The FY09 result was weaker than Citi expected and was driven by...

The FY09 result was weaker than Citi expected and was driven by significantly lower MIS sales, weaker Japanese demand for woodchips and a softer domestic construction market.

The balance sheet was also short $100m due to the acquisition of ITC Timber from Elders, but this is a positive in Citi's view. The purchase will be funded through a $145m entitlement offer, notes the broker.

FY10-11 EPS forecasts are cut by 34% and 31% to reflect the dilution from the capital raising and due to the subdued outlook in both forestry products and MIS markets. But otherwise, the Hold rating is maintained and the target price rises 4c to $1.05 due to debt reduction over the year. Sector: Materials.

Target price is $1.05.Current Price is $1.15. Difference: ($0.10) - (brackets indicate current price is over target). If GNS meets the Citi target it will return approximately -9% (excluding dividends, fees and charges - negative figures indicate an expected loss).