DMXASF Monthly Report

July 2023 – DMX

A wholesale unit trust managed by

DMX Asset Management Limited

AFSL 459 120

13/111 Elizabeth Street, Sydney, NSW 2000

Trustee & Administrator

Fundhost Limited AFSL 233 045

Unit price (mid) based on NAV (30 June 2023)


Unit price (mid) based on NAV (31 July 2023)


Number of Stocks


% cash held - month end


1-month return


12-month return


Since inception (1 March 2021) pa


Fund size (gross assets)


Dear Investor,

DMXASF’s NAV increased 8.6% during July, ahead of the ASX 200 Total Return Index which rose 2.9%. With many of our names having sold off in recent times and in particular with tax loss selling of losers into the 30th June financial year-end, July brought some relief with many companies recovering somewhat.


Not much went against us this month which allowed rebounds to a number of our over-sold stocks to translate to a strong month overall. In the data and technology space, Ansarada recovered 50% while Corum rose 22% and Energy One rebounded 43%. Pureprofile rose 23% and IT services company Cirrus Networks rose 22%. With so much negativity and fear priced into much of the market, it’s interesting to observe Shriro jump 21% after falling short against its previous earnings guidance. Battle worn investors have come to expect bad news, so only moderately bad news can still be met with enthusiasm.

Notable updates during the month included:

Michael Hill

Michael Hill provided a full year trading update, with group sales up 6% on last year. The increase was skewed toward the first half, with trading being impacted in the second half by difficult economic conditions. Importantly, gross margin is being maintained at historically high levels for the company. The company’s ability to deliver flat results against a declining jewellery retail segment is impressive, particularly considering this has been achieved without needing to give up margin. We see good value in its shares which trade around 8-9 times earnings with a strong balance sheet and avenues for growth in the periods ahead. We believe Management and the Board are approaching their opportunity set rationally, with a balanced focus on business improvement & organic growth; value-adding acquisitions; paying a strong dividend; and buying back shares. Our expectation is that in time these will flow through to a meaningful re-rating from these current levels.


As mentioned above, Shriro reported second half EBITDA 15% lower than previously guided, in February. Despite this, its shares rose 21%, in part due to that result not being as bad as it might have been in this challenging consumer environment. And partly due to the company’s announced cash balance which was probably higher than many expected. The company has exited certain business lines over the past year, and this – together with good working capital management – has helped free up considerable cash. The company had previously announced it intends to make a special distribution to shareholders, drawing from its growing cash pile. An announcement on this is expected in the next month or so, and given the quantum of its cash at hand, this distribution potential is now being priced into the shares.

The DMX Capital Partners report includes updates on four smaller companies that are commonly owned by DMXASF: Kinatico, Advanced Braking, Corum and 8Common. These all enjoyed positive developments this month, and the DMXCP commentary is reproduced as an Appendix to this report.


As outlined last month, the smaller segment of the market has been sold off most aggressively over the past year. We’ve witnessed some reversal to this over July, but overwhelmingly, we see significant embedded value across our portfolio companies, which we believe will help drive strong returns in the years ahead. Outcomes are never linear, and we’re not perturbed by the ups and downs along the way. Instead, we remain focused on executing on our time-tested philosophy and process, and seeking to capitalise as best we can on the opportunities in front of us.

If you’d like to discuss the portfolio or the potential to invest or add to an existing investment, please contact Michael any time at or 02 80697965.

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