If we looked at small to medium cap companies listed on ASX,...

If we looked at small to medium cap companies listed on ASX, most of them might be in danger of going concern issues(KZL, LGL, SBM, CEU, PPX and so on). However TIM serves agriculture business, which is important for the Australian economy. So there is no reason for spreading the rumour TIM won't survive. Here are the facts:

General Information
Company Name: Timbercorp Limited
Stock Code: TIM
Website: www.timbercorp.com.au
Market Cap ($M): 43
Equiv. Shares (M): 389

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 0.105 $ 0.110 $ 0.110 $ 0.105 $ 0.110 1,220,423 $ -0.005 -4.545 %

Current Broker Consensus Recommendation
Recommendation : Hold
Recommendation Date : 13th Mar 2009
12 Month Target Price (average) : $0.29
Brokers Surveyed : 4

Market Statistics
% of Market: 0.0000
% of Sector: 0.0103
Sector: Materials
Industry Group: Materials
Industry: Paper & Forest Products


Company Overview
Timbercorp is an agricultural investment manager. It pools the money of many investors, uses it to establish large-scale, agricultural-based investment schemes, which it then manages on behalf of those investors. The future of this side of the business is in question following the ATO taking a tough position against non-forestry MIS tax deductibility. More recently, the company has started to move into downstream processing of fruits and vegetables.

Company History
Timbercorp was established in 1987. It was incorporated in 1992, by which time it had begun managing forestry plantations in Victoria and Western Australia. TIM achieved an ASX listing in 1996. In 1997 TIM formed a joint venture with leading forestry contractor Silvacorp and the following year, acquired its partner to form what is now Timbercorp Treefarms. From 1999 onward the company has moved towards horticultural investments in an attempt to diversify its earnings.

Differentiating Factor
Building on its strong position in the forestry sector, TIM has now gained a significant presence in the horticultural MIS market which it can now turn into an annuity syle business. Existing horticultural schemes will deliver TIM a recurring revenue stream consisting of rents and annual management fees.

Major Customers & Competitors
TIM’s major customers for forestry MIS will continue to be sophisticated retail investors and professionals who favour its tax-effective investment products. Competition will come from any company that offers timber plantation products to the Australian market. The fiercest competition is likely to come from the other large listed players, including ITC (a subsidiary of Futuris), Gunns and GTP.


Financial Summary
Year to Sep
NPAT
Rep $M NPAT1
Adj $M EPS
c EPS chg
% PER
x PER rel
All Ords x PER rel
Sector x DPS
c Yield
% Franking
% ROE
%
2006A 79.6 78.7 25.3 20.4 0.4 0.0 0.0 9.5 90.5 100 19.1
2007A 65.7 76.5 22.6 -10.7 0.5 0.0 0.0 7.0 66.7 100 14.4
2008A 44.6 55.6 14.6 -35.2 0.7 0.1 0.1 1.5 14.3 100 8.0

1NPAT is normalised by removing non-recurring items and goodwill. All the above statistics are derived from normalised earnings.


Peer Comparison
P/E (x) EPS Change (%) Dividend Yield (%)
Company Code Last Price Mkt Cap 07A 08F 07A 08F 07A 08F
Gunns Limited GNS $0.90 $573M 5.8986 8.0722 -23.7567 -26.9268 11.1111 5.5556
Great Southern GTP $0.14 $97M 1.5183 2.5593 -72.8387 -40.6744 21.4286 0.0000
Gunns FORESTS GNSPA $53.40 $65M n/a n/a n/a n/a n/a n/a
Timbercorp TIM $0.11 $43M 0.7513 3.2273 -35.2056 -76.7213 13.6364 0.0000
Timbercorp Notes TIMG $15.50 $13M n/a n/a n/a n/a n/a n/a


Share Price Returns
3 Months (%) 6 Months (%) 12 Months (%)
TIM -21.4286 -82.5397 -91.3386
Sector 3.1806 -9.4003 -37.6471
Market -0.8537 -19.6079 -34.9701


Ratio Comparison
Year TIM Sector Market
P/E (x) FY07 0.5 11.3 12.6
FY08 0.7 10.3 12.1
Yield (%) FY07 66.7 2.6 5.9
FY08 14.3 3.0 6.0
EV/EBIT (x) FY07 2.5 9.2 8.2
FY08 2.6 7.9 7.7
EV/EBITDA (x) FY07 2.3 7.7 7.0
FY08 2.3 6.4 6.4


Cheers