This was published 4 years ago
'They'll find out': Rural Funds ups income as short-seller stoush rolls on
By Colin Kruger
Rural Funds Group founder David Bryant promised that its battle with short-seller Bonitas Research isn't over yet, after the real estate investment trust announced a lift in earnings and distributions for the December half.
Mr Bryant said the "positive" result for the six months ending December 31 is RFG's latest response to Texas-based Bonitas Research's allegations that it fabricated rental income and might ultimately be worthless, which sent the stock plummeting last September.
Rural Funds Group assets include vineyards leased to Treasury Wine Estates. Credit: Andrew Meares
RFG, which owns more than $900 million worth of leased agricultural assets, including vineyards, reported on Monday that property revenue increased 22 per cent to $37.6 million and said adjusted funds from operations (AFFO) per unit increased 11 per cent to 7.1¢.
The trust increased its forecast of AFFO for the financial year to 13.5¢ per unit.
Mr Bryant was asked what happens next with the Bonitas battle after the fund was delivered a comprehensive legal victory in the NSW Supreme Court last month.
"They'll find out in due course," he told told analysts and investors on a conference call, but did not elaborate further or offer any assurance of when the stock will return to the $2.35 level it was trading at before the attack.
RFG had slipped 1.3 per cent to $1.905 during mid-afternoon trade on Monday, against broader market losses of around 0.7 per cent. Shares closed up 1.3 per cent to $1.96.
Short selling is a trading strategy in which the trader profits from a fall in the target company's share price.
The scathing court judgment found Bonitas made false and misleading allegations against Rural Funds Group, but the short seller labelled it "procedurally and substantively infirm".
Bonitas did not contest the case and later said it "would have been granted discovery of key documentation about RFM and (RFG) operational and financial performance that we believe justifies our opinion."
Bonitas and Hong Kong-based Bucephalus Research Partnership - which also published a report attacking RFG's financial accounts last year - did not have any immediate response to the interim report.