TIM 0.00% 4.4¢ timbercorp limited

Timber stock overview from the AFR

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    At the ongoing risk of having cut and pasting outlawed for ever here is an article by Cathy Bolte in todays Australian Financial Review pg 17.

    The highlighting is mine.

    Gunns the standout plantation player
    Jul 2
    Cathy Bolt

    Australia's listed plantation investment managers have reported mixed results from their peak pre-June 30 selling period, with little evidence yet of any major pick-up in investor enthusiasm for tax-effective agribusiness projects.

    The clear exception was Gunns Plantations, a subsidiary of Tasmanian forestry group Gunns, which closed its prospectus late last week after selling 13,000 hectares or about $60 million of eucalypt woodlots.

    The figure represents a huge increase on last year's sales of 1700 ha and was well in excess of its target of 6,000 to 8,000 ha.

    Rival project managers have questioned the sustainability of the Gunns business model, which was considerably cheaper than other projects at about $4,300 a hectare and included no significant further payments over the 13 to 20-year period before the trees were harvested and sold to Gunns.

    Gunns managing director John Gay said yesterday that the prospectus project was profitable in its own right but was primarily intended to shore up the company's wood supply. Its maintenance costs were cheap because it already had 70,000 ha of plantations.

    "We are giving reasonable returns to shareholders and reasonable returns to growers," he said.

    In recent years, more than $500 million annually has been poured into the schemes but sales last year were hit after a crackdown by the Australian Taxation Office on unrelated projects mass marketed in the mid to late 1990s.

    Timbercorp yesterday said it had sold $51 million of almond, olive and bluegum products, GST-inclusive, which missed its $60 million target but was 7 per cent higher than last year.

    Managing director Robert Hance said it was a good result in an uncertain environment but it had hoped for better.

    Great Southern Plantations will announce its sales figures today, including their likely impact on earnings, but managing director Cameron Rhodes said it had managed solid growth on last year's $42 million sales.

    Integrated Tree Cropping, which is merging its retail tax-effective business with that of defunct Australian Plantation Timber, said it had sold a little over 5,000 ha of plantations, a fall on last year's 8,500 ha.

    ITC managing director Tony Jack said the Gunns product had probably eaten into its sales and it had also been affected by disruption flowing from delays in the settlement of the APT deal.

    Tasmanian-based Forest Enterprises Australia will also confirm its results in the next two days but rivals expect it will significantly undershoot its target of 2,000 to 3,000 ha.

    Australian Growth, which plans to list this month, said it would be not far off its sales target of 2,000 ha of eucalypts but managing director Brian Mangosi said it would miss the target $4.2 million capital raising linked to the float, which closed yesterday.
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