16/07/2008 - 15:30

Agri MIS capital raised down 5% in FY08

16/07/2008 - 15:30

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Total capital raised in the agribusiness managed investment scheme industry over the 2008 financial year has dipped 5 per cent, with the wine grape category suffering the biggest fall.

Total capital raised in the agribusiness managed investment scheme industry over the 2008 financial year has dipped 5 per cent, with the wine grape category suffering the biggest fall.

In the Australian Agribusiness Group's latest MIS annual report on capital raising, to be released tomorrow, total funds raised over the year were $1.0.79 billion, down from $1.139 billion from fiscal 2007.

Overall capital raised for timber projects increased by more than 5 per cent, horticultural funds were up by 4 per cent but funds raised in the wine grape category were down by 46 per cent.

"We think the Agri MIS industry has stood up pretty well considering the global turmoil affecting investments and the lack of certainty surrounding tax rulings," AAG research director Tim Lee said.

"A decrease in funds of only 5 per cent is a very good result and MIS is proving to be pretty robust when compared to general equities markets which have taken a real hammering."

Highlights from the AAG report include:

* There were 57 agribusiness offerings open for investment in 2007/08. This compares to 67 in 2006/07.

* Similar to last year timber received 65% of total MIS funds ($705 million).

* Horticulture increased by 4% to $246 million but wine grapes decreased by 46% to $42 million.

* There were 24,500 individual investors who participated in MIS projects in 2007/08, 5% less than last year.

* 73% of investments were geared in 2007/08 down from 77% in the previous year.

* Victoria will receive the largest quantum of funds raised while Western Australia will see the largest area of new project development.

* When allocated per head of population, investment will be the highest in Tasmania at $383 per person, followed by the Northern Territory at $230. Victoria and New South Wales were the lowest at $46 and $27 per person respectively.

* The companies involved in the MIS industry employ more than 2,300 persons directly and a further 3,100 on a contract basis

* ASX listed project managers raised the vast majority of the capital at $916 m (85%)

* Only 25% of projects achieved funds raised equal to or in excess of their stated target figure for the year

AAG's Managing Director Marcus Elgin noted "this is the first decrease in funds raised since we started the survey in 2002. Factors like interest rates which impact on gearing levels, a lack of water and the way the test case for non-timber MIS has dragged on certainly wouldn't make the job of raising capital any easier, so I reckon it's an
outstanding result."

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