Link investor

PEXA looks for positives in Link’s plan to offload half of its stake

Link had been a supporting shareholder, backing PEXA’s expansion and helping it with “appropriate connections to different markets, like the UK market,” he said from Link’s London office, which PEXA uses. as a basis.

UK Timetable

PEXA recently reached a key milestone in its UK expansion, completing its first mortgage transaction with Hinkley & Rugby Building Society. The same week, he announced that he was buying an English mortgage processing company, Optima Legal.

She is now preparing to launch mortgages with her next client, a retail bank called Shawbrook, in late October or early November. Two other potentially larger financial institutions are expected to join the platform in the first half of 2023, and two others in the second half.

A “proof of concept” for sell-buy transactions will “ideally” be ready for testing towards the end of next year, with a view to going live in early 2024.

The pace of expansion is somewhat dictated by the Bank of England, which has locked down its real-time gross settlement platform until early 2024 for a two-year upgrade. This limited the number of lenders that PEXA can put on its “PEXA Pay” system to 11 during this period.

But although the rollout was relatively slow, Mr King said it was going smoothly.

“A lot of times when you’re building new technology, there’s a lot of cases where the technology goes off the rails: it’s delayed, there’s budget overruns, it doesn’t deliver exactly what was intended. So we’re really happy with the progress that we achieve with the technological construction,” he said.

“If we can get things done, we will, but we’re not going to jeopardize our execution.”

Some PEXA watchers have suggested the slow and steady rollout could allow competitors to beef up and potentially overtake the Australian contender.

Mr King said he couldn’t see anyone ‘trying to do anything on a similar basis in this market right now’.

And he said PEXA had the advantage of its experience and lessons learned in Australia, which bolstered its first-mover advantage.

“Anyway, we’re not necessarily looking at achieving 90% market share here in the UK,” he said.

“It’s actually a big market: more or less, it’s two to two and a half times the size of the Australian market. So our goal is to get a good share of that market.

New Horizons

PEXA is now looking beyond England to further expansion opportunities, particularly in Canada. “We are exploring other geographical areas. And we are evaluating those opportunities, both in terms of the likelihood of success, and also who we might partner with in those geographies, because nothing compares,” he said.

Another possibility is to test certain elements of the platform or technology in European markets, working with companies or institutions in these countries. “These look interesting, but we don’t want to lose sight of them.”

In the UK, PEXA is not only looking for other partners to work with, but also potentially to acquire – such as Optima Legal. He described PEXA’s approach as “organic, with an M logic&A”.

“We are a good cash company and we are looking to grow. So we’re constantly looking at how you grow commercially and inorganically in a logical way,” he said.

“What’s also interesting is that there are opportunities emerging in the market, just because the market is under a little pressure and the funding is under a little pressure. So that creates opportunities for us. .

The Optima Legal merger was “an opportunity to help gain momentum in the market”. This included acquiring a development test bed and increasing transaction volumes, but also building “the culture, the back office, the shared services and all the other aspects. And it generates revenue.