Smoove AIM:SMV, the Oxfordshire-based software company providing data platforms to conveyancers, mortgage brokers and home-movers, published its final results for the year ended 31st March 2022 on Monday.
The company made a statutory loss before tax of GBP5.4m, widening against a loss of GBP2.4m from 2021. The company also reported underlying EBITDA losses of GBP3.8m compared to a positive EBITDA of GBP0.4m in 2021, which the company said reflected investment in the core eConveyancer business and in new product areas.
Despite that, the company was fairly upbeat, Jesper With-Fogstrup, Smoove’s chief executive, said: “Despite the economic headwinds facing households there is still a reasonable amount of momentum in the housing market. This, coupled with the substantial uptick in remortgaging instructions we have seen in recent eConveyancer trading, has allowed us to make a solid start to this financial year.”
Buoyant Housing Market
Smoove saw a 13% increase in revenues to GBP 19.2m, up from GBP16.9m in 2021, reflecting strong growth in broker channel, progress in developing core business and exposure to a buoyant housing market and a gross profit increase year-on-year from GBP6.9m to GBP7.8m.
The company has cash-in-hand of GBP20m, down marginally by GBP4m from 2021.
With-Fogstrup said: “This was a busy period for the company – with continued investment in development and technology, strong growth in routes to market, instructions and completions as well as a number of new product launches and contract wins.”
Smoove changed its name from the less-customer focussed ULS Technology in April of this year with With-Fogstrup saying at the time: “Smoove has a huge range of data, insight and technology to help us write a new chapter in this next exciting growth phase and help many more people enjoy a Smoove home moving experience.”
Over the last year Smoove has been rapidly developing its product suite, expanding its product range “to support the broader home moving experience” and enhancing its capabilities across marketing, data and analytics, and technology platforms.
The company reported that conveyancing completions over the year grew by 11% to 37,104, which was matched with a 20% increase in conveyancing instructions to 66,394. It also was very active in terms of business developments, securing new clients in the B2B and B2C channels, including Chase de Vere, Moneyfacts, and Haysto and increasing sales to existing customers, such as adding new services to Lloyd’s Banking Group’s property platform. All-in-all Smoove reported 10% growth in the number of active users in its broker channel to 2,207 from 1,998 at the end of FY 2021.
Smoove sees opportunity for radical change
With-Fogstrup said: “Our strategic approach is broadening our reach beyond our strong position in the first-time buyer market and providing a good balance across multiple audiences. The home ownership process remains broken and provides huge opportunity for radical change. We are ideally placed to take a leading role and are very optimistic given the progress over the last 12 months.”
The company was confident enough about the future to announce a share buyback scheme, proposing a return of capital to shareholders via a tender offer of up to GBP5m as “the best way to achieve a balance between an immediate return of capital to shareholders whilst retaining funds to support value creating new products and business improvements.” The proposal will be put to an AGM in September.
“Overall, we are pleased with the headway we have made with our growing portfolio of products and services including the recent roll out of Smoove Start following a successful pilot with estate agents. In building our diverse range of products, we are well placed for economic uncertainty and the impact that will have on the property sector,” said With-Fogstrup.
The company said more than one in three home purchases have fallen through in the last 12 months, with potential buyers typically ending up GBP2,000 out of pocket. Smoove revealed 34% of property transactions did not ultimately end up going ahead. It said the problem stems from a crowded housing market with lots of competition, as the research also revealed that new property searches from would-be buyers were up 36% year-on-year. The figure climbs to 54% for first-time buyers, according to the Smoove’s inaugural Home Movers Report.
Broken dreams
With-Fogstrup said: ‘Home moving can often be an agonising, horribly stressful experience. The fact that few would argue with this speaks to a failed system. One in three home buying transactions should not be falling through. This figure represents tens of thousands of broken dreams and huge sums of money essentially poured down the drain.’He said in an interview that the law needed to be reformed in order to prevent as many sales collapsing, “People should be able to engage with the transaction process entirely online or via an app, providing digital IDs, signatures and form filling and see its progression in real time. This could really help modernise the industry and transform the home moving experience.”
The company argued that encouraging the industry to embrace the technological advancements that are being developed is the only way that it will be able to remove the frustration felt by many. “We obviously have a strong digital brand in Econveyancer which is widely used by brokers and it is reassuring to see the number of partners now using our home moving platform DigitalMove,” said a statement.
Shares opened trading at 61.27p, falling to 60p by mid-morning. The shares have ranged between 57.31p and 88.81p over 52-weeks, offering a year-to-date return of -25.4% and a one-year return of -20% giving Smoove a market capitalisation of GBP38.9m.
