Assetora Limited (AOH) Earnings Call Transcript & Summary

Okay, let's get started. So hi, everyone. Welcome to today's webinar. Just going to be talking about the -- an update around Assetora, and as many of you guys know, also previously known as DomaCom. So I'm going to share a presentation just to get started. So I'll get started with the presentation now and just talking about Assetora and the way forward and what the update is as of today. We just want to go through, first of all, a disclaimer. The presentation is available on the ASX announcements, on our website as well. So you can have a look and download this. Obviously, I don't want to go through all of this detail bit by bit. So really just want to get started with the presentation itself. This is all about the journey from when we first started, which was around November in last year, where we got involved in the business and started to move the business forward. And that was when it was DomaCom back in the time. So we've done a lot around the transformation of that. And a lot of the people that spoke about -- that I've spoken to, a lot of the investors and shareholders that I've spoken to at the time also were letting me know that, hey, it's good to see some new people come in and get involved with the business. But hopefully, some change will be made. And here we go again. We've got some -- a new team and hopefully, some results will come with this. So the -- so what I'm going to go through is a bit of the detail around what we actually have done and how we've actually delivered on what we've done or what we said we're going to do all along. So first of all, just going through a bit of the progress in the stages around DomaCom, where it was and what it had achieved so far. But before we do that, I just want to let everybody know as well that you can put questions -- we're going to have questions and answers after this. And feel free to put those into the webinar -- into the Q&A section as well. So the way we started with DomaCom, obviously, when we got involved in November, there was a lot of challenges. And the net liability position was a very good example of that where the liabilities of the business were at $8.2 million. By the end of December, when we actually reported -- the end of December, the -- and that was the liability number. It was also suspended from the ASX and had been suspended from trading on the ASX from about -- I was thinking it was late February in 2024. So it had been suspended for quite a while. The PDS had been suspended. So there was -- for new business, so there was no way to operate new business into the fund, into the DomaCom Fund. The secondary market was also suspended. There was a breach in the AFSL, financial reports not being lodged. So there are a lot of challenges in the business that we took on. And a lot of people thought that we were a little bit crazy for taking it on in such a way. So I totally understood when people thought that maybe there's not going to be a way forward and here we go again, see what happens. So what we did was really get focused on what we needed to deliver, and we needed to deliver and show some results in a very short period of time. So with that, we set about raising fresh funds into the business after already, obviously, committing money into the business. We -- by the end of the first quarter, we announced the net liability position reduced down to $3.1 million. So to get it down by $5 million was quite an achievement. The -- I mean that was by bringing in new equity and also clearing out a lot of the debt that was in the business. And that was quite significant to be able to really stabilize the business from a financial point of view. The executive team was one that we really focused on a lot to make sure that we have the right people in the right positions to really make this business grow and be something very, very successful. And so we -- and we will continue to grow on that executive team over time. Getting all the financial reporting complete and also the responsible entity of the DomaCom Fund was an important piece. And -- which I'll talk about in a little bit more detail, opening new business in the secondary market of the fund. So what we've done, if you look at those 2 from DomaCom to what is now known as Assetora, we've actually achieved a lot in a very short period of time. And we'll continue to grow the business in that way. What have we actually achieve? Well, the main thing that we had to get done first of all was the reporting. There was a lot of reporting that was behind when we got involved in DomaCom. So the ASX reporting, there was 18 months of reporting that had to be brought up to date. To do that, we also changed auditors. So there was a bit of a process around changing the auditors to be able to enable all those things to happen. And that was a process in itself. Part of it also was changing the company name. So we -- after speaking to a number of shareholders, we also understood that changing the name to a new entity to remove or to reduce that heritage was a really good way forward. And so what we did is we took that to the AGM in March. To give you an idea on the support that we have from the shareholders, what we did was -- at the AGM in November was where we actually had to vote to have a resolution passed to convert the investment that we'd already put into the business, which was debt funding. And that resolution passed by just over 50%. And so it was a bit of a struggle to get that. There was a lot of angst and a lot of challenges with the shareholders at the time, not really knowing -- is it worth following this path or is it not? We got that over the line, which was great. And to give you an idea of the difference now is by the time we got to the AGM in March and these resolutions, which included the change in name for the company, these resolutions were passed with greater than 95%. In fact, most of them greater than 98% passed. So just to give you an idea of the shareholding and the support that we have from the shareholders, which is great to see. And we continue to move it forward. I've already mentioned about the balance sheet changes. We are working towards -- our goal is to be in a positive net asset position by the end of June. So we'll be announcing -- we'll see those results at some point. And the goal is to be in a much better position, again, than the $3.1 million liability that we announced at the end of March. The announcement yesterday around -- or this morning around the trustee change is obviously a very important one for us. And I'll go into more detail in a minute around that, but that was obviously a very important step to the business. And what it does is it enables us to open up for new business for the fund, for the DomaCom Fund and also for the secondary market, which is really exciting. And on top of all that, we also introduced new ways to bring in revenue via a new fund and also a mortgage management contract, which I'll talk through in more detail as well. Yesterday was a was a major milestone for the business. It was -- what we actually did there was achieve a really good result to be able to move the business forward with Assetora appointed as the responsible entity. We -- this was announced following the announcement of the Melbourne Securities to change or to retire as the fund trustee. What we did then was look at, well, how do we move forward? And do we actually put our hand up and be the responsible entity of the fund, which we did. And along the way, we actually had another competitor joining to that conversation. And that option was given to BrickX as well to become the trustee of the DomaCom Fund. This was made very obvious to the unitholders as there was a lot that happened over the last few weeks, a lot of conversations, a lot of e-mails, a lot of SMSs, a lot of e-mails to the unitholders pushing certain directions. What we actually did in the end was we received a 56% resolution pass for our resolution to become the responsible entity, which was what we needed to move it all forward. The original meeting was on the 6th of June. We didn't quite get to the 50%, but there are a number of unitholders that hadn't voted yet and wanted to make sure that their votes counted. And so the unitholders elected to adjourn the meeting. And so the follow-up meeting was yesterday. And great to see that we got that resolution passed. The resolution to appoint BrickX didn't pass. They received 33% support. So what that means is that Assetora is now formally the responsible entity of the fund. Obviously, we just need to go through some changes with ASIC to make it formally on their register. But the vote was decided yesterday and announced this morning. So we're very excited by that. And you can see from this quote from one of the unitholders, there's -- we've got a lot of support from the unitholders as part of this process. And we got to know quite a few of them as well because we had a lot of inquiry, a lot of questions. And we wanted to really support the unitholders in a way that they hadn't really been supported in past. Our main mission, as we've always said since back in November, is to be a fund-first, technology-enabled business, and we're showing that by all the things that we're delivering. We've just delivered the mobile app version 1, which was launched only a couple of weeks ago. So it's kind of like a beta test version, I guess. We just wanted to launch the app, get some information out there for unitholders to be able to get information in real time about their subfunds and about their investments. And this was very well received. We've had quite a few bits of feedback around the app. And it's been quite promising around -- at least we have an app out there. It doesn't do a lot at the moment but provides real-time information. But it's information that wasn't easily accessible before. Obviously, we have a way -- we've now got a platform where we're going to start delivering on. And we look forward to creating a whole load of functionality, which will be interactive functionality as well. So being able to see a lot more about the investments, but being able to also interact with unitholders and being able to interact with Assetora team as well. So it's quite exciting. Another thing which came out of the interaction with the unitholders recently is that some of the unitholders actually got together and decided that they wanted to have a bit more of a voice and be able to communicate with the Assetora team in a little bit more detail. And what we actually got out of that was they actually come up with a concept called a Unitholder Advisory Committee and approached us and said, look, if we put together an advisory committee, is this something that Assetora would support in this communication sharing. And it was very easy to answer that. Absolutely, yes. And I've spoken to the management team of Assetora, who everybody is really -- wants to help and wants to be involved in that and to be able to communicate backwards and forwards with unitholders. I think it's a great idea. And we'll probably see more and more initiatives from unitholders as we progress this journey because it's something that I don't think has been there much in the past, especially for the DomaCom Fund, where people have been isolated. They've been an investor and not really known anybody else. But what we're seeing already is the camaraderie or the way that people are actually communicating together. I think it's a great thing, and that's what we want to really drive with the whole Assetora platform, to be able to drive not just investments, but an investor community that is all talking about and investing in things that they love and being part of the community. So we very much encouraged that. And it's great to see things that are driven by the unitholders as well. So when they came to us with that, we thought it was a great initiative because it's something that even though we support it and we will work with them on it, it wasn't something that we actually came up with and we were telling unitholders, hey, this is what we're going to do and this is how we're going to do it. So it was quite -- it was very refreshing to see that kind of feedback from the unitholders and wanting to participate in the fund as well. With the enablement of the fund and turning on new business as part of the road map now that we become the responsible entity, we have a number of funds that we already have in our pipeline that we're looking to launch very soon. And just to give you a bit of a snapshot, this is 6 of the new funds. We already have a big pipeline, and there's lots of opportunity around lots of different types of assets. But to give an idea that -- the fund previously has been made up of primarily real estate assets and a big area that was in NDIS and SDA properties. The way forward for us is to focus on all sorts of assets. We don't want to just be known as a fractional property, but also we want to be known as fractional investments and to give everybody the opportunity to invest in all sorts of assets, real assets that they can get their hands on. To give you an idea on the first ones that we're launching. So Surf Lakes Queensland is a $45 million project, great project up in North Queensland that was originally -- a prototype has been built. Quite a bit of money was spent on the prototype. A big lake was created, and it's like a big plunger in the middle that creates the waves. And quite an exciting project and it looks like it's going to create an opportunity for people, especially those in the surfing world that are really passionate and want to invest in those sort of things. It's a really good one, and the resort around it is going to drive a lot into the community as well -- into that local community around tourism, which is something else that we see a lot. The other real estate ones on this slide, The Sands, which is a golf resort in Victoria, and Pialligo Estate, which is an event center in Canberra. So it's not so much the residential properties anymore. Though obviously, we'll still do residential properties. But this is just giving you a snapshot of the commercial properties and some of the opportunities. The Vigo Heart opportunity is a medical device fund. This one we're really excited about because it came to us via a group that is really driving this forward. They -- it started with one of the guys who actually had open-heart surgery, had triple heart bypass. The -- and he got to experience this piece of equipment firsthand and worked with the company then to see how we could help scale that out. What it is, it's actually a device that provides like an ECG reporting, but it's done in a very different way where it's just strapped on and provided by a Bluetooth connection, things like that. But the fund is to deliver -- is to actually purchase these devices and distribute them through GPs and get it out there in the marketplace because it's something that really needs to be done. And creating a fund that's helping medical devices get out there and save lives is -- to me, it sounds great. And it's a really good opportunity also, really good return for that fund as well. So just to give you an idea on some of the different types of things that we're going to be rolling out now that we have this opportunity to really start to scale things up. Women Of Wisdom is a debt fund. Great bunch of people that -- they look at how to focus on people -- women that are driven to change and to move things forward. And that's a great organization, and that's a smaller debt fund. And then Real Toll Cards is another one that we'll be launching soon, which is around tolls and -- infrastructure and tolls. So again, quite exciting, something very, very different in what we've done previously or what has been done previously in the DomaCom Fund. But Assetora is all about providing these extra range of opportunities. And I think as we really grow this, we're going to have some quite exciting opportunities coming out of this. The Homeowner Equity Fund is one that we launched just recently. This is a wholesale fund to start with. This one is really exciting because it helps people in Australia get into their home via the Bricklet platform. And what it does is provides the deposit funding. So for those that have got good income, don't necessarily have the savings to buy a home, they can actually use the platform and have access to this fund that provides that deposit funding. So we see there's a lot of opportunity in the market. We've already seen the market being tested with the Bricklet platform previously. We know that the opportunity is there, and we're looking to scale this out in a big way as well. So stay tuned for some updates on this fund. It's actually now been launched. And like I said, we're really excited about the growth of this one and what it's actually going to do and the impact that it's going to have on the community. The other thing that we've been focused on a lot is driving new business that's not necessarily funds management business. And this is another good example of that. This transformational partnership with -- which is effectively a management of a loan book. A lot of people say to me, well, how do you manage that? And it's something that -- the DomaCom business actually has been doing mortgage management internally for quite a number of years and not realize that they can actually make extra money by doing it for external companies or external loan books. And so what it basically means is there's a company called EquitiFund, who has the contract for a range of mortgages. And it's just a matter of managing those mortgages and when they're due and looking at how they get refinanced and making sure that they've got the best results for that, no different to what we do for all the loans within the DomaCom Fund. And to give you an idea on that, what we've achieved for the DomaCom Fund as well in that same area, just recently, we've refinanced one of the subfunds that had a $2.7 million loan on a medical asset. And instead of using a private fund, which was about to be signed at almost 15% interest rate, we went and found an opportunity with the Commonwealth Bank to be able to do the same loan and save those unitholders about $250,000 a year. So it was quite significant in nature, but that's what loan management is all about. It's trying to find the best opportunities for each of the subfunds, and in this case, for external. So it's something that we've always done as a business, but nothing -- but not really capitalized on that as an opportunity outside of the DomaCom Fund. So we're quite excited by this opportunity. So what I'll do now is, yes, enable everyone to ask any questions.

[Operator Instructions] Sorry, I'm just going to go to the chat now. When is Assetora likely to be relisted on the ASX? Yes, it's a good question. And we are working with the ASX at the moment around our reinstatement. We -- like I said, we've completed all the tasks around the outstanding reports for the ASX. And what we've done is provided -- we've completed all those. So now we're working with them on making sure that we comply to the listing rules that are around more the operational and the financial stability. So we don't believe we're too far away, but we're working very closely with the ASX at the moment to get reinstated and to be able to start trading again, which would be great for all those shareholders as well that have been in for a long time. [Operator Instructions] Okay. It doesn't look like we have any questions today. So it looks like we've covered off a lot of the detail, which is great. I've got a question from [ Wayne ] just on the convertible notes and the conversion. Yes, the new shares -- I'll write to you separately, [ Wayne ], until those convertible noteholders -- the shares are in process of being issued. So I'll get a clarification on the date of those and get an update to all those convertible notes that have now converted into shares. And there was over -- there was around $1 million worth of convertible notes. Will Assetora give more regular updates on NDIS units? So one of the things that we're going to be doing in general, and this includes the NDIS properties and every subfund actually, is that we're going to be providing more regular updates. That app that I talked about is the way that we're going to be communicating with unitholders. And all of your subfunds are automatically in the app when you sign in. So you don't have to do anything other than use your current log-in to log into the app. And we'll be providing regular updates. We want to provide updates as kind of frequently as we possibly can, and then especially for those that are under construction or have got moving parts that you want to be updated on. Once they become kind of business as usual and it's just a tenet, then it may not require such regular updates. But we definitely want to be providing updates on a very regular basis across all the subfunds and all the assets. It includes also the valuation. So we've got valuations across most of the assets, especially the NDIS assets. That should come through over the next -- in the coming weeks. I think we've gone through about -- we've got through about 50% of them. And I think the rest of them will be in the next week or 2. So if you haven't seen one of the external -- I think CBRE is doing all the valuations for that -- for those properties in that portfolio. So if there's something around that and if you are a unitholder as well as a shareholder, then yes, expect that coming soon. So -- and I don't -- and I won't go into a lot of the detail around the fund -- the actual subfunds in today's session. This is an ASX presentation that's designed for the shareholders of the business. So I understand that many of you are also unitholders as well, but we'll go into more detail in the unitholder presentation that will be held with me and Ray. And then there's also going to be a number of webinars that will be set up for each of the subfunds as well to really get into the detail and help everybody understand where they're at and also give everybody the opportunity to provide feedback on those subfunds as well. Okay. It doesn't look like there's any more questions. Anyone have any last questions before we finish up? Okay. It looks like we're good. So thanks, everybody, for joining today. Really appreciate the feedback. The detail of -- like I said, the detail of the NDIS properties and subfunds specifically, we'll go into more detail. We'll send out some more updates around what those -- when those webinars will be held so that everyone can get into the detail of their actual assets and we can start those conversations. Just a little question on the app as well. Is it available in New Zealand? I'll double-check on how that works for New Zealand, but you should be able to have access to that. So I'll check that with the team. And thanks, everyone, for your comments around the responsible entity as well. Really appreciate that. And it's been a big effort to get that over the line. And it's obviously -- it's a major milestone in the business and one that we're really excited about because it opens up a lot of opportunities for us to move forward. So thanks, everybody. And like I said, this presentation is also now available. It's been published on the ASX as an announcement as well. So anybody can access the presentation that we went through today as well. So thanks, everybody, for joining today, and chat again soon.