Agribusiness Elders Forestry has indicated its managed investment scheme (MIS) sales will come in below expectations, as the company was unable to reach an agreement with Rural Bank about the provision of bank finance to investors.
Elders Forestry said it will continue to offer limited, internally-funded finance to a select number of investors.
"Marketing of the 2010 product offering is continuing, albeit now with significantly lower sales expectations," the company said.
Elders Forestry indicated that it could fund grower finance of up to $15 million in total to investors who meet certain criteria.
"Market indications are that this may well be sufficient for what now appears to be reduced demand levels," the company said.
Although the final sales figure will not be known until the end of the year, the failed negotiations and lower demand could affect the company's profitability.
If MIS sales come in at $15 million, the company said it could still achieve its previous forecast for earnings before interest and tax (EBIT) of $3.1 million.
But if no sales are made then Elders Forestry will suffer an EBIT loss of $2 million.
"While a nil result is not expected, market indications are now that the MIS result may finish at the lower end of the sales range," the company said.
