The trials and tribulations of the managed investment scheme sector in recent months have taken their toll on some of the remaining players in the sector.
Gunns Ltd, Elders Ltd, Willmott Forests, TFS and FEA, five of the continuing groups, all revealed sharp falls on 2008 sales figures, some of 30% to 60%.
The failures of Great Southern and Timbercorp (which was substantially wound up this week after creditors voted to put the 40 subsidiaries into liquidation) plus the 24% fall in the stockmarket in the year to June, meant a fall in the number of people willing to take the risk (or people with profits to try and shelter).
Elders’ subsidiary, ITC, which yesterday reported another sharp fall in its sales of the tax driven projects ahead of the June 30 financial year end.
Elders said ITC Limited, had recorded managed investment scheme (MIS) sales totalling "approximately $24 million (exclusive of GST) for the year ended 30 June 2009."
"The sales will fund establishment of approximately 3,700 hectares of plantation," Elders aid.
"Mr Vince Erasmus, Chief Executive Officer of ITC, described the sales result as pleasing, given the impact of the collapse of Great Southern Limited and Timbercorp and uncertainty in financial markets on MIS investor confidence.
That sales figure was down sharply from the $37 million (and 7,500 hectares of hardwood plantations) recorded by ITC in 2008 and substantially lower than the record $61 million in sales for the 2007 financial year (And half the $47 million for the 2007 year).
Elders this week reported the extension of loans debt to September 30, its new balance date, to allow talks to continue on consolidating and restructuring that debt.
The market didn’t much like the ITC sales figure (which was to be expected given the Great Southern and Timbercorp failures).
Elders shares fell 2.5 cents to 26 cents yesterday, a drop of 8.7%.
Another MIS tree scheme company, Willmott Forests saw a 33% fall in total woodlot sales in the June 30 year to $65.8 million (exclusive of GST) and has warned it may cut final dividend as a result.
"Although down on the previous year this is another strong result given that the market in the last twelve months has significantly contracted due to forces beyond Willmott Forests’ control," the company said.
Sales for the 2008 financial year totalled $95 million, a rise of 110% on the $44 million in 2007. That makes this year’s fall quite substantial
"Willmott Forests expects to record NPAT for FY2009 in excess of the $11.3 million achieved in FY2008. This will be reported in August 2009.
"The directors will consider the quantum of the final dividend from the profits of FY2009 in August 2009. In light of reduced Woodlot sales and current market conditions it is likely that the final dividend may be reduced from the previous level of 5¢ per ordinary share.
Willmott shares ended up 3 cents at 56 cents, despite the dividend warning.
And Gunns said yesterday that its wholly-owned subsidiary Gunns Plantations had achieved sales of approximately $45.5 million (including GST) across its full range of plantation forestry and walnut investment projects in the 2008/09 financial year.
"The sales have been achieved in challenging market conditions and I believe the result reflects the strength of the Gunns’ investment offering," said Mr John Gay, Chairman of Gunns Limited."
No comparison with previous years was made, so off to the Gunns website.
And no wonder the company made no comparison with past years.
This year’s sales were nearly 66% down on the $122 million in 2008, and over $100 million down on the $152 million in 2007 (and the $87 million in 2006).
Gunns shares fell 4 cents to $1.035.
The company this week said it had chosen a strategic partner for its controversial pulp mill project in northern Tasmania.
And West Australian Indian Sandalwood plantation manager TFS Corporation said it had raised $51.1 million from sales of its 2009 Indian sandalwood MIS project – down 15% on the $59.8 million raised in 2008 – after accepting applications for 675 hectares.
TFS said that, in addition to its MIS sales, it attracted overseas institutional investment for the first time, with an application received for 350 hectares in the new 2010 Indian sandalwood plantations, worth $35 million.
"This is a significant development for TFS and represents the first investment by non-MIS investors into Indian sandalwood plantations managed by TFS," the company said.
"Going forward, we expect plantations to be funded by both MIS and non-MIS investment, with non-MIS investment playing an increasingly important role."
Forest Enterprises Australia Ltd (FEA) said sales of its managed forestry investment products for the 2008/09 year just ended had totalled about $23 million, less than half what it sold in 2008.
FEA warned in late June that sales for 2009 were likely to be significantly less than the $60 million achieved in 2005-06 and 2006-07. They were.
