03/07/2007 - 22:00

Mixed results for MIS

03/07/2007 - 22:00


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In a difficult 12 months for agricultural managed investment schemes, project managers have posted mixed results for the 2006-07 sales year.

Mixed results for MIS

In a difficult 12 months for agricultural managed investment schemes, project managers have posted mixed results for the 2006-07 sales year.

Impending changes to the tax treatment of non-forestry MIS, changes to superannuation, and the drought all worked against the industry, with total sales expected to fall short of the forecast $1.3 billion to $1.5 billion mark.

The industry’s biggest player, Great Southern Ltd, registered a 9 per cent drop in sales for the financial year.

This was despite both its cattle project and wine grape projects closing early and oversubscribed, and a 30 per cent increase in non-forestry project sales.

Fellow industry heavyweight, TimberCorp Ltd, also posted a drop in sales from the previous year, down 20 per cent to $132.8 million.

But managers of smaller, boutique investments have experienced strong results.

Subiaco-based Arafura Pearls Ltd, which operates a pearl oyster hatchery and farm in the Northern Territory, boasted a 220 per cent increase in sales revenues, up from $4.6 million in 2006 to $10.5 million in 2007.

Similarly, Australian Agricultural Contracts Ltd’s grain co-production contract more than doubled its sales for the year, achieving $21.5 million in new sales.

Sandalwood producer TFS Corporation Ltd also upped its sales revenue, to $33 million this year, from just less than $20 million for the 2005-06 financial year.

Diversified boutique agriculture project manager Rewards Group sold out its four projects, raising $60 million in new sales, up 10 per cent on last year.

Rewards Group director John Kenny said a number of negative factors had a mild effect on sales, with the changes to superannuation playing a key role.

“We’re delighted we did $60 million and that we’re up 10 per cent on last year, but it was probably harder than we thought it would be,” Mr Kenny told WA Business News.

He said that, despite these negative factors, the outlook for Rewards Group remained positive, with the company adding a fifth viticulture project in 2008.

AACL director Robert Melville said while sales had increased this year, the uncertainty surrounding the tax changes still hung over the industry and would remain an issue for the non-forestry sector.

Great Southern Ltd’s David Ikin said even though sales were down on 2006, the result was still the second highest in the company’s history.

Mr Ikin said this year’s shocks would not be ongoing factors for the industry.

Great Southern’s acquisition of agricultural funds manager Rural Funds Management Ltd, announced this week, will provide a mainstream investment vehicle for the company’s non-forestry projects.

The acquisition will provide the base for a new Rural Opportunities Fund, to be launched by Great Southern in the coming months.

“It’s a strategically important acquisition. It gives us a vehicle to utilise a non-MIS, non-tax effective structure to grow those agricultural products,” he said.


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