Greg's Chutzpah

He’s done it again.

This time in broad daylight.

Under the gaze of thousands of Gunns’ watchers, CEO Greg L’Estrange has once again manufactured a few book entries to help Gunns achieve a modicum of P&L respectability.

That boy certainly has chutzpah.

Bartlett's mess

It’s not uncommon for people from all walks of life to take credit for the favourable decisions and blame the rest on circumstances beyond their control.

Politicians are probably keener than most to take credit for the good stuff.

Forestry tasmania's cover up

Sue Neales was on the right track with her story titled $22m in forest funds sit idle (HERE)

The story regarding unspent funds received by Forestry Tasmania as part of the Tasmanian Community Forest Agreement TCFA was immediately rebutted by FT’s Hans Drielsma (HERE) who denied any hoarding of funds saying a prudent plan was in place to spend the remaining $22 million, a figure from internal FT spreadsheets obtained under RTI and referred to by Sue Neales.

But the truth is much worse, if one chooses to believe Mike Blake, the Auditor General. The TCFA future commitments far exceed the available cash on hand. There is an eerie resemblance between FT’s use of TCFA funds to operate and Mr Aird’s use of the SPA account to fund current Government programs.

Let’s start at the beginning.

Trust us

Simon’s plaintive cry suggested, inter alia, environmentalists are operating in “a knowledge vacuum” away from “the harder reality” of a true understanding of ecology and conservation.

Maybe but what’s worse is that forestry issues continue to be discussed in an economic vacuum away from the harder reality of dollars and cents. I’m not suggesting the latter should be the only criteria but to ignore them completely will lead to an unrealistic analysis and erroneous conclusions.

Simon laments that “professional foresters and conservation biologists have been largely disenfranchised”. Welcome to the Club.

Accountants and economists have likewise been largely ignored.

A state of delusion

Reading transcripts of Government Business Scrutiny Hearings can be boring.

But it can also be revealing. Sometimes it’s the questions. Other times the answers. Sometimes it’s the non answers.

Football and the Nanny state

Talking about Bellerive Oval ( HERE ) Paul Muller laments the lack of interest by Governments in spending further funds. “That it lies all but barren for the remainder would suggest to even armchair economists that it is failing to realise its profit potential”.

The world is awash with surplus supply capacity following the GFC. It surely cannot be a serious proposition to assert that such a situation requires Government funding to create more demand.

If so we’ll be insolvent even sooner.

Gunns: The next chapter

The Truth and Reconciliation Roadshow continued last week with a presentation by Gunns’ CEO to a conference run by investment bank UBS, coincidentally a Gunns’ shareholder.

The changes from the presentation which accompanied the release of Gunns’ preliminary 2010 financials in mid August were subtle and revealing of the future chosen path.

John Gay’s business model was then described as being “a conglomerate of long life low yielding assets…..(consisting of) many businesses….. excessive levels of encumbered assets .....excessive debt levels to earnings,..... (where) potential investors do not understand the business.”

The latest presentation includes further criticisms of the old model. Mr L’Estrange confirmed that Gunns was “cash negative” and was bedevilled by “aging inefficient assets”.

Cash negativity is a fairly serious condition. If it persists disaster usually awaits. Aging inefficient assets make the problem worse.

Forget about a social license. Gunns needs cash and a more ‘efficient’ portfolio of assets.