On a profit and loss basis yes I agree. they only get 5%However...

On a profit and loss basis yes I agree. they only get 5%

However on a cash basis no I still respectively disagree. Note 8 (a) and (b) of their financial report states secured loan receivables amounting to $77m + $328m = $400m this is the amount of grower loans securitized in trusts. This is the basis (along with property and other assets) that financial instos have provided $554m worth of loans under Note 20 (ii) , the detail shows that the first 25% of the amount if not repaid is Timbercorps responsibility. Obviously they only get hit if the investor doesnt pay up which can only occur in the first place if the projects dont make money. So there is a significant potential financial loss.

In addition bad debts have been rising - I cant quite remember where I saw this in regard to Timbercorp (I think a friend maybe mentioned it) but if you have a look at page 25 of GTP AGM released today they say and I quote "we would currently expect that total bad debt provisions in the range of around 10% may be possible" admittedly they also state these are the higher risk loans still on their balance sheet. But if the economy turns sour and the projects dont make a profit, then some growers wont/cant pay up.

So if woodchip prices go up there is less chance that the loans will not be repaid, therefore the NTA of $1.65 is much more able to be realised into cash when the crops come in.

Much of the above I suppose is not really my interest, on a short term basis I am hoping to cash out if it gets to my target of $1.50+ , longer term though this and GTP/GNS are I believe (maybe in a few years) the final wave of commodity price increase plays. Soft commodities are finally booming and I believe the assets they have accumulated (in a tax dodge fashion) will pay big time in the future.