sales update

Sales update out today. Seems pretty much as expected.

"Great Southern Limited (ASX code: GTP) advises that sales of its MIS projects for the period ended 30 June 2008 have totalled approximately $315 million. This represents a decrease in total sales from last year of approximately 24%. However, when comparing 2008 with 2007 sales on a like for like basis (i.e. excluding the 2007 Beef Cattle project which was not offered this year), sales for 2008 have reduced by 6%.

Commenting on the sales result, CEO Cameron Rhodes said: “Obviously lower sales are disappointing.
The result was driven by a number of adverse factors, particularly general market conditions and investor confidence, uncertainty regarding MIS generally and delays in finalising the company’s pulpwood plantation project. Based on recent industry estimates of total agribusiness MIS sales this year of around $900 million, Great Southern has maintained its position as market leader and expects its market share to be relatively consistent with prior years at greater than 30%. “Significantly, sales of the company’s high value timber project increased approximately 40% from last year to $84 million. Relative to the company’s other products, this project delivers higher returns to the company, as well as having reduced capital expenditure requirements, and is expected to represent an increasing proportion of future sales. Whilst sales of the company’s Future Forestry Investment were lower than expected, the lower sales will mean that the majority of the land requirements for the project are expected to be met through the company’s second rotation land and external leases, significantly reducing the company’s capital expenditure requirements in respect of the project over the next 12 months.

“As usual, our pre-existing securitisation arrangements mean that the majority of the 2008 MIS sales provide almost immediate cash to be used within the group. Nevertheless, with the lower MIS sales this year and the ongoing regulatory uncertainty over non forestry projects, we have commenced reviewing our operating cost structures and we will now implement plans to reduce our operational costs."

And GTP continues to get cheaper, now at almost a 1/4 of book value. Bought some more at 60c.