Trading Update
02/05/2023 07:00
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RNS Number : 9363X Smoove PLC 02 May 2023
Smoove plc
("Smoove" or the "Company")
Trading Update
Smoove plc (AIM: SMV), the customer focused technology and services business
aiming to revolutionise home moving and ownership, is pleased to announce an
unaudited trading update for the 12 months to 31 March 2023 (the "Period").
Financial and Operational Highlights
· The Company continued to trade in line with the Board's expectations
during the Period, whilst investing in its product suite and routes to market
· c.7% increase in revenues to c.£21m (2022: £19m)
· Conveyancing completions in the Period grew 44% to 53,224 (2022:
36,965). This is composed of transactional completions of 18,382 (2022:
21,837) and remortgage completions of 34,842 (2022: 15,128)
· Conveyancing instructions in the Period grew 5% to 69,976 (2022:
66,394). This is composed of transactional instructions of 26,877 (2022:
35,917) and remortgage instructions of 43,099 (2022: 30,447)
· Year-end cash balance of c.£10m (2022: £20m) reflects ongoing
planned investment and the return of £3.65m to shareholders in January 2023
· New eConveyancer relationships with Mojo, Legal & General,
Chimnie, Adviser Services Holdings, and Unbiased
· Release of new eConveyancer user interface generated positive
feedback. Release of new APIs is expected to deepen integration with
introducers
· 12 Consultant Conveyancing Lawyers ("CCLs") now signed up to Smoove
Complete, in line with management expectations
Both transactional and remortgage instructions fell sharply in Q3 following
the government's minibudget on 23 September 2022, but recovered significantly
throughout Q4 FY23. Furthermore, the growth in remortgage volumes throughout
the period was enhanced by the expansion of the Lloyds Banking Group
relationship late in the previous financial year to include remortgage
products.
Growing Product Range and Routes to Market
Strong progress for Smoove Complete, the Company's platform for self-employed
CCLs, which launched in late October 2022, is reflected by the fact that there
are now 12 CCLs contracting with the platform. This is in line with
management expectations - reinforcing the Board's belief in the strong demand
amongst conveyancers for the proposition and the large addressable market.
The Company released the new eConveyancer user interface late in the Period to
selected users, who have responded with very positive feedback. The new
interface provides a significantly improved user experience and is intended to
reduce conversion friction and also increase usage and instructions from
mortgage brokers, lenders and other Introducers. At the same time, the Company
has released new APIs that will allow for easier and deeper integration with
partners' systems to access a greater pool of instructions.
Smoove Start, which targets estate agents has been refocused to emphasise the
fee earning potential for estate agents through referral of cases to
eConveyancer. This change of emphasis is in response to uncertainty in the
housing market following the Government's minibudget and will involve lower
support costs for Smoove Start as the software offering for ID, AML checks and
upfront information is paused.
Outlook
As noted above, the Company saw significant volume improvements during Q4
FY23, which have continued into the current year. The outlook for FY24 profit
is in line with the Board's expectations but with a different composition than
previously expected. In particular, the Company's cost base has been reduced
further in response to the changed macroeconomic environment, whilst expansion
in the cost base to support new businesses, such as Smoove Complete, will be
calibrated to the revenue growth of those businesses. The Board expects the
Company's cash burn to significantly reduce in the current financial year.
The Company remains focused on executing a strategy that will broaden routes
to market and provide greater diversity and resilience to revenue. The
development of the eConveyancer user interface and APIs aims to expand the
revenue potential of the Company's already strong relationships with mortgage
brokers and lenders, as well as enable new Introducer channels. Smoove
Complete opens up a new revenue stream of conveyancing fee income and
capitalises on strong demand for a self-employed consultant model. This
approach will enable the Company to generate positive returns across a variety
of market conditions whilst delivering a better experience to consumers and
industry stakeholders.
Jesper With-Fogstrup, Chief Executive of Smoove plc, commented: "While last
year was not without its challenges, we repositioned where necessary while the
successful launch of new products added to our flexibility and resilience. The
upswing during Q4 FY23 was testament to the strength of our model as we
successfully grew the number of instructions and completions. We remain
extremely excited by the growth opportunity and confirm that our outlook for
FY24 is in line with the Board's expectations."
Enquiries:
Smoove plc Via Walbrook PR
Jesper With-Fogstrup, CEO
Michael Cress, CFO
Panmure Gordon (UK) Limited (NOMAD and Broker) +44 (0)20 7886 2500
Dominic Morley
Amrit Mahbubani
Cenkos Securities plc (Rule 3 Adviser) Tel: 020 7397 8900
Adrian Hadden / Stephen Keys / George Lawson
Walbrook PR Limited smoove@walbrookpr.com or Tel: 020 7933 8780
Tom Cooper/ Nick Rome
Certain information contained in this announcement would have constituted
inside information (as defined by Article 7 of Regulation (EU) No 596/2014)
prior to its release as part of this announcement.
About Smoove:
Smoove's (hellosmoove.com) mission is to revolutionise the home moving and
owning process for everyone involved. The Company's cornerstone cloud-based
platforms provide significant leverage for growth with strong, established
client bases and routes to market - including mortgage brokers, conveyancers,
estate agents and lenders.
eConveyancer ( https://econveyancer.com/ (https://econveyancer.com/) ) is one
of the leading distribution channels for conveyancing in the UK, bringing
consumers and legal professionals together via comparison services, which
provide solutions for home movers and the re-mortgage market.
The Company's existing platforms have been designed with a view to adding
services and reach and the Company is well placed to create exponential
returns as functionality increases.
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