The Link Administration Holdings Ltd (ASX: LNK) share price is under the spotlight today after giving an update from PEXA.
What did PEXA reveal?
Link is a substantial shareholder of PEXA. It provides a world-first, digital settlements. PEXA helps over 20,000 families a week safely settle their homes.
PEXA has given Link draft information, which is material to the company. However, Link didn’t prepare the update and said it isn’t responsible for the information provided.
The electronic property exchange business estimated its transfer market share in each of these states: Victoria (98%), New South Wales (96%), South Australia (95%), Western Australia (80%) and Queensland (60%).
PEXA believes that the total addressable market opportunity for the PEXA Exchange in Australia will be approximately $280 million in the 2021 calendar year, based on the forecast of property transaction volumes and transaction types and PEXA Exchange prices.
PEXA forecasts that total market billable transactions will increase to 4.2 million transactions in FY21.
Growth plans
Link also said that PEXA outlined different growth opportunities that it’s pursuing.
PEXA International is developing digital property settlement solutions for offshore markets with Torrens lands title systems.
PEXA Insights is harnessing property data from the PEXA Exchange and other data sources to generate data-driven insights for property market participants and other stakeholders.
PX Ventures is identifying, incubating and accelerating new business ventures with partners to provide solutions for consumers, business and governments across the property sector.
Perhaps most importantly, in England and Wales, PEXA International is working towards potentially launching an initial re-mortgaging solution in 2022.
FY21 forecast
PEXA included a revenue forecast for FY21. In the second half of FY21 it’s expecting to grow revenue by 54.5% to $118.8 million. That is coming from an expectation that fourth quarter revenue will grow by 57.2% to $63.1 million.
Total FY21 revenue is expected to grow by 40.4% to $218.5 million.
The EBITDA margin (EBITDA explained) for FY21 and FY22 and expected to be broadly in line with PEXA’s FY21 half-year operating EBITDA margin.
Summary thoughts on PEXA and the Link share price
One of the best things about Link is its PEXA shareholding. It has a very promising future ahead, particularly if it can expand overseas.
I’m not sure if the Link share price is a buy at this stage, but it could be one of the more promising financial shares on the ASX today for the longer-term.
