BGI FY20/21 Financial Results

AUCKLAND, New Zealand, 31 May 2021

The Board of Blackwell Global Holdings Limited (NZX: BGI) provides the market with their full year update for the 12 months ended 31 March 2021.

Lending Operations Discontinued

As previously advised to the market, during the course of the financial year the Directors resolved to wind down the Group’s finance company operations given the Company was unable to raise sufficient funding to grow and develop a meaningful finance company operation.

The Company’s loan book as at 31 March 2021 was $643,672 represented by one loan. The loan was secured by a first mortgage over residential property. It is anticipated that this loan will be repaid in full during the course of June 2021.

In parallel with the wind down of the finance company operation, the Board implemented a number of strategies to reduce the outgoings of the Company. These initiatives included the disestablishment of the roles of Chief Executive Officer and Chief Operating Officer. Both executives left the employment of the group in February 2021.

During the course of the financial year, one of the non-executive directors Ewe Leong Lim elected to retire from the his role with the Group effective from 31 March 2021.

Changes in Accounting Policy

The consolidated financial statements have been prepared using the same accounting policies detailed in the Group's audited consolidated financial statements for the year the ended 31 March 2021.

There are no other NZ IFRS, or NZ IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.

Bonds

The bond agreement with Blackwell Global Group Limited was amended by Deed of Variation dated 24 March 2020 where the maturity date was extended from three to four years, and the interest rate reduced from 6% to 0% for six months starting 24 March 2021. On 25 November 2020 a Letter of Undertaking was agreed with Blackwell Global Group Limited further extending the bond maturity date to 30 June 2022, with 0% interest until maturity. The net present value of the bonds has been readjusted on the balance sheet for the present value of the face values at maturity using the original effective interest rate of 6% per annum.

Other than the above, there has been no reassessment of the useful life of assets or their residual values.
While the Company has secured a varied bond term, and interest rate mentioned above, and the present value discount rate has been adjusted to reflect this change, it has not been further adjusted due to any impact from the Coronavirus, as it is not deemed to have been affected.

Revenue from contracts with loan holding customers have not been impacted. No impairment losses have been recognised on financial instruments in these unaudited results, as there has been no significant change in the risk profile of the loan receivables.

Going Forward

The Board is actively looking to identify a suitable business opportunity to invest in and/or acquire through a reverse takeover transaction (RTO). Discussions have been had with several potential acquisition targets to date, but none of those discussions have developed into a tangible transaction to date.

What is an RTO?

An RTO is a transaction structured such that the Company would acquire 100% of the business assets, or the shares in the company that owns the business assets, in consideration for the payment of cash and/or the issue of new shares in the Company, to the vendors, to fund the acquisition.

The new business acquired would then effectively become a subsidiary of the Company (the listed company), trading on the NZX Main Board. The stakeholders in the business acquired, would ultimately become shareholders in the Company as part of the RTO, and would have representation at the Board level as appropriate.

In conjunction with the RTO process, the Company would seek to raise additional growth capital to assist in funding the future growth of the business.

Investment Criteria

The Board is focusing on business opportunities that satisfy one or more of the following investment criteria:

• The business has excellent personnel and management

• The business operates in an attractive and positive business sector

• The business has a robust business model

• The business has solid historical earnings, or alternatively has a sound business platform from which to implement its business plan and generate strong earnings in the future;

•The business owns proprietary intellectual property

• The business has potential to grow organically, via acquisition, or through the further investment in capital plant

• The business has the potential to scale internationally

• The business would benefit from being able to raise additional capital on the market

• Is likely to generate superior returns for the Company and its existing shareholders

The Board continues to investigate all credible investment opportunities that may present themselves and are hopefully of having a transaction underway during the course of this calendar year.

Earnings per Share and Net Tangible Asset per security

The earnings per share are shown in the Consolidated Statement of Comprehensive Income. The net tangible asset backing per security is shown in the Consolidated Statement of Position.

Audit

The consolidated financial statements are to be audited.

The annual report for BGI is due 30 June 2021.

Authority for this announcement
Craig Alexander
Director
Ph: 021688396
[email protected]
Date of release: 31 May 2021

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