Plantation director critical over van Eyck report
Great Southern Plantations managing director John Young has fired a broadside at researchers van Eyk Capital, claiming the group had partly been responsible for the recent slump in Great Southern’s share price.
Great Southern Plantations managing director John Young has fired a broadside at researchers van Eyk Capital, claiming the group had partly been responsible for the recent slump in Great Southern’s share price.
Young told wire service AAP a negative report on the blue gum plantations industry by van Eyk Capital, combined with the slump in technology stocks had been the primary contributing factors in the share price decline from $4.80 in late March to $2.18 yesterday.
"We're part of the small capitalisation market and there is a move away from that as a result of the nervousness of the industry due to hi-tech stocks and we have suffered accordingly," he said.
In addition he said a research report in April by van Eyk Capital on rural tax shelter investments had been particularly damaging.
After looking through 73 prospectuses and judging them on their pre-tax merits against other in-vestments, van Eyk recommended just five as acceptable investments. Of the 15 blue gum proj-ects he studied, only two met his criteria, those marketed being by Integrated Tree Cropping and Australian Plantation Timber.
Young said the van Eyk report had had a damaging effect on the whole plantation industry.
"He has certainly caused some our competitors share price and our own to drop because he is prepared to say negative things about the industry and people are prepared to listen I suppose,” he told AAP.
"But I think our investors are a bit more sophisticated than to pick up the paper and read what he has to say without asking the question, what is behind it."
Despite the negative publicity, Great Southern says it has exceeded its revenue forecast by al-most $20 million for the current financial year.
Great Southern raised $76.5 million as part of its Great Southern Blue Gum Plantations 2000 project, 34.9 per cent more than originally forecast. It also beat last year's revenues of $50.4 mil-lion by more than 35 per cent.
Young says the result reflects continuing strong demand for Great Southern's product.
"The fact that all new and proposed tax changes have been addressed places it in a very secure position moving forward and should result in continued growth in the ensuing year," he said.
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