Small Caps | 10:30 AM
Pexa Group’s first quarter results revealed strong growth in refinance activity while the UK benefited from a remortgage volume tailwind.
- Pexa Group's first quarter meets expectations, guidance reaffirmed
- A refinancing boost locally, remortgage volume tailwind in the UK
- UK pricing schedule released, faster conveyancer adoption expected
- Natwest commitment may drive additional Tier 1 lenders
By Mark Woodruff
Digital property settlements and data insights provider PEXA Group ((PXA)) delivered reassuring first-quarter operating metrics, supported by a rebound in refinancing activity following recent interest rate cuts.
Management re-affirmed FY26 guidance and maintains confidence in the progress of investments across both the Australian exchange and the UK rollout.
Pexa Chief Executive Officer and Group Managing Director Russell Cohen noted management had “delivered a solid trading performance in the first quarter of FY26 across both Australia and the UK. In Australia, property transaction volumes grew 6%, driven by stronger refinancing activity. The UK market is gaining momentum, showing clear signs of growth after a period of subdued activity”.
Domestically, total exchange volumes tracked in line with expectations, underpinned by stronger growth in lower-margin refinance activity.
In the UK, elevated remortgage volumes provide a near-term tailwind, UBS notes, while medium-term momentum in the Sale & Purchase (S&P) market remains encouraging, contingent on management’s ability to secure broader adoption from banks and conveyancers.
Total transaction volumes processed by the PEXA Exchange were 1,055,000 in the quarter, an increase of 6% from a year earlier, while transfer volume grew by 3% to 667,000.
PEXA Exchange enables lawyers, conveyancers, financial institutions, and land registries to lodge documents and settle property transactions online, replacing traditional paper-based conveyancing.
A service fee is charged per successful transaction (with no upfront or subscription cost), with revenue tied to the volume and type of property dealings completed on the platform.
These fees are collected at settlement from transaction proceeds, meaning PEXA’s primary revenue stream grows alongside property market activity.
In Australia, the group went truly national in August, by launching its platform in the Northern Territory, the last jurisdiction to adopt/mandate e-conveyancing.
As of 2025, Pexa Group has facilitated over 20 million property settlements in Australia, and around 90% of all property transfer settlements nationally are processed through its exchange network.
Sympli, a rival platform backed by InfoTrack and the ASX ((ASX)) has so far captured only a negligible share, leading to regulatory scrutiny of Pexa Group’s market power. Total market penetration was maintained at 90% during the first quarter.
Refinances in the period benefited from consecutive interest rate cuts by the RBA in July and August, increasing 16% and resulting in a 2% increase in refinance mix.
FY26 group revenue guidance is $405-430m with an earnings (EBITDA) margin between 32-35%. Group profit is guided to $5-15m with group capex in the range of -$60-65m.
In the UK
At the first quarter results presentation, management also released its UK pricing schedule, laying out the fee per completion for both S&P and remortgage transactions.
The company’s UK platform integrates with HM Land Registry and the Bank of England to enable digital refinances, and the company is now working to digitise S&P transactions in that market.
Macquarie points out UK S&P fees are slightly lower than in Australia, while UK remortgage transactions are priced at a premium. The broker explains this reflects structural differences, with the outgoing mortgagee not involved in the UK remortgage process and therefore not incurring a fee. Management aims to include the outgoing mortgagee in time.
Jarden explains S&P transactions are approximately -16% cheaper than in Australia, while remortgage transactions are around 43% more expensive than in Australia.
Macquarie estimates a typical UK remortgage transaction is priced at GBP70 (approximately $140), representing a substantial premium to the current Australian fee range of between $71.00 and $111.00.
Pexa charges for three transactions per completion in the UK, compared to four in Australia, as the outgoing lender is not billed, reflecting the greater role of the seller’s conveyancer in managing fund transfers.
Analysts believe competitive pricing for S&P transactions will support faster conveyancer adoption. Growing interest following recent UK roadshows was also noted.
Jarden continues to see asymmetric upside risk, noting that while the UK pricing outcome is disappointing, it is more than outweighed by the long-term market opportunity.
At current levels, it’s felt the Pexa Group share price appears to assign minimal value to the UK business.
Onboarding Natwest
In July, Pexa achieved a major UK milestone by securing a formal commitment with NatWest. PEXA’s UK subsidiary (Digital Completion UK) and NatWest signed an implementation program agreement to begin processing NatWest’s remortgage transactions on the PEXA platform.
Under this plan, UK Tier 1 lender NatWest’s digital remortgage service is expected to go live in the first half of 2026, followed by digitised home sale and purchase transactions.
Macquarie suggests formal commitments from additional Tier 1 lenders in the UK would likely incentivise other lenders to onboard quickly, driving rapid market share gains.
Strength in the UK property market in the first quarter drove growth in Optima Legal and Smoove remortgage completion volumes up 32% and 22%, respectively.
The group’s UK mortgage share rose to 26% from 22% in the prior quarter but declined marginally from 27% a year ago due to the loss of a low margin mandate in Smoove.
Smoove sale and purchase completions rose 15% year-on-year but declined -4% versus the fourth quarter of FY25.
Digital Solutions
The strategic review of the Digital Solutions business remains ongoing. This segment generates subscription and project-based revenues, aiming to leverage the company’s property data to broaden its revenue streams beyond settlement fees.
With the aim of allocating resources to the highest-return areas, the company signaled at FY25 results in August it would consider restructuring or divesting non-core digital products and, accordingly, took an impairment charge of around -$78m in FY25 on certain acquired assets.
The segment continues to show solid momentum, highlights UBS, with subscription revenue up 15% year-on-year and 19% growth in project and consulting services. This was partially offset by a -100% decline in transaction revenue, reflecting Pexa Group’s exit from the Land Insight business.
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