Eucalypts lead agribusiness to $1bn year
Sales for agribusiness schemes have broken through the $1 billion barrier for the 2005 financial year with eucalypts contributing most, research house Adviser Edge has reported.
Total agribusiness raisings for the year were $1.03 billion, which is the first time the sector has broken the $1 billion barrier since 1999.
The winners were eucalypt schemes which took almost 60 per cent of the funds raised, with pine tree plantations taking 6 per cent market share, Adviser Edge managing director Shane Kelly said.
“Inflows into timber projects will see abut 105,000 hectares of trees planted in the next 12 months,” he added.
“This is the third consecutive year of growth for the agribusiness sector.”
The top funds manager was Great Southern Plantations for the second year in a row, although its sales of $365 million fell below market expectations, Kelly said. The manager has a market share of about 35 per cent in the sector.
“The top five companies, Great Southern, Timbercorp, ITC, Macquarie and Forestry Enterprises accounted for $754 million in sales which is 73 per cent of the total market,” he said.
“This indicates just how hard it is likely to be for any new entrants attracted by the market’s strong growth.”
Another factor in the strong sales growth of these companies is the relationship between the fund managers’ business development managers and sales, Kelly said.
“There appears to be a strong and positive correlation between the number of business development managers and sales,” he said.
Other segments of agribusiness that performed well during the year were horticulture schemes (includes citrus fruit, olives and table grapes) which raised $114 million, and almonds with $80 million of sales.
Kelly said the challenge for fund managers this year would be to consolidate on this sales growth and make sure there was an adequate supply of projects for the 2006 financial year.
Recommended for you
Despite the government agreeing to replace SOAs with CARs, the FAAA and SIAA believe greater streamlining of documentation is needed for the change to have a positive impact on advisers.
There are “multiple black swan events” threatening the financial advice industry currently, according to the FAAA’s Phil Anderson, potentially running up the compensation bill for advisers.
Former national business growth manager at AMP Advice has taken a new role at Sequoia Financial Group.
With the ESG label often causing confusion among investors, Nanuk Asset Management has encouraged financial advisers to use more plain, specific language with their clients.
