We added the electronic property settlement company to the portfolio last week, a position we wanted to own before it reports on the 25th of this month. Heading into reporting, consensus estimates have the company doing $280m in revenue for the year and $87.7m in EBITDA, flat and -17% on FY22 respectively. In our view, these estimates are conservative for the year and MM expects the company to beat on an improved second half. PEXA benefit from turnover in the property market as well as refinancing of home loans. Looking at the data from PEXA and the ABS, volumes for both have been higher in the second half vs the first half, while consensus has the company flat for revenue and going backwards on EBITDA – expectations are low.
The company is also looking at a UK acquisition, though progress has been slow on both the M&A front also well as their efforts to encourage a move away from the current system. While PEXA should be looking at international opportunities, we think the near-term upside will come from the Australian market given the only competitor, Sympli, has had issues coming to market.
MM is long & bullish PXA ~$13
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