Friday, November 03, 2006

TFS Limited Announces Expected Sales Figures for FY07

TFS Limited (ASX:TFC) has announced that sales are ahead of expectation. They anticipate sales of approximately 375 hectares of Indian sandalwood in FY07. This would represent an increase of nearly 15% over the 326.5 hectares of sales concluded in FY06 and compares to previous guidance for FY07.

This has allowed the company to purcahse further land for sales in the
future. It has purchased a property "Kingston Rest", an operating hay and cattle farm some 66 kilometres south of Kununurra. The property comprises 2,400 hectares of freehold land, 1,200 hectares of pastoral leasehold land and a 3,200 hectare dam with a current capacity of 65 gigalitres. At least 1,900 hectares of the land has been identified as being suitable for the growth of Indian Sanderwood.

This company is unique in the product it sells and it should not be affected by any glut in the wood chip business.

Personally I own TFC having bought in at around 38c. It has done well and shortly after this announcement the share is up to 47.5c. At this price it is still below value as the current talks in government on the treatment of tax deducations from timber investments is keeping the share at a low PE level. This stock has the potential to be over 60 - 70c within the next few months. A PE of 13 would value it at 98c. Considering the market PE is approx 16 this is still a very cheap share.

Good Luck investing.

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