But Lendi Group disputes this, says it's unaware of Domain's decision
Real estate giant Domain has confirmed its intention to pursue a sale exit from its Domain Home Loans joint venture with Lendi Group, although Lendi disputes this and said it was unaware of any sale process.
Formed in 2017, home loans platform and brokerage Domain Home Loans (DHL) is the result of a joint venture between Domain and Lendi Group. Domain Group is a Australian digital property portal which includes a number of businesses, such as domain.com.au, Allhomes, Commercial Real Estate and Pricefinder.
Domain managing director and CEO Jason Pellegrino (pictured above left) said in the company’s 2023 full-year results released on August 17 that Domain had recently made the decision to “pursue a sale exit” from its DHL joint venture.
Lendi Group CEO David Hyman (pictured above left) said that the retail mortgage brokerage was disappointed in Domain’s statement that Domain Home Loans is up for sale. The announcement is “factually incorrect” and “fundamentally misleading”, Hyman said.
Domain aspires to be a business with “ability to scale and achieve profitable growth” Pellegrino said in the results announcement. Given the size and level of engagement of its audience, Domain was confident that home loans could play a key role in its marketplace strategy over the longer term, he said.
In a statement provided to MPA, Hyman said that Lendi Group was “not aware” of any active sale process for the DHL joint venture and confirmed that Lendi Group was “not a buyer” of Domain’s stake in the business.
Lendi Group maintains its strong conviction around the opportunity to connect the property experience with the home loan experience, including through its DHL joint venture, Hyman said.
“Lendi Group remains committed to upholding our extensive obligations in the Domain Home Loans Shareholders Agreement, and expects that Domain does the same,” Hyman said.
“As such, we were surprised to read Domain announced to the market its stake in Domain Home Loans is for sale and it is pursuing other opportunities outside of the DHL joint venture.”
DHL sale to proceed, says Domain CEO
In a statement provided to MPA, Pellegrino said that while DHL continued to outperform the broader lending market, Domain saw “much greater potential” than was able to be achieved through the joint venture.
“After an extensive period of discussions with our joint venture partner, the decision was made by Domain to pursue a sale exit of the business,” Pellegrino said.
“DHL is being held for sale, and treated as a discontinued operation, and is therefore excluded from trading results.”
Given Domain’s large and engaged audience, the business remained “very confident” that home loans could play a key role in its marketplace strategy in the future, he said.
“Domain considers that the ability to scale a business and achieve profitable growth are critical,” Pellegrino said.
“Looking ahead, Domain sees the potential for future opportunities with alternative solutions that allow for a much greater degree of integration, a lower cost structure, and alignment on future direction that will support a profitable contribution to our marketplace.”
Domain Holdings Australia Limited (Domain) announced a net profit after tax of $26.1 million for the 2023 financial year, including losses of $5.2 million from significant items and a $7.3 million loss from discontinued operations.
In the 2023 full-year results commentary, Pellegrino acknowledged that the decision to pursue a sale exit from DHL had impacted on Domain’s reported results, with the business now treated as a discontinued operation. The results were presented on a continuing business basis and included discontinued operations.
DHL settlements outperformed market, says Lendi Group
Since 2017, Lendi Group has “invested significantly” in the platform and the DHL customer experience, Hyman said.
With Lendi Group, Domain Home Loans is maturing, experiencing growth in settlements at a compound annual growth rate (CAGR) of 42% since FY21, up 19% year-on-year, he said.
Hyman noted that these figures outperformed the market and its major competitors.
“Since Lendi merged with Aussie Home Loans in 2021, DHL settlements have increased by 100% on a monthly basis – this is compared to the market which over the same period is broadly flat,” Hyman said.
Lendi Group, which confirmed settlements reached $16.8 billion in first half of 2023, remained committed to powering DHL and believes in providing Australians with transparency, choice and access to competitive loans, he said.
“As part of the merger, Lendi Group significantly increased our resourcing and spend on supercharging the technology platform as well as user experience, of which DHL is a direct beneficiary, and this is reflected in the financial outperformance Domain released today,” Hyman said.
Lendi Group remained “100% supportive” of the DHL business, the opportunity and its people, he said.
