Another loss-making mini-bond firm is employing the same marketing company that promoted investments on behalf of London Capital & Finance before it collapsed, Money Marketing has learned.
Blackmore Bonds Plc, which issues unregulated bonds known as “mini-bonds” paid more than £5m to Surge Financial, an online marketing company, which made also millions helping LCF raise money from investors before its collapse.
The latest available accounts, which run up to December 2017, show that Blackmore reported an operating loss of £7.6m.
Blackmore’s latest accounts say the loss for that period “has primarily arisen from the charging of distribution fees from our strategic partner, Surge Financial Ltd. These are fees charged to the group for sourcing new investor funds and the facilitation of the front and back offices for investor relations”.
The document does not detail exactly how Blackmore’s fees to Surge were allocated, but notes that directors “made a judgment” that 50 per cent went to “initial start-up” and “know your customer checks” with the remaining 50 per cent going to “ongoing servicing of the bondholders”.
The Companies House records show Blackmore has extend its deadline for filing more recent accounts.
Blackmore accounts up to 30 December 2018 were due to be filed by 30 June 2019. However on 27 June the company changed its reporting period and shortened it to 29 December 2018, which now gives it three more months to file the accounts. The new deadline is set for 1 October 2019.
According to the Bond Review website, Blackhore has adjusted some of its disclosures around capital protection since the closure of LC&F.
It had disclosed that up to 20 per cent of investors’ money is commission for sourcing investor’s funds, the website says.
Blackmore’s website currently says it has met its fundraising goal and does not accept new investors.
A Blackmore spokeswoman says: “Our annual accounts will be filed in September, after they have been reviewed by our newly appointed auditor.
“We are on track to deliver in line with our business plan, with coupons to be paid as expected in July.
“The seven sites we are delivering this year will generate approximately £20 million in revenue, with recent practical completions in Ealing and Oxshott and deals agreed in Stevenage and Birmingham.”