Property settlement exchange platform PEXA Group (ASX: PXA) has posted a 24 per cent rise year-on-year in earnings for the first half of FY25, generating $73.2 million as the company sees solid performance both in Australia and abroad.

The Melbourne-based company saw revenue rise from $161.8 million to $202.5 million, while operating free cash flow surged by 82 per cent to $27.9 million.

However, PEXA posted a bottom-line loss of $32.7 million, an increase on the $4.6 million loss a year earlier, due to the impairment of a minority investment amid challenging market conditions and the derecognition of deferred tax assets. The company removed about $19 million in tax benefits because its new business activities no longer qualify for the tax breaks it had expected to use from past losses.

PEXA has announced plans for a share buyback in mid-March 2025, with completion expected within six months and ahead of the company’s FY25 results. The scale and timing of the buyback will be assessed on an ongoing basis, contingent on market conditions and the board’s review of PEXA’s capital management strategy.

“The group’s strategic position and operating performance improved during the half, with all businesses contributing. Although statutory profits were impacted by non-cash charges, underlying cash generation grew, supporting a stronger balance sheet,” says outgoing group executive and managing director Glenn King.

“Pleasingly, this means we can return up to $50 million to our shareholders via the on-market buyback announced today.”

PEXA’s Australian business posted a revenue of $162.6 million, reflecting an 8.7 per cent uptick, while market share increased to 90 per cent.

The number of transactions also grew by 3.7 per cent to 2.04 million, with operating margin growing by 9 percentage points to 56.3 per cent. Engagement in the Northern Territory is progressing to enable e-conveyancing in FY26, while PEXA has also kicked off coverage in Tasmania.

The international arm, which includes UK businesses Smoove and Optima Legal, saw revenue grow by 20 per cent to $32.1 million.

Optima Legal increased its market share to 15 per cent, with revenue up $1.6 million from higher transactions completed in the period. PEXA also noted that Smoove is “trading above expectations” due to “modest sale and purchase volume growth across the market”.

Capital expenditure fell by 13 per cent in the half, with the slump attributed to improved productivity and lower development activity.

PEXA says it expects macro-economic and property market outlook to “remain uncertain” in both Australia and the UK as each market “digests recent monetary policy changes and ongoing domestic and international developments”.

Looking ahead, the company has reaffirmed its operational guidance for FY25, targeting group business revenue growth of 13 per cent to 19 per cent, while anticipating EBITDA margins of 34 per cent.

The results come six months since PEXA announcedKing would be stepping down, with Russell Cohen to take over as the group’s managing director and CEO from 31 March 2025.

Group chief financial officer Scott Butterworth will assume the role of acting group managing director and CEO until Cohen takes control. King has agreed to provide advisory support until June 2025.

Shares in PXA are up 8 per cent to $12.31 each at 12:07pm AEDT.

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