Trading Update

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 Jesper With-Fogstrup, CEO Michael Cress, CFO	Via Walbrook PR
Panmure Gordon (UK) Limited (NOMAD and Broker) Dominic Morley Amrit Mahbubani	[phone]
Cenkos Securities plc (Rule 3 Adviser) Adrian Hadden / Stephen Keys / George Lawson	Tel: [phone]
Walbrook PR Limited Tom Cooper/ Nick Rome	[e-mail] or Tel: [phone]

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/) 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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