Review of Operations as at 30 JUNE 2016
BKM Management Limited (BKM), has reported a loss for the full year of $309,717, which is slightly higher than the previous period. Revenue slipped almost 15%, 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 be in evidence again for the foreseeable future. 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 revenue was down overall, the board has been able to exercise further restraint over costs for the Company, with corporate and overhead costs declining appreciably by approximately $165,000
During the year, some $141,500 was raised through an Share Purchase Plan (SPP), and we wish to thank those shareholders who participated in a tough market.
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 the 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 based in Singapore, and is ideally placed to source and deliver quality assets in the South East 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 utilize 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 rebuilding of the Melbourne branch has begun and steps are being taken to re-establish a Sydney footprint once again, to bring Scene back as a National business in Australia. On this strength, management has plans to utilize its links with Asia to expand opportunities for its modelling client base.