GTP - Great Southern Plantations

TheAnalyst said:

The government will not stop these schemes however it may tighten tax legislation to ensure that the most genuine resourceful schemes and operators only can offer the MIS.

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Hehe its already happened in 00/01 and thats why I got into them in the first place 3-4 years ago

Hi Nicks,

How is the GTP SP playing out on a technical front....are you still Bullish even after the recent panic selling because of the uncertainty RE: tax ruling. I mean if the SP falls as it did last year prior to the ruling do you see it well supported at $3.80 first and then $3.50???????

I am happy to hold as i have said except i am expecting some volatilty in the coming weeks until this thing is sorted out. I am actually hoping it will get to the $3.50 mark so I can buy some more shares......

regards
savtin

savtin1 said:

Julia,

Do you honestly think the government will change their policy to hinder the plantation industry???? It is the usuall banter every year by the AFR regarding tax schemes and every year the government reinforces the ruling by extending. I don't think it will be different this year. But if you are concerned, exit your position until this uncertainty is over (mayber by the 11th April or you may need to wait until the May 9 Budget to know for sure)

then you may want to get back in afterwards if the ruling is favourable or just stay out..............I agree that it is a pity that the SP of a company should be at the mercy of certain tax rulings but that is the nature of the beast. Remember that their business is unaffected until 2008 June if the worst case transpires.....then their land bank comes into play to assist them.

But my opinon is that the government will extend the sunset clause for another 5 years.....that is the way i see it going and that is why i am staying long with the company..........once this fiasco is over then the GTP should rocket higher..............now if my guess is wrong then YES the SP could go for a dive and my money with it.....but atleast i have my money where my mouth is..............

cheers
savtin

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Hello Savtin,

It doesn't matter what I think and it doesn't matter what you think.
Neither does it matter that we may think the fundamentals for GTP are terrific.
What does matter is what the market in general PERCEIVES about the stock.
That is what drives the SP. As we've seen in recent days, any hint of uncertainty hanging over a company adversely affects the price. There are plenty of other stocks out there without this uncertainty attached to them.

I had a phase of being "attached" to GTP. Not any more. Attachment precludes objectivity. I will sell sooner rather than later rather than endure another year of watching the SP drift lower after the June peak. I've just become fairly ruthless about chopping out non-performers. My money can be working better for me than being tied up in a stock that is not a consistent performer.

I'm not arguing with your position on GTP at all. But I'd be interested to know what would affect your confidence to the point that you would exit, even if temporarily?

Cheers
Julia

Media Releases
Multiple use forests key to reducing global warming
07 Apr 2006


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NAFI has welcomed the news that native forestry and the establishment of tree plantations will play a major role in reducing the effects of global warming, according to a new report by the Australian Business Roundtable on Climate Change.

“The report has identified the importance of tackling greenhouse gas emissions and climate change in a cost-effective, sustainable manner. Forestry provides a number of low-cost solutions for reducing the impacts of industry and the community on the environment,” said NAFI’s CEO, Catherine Murphy.

“Tree plantations and actively growing native forests sequester greenhouse gases from the atmosphere and these gases are then permanently stored in the harvested timber products,” she said.

The report refers to reductions in landclearing combined with forestry (largely plantation establishment) as having the largest positive affect on carbon emissions in the last 20 years.

“Tree plantations are a cost effective way of reducing global warming as they are a market based mechanism which provides a dollar incentive to reduce global warming. $390 million of new carbon credits are currently produced for free each year from new plantations,” said Mrs Murphy.

The ongoing creation of new reserves is a major concern to the forest industries as there is no existing guide to how these new reserves are being managed with consideration of the effects of global warming.

“Global warming will affect new reserves in a number of ways. Climate change could potentially threaten ecosystems and biodiversity. There are currently no considerations of how global warming will affect rainfall, temperatures and adverse weather conditions or increase the occurrence of bushfires.

“With a large area of new reserves created in recent decades, governments must ensure the areas are actively and adequately managed. This will require more funding for national parks and a more positive approach to active land management,” said Catherine Murphy.

The report also refers to the huge impact ‘stationary energy sources’ are having on greenhouse gas emissions. Australia’s reliance on stationary energy sources (fossil fuels for energy production) could be offset by using biomass as an alternative energy source.

“By-products of timber harvesting and processing, or wood waste, can be used to generate renewable energy. The energy derived from the by-products of forestry activities could produce 3000 giga-watt hours of electricity without harvesting one more hectare of native forests,” said Mrs Murphy.

The report also refers to the need for 5-star energy rating systems for building construction. The proposed 5-star system for residential construction does not account for the amount of energy used in producing building products, known as embodied energy.

“The low amount of energy used in the production of timber products, combined with the carbon it stores, means it is better for reducing greenhouse gas emissions than using products such as steel and concrete. The Kyoto Protocol fails to recognise that timber products permanently sequester and store carbon from the atmosphere, so it is pleasing to the forest industry to see the Australian Business Roundtable on Climate Change is looking beyond Kyoto.

“This report sends a clear signal that government decisions at all levels must consider the many positive effects that plantations and native forestry can have in reducing global warmig,” said Catherine Murphy.

Great report Abucs,

Julia,

What you say is spot on and I don't disagree with you. You are also correct in that no matter what I think or value the company at .......at the end of the day it will be the broader market that values the company and hence its SP. AT the moment i don't see a reason to sell based on fundamentals....and the fact that the CBA and UBS nominees increased their positions doesn't hurt either.........

.as for what would cause me to sell my stake in the company.......well only if four things happen.........1) the government changed the laws/rules to discourage grower investors as this would ultimatley affect the profits and hence the SP of GTP.(i don't see this happening as stated above but if it did i would immediately assess my position and could exit)........2) that the management of GTP changed considerably .......3) That i felt that their fundamentals had changed considerably and they would not achieve the growth i have expected............4) if their SP rocketted dramatically and became overpriced........above my valuation of the company.....

cheers
savtin

p.s i can understand your frustration with them.......

p.s.s let us hope that the rest of the market percieves a higher price for them in the future........we just need to get past the May 9 budget first and then it will be on the merits of the company to prove themselves and suprise the analysts and market at large with excellent revenue growth for the year ending June 06.


p.s.s.s I also think that the company is attemping to get the market to re-rate their P/E ratio (i.e increase it to 12-14) by trying to acheive a more controlled growth in sales of plantation products and achieve a higher level of growth in their income based (non-plantation products) i.e. annuity income
............also by telling the market that they are moving away from hybrid and equity issues and may use a modest level of debt instead. At the end of the day it is about what the general market feels about them and GTP has to convince them with performance and results.

JUst got some this morning....go GTP go...dont be afraid of the tax situation there is no way no the government will get rid of it.....its buying oppurtunity......do u really think cba would be buying up buig for no reason??


GTPIZK 10/04/06 10:07 324676 Buy 6000 1.61 9,679.80 Filled

UBS announcement as well that they have increased their stake again by over 2% to 10 %.

With both the big boys continuing to buy substantial parcels beyond the $4.00 mark, at a time where there is uncertainty (for us anyway) you could be forgiven for thinking that they have their ear to the ground, and it's positive rumblings. )

CBA increased theirs as well......What is it with me?? I just seem to have picked it again!!!!!!!!!!buying sellingbuying selling buying

savtin1 said:

Great report Abucs,

Julia,

What you say is spot on and I don't disagree with you. You are also correct in that no matter what I think or value the company at .......at the end of the day it will be the broader market that values the company and hence its SP. AT the moment i don't see a reason to sell based on fundamentals....and the fact that the CBA and UBS nominees increased their positions doesn't hurt either.........

.as for what would cause me to sell my stake in the company.......well only if four things happen.........1) the government changed the laws/rules to discourage grower investors as this would ultimatley affect the profits and hence the SP of GTP.(i don't see this happening as stated above but if it did i would immediately assess my position and could exit)........2) that the management of GTP changed considerably .......3) That i felt that their fundamentals had changed considerably and they would not achieve the growth i have expected............4) if their SP rocketted dramatically and became overpriced........above my valuation of the company.....

cheers
savtin

p.s i can understand your frustration with them.......

p.s.s let us hope that the rest of the market percieves a higher price for them in the future........we just need to get past the May 9 budget first and then it will be on the merits of the company to prove themselves and suprise the analysts and market at large with excellent revenue growth for the year ending June 06.


p.s.s.s I also think that the company is attemping to get the market to re-rate their P/E ratio (i.e increase it to 12-14) by trying to acheive a more controlled growth in sales of plantation products and achieve a higher level of growth in their income based (non-plantation products) i.e. annuity income
............also by telling the market that they are moving away from hybrid and equity issues and may use a modest level of debt instead. At the end of the day it is about what the general market feels about them and GTP has to convince them with performance and results.

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Hey Satvin, was there any "news" on 11/04/06?

GTP and TIM havent dropped abit since?

thx

MS

No decision has been made. We will have to wait until the May 9 budget.
cheers
savtin

Down 17c today. No announcement on the ASX. Does anyone know what has happened to cause his?

Julia

Hi Julia,

Maybe either the TREES conversions and the tax uncertainties until May 9 budget.....is affecting some shareholders....who are exiting for NOW????

savtin said:

Hi Julia,

Maybe either the TREES conversions and the tax uncertainties until May 9 budget.....is affecting some shareholders....who are exiting for NOW????

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Hi Savtin

But wouldn't you think there would have to be some sort of definiive announcement to cause such a large drop in a market where most oher stocks are subsantially up? No announcement on the ASX and the company say they have no idea what has caused the drop.

Julia

Julia said:

Hi Savtin

But wouldn't you think there would have to be some sort of definiive announcement to cause such a large drop in a market where most oher stocks are subsantially up? No announcement on the ASX and the company say they have no idea what has caused the drop.

Julia

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Yesterday's ABC midday TV news ran quite a long story on (part of??) lobbying to change the tax treatment for MIS investors. Can't imagine that they had an enormous audience of institutional investment managers, but it does suggest that the rumours are flying.

Real question seems to me to be how much would the changes (whatever they turned out to be) affect GTP's own profitability and growth. I'm asking myself the same question about TIM.

Cheers,

Ghoti

ghotib said:

Yesterday's ABC midday TV news ran quite a long story on (part of??) lobbying to change the tax treatment for MIS investors. Can't imagine that they had an enormous audience of institutional investment managers, but it does suggest that the rumours are flying.

Real question seems to me to be how much would the changes (whatever they turned out to be) affect GTP's own profitability and growth. I'm asking myself the same question about TIM.

Cheers,

Ghoti

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Hi were the rumours on the show +ve or -ve for GTP/TIM u think?

thx

MS

Can't answer for GTP - I don't know enough about it.

If the tax changes reduce the amount of capital TIM can raise, then presumably they'll slow its expansion. However the company is already well on the way to substantial annual income from food crops i.e. to funding growth from cash flow.
Positive or negative? Depends on your time frame and reasons for holding.

Don't you just hate people who always say "It Depends"

Ghoti

Dont be concerned it was the share price adjusting to the trees conversion into ordinary shares and diluting to the conversion......so relax.....

TheAnalyst said:

Dont be concerned it was the share price adjusting to the trees conversion into ordinary shares and diluting to the conversion......so relax.....

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If that was the case, wouldn't the company have commented on it - if for no other reason than to reassure a shareholder - when phoned and specifically asked if they knew of any reason why the SP should have dropped so much?



Ghoti,

Thanks for report of the programme. Despite your previous non-committal reply to Michael, what sort of impression were you left with ?
i.e. would these companies represent a good investment?
do they seem risky? are there presently question marks over the MIS schemes?
The timing does seem to indicate a connection given that there isn't anything much else that has happened.

Regards

Julia

Hi Julia,

I truly don't have any other comment to make. The programme was a news bulletin and there was no editorial comment. The item reported that there is lobbying to remove the tax deferral for investor growers on the grounds that it makes funds more readily available to plantation companies than to other agribusinesses, and showed a short interview with a dairy farmer who now has plantations around his farm.

I still don't see GTP and TIM as being directly comparable. I've forgotten most of the detail I looked at in GTP when I chose TIM instead, but the 2 things that sticks in my mind are TIM's greater diversity and the fact that TIM is classified in the materials sector where GTP is financials.

FWIW I haven't yet seen any reason to sell my TIM shares, but then I only have 515 of them and I'm a long way in front. OTOH I'm not buying any more unless the price drops quite a long way, and if that looks like happening I'd be looking might hard at why. But I buy very conservatively - buffetologically conservatively as far as I'm able. There are an awful lot of people who are happy to buy where I'm not.

Sorry I can't be more definite.

Cheers,

Ghoti

Julia said:

If that was the case, wouldn't the company have commented on it - if for no other reason than to reassure a shareholder - when phoned and specifically asked if they knew of any reason why the SP should have dropped so much?



Ghoti,

Thanks for report of the programme. Despite your previous non-committal reply to Michael, what sort of impression were you left with ?
i.e. would these companies represent a good investment?
do they seem risky? are there presently question marks over the MIS schemes?
The timing does seem to indicate a connection given that there isn't anything much else that has happened.

Regards

Julia

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They did announce it to the market last month with plenty of warning....just check company announcements and calculate the percentage of dilution of the share price....i think i posted about it and did the calculation previously.