Smoove plc Trading Update - Growth in revenue and volumes

29 April 2022

Smoove plc (AIM: SMV), the customer focused technology and services business aiming to revolutionise home moving and ownership, is pleased to provide an unaudited trading update for the 12 months to 31 March 2022 (the “Period”).

Financial Highlights

Revenue grew by c.12% to c.£19m (2021: £17m)
Strong year end cash balances c.£20m (2021: £24m), with no debt
Conveyancing completions in the Period grew by 10% to 37,009 (2021: 33,767)
Conveyancing instructions in the Period grew by 22% to 67,156 (2021: 55,092)

Operating results for the year as well as cash balances at year end were significantly better than management expectations.

Increased revenues were driven by strong growth in the broker channel, with especially strong comparative growth during H1, reflecting the effect of COVID-19 on the prior year. The Company continued to invest to strengthen its existing business and to support the Company’s growth strategy to drive greater transparency into the home moving process to make it a better experience for everyone.

Operational Highlights

Continued growth of broker channel with 10% growth in the number of active users to 2,207 from 1,998 at the end of FY 2021
Agreement to provide additional services to Lloyd’s Banking Group for the provision of remortgage services
Several significant contractual wins including an exclusive conveyancing partnership with comparison website, Moneyfacts
75,000 DigitalMove cases completed (2021: 40,000)
Launch of our Estate Agency product, Smoove Start, in pilot
Key hires across the management team and in specialist roles bringing new capability especially in technology and data
Migration of all our infrastructure and technology to the cloud – allowing faster, more modern development and, in time, cost benefits
Acquisition of Amity Law in October 2021, a conveyancing firm based in Bolton, enabling the Group to test products in a live environment (Revenue of £0.2m in the post-acquisition period)

The Company was positively impacted by the increased demand driven by the bounce back from COVID-19 and the stamp duty holiday, and the business was able to successfully manage supply partners to ensure there was sufficient capacity. The buoyant property market and the level of transaction volumes caused prolonged processing with home purchase now taking an average of 153 days vs 146 days in the prior year. The second half of the Period saw, as expected, greater remortgage demand, which impacted performance positively in Instruction volume terms.

Outlook

We continue to see strong trading demand for our flagship eConveyancer brand, especially for remortgage cases. New partners have been added to the platform and the Board believes the business has considerable further potential and is investing to develop the platform which will allow it to enter new markets as well as providing a more enhanced customer experience for all parties.

The business relaunch to Smoove plc reflects the long-term ambition and purpose to build frictionless products and services for current and future customers. Increased digitisation and innovative product development remain the cornerstone of our growth model as we focus on revolutionising home moving and ownership and further enhancing relationships we have in place.

The Company will over the coming months roll out future versions of Smoove Start to the wider market and start to build the revenue stream from this sector. The Board believes that Smoove Start together with the Company’s other existing and future products will accelerate digital adoption in home moving and enhance the home moving experience for the benefit of consumers and other stakeholders.

Combined, the Group’s businesses and strategy are well placed to take advantage of the faster digital adoption from industry partners and consumers post COVID-19. The Company will continue to strengthen its technology stack to take advantage of this opportunity in the wider home ownership market.

Jesper With-Fogstrup, Chief Executive of Smoove plc, commented: “We made substantial progress in our core business this year having expanded our relationship with Lloyd’s Banking Group, grown our existing routes to market and launched a new Estate Agency channel. We’ve also continued to develop our plans to make the entire home moving process simpler.

“Recent times have seen an acceleration in the adoption of new technology in an industry that has lagged behind many others. Our significant investment in technology and data enable us to be at the forefront of this change while at the same time meeting the demands of a market for home moving and remortgages that is currently booming.

“Our strategy is to build digital products and services that play a part at every stage of the home ownership process and I’m pleased to report on the progress we have made as we pilot our first product for estate agents.

“Consumer confidence in the housing market shows little signs of abating which allows us to build new routes to market and unlock revenue earning opportunities. “