GTP - Great Southern Plantations

[barnz2k]

CBA ceasing to be a substantial holder!

http://newsstore.smh.com.au/apps/previewDocument.ac?docID=GCA00800171CBA

This cant be good

 

[treefrog]

I'd guess the forecasts have something to do with the slide

recently has dropped below 4yr low and strong LT support/resistance of $1:90

2007 2008 2009 2010
EPS 16.5 18.0 19.9 17.6
DPS 9.6 13.5 12.0 0.0

 

[Jackob]

I found an actual profit warning hidden in its 2007 Annual Report.

"Because of the changes to the timing of revenue recognition arising from the new plantation forestry product profits will be lower next year but should improve the following year as the recognition of the balance of the sales receipts flows through to revenue. Dividends in the coming year will reflect cash availability and future expected profits and will not necessarily reduce with the profit reduction." (page 4, issued 21/12/2007)

This warning is so cunningly hidden in an extremely lengthy sentence that I bet not many people would find it.

Take care.

 

[Nicks]

Yes true, but on the positive side they are hinting that the dividend payout will remain constant, so at the current SP the payout ratio is in fact increased. I no longer hold (sold out at 2.20), just an observation. So it may be attractive to those interested in a decent dividend yield.

 

[treefrog]

this info from comsec site:

FORECAST EARNINGS TREND
Have the analysts been upgrading or downgrading their forecasts over the last 3 months?

 

[Jackob]

Yes true, but on the positive side they are hinting that the dividend payout will remain constant, so at the current SP the payout ratio is in fact increased. I no longer hold (sold out at 2.20), just an observation. So it may be attractive to those interested in a decent dividend yield.

No, what they said about dividend was "Dividends in the coming year ... will not necessarily reduce with the profit reduction.".

I reckon "will not necessarily reduce" should be read as "will likely reduce".

 

[Jackob]

this info from comsec site:

FORECAST EARNINGS TREND
Have the analysts been upgrading or downgrading their forecasts over the last 3 months?

Treefrog,

Thanks for posting the colourful figure on board.

According the present ComSec "consensus forecast", GTP's 2008 earnings and dividend are all higher than last year's. Apparently they haven't take GTP's own predictions into account and they will be certainly downgraded sooner or later.

(But as I said that GTP's profit warning was hidden so deep in its lengthy Report that I bet not many people would find it. Many brokers also might not see it - just wait'n see when they will find out! )

 

[pch]

That statement is funny, its a really long, complicated way of saying "it may go up, it may go down too", which I also notice people do when TA'ing a chart.

No time to really do much here lately Jackob, but the cynic in me sees the High Value Timber project (and its associated oversubscription) as a stroke of MIS genius. 25 years till you and I can argue about ROI and yield!

 

[The Captain]

In my last post I said that Gtp would break the $2 barrier and head towards $1.80. So where to now? Selling pressure seems to be fading away and chart is indicating a EW 4 Sell. So my new target for this stock is around $1.50 before this will have to be re-assesed. The EW is not a great one as it does not conform to correct EW properties, however the chart does seem to suggest a lower price around the $1.50 mark.
Volume has been increasing so we may just see it touch this bottom before a retracement can occur. The market may see that $1.50 is a great buy. The stock recently bounced off the 50 day M.A. and is well below the 200 day. So I am still bearish on this one however a change might be around the corner if it completes the EW 5.

Again these are my own thoughts and you should not take this as a recommendation to buy or sell this stock, you should do your own research. My dog never listens to me, and my wife does the opposite. Oh and thanks to Jackob for ferreting out the bad news for me on this stock in the last annual report. I knew I wouldn't have to read it (LOL) . Cheers and Happy Trading

 

[Jackob]

Hi, The Captain,

Thanks a lot for showing the GTP’s diagram and the next leg of GTP's fall to $1.50.

Regarding GTP’s profit warning, we didn’t have any from GTP last year, but GTP’s earnings per share fell more than half from 41.6c (2006) to 20.7c (2007).

This year we do have a warning from GTP itself now, so I reckon its e/s reduction had to be worse last year, that is, its e/s should fall more than half from ~20c to 10c or even to 5c.

In the light of GTP historically having a p/e ratio around 10x, I would predict GTP’s price would accordingly fall to 50c - $1.00.

 

[barnz2k]

new paperprice agreement up 10%. Dunno how positive this is or what it means, how much they sell etc, but

from here

Great Southern secures new export woodchip price
27-February-08 by Edited announcement

Great Southern Ltd has announced a new price agreement for the sale of hardwood woodchips to Japanese pulp and paper customers for the 2008 calendar year.

The new price of A$207.40 per bone dry tonne (BDT) was agreed for plantation hardwood supplied from the Albany region in Western Australia. This price represents an increase of $18.00 per BDT - almost ten per cent more than last year's price.

 

[pch]

Taken over the lifetime of a project it adds a around 1% per annum (not adjusted for inflation). It's good obviously as it would reduce further 'propping up' thats been discussed before. Whether its enough to mitigate it totally who knows, you'll only know when the next half yearly is released.

But I'm more interested in whether it would result in bluegum projects being close to or oversubscribed given they restructured them to improve thinning margins.

I'd say this year there are a lot of people that are going to crystalise tax losses on property stocks, wheras the last few years there have been fat capital gains. So I'm skeptical whether than can do it..

Still, at least the price increase is over CPI for once!

 

[snabbu]

I found an actual profit warning hidden in its 2007 Annual Report.

"Because of the changes to the timing of revenue recognition arising from the new plantation forestry product profits will be lower next year but should improve the following year as the recognition of the balance of the sales receipts flows through to revenue. Dividends in the coming year will reflect cash availability and future expected profits and will not necessarily reduce with the profit reduction." (page 4, issued 21/12/2007)

This warning is so cunningly hidden in an extremely lengthy sentence that I bet not many people would find it.

Take care.

I don't think they are trying to bury this, Chairman David Grithifs said something to that effect in the first two minutes of his presentation, which was reittererated by the new MD later in the presentation.
The key points are there is to be no cattle MIS this year so sales will reduce.
There is a timing issue between acquisition of land and sales, the sales being in the last three months of the financial year.
The increased cost of funds.
The reduction in company gearing to 43 percent. (refer no cattle MIS)
There is also a statement by the new MD that he intends to impliment some policies designed to improve long term outlooks that will have a detrimental effect on short term performance.
The thing to watch here is the result of a test case with the ATO and what the Rud government does tax wise in regards to MIS. I guess we will have to wait for the budget to see that. What I am hoping is that the short term nervous nellies will sell this down a little more so I can buy lots cheap on the day before budget night then hope like hell for some carbon sequestration tax effective components to be rolled out.

Cheers

Gary

 

[Jackob]

Has fallen as low as $1.52 today and broken through the months-long $1.60 support barrier!

The poor fundamentals just can't support it at the present price level any more.

 

[The Captain]

Yeh, Target in site, there really is a lot of selling pressure on this stock and I was wondering when it would break. Chart was just about on the money so far.

 

[snabbu]

Has fallen as low as $1.52 today and broken through the months-long $1.60 support barrier!

The poor fundamentals just can't support it at the present price level any more.

I am looking at a chart on the ASX for this stock verses other diversified financials. It looks to me as if this stock if following the sector as a whole exactly, rather than having any individual problem of it's own.
So perhaps it is a sector thing.

Cheers

Gary

 

[Out Too Soon]

Maybe it's insider trading or April fools day but GTP has leapt to $1.70 today on seemingly no news. Should I ditch what I hold now or wait for an announcement that may shed light.

 

[Out Too Soon]

This should be todays GTP chart, bear with me & I'll add 100 characters (who said a picture is worth a thousand words, Joe?)

 

[Jackob]

It looks not like a short journey at all since you said in your post on 7th-November-2007,

"Nice little break out yesty but the buying volume looks quite thin today.
Now they have a 50% interest in a wood chipping mill I feel I no longer want to be associated with them.
Have to wait for a real up trend to dump them though. Guess patience is the word."

On that day you wrote the above, the GTP price was ~$2.28. It dropped to as low as $1.36 last week and suddenly came back to $1.74 at today's close.

I reckon the moment you have been waiting "for a real up trend to dump them" has finally come, if you are still holding them.

I don't think this "up trend" would last long, as GTP has just announced today that its 1H sales dropped from $150m last year to $51m now.

 

[Nicks]

Hi Jackob,

I am just wondering what your position is on GTP? eg. short? CFD?

Fortunately I sold out at 2.19 or something last year, but come back every now and then to see whos still following it.