GTP - Great Southern Plantations

[TheAnalyst]

Hi Jacob

If you look at Austral they had a huge increase in their profit due to the land revaluation increases going through profit and loss because of IFRS,s but that in no way increases their share price as the market was aware that this was just a book entry......the same will be for the increases in gtp land....the revaluation increments and decrements will be just that book enteries.....i have come to the opinion that the share price has been re-adjusted now for the effects of the new reporting date for gtp a slight step back in time.

 

[Jackob]

Analyst,

Sorry, but which company do you mean by "Austral"? I couldn't work out myself.

Thanks

 

[Jackob]

The GTP final sales figure came out yesterday. Nothing changed since JY's open briefing 2 weeks ago, except the pulpwood project sales that increased by 5% from an estimated $300m to an actual $315m.

But don't forget that the bank loan (debt) JY said to be used to buy the lands for the new pulpwood project would also increase by the same percentage from $200m to $210m, and the written down value of the lands for the new pulpwood projects would also increase by the same percentage.

 

[abucs]

MIR Investment Management have just announced they have bought $60 million of GTP shares over last 6 months (icluding July 2006) for average price of around $3.90.

http://moneymanager.smh.com.au/articles/2005/03/30/1111862430601.html

http://www.moneymanagement.com.au/articles/87/0c041387.asp

http://www.advance.com.au/about/media_centre/news/archive.asp?id=145

Looks like they have a good record and act on behalf of the biggest institutional names in Australian investments.

 

[hypnotic]

Analyst,

Sorry, but which company do you mean by "Austral"? I couldn't work out myself.

Thanks

I think Analyst was talking about Brickworks, who own Austral Bricks + other tile and paver and timber companies...

Hypnotic

 

[michael_selway]

Hi all GTP holders,

speaking to a friend of mine, he has heard throught the big grapevine that the cattle projects have sold out at capacity (don't know exactly what that is but it was about 11000 droves i think), olives did well and wine did it tough, but i think met the minimum of 300 Ha (= 6000 lots). if he is right then we could at least get the following:-

cattle - say capacity $55 million
olives (more than minimum) say $40 million
wine (say at minimum) = 24 M

total non-forestry of $119million ( up 138 % on last year)

if this is correct that would be a great result. to achieve $400 million they would only need another $281 million in plantation sales and i think they'll achieve that.

anyway fingers crossed the market receives the sales well.................otherwise down she'll go.

if the volume and the price action of the last couple of days is a hint then it could be all right.

regards

savtin

p.s what do others think?

p.s.s i would be very interested in what others were EXPECTING for the sales of non-forestry products.....

p.s.s me personally in todays bearish markets i would be very happy with anything over $100 million - which would equate to 100 % growth on last year.

Hi Satvin

how does the below compare to your estimates above?

thx

MS

COMPANY ANNOUNCEMENT / MEDIA RELEASE
Thursday, 29 June 2006
2006 Sales increases 30% to $458 million
Great Southern Plantations Limited is pleased to announce that total sales of its agricultural investment products
for FY 2006 are $458 million, an increase of approximately 30% over last year. The company has closed sales in
its plantations project early for the current financial year after being oversubscribed, raising some $315 million.
The current year’s results are expected to reflect approximately 60% revenue growth for the year, through
increased sales, recognition of deferred revenue and woodchip and horticultural commodity sales.
Demand for the company’s investment products have exceeded supply this year, with both the plantations project
and cattle project being well oversubscribed. Such a result provides a solid platform for further sales growth in
FY07. Whilst modest profit and EPS growth is likely for the current financial year as a result of increased costs,
human resources and fixed costs are not expected to continue to increase significantly moving forward. It is
expected through growth in sales, revenues and relatively stable fixed costs in FY07, the company is well placed
to achieve solid earnings growth next year.
The company expects to release its preliminary financial results, including final dividend information, for the year
ended 30 June 2006 in August 2006.

 

[Jackob]

I think Analyst was talking about Brickworks, who own Austral Bricks + other tile and paver and timber companies...

* Analyst advised me via a private message that the "Austral" he was talk about was "Australald" (ALZ). ALZ had restated their 2004 profit under AIFRS by writing down about 15% of it and only a big profit jump in 2005 saved it from a price drop.

** MIR bought GTP shares between Jan-Jul this year at an average price of $3.879 per share - a loss of 12.1% at today's price of $3.41. I can't say I am not surprised at it.

*** GTP last year's sale jumped 50%, whereas e/s increased, as a matter of fact, a mere 4%.

 

[Julia]

* Analyst advised me via a private message that the "Austral" he was talk about was "Australald" (ALZ). ALZ had restated their 2004 profit under AIFRS by writing down about 15% of it and only a big profit jump in 2005 saved it from a price drop.

** MIR bought GTP shares between Jan-Jul this year at an average price of $3.879 per share - a loss of 12.1% at today's price of $3.41. I can't say I am not surprised at it.

*** GTP last year's sale jumped 50%, whereas e/s increased, as a matter of fact, a mere 4%.

Just for the record, ALZ is Australand - property developer.

Julia

 

[Jackob]

At present GTP price of $3.35, MIR's 15m shares has lost about $8m in value.

Would any one give me a clue of the MIR fund size? If the fund size is too small, MIR could sink just because this trade.

 

[abucs]

Look it up yourself, it's not hard.

People are getting shaken out of their positions atm, while the funds increase their holdings.

These fund managers like Macquarie are competitors, not independant watchdogs.

Do not Macquarie underwrite the GTP dividend re-investment program ?

A stock that will be unsinkable and extremely profitable in 4-5 years can be played with by Macquarie in the short term to make money on the dips that they create.

It's not rocket science.

 

[Jackob]

Look it up yourself, it's not hard.

People are getting shaken out of their positions atm, while the funds increase their holdings.

These fund managers like Macquarie are competitors, not independant watchdogs.

Do not Macquarie underwrite the GTP dividend re-investment program ?

A stock that will be unsinkable and extremely profitable in 4-5 years can be played with by Macquarie in the short term to make money on the dips that they create.

It's not rocket science.

Hi Abucs,

I rang MIR office this afternoon and was told that the 15m GTP shares were bought by "MIR Australian Emerging Opportunities Fund", which manages $68m fund in the mid of last month. Not something they were very happy to talk about more ... ($8m gone, ouch!)

"Do not Macquarie underwrite the GTP dividend re-investment program ?"

Do you mean that Macquarie does underwrite the GTP dividend re-investment program at present (in 2006 or 2005)?

 

[abucs]

$8m is not gone.

I haven't read anything to say Macquarie won't continue to underwrite dividends in 2006.

 

[TheAnalyst]

Hi everyone

Sorry about the slow response.....read ALZ interim financial report...Jan 2006 roughly thats where the new IFRS's were first used for reporting entities and thats where it is explained about the revaluations and the distortion effects it has in profit and loss.

As for the market dont expect any great jumps for a few months or maybe even to the end of the year...likely a sideways market especially with the conclusions in regards to the economic indicators overseas and here in Australia.....and the RBA ready to put its foot on the economic break..."interest rate increases"....

 

[Nicks]

The stock has (unfairly imo) copped a fair bit of bad press lately. Is this some of the reason for the share prce fall lately. Tall Poppy syndrome if you ask me. Stock is a good return at these prices. Around last year at this time the stock was travelling around the same, then as started to take off toward $4.

 

[Out Too Soon]

I like Great Southern. There was a time when I hated it because I was looking at a large loss, I held on until it was a nice profit tho', got "out too soon" as always, now I'm watching ready to get on again. The question is how low can the knockers drive it. Must be patient with this stock, it rewards.

 

[Jackob]

Not quite. Around this time last year GTP was actually on a steep down slope, price dropping from a high of $4.49 on 20/6/2005 to a double low of ~$2.66 on 1/9/05 and 7/10/05. If the same scenario repeated this year, GTP would reach a low of ~$2.20 in the next a few months.

 

[Jackob]

The following is an abstract of an article in the AFR (Coppied from ComSec).

Reform loggerheads
Date: 14/7/2006
Author: Fiona Buffini; Narelle Hooper
Source: The Australian Financial Review --- Page: 30

Government proposals to curb tax deductions for forestry investment schemes have drawn criticism from a number of sources. While some critics of the plans claim that they do not go far enough, forestry groups including Gunns, Great Southern Plantations and Timbercorp claim that the plans will drive investment out of Australia's rural areas. Under the proposals, forestry deductions would be capped at $A6,500 a hectare per year, deductibility will be conditional on best-practice land use and investors will be prevented from claiming goods and services tax credits

Any comments?

 

[TheAnalyst]

I have come to realise that the goverment will surely curb tax cuts as the large purchase of rural land for these investment purposes continuing at this present rate is having a negative affect as the next step will be to buy even small farms and will lead to a demise and diminishment of country and rural towns.

 

[abucs]

Won't this just mean agribusiness companies will now charge $6,500 a hectare and plant less trees on each hectare ?

Great Southern are approaching 300,000 hectares of timber land that they own/control themselves anyway. In capping the sales at 31,000 - 35,000 hectares p.a. they won't be looking to buy too much more timber land.

Although putting the cashflow off into the future, Great Southerns past plan of owning their land puts them in a much stronger position against competitors who have to continually make lease arrangements with farmers.

TheAnalyst, i think you make a fair point about the survival of small farms. It would be good to protect this way of life. It seems globalisation and the need to become bigger and more efficient is continually putting increasing amounts of pressure on that way of life all over the world.

 

[TheAnalyst]

I think it is a little more than just that abucs. I think it has a lot to do with rural towns and cities of any size remaining economically viable as in the best interest for Australia and this means also financially as this is the most important issue to the government otherwise the government would not have the slightest interest in minimising the amount of tax deductability.