MIS revenue may drop 25pc

Revenue from sales of managed investment schemes this year is expected to be almost 25 per cent lower than in 2007.

This year's MIS offering was characterised by a limited number of new managers or projects among the 65 or so projects on offer, with the legislative uncertainty surrounding non-forestry MIS limiting the incentive for new entrants.

Managing director of MIS research group Adviser Edge, Shane Kelly, said sales should total about $900 million plus in 2008, well below the $1.25 billion received in 2007.

He believes the reductions will be shared by both the forestry and non-forestry segments.

"Our expectations are that sales will fall well below last year," Mr Kelly said.

While forestry projects are open until June 30, most horticulture and other non-forestry projects have already closed.

The country's biggest player, West Perth-based Great Southern Ltd, will post its 2008 sales results in the first week of July and expects its results to be consistent with the industry wide softening of sales.

Great Southern announced its new MIS sales to March 31 totalled $15.1 million, compared with $61.4 million in the previous corresponding period. It said the difference was primarily due to the company's decision not to offer a beef cattle project this year.

Timbercorp Ltd has estimated new sales reached $76 million from its horticulture projects for 2008, comprising $40 million from sales of the balance of its 2007 almond project, and $36 million in sales from the 2008 olive project.

The company's 2008 horticulture sales are slightly below 2007 sales at this time last year, at $92 million.

The company said it was tracking for $105 million in horticulture sales, higher than the 2005 result of $77 million but less than last years result of $123 million.

Sales for its plantation forestry project to date are higher than at the same time last year.

Perth-based Arafura Pearls Ltd raised $4.3 million ex-GST for its 2008 Australian south sea pearls MIS project, more than 50 per cent lower than its 2007 raising of $9.8 million.

The company was looking to raise $13 million this year, but chief executive Andrew Hewitt said it was hit by difficult market conditions and the lack of certainty surrounding non-forestry MIS.

But amidst the losses, there were some gains.

Australian Agricultural Contracts Ltd managing director Andrew McBain said the company would raise $40 million in new sales of its grain co-production project in 2008, almost doubling its 2007 raising of $21.5 million.

Rewards Group Ltd also managed to raise $14.9 million for its 2008 berry project, up from $10 million the year before. The project was one of four offered in 2008, in addition to tropical fruits, teak and sandalwood projects.

Recent changes in the tax treatment of forestry carbon sink developments are expected to drive further investment in these types of projects.