Smoove losses widen as it invests in its offer

Conveyancing and mortgage broking technology and service provider Smoove reported a 13% increase in revenue in its final results on Monday, to £19.2m.

The AIM-traded firm, formerly known at ULS Technology, put the rise down to strong growth in its broker channel, progress in developing its core business, and exposure to a “buoyant” housing market.

Gross profit increased to £7.8m in the 12 months ended 31 March, from £6.9m a year earlier, while the company swung to an underlying EBITDA loss of £3.8m, from a profit of £0.4m.

That was put down to Smoove’s investment in its core ‘eConveyancer’ business, and in new product areas.

Its underlying loss before tax widened to £4.9m from £0.9m, and its statutory loss before tax grew to £5.4m from £2.4m.

Net cash at the end of the financial year totalled £20m, down from £24m at the end of the 2021 period.

Looking ahead, Smoove said that despite the economic headwinds facing households, there was still a “reasonable amount” of momentum in the housing market.

It said that, coupled with the “substantial uptick” in remortgaging instructions in recent eConveyancer trading, allowed it to make a “solid start” to the new financial year.

With projections of further interest rate rises and 1.1 million homeowners on standard variable rate mortgages and a further 850,000 on tracker rates, the board said the firm’s diversified offer ensured eConveyancer was well-positioned to drive scale.

The company’s new estate agent offering, ‘Smoove Start’, was also building subscription revenue as well as expanding services to new market segments such as property sellers.

It was also in the early stages of piloting ‘Smoove Complete’, a conveyancing platform for consultant conveyancing lawyers, which was designed to meet the “changing technological and lifestyle trends” in the sector.

Smoove said its strategic approach was broadening its reach beyond its “strong position” in the first-time buyer market, and providing a “good balance” across multiple audiences.

The home ownership process remained “broken”, the board said, providing “a huge opportunity” for “radical change”.

It said it was “ideally placed” to take a leading role, and was “very optimistic” given its progress over the last 12 months.

“In the last year we have set out ambitious plans to make the home moving and ownership experience better for everyone,” said chief executive officer Jesper With-Fogstrup.

“We have made significant progress in the key areas that will be the bedrock of our future success.

“Our proposal to return capital to shareholders will allow us to create value for investors while at the same time ensuring we retain funds to continue to invest in the technology and business developments required to deliver our strategy.”

With-Fogstrup said the investment made in eConveyancer, including fully integrating the ‘DigitalMove’ offering, allowed the firm to further grow routes-to-market and consolidated its position as “one of the leading conveyancing platforms” in the UK.

“The improvements we continue to make are likely to drive scale and generate increasing returns.

“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.

“The year ahead will be another opportunity to grow, as we look to continue our journey of revolutionising the home ownership market while simplifying processes and reducing the stress and frustration for everyone involved.”

At 0930 BST, shares in Smoove were flat at 60p.

Reporting by Josh White at Sharecast.com.