Full year preliminary unaudited announcement

1
Blackwell Global Holdings Limited (NZX: BGI)

Full Year preliminary unaudited announcement for the 12 months ended 31 March 2019

Commentary
AUCKLAND, New Zealand, 30 May 2019 - The Board of Blackwell Global Holdings Limited (NZX: BGI)
provides the market with their full year update for the 12 months ended 31 March 2019.

Results for Announcement to the Market

Reporting Period 12 months to 31 March 2019
Previous reporting period 12 months to 31 March 2018

Amount (000s) Percentage change
Revenue from ordinary activities NZ$1,254 690%
Loss from ordinary activities after tax
attributable to security holder
NZ$(585) (22%)
Net profit attributable to
shareholders
NZ$(585) (22%)

Interim/Final Dividend Amount per share Imputed amount per share
The company does not propose to pay
a dividend at this time.
Not applicable Not applicable

Record Date Not applicable
Dividend Payment Date Not applicable

Comments: See below

2
Blackwell Global Holdings Limited (NZX: BGI)

Full year preliminary unaudited announcement for the 12 months ended 31 March 2019

Lending Operation a Focus for the Company
During the course of the financial year Blackwell Global Holdings Limited (“BGI” and “the Company”)
has been concentrating on the ongoing development of its finance company operation.
The Company’s focus has, in particular been on:
• Continuing to develop its internal operational infrastructure to provide a platform for growing its
finance company operations;
• Deploying its funds towards good quality, moderate margin loan receivables. To this end, the
Group has to date:
- Funded 10 separate loan facilities;
- The total amount of funds deployed to date has been $5,420,729;
- The loans have been structured across a mix of capitalised interest arrangements, and interest
only loans;
- The loans have all been secured by first ranking mortgage securities over quality real estate
assets;
- Developing a bespoke investment/funding structure whereby the Company can facilitate
investment by third party wholesale investors into loan facilities procured and managed by the
Company.
The ongoing challenge for the Group in respect of growing its finance company operation continues to
be the ability to raise debt finance from third party wholesale investors which can then be deployed
towards funding loan receivables, and generating a profit margin for the Company. The Company is
continuing to explore innovative new initiatives to secure more funding with a view to continue
growing the finance company operation in the future.
To assist the Group with funding its ongoing working capital requirements and loan receivables, the
Group has drawn down a further $500,000 of bonds issued to the Group’s major shareholder in April
2018.

Discontinuation of Derivatives Trading Licence Application
In December 2018, the Board announced that it had resolved to discontinue its ongoing investment in
developing a derivatives trading operation through its wholly owned subsidiary, Blackwell Global
Investments (NZ) Limited (BGINZ). BGINZ had been in the process of preparing an application to the
Financial Markets Authority for a derivatives trading licence. Following the Board’s decision, the
application did not proceed, and all employees associated with this operation ceased working for the
business.
In resolving to discontinue its investment in the derivatives trading initiative, the Board noted that:
• The regulatory landscape for derivative trading operations in New Zealand had become
increasingly complex and expensive to comply with;

3
• The sector has developed to become highly competitive;
• The quantum of investment required to launch the derivatives operation had increased
significantly beyond that original forecast during the course of the last financial year;
• The timeframe for the derivatives operation to become cashflow positive was anticipated to take
longer than originally forecast.
The Group has been able to offset much of the costs associated with the investment in the derivatives
trading operation via the contribution towards those costs by the Group’s major shareholder. The
major shareholders contributions are recognised as Other Income with the corresponding expenses
included in Operating Expenses.
The Board believes that if the Company is able to secure additional debt funding (which can in turn be
deployed towards funding the Company’s finance company operation), there is a genuine opportunity
for the Company to generate meaningful revenues and profits.
The Board is committed to explore all avenues available to it to raise further debt funding to this end.
The Board will report back to shareholders with any meaningful developments in this regard should
they eventuate.

Changes in Accounting Policy
Apart from the changes noted below, the unaudited financial statements have been prepared using
the same accounting policies and methods of computation detailed in the company’s Annual Report
for the year ended 31 March 2018.
Application of new and revised standards, amendments and interpretations
The Group has applied NZ IFRS 9: Financial Instruments and NZ IFRS 15: Revenue from Contracts with
Customers for the first time in the current financial year. Details of the impact of the application of
these new NZ IFRSs are described below.
Application of NZ IFRS 9: Financial Instruments
Financial assets classified as loans and receivables under NZ IAS 39 that were measured at amortised
cost continue to be measured at amortised cost under NZ IFRS 9, and classified as such, as they are
held within a business model to collect contractual cash flows and these cash flows consist solely of
payments of principal and interest on the principal amount outstanding.
In relation to the impairment of financial assets, NZ IFRS 9 requires an expected credit loss (ECL) model
as opposed to an incurred credit loss model under NZ IAS 39. The expected credit loss model requires
the Group to account for expected credit losses and changes in those expected credit losses at each
reporting date to reflect changes in credit risk since initial recognition of the financial assets. In other
words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.
In assessing whether the credit risk of the loan receivables has increased significantly since initial
recognition, the Group considers both quantitative and qualitative information that is reasonable and
supportable, including historical experience and forward-looking information that is available without
undue cost or effort. Forward looking information considered includes the future prospects of the
domestic housing market and similar overseas markets, as well as economic expert reports, financial
analysis and government data.

4
The Group recognises any impairment gain or loss in profit or loss for all financial instruments with a
corresponding adjustment to their carrying amount through a loss allowance account.
No impairment losses have been recognised in these unaudited results, as there has been no
significant change in the risk profile of the loan receivables.
Further details about the application of this new standard will be provided in the Annual Report, when
it is released.
Application of NZ IFRS 15: Revenue from Contracts
This new standard requires the Group to provide additional disclosures about revenues in its Annual
Report. The new standard does not have a material impact of the amounts recognised in the
Consolidated Statement of Comprehensive Income or the Consolidated Statement of Financial
Position.


Earnings per Share and Net Tangible Asset per security
The earnings per share are shown below the Consolidated Statement of Comprehensive Income
below. The net tangible asset backing per security is shown below the Consolidated Statement of
Position below.

New Subsidiary
In April 2018 Blackwell Global Funds Limited was incorporated as a wholly owned subsidiary. The
company was established to act as a custodian for a special purpose loan origination and lending
service. The subsidiary holds the Group’s interest in the $2.9 million of loan receivables and the $2.9
million of borrowings through the SPV arrangement. The net profit of this subsidiary is not material to
the Group’s results for the period.

Audit
The consolidated financial statements are in the process of being audited.


Future Events
Event Date
Annual Report due 30 June 2019


ENDS

Authority for this announcement
Mark Thornton
Chief Executive Officer
Ph: 021 723766
mark.thornton@nzf.co.nz
Date of release: 30 May 2019

5
Consolidated Statement of Comprehensive Income
Blackwell Global Holdings Limited
For the year ended 31 March 2019



2019
2018
Notes
$
$
Revenue
Interest and fee income
5
822,430
76,462
Other income
5
431,707
82,352
Total Income
1,254,137
158,814
Expenses
Directors' fees
25
(281,250)
(284,481)
Employee expenses
(622,717)
(135,000)
Interest expense
(519,919)
(99,200)
Other operating expenses
6
(415,181)
(392,293)
Total expenses
(1,839,067)
(910,974)
Loss before income tax
(584,930)
(752,160)
Income tax benefit/(expense)
7
-
-
Total comprehensive loss for the year
(584,930)
(752,160)
Attributable to:
Owners of the parent company
(584,930)
(752,160)
Earnings/(loss) per share
Basic (loss) per share (cents per share):
10
(0.13)
(0.21)
Diluted (loss) per share (cents per share):
10
(0.13)
(0.21)

6
Statement of Changes in Equity
Blackwell Global Holdings Limited
For the year ended 31 March 2019




Notes
Share
Convertible
Contributed
Accumulated
Total
Capital
Note
Capital
Losses
Equity
Reserve
$
$
$
$
$
Balance at 1 April 2017
9,650,250
-
-
(10,041,222)
(390,972)
Loss for the period
-
-
-
(752,160)
(752,160)
Other comprehensive income
-
-
-
-
-
Total comprehensive loss for the year
-
-
-
(752,160)
(752,160)
Issue of ordinary shares, net of transaction
costs
20
2,460,496
-
-
-
2,460,496
Contributed capital on the bonds
17.1
-
-
102,013
-
102,013
Equity component recognised in
convertible note reserve
17.2
-
114,716
-
-
114,716
Balance at 31 March 2018
12,110,746
114,716
102,013
(10,793,382)
1,534,093
Balance at 1 April 2018
12,110,746
114,716
102,013
(10,793,382)
1,534,093
Loss for the year
-
-
-
(584,930)
(584,930)
Other comprehensive income
-
-
-
-
-
Total comprehensive loss for the year
-
-
-
(584,930)
(584,930)
Contributed capital on the bonds
17.1
-
-
25,503
-
25,503
Balance at 31 March 2019
12,110,746
114,716
127,516
(11,378,312)
974,666

7
Consolidated Statement of Financial Position
Blackwell Global Holdings Limited
As at 31 March 2019



2019
2018
Notes
$
$
Current assets
Cash and cash equivalents
18
1,513,055
801,387
Prepayments and other receivables
12
26,399
9,648
Loan receivables
17
5,377,175
3,258,960
Total current assets
6,916,629
4,069,995
Non-current assets
Prepayments and other receivables
12
75,500
75,000
Property, plant and equipment
13
3,780
1,668
Total non-current assets
79,280
76,668
Total assets
6,995,909
4,146,663
Current liabilities
Trade and other payables
14
103,583
146,733
Accruals, provisions and other liabilities
15
103,765
124,159
Borrowings
17
2,955,904
38,218
Total current liabilities
3,163,252
309,110
Non-current liabilities
Borrowings
17
2,857,991
2,303,460
Total liabilities
6,021,243
2,612,570
Net assets
974,666
1,534,093
Equity
Share capital
20
12,110,746
12,110,746
Contributed capital
17.1
127,516
102,013
Convertible note reserve
17.2
114,716
114,716
Accumulated losses
(11,378,312)
(10,793,382)
Total equity
974,666
1,534,093
Net tangible assets per share (cents per share):
11
0.22


0.35

8
Consolidated Statement of Cash Flows
Blackwell Global Holdings Limited
For the year ended 31 March 2019




Reporting of Segments
Operating segments are reported in the manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision maker is identified as the Board of
Directors. The Group internally reported as a single operating segment to the chief decision-maker.

2019
2018
Notes
$
$
Cash flows from operating activities
Interest received
710,578


23,613


Lending, credit fees and other income received
234,238


74,310


Operating inflows
944,816


97,923


Net advances in loan receivables
(2,240,600)


(3,280,421)


Payments to suppliers and employees
(924,157)


(774,150)


Interest paid
(385,553)


(25,015)


Repayment of GST liability
(82,838)


(93,516)


Income taxes paid
-


-


Operating outflows
(3,633,148)


(4,173,102)


Net cash used in operating activities
(2,688,332)


(4,075,179)


Cash flows used in investing activities
Purchase of property, plant and equipment
-


(2,669)


Net cash used in investing activities
-


(2,669)


Cash flows from financing activities
Increase in funding from bonds
17.1
500,000


2,000,000


Proceeds from borrowings
17
2,900,000


-


Proceeds from convertible notes
-


500,000


Proceeds from issue of share capital
-


2,220,496


Net cash flow from financing activities
3,400,000


4,720,496


Net increase in cash and cash equivalents
711,668


642,648


Cash and cash equivalents at the beginning of the period
24.3
801,387


158,739


Cash and cash equivalents at the end of the year
1,513,055


801,387