DomaCom Australia Ltd (ASX:DCL) achieved many milestones during the 2022 financial year as the company continued to create innovative product offerings using its unique fractional investing platform.
The company has witnessed a sustained uplift in its funds under management over the year that fed through into significantly increased management fee revenues.
Strong uplift in funds under management
DomaCom reported strong growth in the number of sub-funds on its platform in FY22.
Over the 12-month period, 49 new sub-funds were added underpinning a strong uplift in funds under management (FUM).
By early in the 2022 calendar year, FUM in DomaCom’s fractional investment platform had pushed up through the key $100 million barrier.
By the end of financial year 2022 this figure had swelled to $134 million, which was more than 60% above its year-earlier number.
ESG credentials
DomaCom’s FUM increase came with a focus on Environmental, Social, and Governance (ESG) credentials.
A key factor driving the ESG growth was increased adviser syndication for National Insurance Disability Scheme (NDIS) transactions executed through DomaCom’s investment platform.
These deals were highly attractive to DomaCom’s investor client base, as they are expected to deliver competitive yields but also having the socially responsible element of investing.
Licensees and adviser networks
The company’s partnering financial service licensees and their adviser networks experienced further growth over the past 12 months.
Investors serviced by these advisors continued to derive benefits from exposure to the wider spread of asset classes accessible via the syndicated investing model.
Notably, funds under management expansion via licensees and their adviser networks occurred without a material jump in the company’s cost base.
Growth strategy
DomaCom has set in motion a detailed strategic plan that is targeting both enhanced client engagement together with a further rapid improvement in its financial performance.
To help achieve this goal, DomaCom has raised $8.7 million in new equity over the last 12 months.
The company is also working closely with the ASX to ensure that it meets the requirements to be readmitted to quotation.
Strategic plan: client relationship
From a client relationship perspective, DomaCom’s strategic plan aims to make it the managing fund platform of choice for investors.
In order to achieve this objective, DomaCom has committed to:
- ensure capital sustainability and deployment to meet corporate objectives and shareholder return and liquidity expectations;
- drive connectivity and collaboration with clients, distribution and commercial partners;
- deliver broader, innovative and differentiated digital value propositions to diversify revenue base, increase market share and improve client experience; and
- be the employer of choice and commit to sound ESG policies.
Strategic plan: financial performance
From a financial performance angle, DomaCom’s strategic plan is expected to deliver strong growth in both revenues and improved earnings over the next reporting period.
Key targeted deliverables here are:
- the completion of a strategic operational review by September 2022;
- growth in FUM to $300 million and fee revenues to $2.4 million by June 2023;
- a strong focus on cost base discipline, targeting a circa 8% reduction in annual operating expenses to $3.7 million by end-December 2023; and
- a 40% improvement in EBITDA in the 2023 financial year.