Taking on Timbercorp today
February 2, 2010
Dear Mayne Report subscribers,
The Timbercorp AGM in Melbourne at The Sofitel this morning should be a lively affair and I've got a long list of questions for the board.
The company trumpets itself as Australia's biggest exponent of managed investment schemes and an emerging giant of the agribusiness and horticultural industries. Investors have ploughed $1.3 billion into Timbercorp's tax-effective schemes over the years.
Indeed, farmers mounted a major campaign against MIS schemes last year because the likes of Timbercorp kept out-bidding them for large farms and water rights. The company produces 80% of our garlic, 40% of our tomatoes from glass houses, 50% of our almonds, 15% of our olive oil, 25% of our avocados and the list goes on and on.
The 2006-07 net profit was a seemingly impressive $65.7 million but the stock has recently fallen out of bed. Anyone who paid $4 in July 2006 would be most unimpressed with yesterday's close of $1.02 after another 5% plunge.
Indeed, institutions such as Paul Moore's PM Capital, which ponied up $56 million in a placement at $1.525 a share just a few months back, have already lost one-third of their capital.
With hedge funds shorting companies whose executives have geared shareholdings, it will be a fair question to ask co-fouonder and chief executive Robert Hance exactly how much debt he has supporting his 52 million Timbercorp shares and whether we're now getting near margin call territory.
Chairman Kevin Hayes, the former CEO of Cadbury Schweppes in Australia, is a former VRC committeeman and another director is real estate man turned almond plantation investor Rod Fitzroy - the immediate past president of the VRC.
With concern about rising debt levels and the huge sums previously paid buying up land, it will be interesting to ask exactly how much the shareholders put into what press reports have described as the "$400,000 Timbercorp Australia Stakes" - the prestigious Group One race at Moonee Valley on Saturday.
We'll have a full report for subscribers this afternoon.
Finally, go here if you missed yesterday's special edition on foreign ownership.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
The Timbercorp AGM in Melbourne at The Sofitel this morning should be a lively affair and I've got a long list of questions for the board.
The company trumpets itself as Australia's biggest exponent of managed investment schemes and an emerging giant of the agribusiness and horticultural industries. Investors have ploughed $1.3 billion into Timbercorp's tax-effective schemes over the years.
Indeed, farmers mounted a major campaign against MIS schemes last year because the likes of Timbercorp kept out-bidding them for large farms and water rights. The company produces 80% of our garlic, 40% of our tomatoes from glass houses, 50% of our almonds, 15% of our olive oil, 25% of our avocados and the list goes on and on.
The 2006-07 net profit was a seemingly impressive $65.7 million but the stock has recently fallen out of bed. Anyone who paid $4 in July 2006 would be most unimpressed with yesterday's close of $1.02 after another 5% plunge.
Indeed, institutions such as Paul Moore's PM Capital, which ponied up $56 million in a placement at $1.525 a share just a few months back, have already lost one-third of their capital.
With hedge funds shorting companies whose executives have geared shareholdings, it will be a fair question to ask co-fouonder and chief executive Robert Hance exactly how much debt he has supporting his 52 million Timbercorp shares and whether we're now getting near margin call territory.
Chairman Kevin Hayes, the former CEO of Cadbury Schweppes in Australia, is a former VRC committeeman and another director is real estate man turned almond plantation investor Rod Fitzroy - the immediate past president of the VRC.
With concern about rising debt levels and the huge sums previously paid buying up land, it will be interesting to ask exactly how much the shareholders put into what press reports have described as the "$400,000 Timbercorp Australia Stakes" - the prestigious Group One race at Moonee Valley on Saturday.
We'll have a full report for subscribers this afternoon.
Finally, go here if you missed yesterday's special edition on foreign ownership.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.