Autopsy reveals $352m Gt Southern loss

Former agribusiness heavyweight Great Southern was losing hundreds of millions of dollars in the months leading up to its collapse as it continued to raise money from investors.

An autopsy of the failed company - conducted by administrator Ferrier Hodgson - has revealed Great Southern recorded a $352.1 million after tax loss in the seven and a half months before being placed in administration.

This followed a $64.5 million loss in the preceding 12 month period.

The administrator attributed the dire financial position to a 79 per cent fall in annual managed investment scheme sales from its peak in 2006, caused by a range of regulatory and economic factors.

Great Southern also unwittingly coincided a move to take on increasing levels of debt with the credit crunch. Its net debt to equity ratio had escalated from 60 per cent in 2007 to 134 per cent at the time of its collapse.

Roughly 43,000 investors and 12,000 shareholders were left reeling from the demise of the one-time agribusiness heavyweight.

Trees were never planted for investors who deposited money into the most recent schemes.

While Great Southern had a range of assets including everything from cattle to almonds, most investors were exposed to its flagship timber plantations.

Ferrier Hodgson noted that commissions, marketing and promotional costs eroded margins.

"These costs have averaged between 18 per cent to 20 per cent of the MIS sales raised over this time, effectively representing an average cost of 20 cents in every $1 raised from MIS sales activity," the administrator said.

"These expenses impacted the margins retained within the business and funding required each year to generate MIS sales activity."

Great Southern is one of several agribusiness MIS providers to have collapsed in recent years, which includes Palandri Wine Group and former rival Timbercorp.

MIS providers receive the bulk of their inflows in the months leading up to June 30 as investors seek to reduce their tax bills by investing in the tax-effective schemes.

A government inquiry is reviewing the MIS sector.