PEXA nears ‘scorched earth’ valuation on regulatory shock
A shock pricing decision triggered a steep share price fall, sparked warnings of cost cuts and led to a prediction the company could abandon its UK expansion.
Electronic conveyancing company PEXA has said “unpredictable regulatory intervention” risks hurting Australia’s technology sector after a shock pricing decision sparked warnings of cost cuts and a prediction it could abandon its UK expansion.
PEXA shares sank more than 20% last Friday after the NSW pricing regulator IPART recommended that it be forced to slash fees charged to legal practitioners on the most common property transactions.
The stock had recovered by about 2% on Monday to trade at $8.72 that time of publication. That’s still within striking distance of $8, a level UBS equity analyst Kieren Chidgey described as a “scorched earth” valuation for the company.
The draft IPART recommendation would result in a one-off revenue reduction of 20%, or about $70 million, when the changes are expected to come into effect in FY28.
