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DomaCom continues to improve balance sheet by driving funds under management through distribution channels

Snapshot

The company operates investment platform, the DomaCom Fund, enabling investors to select properties of their choice in which they would like exposure to through a crowdfunding campaign process.

DomaCom Ltd - Domacom continues driving funds through distribution channels this March quarter

Quick facts: DomaCom Ltd

Price: 0.042 AUD

ASX:DCL
Market: ASX
Market Cap: $10.29 m
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DomaCom Ltd (ASX:DCL) is intent on improving its balance sheet with increased revenues and reduced costs expected as the company primarily focuses on driving funds under management via its distribution channels.

Several projects are at different stages of development as highlighted in the half-yearly financial report for December 31, 2019.

These projects include land banking opportunities in Badgery’s Creek within Greater Sydney, house and land developments with a particular focus in the Newcastle region, housing developments targeted to the affordable housing and disability sector as well as the Rent to Own sector.

The company is also undertaking community investment projects targeting the renewables sector, in particular wind and solar energy.

Improving balance sheet

DomaCom improved its balance sheet in a number of areas during the second half of 2019.

The company derives fee revenue based on the assets under management in the DomaCom Fund and during the six months ending December 31, 2019, the revenue from ordinary activities was $182,000, a 48% improvement on the $123,000 for the same period of 2018.

Loss from ordinary activities after tax attributable to members was $2.656 million, a 20% decrease on the $3.322 million loss in the corresponding period of 2018.

Net tangible assets per share in the period were 0.1 cents compared to the liabilities per share of 2.1 cents in the second half of 2018.

Core 2020 focus

A core focus in 2020 is the accreditation of advisers so they are able to advise on the DomaCom Senior Equity Release product, which the company believes is a much-needed product in the retirees’ sector of the market.

This allows retirees the opportunity to live well in retirement through the ability to sell a part of their home and receive cash in return from investors who undertake a fractional interest in their home.

Funds under management

The total funds under management at December 31, 2019, were $65 million, compared to $57 million at the end of June 2019 which is represented by 60% held in property assets, 32% in loans backed by first registered mortgages and 8% in cash.

Operating costs include the costs of developing the DomaCom Platform, general staff costs and costs incurred in distributing and marketing the DomaCom products into our distribution channels.

DomaCom continues to focus on tightly controlling costs.

The loss per share of 1 cent has reduced from 3 cents, reflecting an increased number of shares and reduced losses compared to the prior reporting period.

Capital raising activities

Capital raising activities undertaken during the period included private placements of $1.2 million on September 13, 2019, and $1.8 million on September 30, 2019.

In addition, a further $3 million was raised before costs through a rights issue that was completed in December 2019.

This funding allows DomaCom to continue to develop the DomaCom Platform and provides funding to meet ongoing working capital requirements.

Halo Investment Co Pty Ltd, part of the Australian Amalgamated Investment Group, also became a cornerstone investor in DomaCom Limited, which will allow the company to leverage its products into that group's distribution channels.

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