Great Southern to reduce reliance on MIS sales

Market uncertainty hurts sales

By Kate Kachor
Wed 02 Jul 2008

Market uncertainty and lacklustre investor confidence hurts MIS sales.

Agribusiness firm Great Southern is working to reduce its reliance on annual managed investment scheme (MIS) sales as part of a strategic review of its business operations.

"The company is well advanced in revising the company's business model with a focus on the company's core competencies of both forestry and financial services, whilst at the same time seeking to reduce the company's reliance on annual MIS product sales," a company statement to the Australian Securities Exchange said.

"The company expects to finalise its review and to announce key findings within six weeks."

News of Great Southern's progress in its strategic review comes as the firm's MIS sales suffered.

For the period ended 30 June 2008 they totalled about $315 million. This represents a decrease in total sales from last year of about 24 per cent, or a six per cent decline on a like-for-like basis.

"As usually, our pre-existing securitation arrangements mean that the majority of the 2008 MIS sales provide almost immediate cash to be used within the group," Great Southern chief executive Cameron Rhodes said.

"Nevertheless, with the lower MIS sales this year and the ongoing regulatory uncertainty over non forestry projects, we have commenced reviewing our operating cost structures and we will now implement plans to reduce our operational costs," he said.

Fellow agribusiness firm Timbercorp also experienced a decrease in new MIS sales.

New sales revenue for the nine months to 30 June of about $128 million was down from $145 million for the full year in 2007.

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