The PEXA Group (ASX: PXA) share price has gained over 20% to around $15.75, since it announced its agreement with NatWest to implement its technology. This milestone comes after nearly two years of discussions and signals a potential turning point for PEXA’s expansion strategy in the UK market.
Concurrently, PEXA is quietly undergoing a major management reshuffle. Its three top executives have all departed the company over the past 12 months, with what appears to be a realignment of the strategy towards a simplified growth story centred on the exchange businesses.
As a reminder, PEXA operates a digital conveyancing platform that streamlines and digitises property settlements. It’s akin to a toll road, clipping the ticket when a property is sold or a remortgage is refinanced.
Why Is The PEXA Share Price Increasing?
The PEXA share price bolted after NatWest, the UK’s third-largest lender, formally agreed to use PEXA’s platform for facilitating remortgages, as well as for sale and purchase transactions. Securing its first tier-one lender marks a major milestone for PEXA in the UK, paving the way for meaningful transaction volumes across the exchange.
Remortgage transactions are expected to go live in the first half of 2026, followed by sale and purchase transactions. NatWest is the third largest mortgage lender in the UK so this partnership highlights PEXA growing momentum in the UK, with the market moving decisively to price in potential upside.
The announcement builds on news from June that PEXA has successfully completed the UK’s first digital property purchase.. PEXA aims to launch the sale and purchase product later this year, while the remortgage offering is currently able to facilitate 70% of transactions.
PEXA also received approval from the UK’s Financial Conduct Authority to operate as an Authorised Payment Institution. This regulatory approval enables PEXA to facilitate funds on behalf of buyers, streamlining the conveyancing process by eliminating the time-consuming process of holding and transferring.
Why Is The UK Market Important To The PEXA Share Price?
Of the three divisions, expanding in the UK is PEXA’s best chance at growing revenue and earnings. The core Australian Exchange has largely exhausted it’s growth potential with market share above 90%. Moreover, the Digital segment is challenged, with costly acquisitions that continue to incur losses.
Source: PEXA, UK Finance, GOTO, Ochresoft
In contrast, the International segment focused on the UK (initially via England and Wales) allows PEXA to leverage its intellectual property from building the successful Australian exchange. Importantly, it also addresses a genuine pain point in the UK’s often slow and complex property settlement process.
In the UK, 29.8% of property settlements fail. The process typically takes over five months and is hindered by inefficient paperwork, poor communication, and animosity among stakeholders. Since agents and conveyancers are only paid upon completion of a transaction, there is strong industry motivation to address these issues.
What Is The TAM Of The UK Opportunity?
I’m generally not a fan of total addressable market (TAM) estimates – they’re often bias and rarely accurate. That said, I do think there’s value in understanding the size of the UK market. Even if the specific numbers are off, the exercise helps clarify PEXA’s unit economics.
In its 2021 prospectus, PEXA estimated the UK TAM at $719 million. More recently, the FY 2024 AGM presentation revised that figure down to $520 million. Based on my own calculations (shown in the table above), I estimate the TAM to be around $450 million, with a realistic revenue share of approximately $360 million, as per the working in the image below. For comparison, the Australian exchange generated $292 million in FY 2024.
It’s worth noting the UK property market can be volatile. You can see below that the number of transactions declined significantly at the time of the GFC, but had a decent year in 2025.
As for the pricing model, I suspect PEXA will enter the market at a lower price point than the more mature Australian market, and wait until it gains market share to flex the pricing lever. There is obviously a lot of uncertainty about whether PEXA can actually achieve this potential.
What Challenges Does PEXA Face In The UK Market?
There are two primary challenges to PEXA gaining market share in the UK: distribution and the conveyancing process.
Source: PEXA 1H 2025 Presentation
Distribution has proved elusive for PEXA. Despite a partnership with NatWest, there is minimal headway with other major lenders. This will be a key factor to monitor in the upcoming FY 2025 results.
“…it’s one thing to build a platform, and I think we’ve done that quite successfully to date for the U.K. It’s another thing to get distribution for it”. Scott Butterworth, 1H 2025 Results Call
The second obstacle has nothing to do with PEXA, and that’s the conveyancing process.
The conveyancing process itself presents a separate challenge, independent of PEXA. In the UK there is generally no penalty for buyer or seller if they withdraw from a transaction, even after an offer has been accepted. This and other reasons mean that in the UK there are significant frictional costs and time delays in exchanging real-estate for cash.
Adding to this complexity, the conveyancing process has become more demanding. New regulations like the Building and Safety Act 2022, along with increased anti-money laundering, source of funds, and source of wealth checks, have added significant workload. To compound these issues, approximately 15% of conveyancing professionals have left the industry since 2021.
Why Has PEXA Changed Management?
PEXA has experienced a period of significant leadership transition over the past year, marked by several senior departures and the arrival of a new CEO.
Long-serving chief executive Glenn King announced his retirement, leading to the appointment of Grab MD of Operations Russell Cohen as his successor. Cohen’s experience managing 3,000 employees across seven countries at delivery and payments company Grab uniquely positions him to balance PEXA’s operations on either side of the world. Moreover, his regulatory experience will be valuable when navigating central banks, land authorities, and revenue offices.
PEXA Australia CEO Les Vance and CFO Scott Butterworth have both left in the first half of this year. Typically the departure of a company’s three most important leaders (King, Butterworth, Vance) would raise red flags, however I believe this a deliberate decision by the board and Cohen to reposition the company.
Both Vance and Butterworth were intimately involved with the prior growth strategy centred on M&A, so their departure might foreshadow a realignment back to organic growth, primarily in the UK market where PEXA has both the largest and most promising opportunity.
To that end, PEXA has hired Miguel Sard as non-executive director, who was responsible for initiating the relationship with NatWest. The business has also expanded the UK management team, with a Chief Technology Officer, Director of Lender Sales and Head of Conveyancer Relationships all being appointed in the last six months.
As a final observation, it’s telling that the International segment is now prioritised ahead of the Digital division in investor presentations. A couple of years ago, it was the other way round.
Why PEXA Shares Are Now Quite Interesting
When I wrote this Introduction to PEXA Group, I said the company needed to show meaningful progress in the UK for shareholders to do well. Claude also covered the company, criticizing the poor acquisition strategy and outlining how a change of management and strategy may lead the company to greener pastures.
It is now looking like all of these things may come to pass; and PEXA share price has already responded, at least to a degree!
The major concern is distribution – can PEXA attract more tier 1 lenders into the sales pipeline? With the mortgage product ready and the sale and purchase platform nearing launch, distribution needs to scale rapidly or PEXA will miss capitalizing the NatWest momentum. While the hires show promise, it will take time for their distribution efforts to bear fruit.
At $16 per share, PEXA has an enterprise value of around $3.1 million. Because the business is loss-making, it’s hard to value the company on traditional metrics. I believe the company makes around $100 million of free cash from the Australian exchange, so we’re paying a ~3% free cash flow yield for a quality core business with UK optionality. While that’s not cheap, I don’t think it’s unreasonable for a high-quality business.
Therefore, I’m considering purchasing a small amount of PEXA shares before the FY 2025 results, partly because I imagine they will release more information regarding their distribution efforts in the UK, and that could positively affect the share price. Of course, it may well be better to wait until after the August results.
It seems to me that the change in management and progress with Natwest in the UK is making PEXA stock more attractive to investors, and arguably for good reason!
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Disclosure: The author of this article does not own shares in PXA and will not trade PXA shares for at least 48 hours following the publication of this article. The editor of this article, Claude Walker, does not own shares in PXA and will not trade PXA shares for at least 48 hours following the publication of this article. This article is not intended to form the basis of an investment decision and is not a recommendation. Any statements that are advice under the law are general advice only. The author has not considered your investment objectives or personal situation. Any advice is authorised by Claude Walker (AR 1297632), Authorised Representative of Ethical Investment Advisers Pty Ltd (ABN 26108175819) (AFSL 276544).