Blackmore Bonds has delayed paying quarterly interest on its bonds for a second time.
Investors received an email from Blackmore director Patrick McCreesh saying that the payment due in two days’ time would be delayed until 29th November.
Blackmore’s last interest payment at the end of July was also delayed by a few weeks. In that case Blackmore blamed a “clerical error”. This time around Blackmore has blamed “circumstances outside their control”. At least they didn’t try to blame Brexit.*
Blackmore’s business model, including the 20% commissions paid from investor funds to Surge and other introducers, requires it to generate returns of up to 15% per year to meet its obligations to investors. As recently as March Blackmore claimed its business was “entirely on track”.
As inherently high risk unregulated investments with a risk of total loss, Blackmore’s bonds should only have been promoted to sophisticated or high net worth investors who could afford to invest no more than 5-10% of their free assets, and shrug off the loss if Blackmore defaulted.
Unfortunately, judging by the Trustpilot reviews, this hasn’t been the case for some Blackmore investors.
After the very late interest payment last time this comes as a shock and has only given us 3 days to prepare.
Why were we not notified earlier. I was depending on this interest payment being on time.
At time of writing the Blackmore Bonds website is down, possibly due to excess demand. Investors report that the Blackmore app which allowed investors to view their investments is also down.
Blackmore has twice put off filing annual accounts, blaming the resignation of its auditor. At the beginning of October it claimed its accounts were “almost ready” and will be signed off soon.
*Correction 29.10.19: Oh dear, they did blame Brexit. Money Marketing, who obtained a copy of the full email, notes that McCreesh’s opening stated “2019 has been a very challenging year for businesses in all sectors, with the uncertainty around Brexit slowing down markets. The property market is no exception…”