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PEXA Group CEO appointment reinforces overseas ambitions
Lips were sealed at the digital property settlements platform PEXA Group (ASX:PXA) when market reports filtered out claiming it was eyeing the Toronto-listed legal and information services firm Dye & Durham late last year.
But while the official line on the acquisition was “no comment”, the company statement to the ASX did note that it was “continuously assessing opportunities to deliver increased shareholder value”.
It also followed its first overseas venture in 2023 when the Melbourne-headquartered company ventured into the UK market with the aim of building scale in the fragmented conveyancing market, so analysts reasoned that acquiring the publicly listed Canadian company Dye & Durham would be a logical step to expand its product offering and geographical footprint.
For shareholders, who saw the share price increase a solid 16 per cent in the past year to close at $13.19 on Tuesday, it could mean the announcement of more than just the half-yearly results to December 31, 2024, as PEXA is giving every signal that it plans to pursue its ambitious overseas growth plans.
There was no better sign of these intentions than the recent appointment of Russell Cohen as chief executive officer who will take the reins from Glenn King (pictured) on March 31.
In the making the announcement, PEXA chair Mark Joiner described Cohen – his previous role was group managing director of operations at the multinational technology company Grab – as a “seasoned Asia-Pacific technology executive”.
“Cohen is a dynamic leader with deep expertise in scaling platform businesses. In our search for our new CEO, we focussed on selecting a candidate with clear strategic capabilities, a track record in commercial performance and innovation, deep regulatory and industry engagement and a strong people and customer focus.”
His appointment comes with clear performance incentives aligned with shareholder interests. His package includes fixed annual remuneration of $1 million, with a target short-term incentive of 70 per cent and long-term incentive of 100 per cent of base salary. The structure emphasises both immediate operational performance and longer-term value creation.
Cohen’s capacity to meet these targets is off to a solid start for the simple fact he inherits a business demonstrating strong momentum. The company’s annual results to June 30, 2024, showed statutory revenue up 21 per cent to $340.1 million, while operating EBITDA rose 16 per cent to $114.9 million.
PEXA’s core Australian business continued to demonstrate its earnings power, with the company aiming for revenue growth of between 13 and 19 per cent in the 2025 financial year while maintaining operating EBITDA margins above 34 per cent.
However, the spotlight in 2025 will fall squarely on PEXA’s substantial UK investment. While projecting UK operating cash outflows of between $55 and $58 million for this financial year, recent developments suggest growing market acceptance, with the latest quarterly update showing its instructions trend improving, with Optima Legal’s market share reaching 16 per cent in August 2024, up from 15 per cent in April.
The staged rollout of PEXA’s sale and purchase product in the UK market represents perhaps the most significant value catalyst for 2025, while recent partnerships with Metro Bank and Hinkley & Rugby Building Society demonstrate growing institutional acceptance.
Yet challenges loom. A mid-2025 pricing review by the NSW Independent Pricing and Regulatory Tribunal creates regulatory uncertainty in PEXA’s largest market. Meanwhile, mixed economic conditions in Australia and the UK could impact property transaction volumes, although the company’s CPI-linked pricing provides some inflation protection. First quarter data shows Australian refinancing volumes down 21 per cent from their peak, reflecting broader market conditions.
For shareholders, PEXA’s position in the critical digital infrastructure space underpins its investment case. Its dominant Australian market share and high proportion of recurring revenue typically command premium valuations, while the UK expansion offers substantial growth potential despite near-term costs. The total addressable market across Australia and the UK exceeds $2 billion, providing a significant runway for growth.
