Macquarie Bank-backed Property Exchange Australia is on track for an early listing after signing up nearly 30 vendors and major law firms Slater & Gordon, Gadens and Galilee Solicitors to its electronic property settlement system in its first year of operation.
The company, which began as a Council of Australian Governments initiative in 2010 and still counts NSW, Victoria, Queensland and Western Australia as major shareholders, has grown tenfold in the 12 months to the end of June, a compound monthly growth rate of 25 per cent, according to PEXA chief executive Marcus Price.
“Twelve months ago we were doing some caveat work and refinance in Victoria. The big driver this year has been refinancing and now we’re doing 10 to 15 per cent of refinances for the major banks from a cold start,” Mr Price said.
“We’re a company that would go for an early listing, we’re in sight of the next phase of ownership in terms of it being 18 months or two years away, so it’s certainly on the horizon.”
PEXA’s platform allows for the electronic lodgement of land registry documents and the completion of financial settlements, and is targeted at property lawyers, conveyancers and financial institutions.
Late last month, WA announced it had finally integrated its electronic conveyancing system, with savings associated with the online system estimated to reach $80 million by 2028.
The company now counts 27 financial institutions, including major banks, credit unions and mutual savings institutions, as members.
Mr Price said PEXA, which also has former Toll Holdings chairman Paul Little as a significant investor, would be profitable in the near term.
“There’s a lot of money being invested in the technology, and if you back all that out it’s a different situation,” he said.
“But at some point the call will be made about what we do (for a listing), and it might be pre-profitability. We have a lot of confidence in our growth rate and the uptake speaks for itself, so it’s just a matter of time.”
He expects the company to hit profitability in the second half of 2016 or in early 2017.
Development has begun on integrating the PEXA system in South Australia and the company is in early talks with the Tasmanian government.
“The big hurdle is behaviour change, and that’s about hearts and minds and we’ve got a team to work with practitioners, take them through the system and work on their concerns,” Mr Price said.
PEXA has begun to be integrated by more widely used platforms including SAI Global, Veda and Global X, with work under way to persuade smaller legal practices to use the system.
This article first appeared in The Australian Business Review.