Electronic conveyancing business PEXA said rising interest rates and a slowing Australian economy could further cut property transaction volumes, as it reported a near-60 per cent slump in net profit.
In what it called “challenging” market conditions, the company said transactions fell 9 per cent by volume in the six months to December from a year earlier, cutting revenue at its core PEXA Exchange business by 7 per cent to $135.1 million. Cloudy, but diversifying: PEXA’s reliance on the domestic residential market is putting it under pressure to widen its sources of revenue.Net after-tax profit fell to $4 million from $9.7 million a year earlier. PEXA Exchange EBITDA earnings fell 15 per cent to $70.9 billion and its EBITDA profit margin narrowed by 4.9 percentage points to 52.4 per cent.
Property transfer transaction revenue in Australia fell 11.2 per cent to $102.4 million in the first half, reflecting the , while refinance transaction revenue jumped 12.2 per cent to $23.8 million as more people sought a better deal on their mortgage as borrowing costs rose.The Australian Financial ReviewThat was putting pressure on the company to show it could develop other revenue businesses so it was not as reliant on Australia’s residential market. There was still scope for the Exchange business to grow, but the company heavily weighted towards one line of business needed to expand, Mr King said.