Sharechat Logo

Snowball Effect narrows annual loss, expects growth in 2017

Monday 15th August 2016

Text too small?

Snowball Effect narrowed its loss in the 2016 financial year as it reaped bigger fees from its equity crowdfunding platform, but said it may have to crowdfund itself if expected growth doesn't materialise.

The Auckland-based private company posted a net loss of $76,428 in the year ended March 31, 2016, from a loss of $214,720 a year earlier, on a 42 percent rise in revenue to $415,253, its financial statements show. The company also received about $30,000 in finance, referral and other income, up from $11,587 in 2015. 

In Snowball's June quarterly progress report, it said 2016 earnings before interest, tax, depreciation and amortisation was ahead of budget without providing more detail, and that it's targeting revenue growth of about 65 percent delivering a small cash profit for 2017. 

In notes to the 2016 accounts published today on the Companies Office, Snowball said it generated profit and cash flow forecasts for the next 12 months which assume increased customer sales and business growth. If those forecasts aren't met, Snowball's directors believe the company "could take a more conservative approach in a number of key areas with respect to cash outflows," it said. 

The company also said it had considered alternate funding sources, including crowdfunding itself from its existing six shareholders or key investors, if its forecasts weren't realised.  The two main shareholders are Richard Allen and Simeon Burnett.

The June update said there were "no firm capital raising plans at this point". 

Snowball was an early entrant when equity crowdfunding launched in 2014 under the updated Financial Markets Conduct Act, which provides a regime where projects can raise a maximum of $2 million offering equity through crowdfunding platforms. Seven firms have now been licensed though Snowball remains the market leader having grabbed 70 percent of funds raised through crowd-funding - facilitating $20 million of new capital raised in the past two years.

The financial services firm reported costs of $521,791 in 2016, including salaries, marketing and finance costs, up from $518,281 in 2015. Salary costs jumped 68 percent in the past year to about $250,000, while Snowball more than halved its professional services fees to $57,565 and cut costs in all other categories too.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

GEN - Completion of Purchase of Premium Funding Business
Fletcher Building Announces Executive Appointment
WCO - Director independence determination
AIA - welcomes Ngahuia Leighton as 'Future Director'
Mercury announces Executive team changes
Fonterra launches Retail Bond Offer
October 29th Morning Report
BIF adds Zincovery to its investment portfolio
General Capital Resignation of Director
General Capital subsidiary General Finance update