Shane Kelly
Despite predictions of poor sales, agribusiness managed investments schemes (MISs) have attracted about $1.135 billion of sales for the 2008 financial year.
According to research house Adviser Edge, this was just 10 per cent lower than last year, which saw $1.26 billion of sales during the financial year.
The forestry sector of the MIS industry raised an estimated $719 million, which accounted for 63 per cent of the total market.
Adviser Edge managing director Shane Kelly said timber sales had been static for the past three years although market share between forestry companies changed this year.
“There has been a significant redistribution of market power (in forestry) with Forest Enterprises, Willmotts and Tropical Forestry Services accounting for 37 per cent of timber sales, up from just 17 per cent in 2007,” he said.
“They have broken the stranglehold that Great Southern and to a lesser extent Timbercorp and Gunns have had on the forestry market.”
Non-forestry scheme sales were estimated at $416 million for the year despite losing the managed investment scheme tax status this financial year.
Kelly said the 37 per cent market share of non-forestry sales was commendable as the sector faced a number of challenges in 2008.
“The supply of non-forestry schemes was affected by the drought and the difficulty of smaller managers accessing finance for investor gearing,” he said.
“Another problem was people weren’t seeking tax reductions, with little capital gains being generated by share markets.”
Adviser Edge reported Timbercorp, Australian Agricultural Contracts, Australian Bight Abalone and Food and Beverages Australia achieved strong sales.
Kelly said commissions paid to advisers were still a problem, with smaller managers unable to match those paid by larger players.
“It is disappointing that commissions still affect the outcome of sales,” he said.
“Smaller players which can’t afford the large commissions miss out.”
Kelly said the year ahead for the agribusiness scheme industry was uncertain, with the Australian Taxation Office (ATO) test case due to be heard in August.
“The timber managers are well placed, with an increased focus on high value timber species expected during the next 12 months,” he said.
“For non-forestry managers, there is a forced wait to see the outcome of the ATO test case.
“This is not ideal for the market, so the sooner a result is achieved the better it will be for all involved in the sector.”
