Jessica: Hi, I’m Jessica Amir for the Finance News Network, joining me now from DomaCom is CEO Arthur Naoumidis. Arthur welcome back.
Arthur: Hi Jessica good to be back here again.
Jessica: Starting off with Arthur, just tell us about the company and give us a quick update.
Arthur: DomaCom is operating a platform that enables investors and advisers to pull together or syndicate or crowdfund in individual investment properties, to begin with, but shortly other assets including mortgages. So the last few years have been the formative years, we’ve now transacted 48 times, we own 48 properties around Australia in every state. Most of those properties are residential, however, we’ve acquired our first cattle farm in the Western districts of Victoria last year, and we’re just about to acquire our first land banking project right near Badgerys Creek which is an 8 million dollar transaction, so it’s big you know the transactions are starting to gain pace and the size is starting to increase so it’s been a formative years.
Jessica: You’ve been very busy putting out announcements to the market about your distribution and partnerships, just tell us what’s happening in this space.
Arthur: Yes, we’ve had three major announcements over the last few months, I know it sounds like it’s all happened in three months but it’s actually been several years in the making. The first announcement really was our deal with X Plan which is owned by Iris. As most financial advisors in Australia know X Plan is the leading CRM or financial planning tool for financial advisors and what this will do is just make it far easier for advisors to be able to use DomaCom and integrated into their financial planning statement of advice and reporting. So you know like all humans we like to do the easy things so this will make it easier for advisors to use us.
The second announcement was our integration of the Domain listing data and what this will enable both clients and advisers is to you know go on to DomaCom and select any property available for sale in Australia and commence a crowdfunding campaign or a syndication process with their friends and family or with their clients, so it’s a very powerful tool and it’s been a long time coming and it’ll benefit Domain as well.
Finally the third announcement was the approval by trustee partners of DomaCom which is really the first in Australia of a superannuation trustee that enables fractional property investing to occur within their funds. So over the next few months, we’ll be looking to integrate DomaCom within some retail super funds which will give options to those people who don’t have self-managed super to invest in fractional property.
Jessica: Just tell us about the recent federal court SMSF ruling and how it affects you guys.
Arthur: So what we’ve been trying to do for the last several years is see whether superannuation funds can invest in DomaCom sub-funds that are in a property and then have a related party of the super fund rented that property. Unfortunately, we weren’t successful in the federal hearing in December and so after their consideration, we’ve decided to lodge an appeal which was lodged on the 25th of January so we expect to hear the results there sometime mid-year and we’ll see what happens but clearly it’ll be a major result if we are successful.
Jessica: You made some recent announcements about your capital can you just update the market about those transactions.
Arthur: As most people aware, we’ve really had to do something about our capital recently so what we’ve done is two forms of convertible notes to top-up our capital base in addition we’ve also reduced our operating cost base. So firstly, we’ve got a million dollar convertible note from the US and then we’ve got another six hundred and fifty thousand three year convertible note from Australian investors, and so that combined with our reduction of cost base which is you know everything from reducing operating costs to some staff reductions basically puts Domacom in a stronger position for this year. We also have other sources of capital with regards to the ATO rebate that I announced so yes so we’re in a stronger position than we were 5 to 6 months ago.
Jessica: looking forward Arthur what can investors expect over the coming months and longer term
Arthur: Last year we’ve been trying to really solve one of the major problems that we’ve had in DomaCom that’s been inhibiting our growth and that is we haven’t been able to get debt inside the sub funds. Most investors when they buy investment properties, have a bit of debt because it makes it tax efficient. Unfortunately, we hadn’t been able to find a lender that would be willing to lend to DomaCom and we’ve addressed that issue by changing the trustee at the end of last year, so we’re now negotiating with a major bank or in fact several major banks to provide a default loan facility within DomaCom. We’re also enabling our advisors to crowdfund their own mortgages to fund the debt within the DomaCom platform and so what we expect to happen is that the number of transactions will accelerate this year. So frankly we’ve transacted 48 times last year without debt so the question is how many transactions do you think we can do with debt and we expect it to a lot more so we’re going to work very hard to deliver what the market is really looking for DomaCom which runs on the board, funds on their management so that’s really our focus issues.
Jessica: Well very exciting times Arthur Naoumidis thank you so much for the update
Arthur: Thank You, Jessica, good be to here