Financial Results

BKM Financial Results

Review of Operations as at 30 JUNE 2018

BKM Management Limited (BKM), has reported a loss for the year of $341,281 (2017: $490,685), with net (deficiency of) assets decreasing to $468,955 (2017: $127,674). As at 30 June 2018 the group had cash reserves of $167,949 (2017: $497,923).

Revenue slipped 22 percent 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. Despite the challenging times, Scene is showing signs of improvement due to its reduced operating costs. This turn-around has come on the back of the consolidation of operations out of the Perth branch and 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. The board of BKM and Scene’s management are continuing to position the business to respond to the new challenges posed.

Following the announcement on 28 July 2017 concerning the potential reverse acquisition of Zenith Agro Group (ZAG) Limited, the board has been working with ZAG, the ASX and the group’s advisers to conclude the transaction. ZAG is involved with developing an Agarwood project in Cambodia. A number of issues have been flagged which indicate that the project may have difficulty in being acquired under the original terms agreed between the parties. As such, the board is reviewing its position in relation to this transaction.

At the corporate level, the board has been actively working with the management team at IGC Asia Pte Ltd (an investment of BKM) 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 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.