Willmott Forests points to trouble ahead
Listed forestry company Willmott Forests has been forced to review its operations and debt levels following a severe contraction in retail agricultural investment sales.
In a statement to the Australian Securities Exchange, Willmott said its board and management were taking “immediate actions to address current challenges for the company, arising from the lower than expected level of [financial year] 2010 sales”.
Willmott is now cutting its cost base to bring it in line with the lower level of sales activity, and undertaking a “detailed review” of the company to assess progress against its strategic objectives.
The group is also putting together a new capital management plan that may see it sell non-core assets in an effort to reduce debt levels and keep financiers on side.
The company said it had the “early support” of key stakeholders in the process. Following the review the board and management will inform shareholders of the likely impact of the process on the company.
In the meantime the company’s shares have been placed in a trading halt.
Based on the potential for “materially lower” results in the current and coming financial years, the company said a final dividend for 2010 was unlikely to be paid, and nor was the September dividend on the Perpetual Income Exchangeable Securities (PINES).
One “encouraging” upside in the collapse of retail sales for forestry-based agricultural products, the company said, was the fact that Willmott’s Premium Forestry Blend 2010 Project had achieved a share of approximately 25 per cent of the diminished market.
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