Tasmanian Times


FEA suspended … ’til after the poll

FEA suspension extended until just after election, ie until 22 March.

See http://www.asx.com.au/asx/statistics/announcements.do?by=asxCode&asxCode=FEA&timeframe=D&period=W ASX announcements 5 March and 3 March.

Since Gunns are a substantial shareholder in FEA, I suppose pre-election announcement of Govt assistance would be controversial.

http://www.themercury.com.au/article/2010/03/05/131731_tasmania-news.html also reports: “…

Meanwhile, there has been heavier than usual trading in the shares of Gunns Limited shares today.

By 11am more than 10 million shares had changed hands compared with a daily average of over the past week of 4.9 million.

The share price is up by nearly 2 per cent to 57 cents.

The market capitalisation of Gunns Limited has dropped to $366 million since announcing a 98 per cent drop in half year profit last week.”

This morning’s heavy trading appears due almost entirely to one very substantial trade.

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  1. Gerry Mander

    March 5, 2010 at 5:14 pm

    #4. Clearly Gunns’ profit crash is a textbook case, but it wasn’t alone.

    The degree of incompetence shown by Gunns is mind-boggling. In their declared statement in answer to the ASX 3.1 query they stated that they were unaware of their half year decrease in profits of 98.7% before the figures were released by their accountant, on Sunday, 21st February, the day before the market was informed.

    However, despite only finding out about this news on a Sunday, by Monday morning they had already come up with a fairly detailed plan to split the company into three different entities. Fantastic piece of work in such a short time span! The board must have burnt a great deal of midnight oil!

    And then there is the little matter of John Gay selling off $3 million of personal shares just a month prior to the announcement. At the time, as Chairman of the company, I suppose he was ignorant of the decline in profits and sought no advice from his accountants as to whether they expected the share price to rise or fall in the near future?

    Whatever the real story is, I doubt whether we shall get to know, but the company has received a caning from the investors. Nonetheless, the remarkable thing is, that with this display of utter incompetence and a total lack of financial awareness, they are STILL asking investors to come up with $2.5 billion for a pulp mill!


  2. Securities Watch

    March 5, 2010 at 4:26 am

    Disclosure regulations are being ignored: Australian regulations
    Andrew Main From: The Australian March 06, 2010

    AUSTRALIAN regulators have been looking closely, and uneasily, at a rash of companies dishing up bad news in apparent defiance of the continuous disclosure rules.

    “The system’s pretty good but there are a few companies that don’t seem to be getting it,” said Martin Lawrence, senior analyst at Melbourne-based governance consultancy RiskMetrics.

    He said that herbicide producer Nufarm had had two “aware letters” sent out by the ASX in the last year. “That must be some sort of record,” he said.

    Aware letters, also nicknamed Pauline Hansons because they’re saying “please explain”, are not the same as the price queries that are often called speeding tickets. Experts say they are more fundamental, effectively asking if the company knows how the continuous disclosure regime actually works.

    The ASX has sent out four in the last fortnight. The first went to timber group Gunns on February 24, two days after the company’s share price had dropped by 22 per cent from 88c to 68.5c thanks to a 98 per cent drop in interim profit to $400,000.

    The company blamed a downturn in Asian markets for its woodchips and a rising Australian dollar, both of which had been happening for months.

    Australia’s continuous disclosure system, which has been compared favourably by international investors to the US quarterly reporting system, obliges listed companies to “immediately” declare any material information that has not yet been released to the sharemarket .

    An ASX note clarifying the relevant Listing Rule 3.1 says that a change in likely reported earnings “in excess of 10 per cent to 15 per cent”, up or down, from analysts’ consensus forecasts is material and must be reported as soon as the company becomes aware of it.

    Clearly Gunns’ profit crash is a textbook case, but it wasn’t alone.


  3. William Boeder

    March 5, 2010 at 1:24 am

    Information to hand says that Gunns Ltd have sailed quite close to the edge in the manner of the content in a number of its compulsory disclosures.
    Were I a betting man, I would never have lost a cent, simply through my none and never will be purchase of any Gunns Ltd shares.
    The days of the ‘rivers of money’ MIS income activities that fed their bottom line, have drawn to a bare trickle or even a complete and abrupt halt.

    Never could the years of rape and pillage to our forests be condoned or to last forever.
    How this company could have continued in its rapaciousness and its freedom from proper scrutiny activity, is known only by its executives and directors along with this State Labor government.

  4. Cathran

    March 4, 2010 at 10:16 pm

    About 9.5 million shares changed hands before the exchange officially opened, 9.35am if I remember rightly. This was a single XTOS trade (cross trade over seas.

  5. strange

    March 4, 2010 at 8:30 pm

    Gunns closed the day on 62.5c a strong rebound of over 11% today. Doomsayers have not had much effect on the share price and a large number of forward ‘buy’s show the stock is likely to strengthen in the coming week.
    May do a lot better if Gunns drops the pulp mill and gets on with restructuring the company.
    Don’t underestimate Gunns taking a greater position in FEA (subject to approval)


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