Sharechat Logo

Snowball Effect records first profit, thanks to tax benefit, revenue jumps 46%

Thursday 3rd August 2017

Text too small?

Snowball Effect recorded a full-year profit driven by a modest tax benefit, while revenue rose faster than expenses, narrowing the equity crowdfunding platform's pre-tax loss.

The Auckland-based company posted a net profit of $12,404 in the 12 months ended March 31, from a loss of $76,428 a year earlier. Sales rose to $607,519 from $415,253, while expenses climbed to $673,853 from $521,791. The company recognised a $51,110 deferred tax gain.

Some $25.3 million has been raised on the Snowball Effect platform through 33 offers, according to its website. They include $1.7 million for Designer Wardrobe, which allows members to trade their fashion-label clothes, $1.2 million for Zeffer Cider, $3.4 million across three offers for investment group Punakaiki Fund, $3.4 million for mortgage broker and peer to peer lender Squirrel Group, $1.8 million for university research incubator Powerhouse Ventures and $2 million for winemaker Invivio.

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. 

The company's accounts show wages are its biggest expense at $399,433, up from $249,804 a year earlier. Marketing expenses were just $34,878, up from $24,858 a year earlier. Its biggest asset is its website, with a carrying value of $158,609, followed by cash at $129,438.

The accounts list chief executive and co-founder Simeon Burnett's gross pay at $120,016. Burnett is also one of the two biggest shareholders with a stake of 31.6 percent, the same sized stake as is held by co-founder and director Richard Allen. Another co-founder and director Francis Reid owns 18.6 percent. Alastair Lawrence, who is on Snowball's screening committee, owns 12.2 percent with Joanne Lawrence through Antipodes Ventures and business incubator The Icehouse owns 4.9 percent.

The company's auditors, Staples Rodway, added an "emphasis of matter" saying that Snowball's going concern assumption was dependent on its ability to reach profit and cash-flow forecasts and access alternative sources of funding from key crowdfunding investors or existing shareholders.

(BusinessDesk)

  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:

NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut
RBNZ knock-back gives Resolution chance to low-ball AMP - Jarden
Rail hubs may not boost Napier Port log trade
O'Connor looks to overhaul Biosecurity Act, improve animal tracing
Denton Morrell undefended at liquidation hearing
Contact steam to heat Norske Skog pellet business secured
Air NZ to amend booking engine after lawyer’s complaint
Ross McEwan to take helm at NAB
KPMG says bank capital proposals will wreck havoc on dairy farmers
Mild weather saps Vector's June-qtr volumes

IRG See IRG research reports