DMXASF Monthly Report

November 2022 – 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 (31 Oct 2022)


Unit price (mid) based on NAV (30 Nov 2022)


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 5.1% (after fees and expenses) for the month of November, building on its October recovery, and in a strong market environment with the ASX 200 Total Return Index returning 6.6% return.                                                                                         

Portfolio Commentary

It was another eventful month with some big movements on each side of the ledger. Challenged investments in each of AF Legal, Global Health, and Raiz cost us with their declines of 33%, 12% and 25% respectively. We’ve not added to holdings as these names have fallen, so they’re naturally becoming less problematic. Academies Australia and EarlyPay also declined, falling 8-9% each. We’re relaxed with the stock price gyrations for each of these, with Academies Australia simply handing back some of its recent strong performance, and EarlyPay falling to attractive levels where we have added to our position.

Once again, the portfolio has benefited in the short term from private equity-sponsored opportunistic takeover activity. This month, each of ReadyTech and PropTech received takeover offers that saw their share prices increase 26% and 106% for the month. Further, speculation around a potential takeover of Janison saw its share price recover 28%. The portfolio also benefited from positive re-rates for Gentrack (discussed below), Smartpay (discussed in the Appendix); as well as partial recoveries to each of Medadvisor and Pureprofile (each up 25-27%).

We were pleased with the overall tone from updates, and in particular AGM commentary, for our companies over the month. The DMX Capital Partners report contains our commentary on a number of these, including commonly-held stocks Smartpay, EarlyPay, and Aeeris. These notes are included in an Appendix to this report. In terms of companies held just within the DMX Australian Shares Fund portfolio, the most notable positive upgrade was to Gentrack.

Gentrack Pivots, and Begins to Deliver

While a small position for us, the 65% re-rate to Gentrack this month was helpful. The company has taken investors on a wild ride since its 2014 listing, but we believe the company is finally making tangible progress with the business change initiatives of the past couple years. With strong organic revenue growth in the UK market, and acquisitions to augment that growth, the company achieved market darling status, tripling from its IPO through to its 2018 peak. But growth stalled in 2019 as UK energy retailers were adversely affected by regulatory price caps. Capital spending came to a halt in that sector, and many retailers went out of business, both leading to reduced work for Gentrack, and ultimately the expectation of substantial revenue declines. By 2020, the shares were down to the $1 zone, reflecting a major de-rating and change in sentiment toward the business.

Around that time, the Board brought in a new well-credentialled CEO, Gary Miles. With a strong track record at US-based Amdocs, Gary has set about to transform the business including refreshing the management team, upgrading its software stake, offshore much of its development work, and set a path for the resumption of growth. Two years into the role, the new team are starting to deliver with the release of a very positive full year result this past month.

The company has surprised to the upside with its 24% underlying revenue growth within its utility segment, and total group revenue up around 20% year on year. Growth is forecast to continue into the 2023 year and beyond. This, despite the above-mentioned headwinds from losing meaningful UK energy sector revenues. Asian ambitions have been articulated, including the opening of an office in Singapore. The company is projecting strong margins from 2024, on a much larger revenue base. Brokers are scrambling to upgrade their own forecasts, and if the company continues to deliver in its understated fashion, the set-up here for the years ahead may turn out to be very attractive.

So while the UK energy retailer issues have dogged Gentrack for the past few years, its looking increasingly likely that the company will emerge in a stronger position with its upgraded technology stack, and global potential as utility companies seek to modernise and focus on cleantech and their own transitions to the cloud. For us, the investment thesis has de-risked significantly, and we look forward to the company continuing to execute on its strategy.

In Summary

The portfolio continues to ‘benefit’ in terms of short-term NAV from the takeover flurry on the ASX. As we’ve articulated in past reports, and in particular the October report, we’re not pleased with this dynamic and would much prefer these great global growth companies remain in public hands. Nevertheless, as we’ve also highlighted, we do have a broad portfolio exposure and are enjoying a steady and prospective flow of quality opportunities. We remain enthused about the long-term prospects for the portfolio as we rotate out of a number of holdings (in particular, through takeover) and re-deploy into highly prospective new opportunities, and augment other favoured holdings.

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.

Thanks for your trust and support.

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