Financial Results

BKM Financial Results

Review of Operations as at 30 JUNE 2017

BKM Management Limited (BKM), has reported a loss for the full year of $72,929 (2016: $309,717), with net assets increasing by $283,424 (2016: $711) to $290,082 (2016: $6,658). As at 30 June 2017 the group had cash reserves of $497,923 (2016: $305,763).

Services revenue slipped 1.5%, as market conditions for BKM’s modelling business, Scene Model Management (Scene), continued to be challenging with digital marketing and online media eroding the traditional business. This trend is expected to continue for the foreseeable future. However, overall revenue of BKM increased 12.9% as a consequence of writing back a substantial portion of unpresented model payments highly unlikely to be claimed. This decision by management was made despite persistent efforts by Scene over several years to track down the recipients.

The board of BKM and the management of Scene, have been examining ways to better position the business in this enhanced digital and social media oriented business environment. Despite this, the board wishes to acknowledge the dedication and hard work put in by Scene’s management team, who have done very well given the market conditions.

Although services revenue was down overall, the board has been able to exercise further restraint over costs for the company, with corporate and overhead costs declining by approximately $34,000.00.

At the corporate level, the board has been actively working with the management team at IGC Asia (IGC, an investment of BKM Management) at their request to identify additional investment opportunities in primary industry and resource sectors.

The principals of IGC have flagged their intention to involve BKM Management to a greater extent in IGC’s asset selection and due diligence process. IGC is based in Singapore, and is ideally placed to source and deliver quality assets in the Southeast Asian region. With IGC’s on the ground knowledge and expertise, combined with BKM’s corporate experience, your board is looking forward to being involved in some revenue generating projects in the years ahead. As highlighted in previous reports to shareholders, the focus is primarily on revenue generating assets in the agricultural sector in Asia.

IGC has informed the BKM board that the investment structure for any assets to be acquired will most likely involve an Australian incorporated special purpose vehicle, and will require the board to utilise its experience and professional relationships to assist in implementation.

Business Strategy and Future Developments
The consolidated entity continues to look towards growth opportunities in various sectors, particularly in the energy sector as well as resource sector in general.

The consolidated entity has been rebuilding its capital base as well as securing a stable and supportive shareholder base, which will allow the consolidated entity in future to look towards leveraging its strong relationships in Asia and connections in the energy and resource sector.

With respect to the Scene Models business, the consolidation of operations out of the Perth branch is underway. This change reflects an increased focus on Scene’s actor management agency, ‘Now Actors’, which is heavily dependent on its online presence. The decreased focus on modelling towards actors’ management acknowledges the decline in the traditional modelling sector and places Scene in a strong position to take advantage of market trends towards digital marketing and online media.