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Investment research houses van Eyk and Adviser Edge have dropped their endorsement for the Willmott Forests Premium Forestry Blend – 2010 Project following the company’s announcements to the Australian Securities Exchange (ASX) that it had entered a trading halt.
Van Eyk’s head of research, John O’Brien, said the company reported lower than expected earnings for the financial year 2009-10 immediately after closing the project.
“This is very unusual because prior to 30 June Willmott had communicated via [the] ASX that the financial situation of the company [was] expected to be stable,” O’Brien said.
“There is a big question mark around the financial situation of the company so soon after the project had been closed,” he added. O’Brien said this was one of the reasons why van Eyk had dropped the endorsement.
He also said Willmott Forests should refund the money to investors or “hold the investment fund’s suspension until they gain clarification on their future situation, in case the money had not yet been invested”.
David Gleeson from van Eyk said this case is unique and only re-emphasised Adviser Edge’s belief that the viability of the responsible entity is critical to the success of projects.
“This is a locked up process and will be for a very long time. Business [models are] something investors need to be aware of very early on,” Gleeson said.
Willmott Forests last month revealed to the ASX that the sales received for the Willmott Forests Premium Forestry Blend – 2010 Project were $19.65 million, “significantly lower than the expectations and materially lower than financial year 2009.”
