Rural Funds dismisses critical report from Bucephalus Research

Rural Funds dismisses critical report from Bucephalus Research

The Australian farmland owner at the centre of a controversial short selling campaign is now in the sights of another overseas analyst.

Shortly after launching a lawsuit against Texas-based Bonitas Research over its allegations about the company, Rural Funds Group (ASX: RFF) is now under attack from Bucephalus Research in Hong Kong.

In a tweet last week, Bucephalus - which goes by the motto 'exposing creative accounting' - indicated it believed RFF's fair value was between $0.80 and zero, and that a report was on its way.

That document was published on Monday, giving RFF a fair value of $1.20 per share based on a "generous appraisal" of accounting profits, or $0.73 based on reported cash flow.

"Unfortunately, these numbers could still be too high, if the assets get revalued and the covenants are breached," the Bucephalus report said. 

"We note that at RFF distributions exceed recurring profits, even ignoring cost capitalisation and capital raising continues.

RFF's responsible entity Rural Funds Management Limited (RFM) informed the ASX it had become aware of the document critical of RFF, but dismissed its criticisms. 

"In RFM's opinion, the document's criticisms are substantially similar to those made in the recent documents selectively released by short seller Bonitas," RFM said. 

In response, RFF advised investors to refer to and rely on its full year statutory accounts, the presentation of its full year results for FY19 and the Ernst & Young report in response to the Bonitas document.

However, Bucephalus Research managing partner Robert Medd begs to differ. Click here for the full story.  

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Subscribe Now!
Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

PlaySide Studios strikes deal with Warner Bros to create Game of Thrones PC game

PlaySide Studios strikes deal with Warner Bros to create Game of Thrones PC game

Five months after announcing it signed a multi-game licence agreeme...

HMC Capital enters private credit market with $127.5m purchase of Payton Capital

HMC Capital enters private credit market with $127.5m purchase of Payton Capital

After more than a year of due diligence and amidst plans to lift it...

Cost of living elevates salaries and perks as key drivers of employee retention in 2024

Cost of living elevates salaries and perks as key drivers of employee retention in 2024

The cost of living is making salaries and perks just as important a...

Enterprise roll-out "one of the biggest launches in Canva's history" as ARR hits $2.2b

Enterprise roll-out "one of the biggest launches in Canva's history" as ARR hits $2.2b

Sydney-headquartered graphic design and visualisation tool giant Ca...