Archive | Momentum Magazine Group

Published 18 January 2006

7 of Kiwi Property Investor publisher David Hows’ companies went into liquidation on 13 January, but only after 2 of his magazines were passed on to a new company.

The companies in liquidation are Buy a Business Magazine Ltd, Her Business Magazine 2004 Ltd, Inspiring Entrepreneur’s Magazine Ltd (formerly Espy Magazine 2004 Ltd – not Espy Magazine Ltd, as the liquidators wrongly gave notice on Wednesday), Kiwi Property Investors Magazine 2004 Ltd, KPI Commercial Ltd, Momentum Magazine Holdings Ltd & Momentum Magazine Group Ltd.

Liquidators are John Whittfield & Peri Finnigan (McDonald Vague). They’ve set Friday 17 February as the closing date for creditors to file proofs of debt.

The former Espy magazine, now IE (Inspiring Entrepreneurs), is in the hands of the liquidators and for sale. KPI (now incorporating KPI Commercial) & Buy a Business magazines were transferred to Paper Ventures Ltd, incorporated on 20 December with 10,983,883 shares, all held by Oratia Resort Developments Ltd, which is owned by the sole director of both, Mr Hows.

That’s the same number of shares as in the parent of the Momentum companies, Momentum Magazine Group Ltd, but at Momentum Mr Hows was majority shareholder with a number of smaller investors.

Mr Hows sold Her Business magazine to Waikato-based fashion designer & retailer Annah Stretton, who’d already written several columns for the magazine and formed the company to run it, Stretton Publishing Co Ltd, on 12 January.

Liquidator Peri Finnigan said most of the Momentum creditors had been transferred to Paper Ventures with the sale of the 2 magazines to it. A “reasonable shortfall” to a number of trade creditors & Inland Revenue had been confined to one entity.

She said the businesses sold to Paper Ventures had been valued by Grant Thornton Auckland Ltd and McCallum Petterson had been involved in trying to source some funding. “The sale of the businesses has achieved a market value….. over the valuation,” she said.

Mr Hows held the bulk of his shares in Momentum Magazine Group through Oak Tree Consultants Ltd, the former Entrepreneurs Success Centre Ltd.

He quit his partnership with Phil Jones in Entrepreneurs Success Centre Ltd, Richmastery Ltd & various property investment & promotional companies in 2004 when he tried to take the publishing business public.

An IPO seeking up to $4 million was canned in 2004 when the Securities Commission intervened. Earlier, I’d written that “Momentum is forecasting revenue growth from $1 million for the first 6 months to $11.8 million in the first full year, $33.8 million in the next, and the investment statement displays a graph of forecast rocketing pretax earnings.

“There are no crunchable earnings figures, no dividend forecasts, no details of the costs of rolling out the new businesses. Gross margin is forecast to be 46% of revenue by the fourth quarter of the 2007 year, EAIDBT 28% of revenue that year.”

The offer closed undersubscribed, was withdrawn and Momentum refunded all subscriptions.

Earlier stories:

3 December 2004: Momentum directors give enforceable undertaking after scuttling magazine venture

15 October 2004: Momentum takes magazines float to market Monday

27 August 2004: KPI, Espy & Her Business publishers look at float

If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].

Attribution: Liquidation records, liquidator, story written by Bob Dey for this website.

Momentum Magazine Group Ltd takes its $2.5-4 million share float to the market on Monday with the first of 4 promotional breakfasts.

The new company sent out its investment statement in an email mailout today, but the prospectus isn’t available through the Companies Office yet. And the investment statement is well short of any financial detail, especially the kind property investment promoters have to put out.

The first promotional breakfast is in Auckland followed by another in Tauranga on Tuesday, then 2 evening promotions in Wellington & Christchurch.

The offer opens on Monday 18 October and is scheduled to close on Friday 5 November.

The proposal is to expand the business from 3 publications – Espy, Kiwi Property Investor & Her Business magazines in New Zealand – to 16, and to expand geographically into Australia & the US, increasing total circulation from 96,000 to 1.6 million within 3 years.

The investment statement claims audited circulation & readership figures at June 2004 of:

Espy – The Entrepreneur’s Bible, launched October 2001, circulation 6200, readership 23,000
Kiwi Property Investor, launched 1995 as The Landlord, became Residential Property Investor, relaunched November 2002 as KPI, circulation 12,000, readership 42,000
Her Business, launched 1995, circulation 8218, readership 31,000.

In the real estate sector, Momentum calculates that 6% of the population in these countries are real estate investors – 224,000 in New Zealand, 1.2 million in Australia & 18 million in the US. In New Zealand, therefore, its existing audited readership figure puts it above that level, but it says it needs only a 2.5% penetration rate in each country to meet its circulation targets.

Momentum says of its magazines: “Our magazines delve into the hearts & minds of successful global & local business & real estate personalities. Discovers what makes them tick, and uncovers the mystery behind their success. These passionate people live & breathe their businesses & investments, and believe entrepreneurism is a lifestyle choice not a career.”

The investment statement has laid down a line between the Entrepreneurs Success Centre, original owner of KPI magazine, and Momentum, saying no director or member of the Momentum management team will also be a director of hold an Entrepreneurs Success Centre management role.

Momentum proposes rolling out several region-specific editions of Real Estate Investor of America magazine from a Boston base. “Extensive research has shown that there is very little in the magazine category for residentially focused property investors; in fact there are no residential property investment-focused magazines on sale in book or magazine stores.”

It also sees “significant opportunity” to launch an Australian Real Estate Investor magazine.

Momentum has entered agreements to buy the businesses of Kiwi Property Investor Magazine from KPI for $2,656,250 in shares (7,812,500 at 34c) and the other 2 magazines for $743,750 in shares (2,187,500 at the same price).

The transactions – 10 million shares in total going to the promoters, valuing the existing businesses at $3.4 million – are scheduled for Monday 18 October.

The Momentum offer is of shares in 3 categories – the principal offer of $2.5 million in $1 shares, the other 2 categories to be offered only if there is oversubscription on the principal offer.

The other 2 categories are of 1.25 million KPI Momentum shares & 312,500 Espy Momentum shares at $1 each – 3 times the price Momentum is paying the promoters for the businesses.

The 4 directors, all executive, will be Brad Sugars (chairman), David Hows (managing director US), Tim Larwence (editor-in-chief Espy & Her Business) & Luke Blincoe (managing director New Zealand & Australia).

Phil Jones, Mr Hows’ partner in the Richmastery, Entrepreneurs Success Centre & KPI businesses, stays with the existing businesses.

Momentum is forecasting revenue growth from $1 million for the first 6 months to $11.8 million in the first full year, $33.8 million in the next, and the investment statement displays a graph of forecast rocketing pretax earnings.

There are no crunchable earnings figures, no dividend forecasts, no details of the costs of rolling out the new businesses. Gross margin is forecast to be 46% of revenue by the 4th quarter of the 2007 year, EAIDBT 28% of revenue that year.

The publishers of Kiwi Property Investor, Espy & Her Business magazines put feelers out today for preliminary indications of investor interest in the float of a new company, Momentum Magazine Group Ltd.

Momentum was incorporated today, with KPI magazine publisher David Hows listed as sole director & holder of its solitary share.

The offer being considered is for 20% of the company – 2.5 million $1 shares (although there’s only one share now).

“It is intended that the capital raised in this offer will be used to fund the global expansion of the Momentum Magazine Group from its existing New Zealand operations base,” the newsletter notice says.

Expressions of interest are sought by Tuesday 14 September.

Fiona Powell set up Her Business Group NZ Ltd in Rotorua in 2002 and sold the business, including the Her Business magazine, to Tim Lawrence at the end of 2003. Mr Lawrence is director of Espy Magazine Ltd and Espy Her Business Ltd.

Momentum is to acquire all 3 magazine titles.

KPI was launched by Auckland Property Investors Association chairman Andrew King in 1995 as the Residential Property Investor magazine, and was taken over in November 2002 by Mr Hows & Phil Jones.

Espy was launched in 2001 and is about entrepreneurs. Her Business was launched in 1995.

Websites:

Kiwi Property Investor

Espy Magazine & Her Business

Her Business