

The downgrade came with a weak first quarter. PEXA Exchange processed 934,000 transactions in 1Q27, down 11.5% on the prior comparative period. Transfer volumes, the more property-market-sensitive part of the exchange, fell 15.2% to 566,000, while refinances declined 6.4% to 233,000. October provided little relief, with transfer volumes 26% below the same period a year earlier, although refinance volumes were broadly flat.

Market share holds while transfer volumes weaken

The operating picture is not uniformly poor. National market penetration remained at 90%, matching the second half of FY26, and customer satisfaction was broadly stable at 89.1%, compared with 89.8% in 4Q26. Coverage also expanded in Tasmania after paper titles were removed from Land Titles Office processes, while transfer capability in the Northern Territory was scheduled to launch during the week of 9 November.

PEXA said consecutive interest rate rises, tax changes and falling property prices were weighing on buyer confidence and transfer volumes. The company is responding with cost control and tighter capital allocation, reducing the FY27 capex range slightly to $45 million-$50 million. International operating cash flow guidance, however, remains unchanged at an outflow of $55 million-$65 million.

IPART pricing decision remains a material variable

The guidance reset arrives as PEXA awaits the next stage of the NSW electronic conveyancing fee review. IPART submitted its final report to the NSW Premier on 30 October, with public release due by 18 November. ARNECC will then review the report and determine whether PEXA’s prices should change and, if so, by how much. The issue has already been a major concern for the company, which previously challenged IPART’s draft fee review and its implications for future pricing.

That process creates a second source of uncertainty alongside the property cycle. The current guidance reflects PEXA’s transaction-volume expectations and margin target, but the announcement does not quantify the potential earnings effect of any eventual pricing change. The group said it would continue engaging with ARNECC and other stakeholders while seeking an outcome it considers appropriate for customers, shareholders and employees.

UK expansion advances despite uneven volumes

PEXA’s UK operations offered a more mixed picture. Optima Legal remortgage completions rose 12.7% to 15,400 in 1Q27, while Smoove remortgage completions fell 17.8% to 7,400, which PEXA attributed to a slowdown in volumes from a panel lender. Smoove Sale and Purchase completions were broadly stable at 5,300.

NatWest continues to process remortgages on PEXA’s UK platform, with the company reporting faster transactions and improved customer satisfaction. Implementation of Sale and Purchase transactions has begun, following the earlier NatWest UK remortgage launch, and PEXA expects the first NatWest Sale and Purchase transaction by the end of March 2027. Until then, the UK expansion remains a developing investment rather than an immediate answer to weaker Australian volumes.