TIDMTREE
RNS Number : 2289A
Cambium Global Timberland Limited
17 January 2020
17 January 2020
Cambium Global Timberland Limited (the "Company")
Net Asset Value, Interim Results
Net Asset Value
The Company announces that the Net Asset Value per share as at
31 October 2019 is 17.6p.
Interim Results
The Company announces that the Interim Report and Unaudited
Condensed Consolidated Interim Financial Statements (the "Interim
Report") for the six months ended 31 October 2019 are available and
set out in full below.
An electronic copy of the Interim Report is also available on
the Company's website at www.cambium.je.
For further enquiries please contact:
Chairman
Tony Gardner-Hillman
01534 486980
Broker and Nominated Adviser
WH Ireland Limited
James Joyce
020 7220 1698
Administrator and Company Secretary
Praxis Fund Services (Jersey) Limited
01534 835835
Cambium Global Timberland Limited
Interim Report and Unaudited Condensed Consolidated Interim
Financial Statements
for the six months ended 31 October 2019
Cambium Global Timberland Limited
Chairman's statement
Assets and values
The Company's Net Asset Value per share ("NAVPS") as of 31
October 2019 is 17.6p, compared with 18.8p as at 30 April 2019, a
decrease of 6.4% in the period.
The change in NAVPS comprised currency movements (-1.8%), net
expenditure on forestry and other costs (-4.4%), accrued interest
on the loan from Peter Gyllenhammar AB (announced on 21 December
2017) (-0.4%) and the accretive effect of buying back shares at a
discount to NAV (+0.2%).
It is a reality of the market, in the absence of foreign
investor participation in land purchases and of bank appetite to
provide finance, that sales have to be vendor-financed, in our
case, at Agua Santa over two years and at Ribeirao do Gado over
three years. At Forquilha we are talking to interested parties and
taking a realistic look at opportunities to enhance attractiveness
to them by dividing land titles between areas better suited
respectively to tree cultivation and to cattle grazing.
All in all, effort has produced forward motion, but slowly, in
keeping with the constraints of a market that continues to be
challenging.
The Board continues constantly to monitor the Group's cash
position. As at the period end the Company and its subsidiaries had
cash reserves of GBP1.0 million. The purchaser of the Group's
Hawaiian properties continues to make timely payment of lease
rental, resulting in corresponding sums being released to the Group
from the rental escrow. At 3R in Brazil, discussions with the
purchaser of the harvested wood on calculation of the final
instalment of the contract price have concluded and no further sums
are recoverable, resulting in a write-off in the period of the
remaining debtor balance recorded at the prior year end, as noted
in the Operations Manager's Report in the 2019 annual financial
statements.
The Share buy-back programme is in abeyance pending review when
further significant cash comes in, and in the meantime the board is
comfortable that the Company retains sufficient reserves to meet
outgoings for the foreseeable future.
Costs
Cost curtailment efforts continue, which will be aided of course
by land sales. There will be a need though for some further
expenditure at 3R to protect the value in the coppice
re-growth.
Administrative expenses are up 3.3% on the corresponding prior
period (note 4), principally due to increased legal and
administrative costs in Brazil.
However, forestry expenses (notes 5 and 6) again show a
meaningful fall against the prior period, down 22.5%, demonstrating
the ongoing effort to curtail costs, but in a way that continues to
protect the Group's remaining assets ahead of disposal.
The net result, allowing for the impact of currency
fluctuations, is that total costs, including finance costs, but
excluding bad debts, for the period in Sterling terms amounted to
GBP0.59 million, as compared with GBP0.64 million for the same
period last year.
Conclusions
The period showed land values holding their own rather than
increasing in any significant way, supported perhaps by signs of
interest from ranchers in light of a recovery in beef prices, but
saw plantation values struggling in light of the subdued demand for
both pig iron and pulp.
The journey to exit Brazil, our only remaining location,
continues to move in the direction of a conclusion. The ongoing
frustrations are all to do with lack of urgency in the market, but
we continue to look sensibly for the terms that will provide
overall the best exit outcome for our loyal shareholders.
I am pleased with the events the Company has been able to
announce, although I do wish we could have announced more, and I
continue to look forward to completing the process, and to
reporting further in due course.
Antony R Gardner-Hillman
Chairman
17 January 2020
Cambium Global Timberland Limited
Operations Manager's report
For the six months ended 31 October 2019
The total loss for the period covered by these financial
statements, excluding translation differences, was GBP0.65 million,
compared to a loss of GBP0.65 million in the corresponding prior
year period. The portfolio returns were primarily impacted by
operating costs and foreign exchange losses arising on
translation.
Below is a summary of the results by geographic area.
Brazil
The Brazilian portfolio now represents 100% of the physical
assets and 95% of the total assets.
At 3R, the good 1,600 hectares of coppice regrowth are growing
well and demonstrating the potential of the site when planted with
the right clone and well tended. Regrowth of other clones is much
poorer and does not justify expenditure on control of leaf eating
ants and weeds. Given the lack of activity in the local land
market, discussions are underway to lease the property to a local
forestry company, which will allow Cambium to reduce management
costs while maintaining an interest in a future revival of
liquidity and land values.
In Minas Gerais, payments were received for harvesting at Agua
Santa and, after the period end, at Ribeirao do Gado. Charcoal
prices, on which the wood sale prices are based, have fallen in the
last six months, but remain above contract minima. This fall has
been caused by plentiful supply of wood, and of charcoal for the
modest level of demand for pig iron. Indirectly, the subdued market
for paper pulp is also diverting wood into charcoal production so
increasing charcoal supply and holding down prices. The previously
announced sale of Agua Santa for R$30 million, less the value of
wood harvested under the current wood sale contract, will close
shortly after a delay due to unexpected minor environmental
compliance issues, which have now been resolved. Negotiations
remain under way to sell Ribeirao do Gado. At Forquilha,
discussions remain underway with potential farming purchasers for
the majority of the land and with charcoal companies for the
plantation area.
An upturn in the Brazilian forestry land market activity remains
elusive. There are some signs that improved beef prices worldwide
and in Brazil are being reflected in increased interest from
farmers in non-forest land such as much of Forquilha and possibly
3R, but prices and market activity remain subdued.
Security, fire protection and insurance will continue to be
required to protect the Company's assets.
United States - Hawaii
Cambium records the balance of outstanding rental payments in
escrow as an asset which represents less than 1% of the total
assets. The owners of the plantations continue to pay the rent to
the landlords, so allowing the release of the small remaining
amount of escrow funds to Cambium as scheduled.
Conclusion
The focus remains one of realising cash from wood and asset
sales while selling or, if necessary, leasing properties to reduce
the considerable costs of management, maintenance, fire control and
insurance. This is being achieved, albeit slowly, despite the fact
that an upturn in economic activity in general and the land market
in particular still has not yet occurred.
Robert Rickman
Operations Manager
17 January 2020
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of
comprehensive income
For the six months ended 31 October 2019
For the For the
six six
months months
ended ended
31 October 31 October
2019 2018
Unaudited Unaudited
Continuing operations Notes GBP GBP
--------------------------------------------------- ------ ------------- -------------
Finance costs (57,891) (44,819)
Net foreign exchange gain/(loss) 1,349 (18)
--------------------------------------------------- ------ ------------- -------------
Net finance costs (56,542) (44,837)
--------------------------------------------------- ------ ------------- -------------
Administrative expenses 4 (228,208) (230,748)
Loss for the period from continuing operations (284,750) (275,585)
--------------------------------------------------- ------ ------------- -------------
Discontinued operations
--------------------------------------------------- ------ ------------- -------------
Loss on sale of assets held for sale (12,798) (7,228)
Administrative expenses 4 (49,882) (38,517)
Forestry management expenses 5 (5,013) (1,334)
Other operating forestry expenses 6 (247,226) (324,104)
Bad debt written off (56,288) -
(358,409) (363,955)
-------------------------------------------------------------------------- -------------
Operating loss from discontinued operations (371,207) (371,183)
--------------------------------------------------- --------------------- -------------
Finance costs (970) (868)
Net foreign exchange gain 2,546 -
--------------------------------------------------- --------------------- -------------
Net finance income/(costs) 1,576 (868)
--------------------------------------------------- --------------------- -------------
Loss before taxation from discontinued operations (369,631) (372,051)
Taxation charge 7 - -
--------------------------------------------------- ------ ------------- -------------
Loss for the period from discontinued operations (369,631) (372,051)
--------------------------------------------------- --------------------- -------------
Total loss for the period (654,381) (647,636)
--------------------------------------------------- --------------------- -------------
Other comprehensive (loss)/income
Items that are or may be reclassified to profit or loss, net of tax
Foreign exchange (loss)/gain on translation
of discontinued foreign operations 12 (256,244) 242,360
Other comprehensive (loss)/income for the
period (256,244) 242,360
--------------------------------------------------- ------ ------------- -------------
Total comprehensive loss for the period (910,625) (405,276)
----------------------------------------------------------- ------------- -------------
Basic and diluted loss per share 8 (0.89) pence (0.79) pence
--------------------------------------------------- ------ ------------- -------------
Basic and diluted loss per share from continuing 8 (0.39) pence (0.34) pence
operations
--------------------------------------------------- ------ ------------- -------------
Basic and diluted loss per share from discontinued 8 (0.50) pence (0.45) pence
operations
--------------------------------------------------- ------ ------------- -------------
All (losses)/profits from continuing and discontinued operations
are attributable to the equity holders of the parent Company. There
are no minority interests.
The notes on pages 8 to 21 form an integral part of these
unaudited condensed consolidated interim financial statements.
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of financial
position
At 31 October 2019
31 October 30 April
2019 2019
Unaudited Audited
Notes GBP GBP
----------------------------------------------------------- ------ ------------- -------------
Current assets
Assets held for sale 11 13,692,922 14,292,311
Trade and other receivables 123,363 208,641
Cash and cash equivalents 1,031,490 1,137,281
Total assets 14,847,775 15,638,233
-------------------------------- ------------------------- ------ ------------- -------------
Current liabilities
Liabilities held for
sale 11 216,171 74,072
Loan payable to related
party 1,595,702 1,539,237
Trade and other payables 44,063 77,529
Total liabilities 1,855,936 1,690,838
-------------------------------- ------------------------- ------ ------------- -------------
Net assets 12,991,839 13,947,395
-------------------------------- ------------------------- ------ ------------- -------------
Equity
Stated capital 13 2,000,000 2,000,000
Distributable reserve 14 82,603,312 82,648,243
Translation reserve 12,14 2,545,981 2,802,225
Retained loss (74,157,454) (73,503,073)
-------------------------------- ------------------------- ------ ------------- -------------
Total equity 12,991,839 13,947,395
-------------------------------- ------------------------- ------ ------------- -------------
Net asset value per 9 17.6 pence 18.8 pence
share
-------------------------------- ------------------------- ------ ------------- -------------
These unaudited condensed consolidated interim financial
statements were approved and authorised for issue on 17 January
2020 by the Board of Directors.
Antony R Gardner-Hillman
Chairman
The notes on pages 8 to 21 form an integral part of these
unaudited condensed consolidated interim financial statements.
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of changes in
equity
For the six months ended 31 October 2019
Share Distributable Translation Retained
Unaudited Capital reserve reserve loss Total
GBP GBP GBP GBP GBP
For the six months ended
31 October 2019
------------------------------------------------ -------------- ------------ ------------- -----------
At 30 April 2019 2,000,000 82,648,243 2,802,225 (73,503,073) 13,947,395
Total comprehensive loss
for the period
Loss for the period - - - (654,381) (654,381)
Other comprehensive income
Foreign exchange loss
on translation of discontinued
foreign operations (note
12) - - (256,244) - (256,244)
------------------------------------ ---------- -------------- ------------ ------------- -----------
Total comprehensive loss - - (256,244) (654,381) (910,625)
------------------------------------ ---------- -------------- ------------ ------------- -----------
Transactions with owners
Share buy-backs - (44,931) - - (44,931)
At 31 October 2019 2,000,000 82,603,312 2,545,981 (74,157,454) 12,991,839
------------------------------------ ---------- -------------- ------------ ------------- -----------
Share Distributable Translation Retained
Unaudited Capital reserve reserve loss Total
GBP GBP GBP GBP GBP
For the six months ended
31 October 2018
-------------------------------------------------- -------------- ------------ ------------- -----------
At 30 April 2018 2,000,000 83,589,060 3,619,128 (72,644,191) 16,563,997
Total comprehensive loss
for the period
Loss for the period - - - (647,636) (647,636)
Other comprehensive loss
Foreign exchange gain
on translation of discontinued
foreign operations (note
12) - - 242,360 - 242,360
-------------------------------------- ---------- -------------- ------------ ------------- -----------
Total comprehensive income/(loss) - - 242,360 (647,636) (405,276)
-------------------------------------- ---------- -------------- ------------ ------------- -----------
At 31 October 2018 2,000,000 83,589,060 3,861,488 (73,291,827) 16,158,721
-------------------------------------- ---------- -------------- ------------ ------------- -----------
The notes on pages 8 to 21 form an integral part of these
unaudited condensed consolidated interim financial statements.
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of cash
flows
For the six months ended 31 October 2019
For the six
For the six months ended
months ended 31 October
31 October 2019 2018
Unaudited Unaudited
Note GBP GBP
---------------------------------------------------------- ----------------- ---------------
Cash flows from operating activities
Total loss for the period (654,381) (647,636)
Adjustments for:
Loss on sale of assets held for sale 12,798 7,228
Net finance costs, excluding foreign exchange
movements -
continuing operations 57,891 44,819
Net finance costs, excluding foreign exchange
movements - discontinued operations 970 868
Bad debt written off 56,288 -
(Increase)/decrease in trade and other
receivables (25,171) 19,197
Increase/(decrease) in trade and other
payables 108,633 (65,566)
---------------------------------------------- -------------------------- ---------------
(442,972) (641,090)
Tax paid - -
-------------------------------------------------------- ------------------- ---------------
Net cash used in operating activities (442,972) (641,090)
-------------------------------------------------------- ------------------- ---------------
Cash flows from investing activities - discontinued operations
Net proceeds from sale of assets held for
sale 11 399,054 165,034
Costs capitalised to land and plantations - (150,381)
Net cash from investing activities 399,054 14,653
------------------------------------------------- -------------------------- ---------------
Cash flows from financing activities
Share buy backs (44,931) -
Net finance costs, excluding foreign exchange
movements (2,396) (2,328)
Net cash used in financing activities (47,327) (2,328)
------------------------------------------------- -------------------------- ---------------
Net decrease in cash and cash equivalents (91,245) (628,765)
Foreign exchange movements (14,546) 26,001
Balance at the beginning of the period 1,137,281 3,071,863
------------------------------------------------- -------------------------- ---------------
Balance at the end of the period 1,031,490 2,469,099
------------------------------------------------- ------- ----------------- ---------------
The notes on pages 8 to 21 form an integral part of these
unaudited condensed consolidated interim financial statements.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements
For the six months ended 31 October 2019
1. General information
The Company and its subsidiaries, including special purpose
entities ("SPEs") controlled by the Company (together the "Group"),
own a portfolio of forestry based properties which are managed on
an environmentally and socially sustainable basis. Assets are
managed for timber production. As at the period end date, the Group
owned forestry assets located entirely in Brazil.
The Company is a closed-ended company with limited liability,
incorporated in Jersey, Channel Islands on 19 January 2007. The
address of its registered office is Charter Place, 23-27 Seaton
Place, St Helier, Jersey JE1 1JY.
These unaudited condensed consolidated interim financial
statements (the "interim financial statements") were approved and
authorised for issue on 17 January 2020 and signed by Antony
Gardner-Hillman on behalf of the Board.
The Company is listed on AIM, a market of the London Stock
Exchange.
2. Basis of preparation
The interim financial statements for the six months ended 31
October 2019 have been prepared in accordance with International
Accounting Standard ("IAS") 34 "Interim Financial Reporting" and
with applicable regulatory requirements of the AIM Rules. They do
not include all of the information required for full annual
financial statements. The interim financial statements should be
read in conjunction with the Group's annual report and financial
statements for the year ended 30 April 2019, which were prepared in
accordance with International Financial Reporting Standards
("IFRS"). The comparative numbers used for the unaudited condensed
consolidated interim statement of comprehensive income, unaudited
condensed consolidated interim statement of changes in equity and
unaudited condensed consolidated interim statement of cash flows
are those of the six month period ended 31 October 2018, which is
considered a comparable period in accordance with IAS 34. The
comparatives used in the unaudited condensed consolidated statement
of financial position are those of the previous financial year to
30 April 2019.
The accounting policies applied by the Group in these interim
financial statements are the same as those applied by the Group in
its financial statements for the year ended 30 April 2019.
The interim financial statements have been presented in
Sterling, which is also the functional currency of the Company, and
under the historical cost convention, except for investment
property, plantations, buildings, assets and liabilities held for
sale and certain financial instruments which are carried either at
fair value, fair value less cost to sell or fair value less
subsequent accumulated depreciation and subsequent accumulated
impairment loss.
The preparation of the financial statements requires Directors
to make estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and the disclosure
of contingent liabilities at the date of the interim financial
statements. If in the future such estimates and assumptions, which
are based on the Directors' best judgement at the date of the
interim financial statements, deviate from actual circumstances,
the original estimates and assumptions will be modified as
appropriate in the period in which the circumstances change.
In preparing the interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty are the same
as those that applied to the financial statements for the year
ended 30 April 2019. The main area of the interim financial
statements where significant judgements have been made by the
Directors is in determining the fair value of the assets held for
sale as disclosed in note 10.
The Company has identified that the Group's Brazilian expenses
(with the exception of insurance premia) have been accounted for on
a cash rather than an accrual basis. In view of the fact that
expenses are paid in the normal course by the end of the month
following the month in which the supplier's invoice is received, by
and large the end of year financial statements will report
Brazilian expenses (other than insurance premia) submitted to the
Group in the previous April to March (rather than May to April) and
the interim financial statements will report expenses submitted to
the Group in the previous April to September (rather than May to
October). The Directors do not believe there is any material effect
in either case and do not plan to make any change.
Going concern and assets and liabilities held for sale
On 30 November 2012, the Independent Directors announced the
outcome of the strategic review initiated in June 2012. The
Directors proposed and recommended a change of investment policy
with a view to implementing an orderly realisation of the Group's
investments in a manner which maximises value for shareholders, and
returning surplus cash to shareholders over time through ad hoc
returns of capital. This proposal was approved by shareholders at
an Extraordinary General Meeting ("EGM") on 22 February 2013. There
is no set period for the realisation of the portfolio.
Since the EGM, the portfolio has been reviewed by the Directors
with a view to an orderly sale of the assets in such a manner as to
enable their inherent value to be realised. As part of this
process, the assets in Georgia, Australia and Hawaii have been sold
and the Directors plan to sell the remaining assets when acceptable
offers are received. As at 31 October 2019, the remaining portfolio
of assets, located in Brazil, is classified as held for sale and
its transactions for the period as discontinued operations.
As at the date of approval of these financial statements, the
Directors have no intention to instigate a winding-up of the
Company, a course of action that would require the approval of
shareholders. As a result, as at 31 October 2019 the assets and
liabilities of the Company pertaining to the Jersey operations have
not been classified as held for sale and its Jersey operations
continue to be treated as continuing.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
2. Basis of preparation (continued)
Going concern and assets and liabilities held for sale
(continued)
The Directors consider that the Group has sufficient resources
available to pay its liabilities as they fall due and believe it is
appropriate to prepare the interim financial statements on a going
concern basis.
Amended Accounting Standards applicable to future reporting
periods
In September 2019, the IASB completed its Interest Rate
Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) project,
which has amended those standards to require additional disclosures
around uncertainty arising from the interest rate benchmark reform,
effective for periods commencing on or after 1 January 2020.
The Directors do not anticipate that the adoption of these
amended standards in future periods will have a material impact on
the financial statements of the Company.
New accounting policies effective and adopted
-- IFRS 9 (amended), "Financial Instruments" (amendments
regarding prepayment features with negative compensation and
modification of financial liabilities, effective for periods
commencing on or after 1 January 2019).
In addition, the IASB completed its Annual Improvements
2015-2017 Cycle project in December 2017. This project has amended
a number of existing standards and interpretations effective for
accounting periods commencing on or after 1 January 2019.
The adoption of these amended standards has had no material
impact on the financial statements of the Company.
Exchange rates
The following exchange rates have been applied in these interim
financial statements to convert foreign currency balances to
Sterling:
31 October 31 October 30 April 31 October 31 October
2019 2019 2019 2018 2018
closing rate average rate closing closing rate average
rate rate
---------------------- ------------- ------------- --------- ------------- -----------
Brazilian Real 5.2017 4.9814 5.1067 4.7534 5.0373
United States Dollar 1.2942 1.2528 1.3032 1.2766 1.3147
---------------------- ------------- ------------- --------- ------------- -----------
3. Operating segments
The Board of Directors is charged with setting the Company's
investment strategy in accordance with the Shareholder Update
announcement made on 6 October 2015. The Board of Directors, as the
Chief Operating Decision Maker ("CODM"), delegates the day to day
implementation of its investment strategy to its Operations
Manager, but retains responsibility to ensure that adequate
resources of the Company are directed in accordance with its
decisions. The day-to-day decisions of the Operations Manager have
been and are reviewed on a regular basis to ensure compliance with
the policies and legal responsibilities of the Board.
Whilst the Operations Manager may make the operational decisions
on a day to day basis, any changes to the investment strategy,
major allocation decisions or any asset dispositions or material
timber contracts have to be approved by the Board. The Board
therefore retains full responsibility for and control over the
major allocation decisions made on an ongoing basis.
The Operations Manager is required to act in accordance with the
Prospectus and the Board-approved investment strategy.
As at 31 October 2019, the Group operates in two geographical
locations, which the CODM has identified as one non-operating
segment, Jersey, and one operating segment, Brazil. All remaining
timberlands are located in Brazil. All segments, apart from Jersey,
have been classified as discontinued operations (see note 11). The
accounting policies of each operating segment are the same as the
accounting policies of the Group, therefore no reconciliation has
been performed.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
3. Operating segments (continued)
Jersey Hawaii Brazil Total
31 October 2019 (unaudited) GBP GBP GBP GBP
------------------------------------- ---------- -------- ----------- -----------
Assets and disposal group held for
sale (note 11) - - 13,692,922 13,692,922
Other assets 509,381 195,186 450,286 1,154,853
------------------------------------- ---------- -------- ----------- -----------
Total assets 509,381 195,186 14,143,208 14,847,775
------------------------------------- ---------- -------- ----------- -----------
Total liabilities 1,638,065 1,700 216,171 1,855,936
------------------------------------- ---------- -------- ----------- -----------
Jersey Hawaii Brazil Total
30 April 2019 (audited) GBP GBP GBP GBP
------------------------------------- ---------- -------- ----------- -----------
Assets and disposal group held for
sale (note 11) - - 14,292,311 14,292,311
Other assets 1,008,862 193,838 143,222 1,345,922
------------------------------------- ---------- -------- ----------- -----------
Total assets 1,008,862 193,838 14,435,533 15,638,233
------------------------------------- ---------- -------- ----------- -----------
Total liabilities 1,616,766 - 74,072 1,690,838
------------------------------------- ---------- -------- ----------- -----------
Jersey Hawaii Brazil Total
31 October 2019 (unaudited) GBP GBP GBP GBP
----------------------------------------- -------- -------- --------- ---------
Loss on disposal of assets and disposal
group held for sale - - (12,798) (12,798)
----------------------------------------- -------- -------- --------- ---------
Forestry management expenses - - 5,013 5,013
----------------------------------------- -------- -------- --------- ---------
Other operating forestry expenses - - 247,226 247,226
----------------------------------------- -------- -------- --------- ---------
Jersey Hawaii Brazil Total
31 October 2018 (unaudited) GBP GBP GBP GBP
----------------------------------------- -------- -------- -------- --------
Loss on disposal of assets and disposal
group held for sale - - (7,228) (7,228)
----------------------------------------- -------- -------- -------- --------
Forestry management expenses - - 1,334 1,334
----------------------------------------- -------- -------- -------- --------
Other operating forestry expenses - - 324,104 324,104
----------------------------------------- -------- -------- -------- --------
As at 31 October 2019 and 30 April 2019 the Group owned four
distinct parcels of land in one geographical area.
There was no revenue in the periods ended 31 October 2019 or 31
October 2018.
The Group's investments will be realised in an orderly manner
(that is, with a strategy of achieving a balance between returning
cash to shareholders and maximising value). In view of this, there
will be no specific investment restrictions applicable to the
Group's portfolio going forward.
This policy will involve a continuing evaluation of the
portfolio in order to assess the most appropriate strategy for each
investment. This will be flexible and may need to be altered to
reflect changes in the circumstances of a particular investment or
in the prevailing market conditions. The Group will, in relation to
each investment, seek to create competition amongst a range of
interested parties. The net cash proceeds from realisations of
assets will be applied to the payments of tax or other liabilities
as the Board thinks fit prior to making payments to
shareholders.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
4. Administrative expenses
For the
six months
For the six ended
months ended 31 October
31 October 2019 2018
Unaudited Unaudited
GBP GBP
-------------------------------------------------------------- ------------
Continuing operations
Operations Manager's fees (note 16) 53,000 51,333
Directors' fees (note 16) 49,000 47,667
Auditor's fees 21,361 16,665
Professional & other fees 104,847 115,083
228,208 230,748
Discontinued operations
Professional & other fees 26,329 22,409
Administration of subsidiaries 23,553 16,108
---------------------------------------------------- -------- ------------
49,882 38,517
Total administration expenses 278,090 269,265
---------------------------------------------------- -------- ------------
Administration of subsidiaries includes statutory fees,
accounting fees and administrative expenses in regard to the asset
holding subsidiaries.
5. Forestry management expenses
For the
six months
For the six ended
months ended 31 October
31 October 2019 2018
Unaudited Unaudited
GBP GBP
------------------------------------------------------------- ------------
Valuation fees 5,013 1,334
5,013 1,334
------------------------------------------------------------- ------------
6. Other operating forestry expenses
For the
six months
For the six ended
months ended 31 October
31 October 2019 2018
Unaudited Unaudited
GBP GBP
------------------------------------------------ ------------
Property management fees and expenses 104,118 96,047
Property taxes 23,395 -
Road maintenance - 28,033
Fencing maintenance - 10,184
Inventory fees - 4,477
Pest control 1,044 56,083
Forest protection and insurance 92,778 121,448
Environmental consultancy fees 22,126 1,200
Other 3,765 6,632
-------------------------------------- -------- ------------
247,226 324,104
------------------------------------------------ ------------
For further information relating to the analysis of expenditure
contained in this note, please refer to the final two paragraphs of
the 'Basis of preparation' section of note 2 on page 8.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
7. Taxation
Taxation on profit on ordinary activities
Entities within the Group made no taxable profits during the
period and there was no tax charge for the period. A reconciliation
of the Group's pre-tax profit/(losses) to the tax charge is shown
below.
For the
six months
For the six ended
months ended 31 October
31 October 2019 2018
Unaudited Unaudited
GBP GBP
--------------------------------------------------------------------- ------------
Tax charge reconciliation
Loss for the period from continuing operations before
taxation (284,750) (275,585)
Loss for the period from discontinued operations before
taxation (369,631) (372,051)
--------------------------------------------------------- ---------- ------------
Total loss for the period before taxation (654,381) (647,636)
--------------------------------------------------------- ---------- ------------
Tax credit using the average of the tax rates in the
jurisdictions in which the Group operates (116,413) (119,487)
Effects of:
Operating losses for which no deferred tax asset is
recognised 114,136 119,487
Capital losses for which no deferred tax asset is
recognised 2,277 -
Tax charge for the period - -
--------------------------------------------------------- ---------- ------------
The average tax rate is a blended rate calculated using the
weighted average applicable tax rates of the jurisdictions in which
the Group operates. The average of the tax rates in the
jurisdictions in which the Group operates in the period was 17.79%
(31 October 2018: 18.45%). The effective tax rate in the period was
0% (31 October 2018: 0%).
At the period end date, the Group has unused operational and
capital tax losses. No deferred tax asset has been recognised in
respect of these losses due to the unpredictability of future
taxable profits and capital gains available against which they can
be utilised. Tax losses arising in the United States can be carried
forward for up to 20 years; those arising in Brazil can be carried
forward indefinitely.
Operational tax losses for which deferred tax assets have not
been recognised in the consolidated financial statements
For the
For the six year ended
months ended 30 April
31 October 2019 2019
Unaudited Audited
GBP GBP
--------------------------------------------------------------- ------------
Balance at beginning of the period/year 5,883,902 5,368,406
Current period/year operating losses for which no
deferred tax asset is recognised 347,277 759,533
Exchange rate movements (92,337) (244,037)
--------------------------------------------------- ---------- ------------
Balance at the end of the period/year 6,138,842 5,883,902
--------------------------------------------------- ---------- ------------
Accumulated operating losses at 31 October 2019 and 30 April
2019 in the table above relate entirely to discontinued operations
The value of deferred tax assets not recognised in regard to
operational losses amounted to GBP1,697,825 (30 April 2019:
GBP1,620,097), all of which related to discontinued operations.
Accumulated operating losses relating to continuing operations
at the period end amounted to GBP28,391,910 (30 April 2019:
GBP28,107,160). No deferred tax assets arose in respect of these
losses.
At the period end the Group had accumulated capital losses of
GBP803,148 (30 April 2019: GBP818,089). The accumulated capital
losses at 31 October 2019 and 30 April 2019 related entirely to
discontinued operations. The value of deferred tax assets not
recognised in respect of these capital tax losses amounted to
GBP273,070 (30 April 2019: GBP278,150), all of which related to
discontinued operations.
Deferred taxation
As at 31 October 2019 and 30 April 2019 the Group had no
deferred tax liabilities or recognised deferred tax assets.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
8. Basic and diluted loss per share
The calculation of the basic and diluted loss per share in total
and for continuing and discontinued operations is based on the
following loss attributable to shareholders and weighted average
number of shares outstanding.
For the
six months
For the six ended
months ended 31 October
31 October 2019 2018
Unaudited Unaudited
GBP GBP
------------------------------------------------------------------------ ------------
Loss for the purposes of basic and diluted earnings
per share being net loss for the period (654,381) (647,636)
------------------------------------------------------------ ---------- ------------
Loss for the purposes of basic and diluted earnings
per share being net loss for the period from continuing
operations (284,750) (275,585)
------------------------------------------------------------ ---------- ------------
Loss for the purposes of basic and diluted earnings
per share being net loss for the period from discontinued
operations (369,631) (372,051)
------------------------------------------------------------ ---------- ------------
31 October 2019 31 October
Unaudited 2018
Weighted average number of shares Unaudited
--------------------------------------- ------------------------------------ -------------
Issued shares brought forward (note 13) 74,117,299 82,130,000
Issued shares carried forward (note 13) 73,728,284 82,130,000
Weighted average number of shares in issue during the
period 73,806,510 82,130,000
---------------------------------------------------------------- ----------- -------------
Basic and diluted loss per share (0.89) (0.79) pence
pence
---------------------------------------------------------------- ----------- -------------
Basic and diluted loss per share from continuing operations (0.39) (0.34) pence
pence
---------------------------------------------------------------- ----------- -------------
Basic and diluted loss per share from discontinued (0.50) (0.45) pence
operations pence
---------------------------------------------------------------- ----------- -------------
9. Net asset value
31 October 30 April
2019 2019
Unaudited Audited
Total assets 14,847,775 15,638,233
Total liabilities 1,855,936 1,690,838
-------------------------------------- ----------- -----------
Net asset value 12,991,839 13,947,395
-------------------------------------- ----------- -----------
Number of shares in issue (note 13) 73,728,284 74,117,299
-------------------------------------- ----------- -----------
Net asset value per share 17.6 pence 18.8 pence
-------------------------------------- ----------- -----------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
10. Investment property and plantations
The Group's investment property and plantations are classified
as disposal group and assets held for sale.
The Group engages external independent professional valuers to
estimate the market values of the investment properties and
plantations in Brazil on an annual basis, with the Operations
Manager providing a desktop update valuation for the purposes of
the Group's Interim Financial Statements.
The investment property is carried at its estimated fair value
and plantations are carried at their estimated fair values less
costs to sell as at 31 October 2019 and 30 April 2019, as
determined by the Directors taking into consideration the external
independent professional valuers' valuations, the latest offers
received for the investment property and plantations and the
Directors' assessment of other factors that may influence
prospective purchasers.
The fair value measurements of investment properties and
plantations have been categorised as Level 3 fair values based on
the unobservable nature of significant inputs to the valuation
techniques used.
Notwithstanding the results of the independent valuations, the
Directors make their own judgement on the valuations of the Group's
investment property and plantations, with reference to the views of
the Operations Manager, other advisors and the latest offers
received.
In forming their conclusions of the fair value of the investment
property and plantations, the Directors have considered the
following factors:
(i) Plantations
Property Fair value Valuation technique Significant unobservable Inter-relationship
inputs between key unobservable
inputs and fair
value measurement
31 30
October April
2019 2019
GBPm GBPm
-------- ------
a) & b) 31 October 2019
Minas and
Gerais 30 April 2019 * Sale prices agreed/subject to final agreement The estimated
-Agua In accordance with fair value would
Santa/ 2.3 2.7 sale agreements increase/(decrease)
Ribeirao completed (Agua * Discount rate: 10% if:
do Gado 0.8 0.8 Santa) or in * the agreed sale prices were higher/(lower)
discussion
(Ribeirao do Gado)
after the period * the discount rate were lower/(higher)
end, discounted
to adjust for
partially
deferred
settlement
-------- ------ -------------------- ------------------------------------------------------------ --------------------------------------------------------------
c) Minas 0.8 0.9 31 October 2019
Gerais and
-Forquilha 30 April 2019 * Estimated log prices per m3, being standing prices The estimated
Market approach, with the buyer absorbing all the costs of harvesting fair value would
using prices and and haulage: BRL 33.00 - BRL 38.00 increase/(decrease)
other information if:
generated by * estimated log prices were higher/(lower)
identical * Estimate of costs to sell the plantations: 5%
or comparable
market * estimated costs to sell were lower/(higher)
transactions
-------- ------ -------------------- ------------------------------------------------------------ --------------------------------------------------------------
d) 3R 0.3 0.3 31 October 2019
Tocantins and
30 April 2019 * Regeneration costs: BRL 1,046.22 per hectare (2018: The estimated
Reproduction cost 808.36 per hectare) fair value would
method increase/(decrease)
if:
* Estimate of costs to sell the plantation: 5% (2018: * regeneration costs were higher/(lower)
5%)
* estimated costs to sell were lower/(higher)
-------- ------ -------------------- ------------------------------------------------------------ --------------------------------------------------------------
Total 4.2 4.7
-------- ------ -------------------- ------------------------------------------------------------ --------------------------------------------------------------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
10. Investment property and plantations (continued)
(i) Plantations (continued)
(i) a) Plantations - Agua Santa
During the prior year, the Group agreed a contract to sell the
plantations at the Agua Santa farm. The Group has provisionally
agreed a contract to sell the entire Agua Santa property to the
same buyer for GBP5.8 million (BRL 30.0 million), with settlement
to take place over 24 months, this contract superseding the
previously agreed contract for the sale of the plantations alone.
The Board has determined that the plantations should be valued on
the basis of this later contract, less an appropriate discount for
deferred settlement, less amounts received for trees already
harvested and removed, and accordingly the Agua Santa plantations
are valued in these financial statements at GBP2.4 million (BRL
12.6 million) (30 April 2019: GBP2.9 million (BRL 14.6 million))
before estimated selling costs of GBP0.12 million (30 April 2019:
GBP0.14 million).
(i) b) Plantations -Ribeirao do Gado
During the prior year, the Group also agreed a contract to sell
the plantations at the Ribeirao do Gado farm. During the period,
the Group has been in discussions with the buyer of the Ribeirao do
Gado plantations to similarly convert the plantations sale contract
into a sale of the entire property for GBP1.5 million (BRL 7.8
million). The Board has determined that the plantations should be
valued on the basis of this later agreement in negotiation, less an
appropriate discount for deferred settlement, and accordingly the
Ribeirao do Gado plantations are valued in these financial
statements at GBP0.8 million (BRL 4.2 million) (30 April 2019:
GBP0.8 million (BRL 4.2 million)) before estimated selling costs of
GBP0.04 million (30 April 2019: GBP0.04 million).
(i) c) Plantation - Forquilha
The Operations Manager has valued the Forquilha plantations at
GBP0.9 million ((BRL 4.7 million) (30 April 2019: independent
valuer's valuation of GBP0.9 million (BRL 4.7 million)), which the
Directors believe represents a reasonable estimation of the fair
value of the plantations as at 31 October 2019 before estimated
selling costs of GBP0.05 million (30 April 2019: GBP0.05
million).
(i) d) Plantation - 3R Tocantins
The Operations Manager has valued the regrowth in the
plantations at 3R Tocantins since harvesting at GBP0.3 million (BRL
1.7 million) (30 April 2019: independent valuer's valuation of
GBP0.3 million (BRL1.7 million)), which the Directors believe
represents a reasonable estimation of the fair value of the
plantations as at 30 April 2019 before estimated selling costs of
GBP0.02 million (30 April 2019: GBP0.02 million).
(ii) Investment property
Property Fair value Valuation Significant unobservable Inter-relationship
technique inputs between key unobservable
inputs and fair
value measurement
31 30
October April
2019 2019
GBPm GBPm
-------- ------
a) & b) 31 October
Minas 2019
Gerais 2.2 2.2 and * Sale prices agreed/subject to final agreement The estimated
-Agua 30 April 2019 fair value would
Santa/ 0.5 0.6 In accordance increase/(decrease)
Ribeirao with sale * Discount rate: 10% if:
do Gado agreements * the agreed sale prices were higher/(lower)
completed
after
the year end * the discount rate were lower/(higher)
and
potential
indicative
offer,
respectively,
discounted to
adjust for
partially
deferred
settlement
-------- ------ -------------- ----------------------------------------------------- --------------------------------------------------
c) Minas 31 October
Gerais 2019
-Forquilha 3.2 3.3 and * Land value per hectare: BRL 1,426 - BRL 4,455 The estimated
30 April 2019 fair value would
Sales increase/(decrease)
comparison if:
approach. * land values were higher/(lower)
Considers
the bare land
price from
comparable
transactions,
soil quality,
and
topography
of the land,
access
and distance
from
cities and
the
proportion of
the property
which
could be used
for
cultivation.
-------- ------ -------------- ----------------------------------------------------- --------------------------------------------------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
10. Investment property and plantations (continued)
(ii) Investment property (continued)
Property Fair value Valuation Significant unobservable Inter-relationship
technique inputs between key unobservable
inputs and fair
value measurement
31 30
October April
2019 2019
-------- ------
GBPm GBPm
-------- ------
d) 3R 3.4 3.4 31 October
Tocantins 2019
and * Comparable land sales prices per hectare: BRL 2,335 - The estimated
30 April 2019 BRL 3,821 fair value would
Sales increase/(decrease)
comparison if:
approach. * land values were higher/(lower)
Considers
the bare land
price from
comparable
transactions,
soil quality,
topography of
the land,
access
and distance
from
cities and
the
proportion of
the property
which
could be used
for
cultivation.
-------- ------ -------------- ---------------------------------------------------------------- ---------------------------------------
Total 9.3 9.5
-------- ------ -------------------------------------------------------------------------------------------------------------------------
(ii) a) Investment property - Agua Santa
During the prior year, the Group agreed a contract to sell the
plantations at the Agua Santa farm in Minas Gerais. During the
period the Group provisionally agreed a contract to sell the entire
Agua Santa property to the same buyer for GBP5.8 million (BRL 30.0
million), this contract superseding the previously agreed contract
for the sale of the plantations alone, with settlement to take
place over 24 months. The Board has determined that the investment
property at Agua Santa should be valued on the basis of this later
contract, less an appropriate discount for deferred settlement, and
accordingly the Agua Santa investment property is valued in these
financial statements at GBP2.2 million (BRL 11.5 million) (30 April
2019: GBP2.2 million (BRL 11.5 million)).
(ii) b) Investment property - Ribeirao do Gado
During the prior year, the Group also agreed a contract to sell
the plantations at the Ribeirao do Gado farm in Minas Gerais.
During the period, the Group has been in discussions with the same
buyer to similarly convert the plantations sale contract into a
sale of the entire property for GBP1.5 million (BRL 7.8 million),
with settlement to take place over 36 months. The Board has
determined that the investment property at Ribeirao do Gado should
be valued on the basis of this agreement in negotiation, less an
appropriate discount for deferred settlement, and accordingly the
Ribeirao do Gado investment property is valued in these financial
statements at GBP0.5 million (BRL 2.8 million) (30 April 2019:
GBP0.6 million (BRL 2.8 million)).
(ii) c) Investment property - Forquilha
At the prior year end, the independent valuer valued the
investment property held for sale in Forquilha, the third farm in
the Minas Gerais property, at GBP4.0 million (BRL 20.6 million).
However, in view of the high proportion of unproductive land in the
property, at 31 October 2019 the Operations Manager and the
Directors consider it prudent to discount the independent valuation
by approximately 19% (BRL 3.8 million (GBP0.8 million)) (30 April
2019: 19% (BRL 3.8 million (GBP0.7 million)), which takes into
account the most recent offer in the year ended 30 April 2015 and
the uncertainty of being granted the necessary forestry or
agricultural licence required to achieve the level of productivity
assumed by the valuer, and accordingly the Forquilha land is valued
in these financial statements at GBP3.2 million (BRL 16.8 million)
(30 April 2019: GBP3.3 million (BRL 16.8 million)).
In arriving at the adjusted valuation of the land at Forquilha,
the Directors have considered the current wood prices prevailing in
the region as an indicator of the economic potential of the land
and therefore implicitly of its value. In this context the
Directors noted that, whilst wood prices have remained fairly
stagnant in the period since the land was purchased in 2009 (when
there was an active land market in Brazil), the independent
valuer's estimation of the value of the land shows an increase of
approximately 76% over purchase price in Minas Gerais. This, and
the land values implicit in the prices that the Group was able to
negotiate for the sale of the Agua Santa and Ribeirao do Gado
farms, support the Directors' view that the independent valuers
have been too optimistic about the economic potential of the
Forquilha land, and believe that their valuation, which marks the
value of the land more closely to its original purchase price,
represents a more realistic view of its fair value in the current
market. The Directors have also considered the fact that certain
areas of the Forquilha property remain unplantable, and have
explored possible alternative uses of these areas to generate value
from the land. The Directors believe that these adjusted valuations
provide the best estimates of fair value of the Forquilha land as
at 31 October 2019 and 30 April 2019.
However, given the almost complete lack of comparable land sales
in the region in recent years, the Directors recognise the
continuing inherent uncertainty of the valuation process of the
Forquilha investment property and that the fair value may differ
materially from the actual value that would be realised if this
were sold.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
10. Investment property and plantations (continued)
(ii) d) Investment property - 3R Tocantins
At the prior year end, the independent valuer valued the
investment property held for sale in 3R Tocantins at GBP6.8 million
(BRL 34.5 million). However in view of the almost complete lack of
comparable land sales in the region in recent years, at 31 October
2019 the Operations Manager and the Directors consider it prudent
to discount the independent valuation by approximately 49% (BRL
17.0 million (GBP3.3 million)) (30 April 2019: 49% (BRL 17.0
million (GBP3.3 million)), which takes into account the most recent
offer for the land in the year ended 30 April 2016, and accordingly
the 3R Tocantins land is valued in these financial statements at
GBP3.4 million (BRL 17.5 million) (30 April 2019: GBP3.4 million
(BRL 17.5 million)).
In arriving at the adjusted valuation of the land at 3R
Tocantins, the Directors have considered the current wood prices
prevailing in the region as an indicator of the economic potential
of the land and therefore implicitly of its value. In this context
the Directors noted that, whilst wood prices have remained fairly
stagnant in the period since the land was purchased in 2009 (when
there was an active land market in Brazil), the independent
valuer's estimation of the value of the land shows an increase of
approximately 91% over purchase price in 3R Tocantins. This, and
the land values implicit in the prices that the Group was able to
negotiate for the sale of the Agua Santa and Ribeirao do Gado
farms, support the Directors' view that the independent valuers
have been too optimistic about the economic potential of 3R
Tocantins land, and believe that their valuations, which mark the
value of the land more closely to its original purchase price,
represent a more realistic view of its fair value in the current
market. The Directors have also considered the fact that certain
areas of the 3R Tocantins land remain unplantable, and have
explored possible alternative uses of these areas to generate value
from the land. The Directors believe that these adjusted valuations
provide the best estimates of fair value of the 3R land as at 31
October 2019 and 30 April 2019.
However, given the almost complete lack of comparable land sales
in the region in recent years, the Directors recognise the
continuing inherent uncertainty of the valuation process of the 3R
Tocantins investment property and that the fair value may differ
materially from the actual value that would be realised if this
were sold.
The Group is exposed to a number of risks related to its tree
plantations:
Regulatory and environmental risks
The Group is subject to laws and regulations in the countries in
which it operates. The Group has established environmental policies
and procedures aimed at compliance with local environmental and
other laws. The Operations Manager performs regular reviews to
identify environmental risks and to ensure that the systems in
place are adequate to manage those risks.
Supply and demand risk
The Group is exposed to risks arising from fluctuations in the
price and sales volume of trees. The Group intends to manage this
risk by aligning its harvest volume to market supply and demand.
The Operations Manager performs regular industry trend analyses to
ensure that the Group's pricing structure is in line with the
market and to ensure that projected harvest volumes are consistent
with the expected demand.
Climate and other risks
The Group's plantations are exposed to the risk of damage from
climatic changes, diseases, forest fires and other natural forces.
The Group has processes in place aimed at monitoring and mitigating
those risks, including regular forest health inspections and
industry pest and disease surveys.
11. Disposal group and assets held for sale and discontinued
operations
During the period, the Group continued its strategy for orderly
realisation of the remaining assets in Brazil, in accordance with
the Shareholder Update announcement made on 6 October 2015.
The assets in Brazil are ultimately likely to be sold through a
disposal of the entities owning the assets. Accordingly, as at 31
October 2019, the Group's Brazil segment is presented as a disposal
group held for sale.
The Brazil disposal group comprises the following assets and
liabilities held for sale:
Liabilities 30 April
Assets held for 31 October 2019
held for sale sale 2019 Unaudited Audited
GBP GBP GBP GBP
----------------------------- --------------- ------------ ---------------- -----------
Investment property 9,332,356 - 9,332,356 9,505,966
Plantations 4,203,236 - 4,203,236 4,683,176
Trade and other receivables 157,330 - 157,330 103,169
Trade and other payables - 216,171 (216,171) (74,072)
13,692,922 216,171 13,476,751 14,218,239
----------------------------- --------------- ------------ ---------------- -----------
A loss of GBP256,300 (2018: gain of GBP214,005) related to the
Brazil disposal group, representing foreign exchange translation of
discontinued operations, is included in other comprehensive income
(see note 12).
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
11. Disposal groups and assets held for sale and discontinued
operations (continued)
Total assets held for sale in the statement of financial
position are as follows:
31 October 2019 30 April
Unaudited 2019
Audited
GBP GBP
--------------------------------------------------------------------- -----------
Balance brought forward 14,292,311 14,774,260
Increase in trade and other receivables 54,161 21,885
Costs capitalised to land and plantations - 151,776
Net proceeds received from disposals of assets held
for sale (399,054) (353,801)
Loss on disposal of assets held for sale (12,798) (72,556)
Increase in the fair value of disposal group and assets
held for sale - 587,773
Foreign exchange effect (241,698) (817,026)
-------------------------------------------------------- ----------- -----------
13,692,922 14,292,311
--------------------------------------------------------------------- -----------
As at 31 October 2019 and 30 April 2019, the assets held for
sale were all located in Brazil.
The fair value measurement of GBP13,692,922 has been categorised
as a Level 3 fair value based on the appraised fair values of the
investment property and the appraised fair values of the
plantations less costs to sell. These assets were measured using
the methods outlined in note 10. The fair value of other assets and
liabilities within the disposal group is not significantly
different from their carrying amounts.
Net cash flows attributable to the discontinued operations were
as follows:
For the six For the
months ended six months
31 October ended
2019 31 October
Unaudited 2018
Unaudited
GBP GBP
------------------------------------------------------------------------------- ------------
Operating activities
Loss for the period before taxation (369,631) (372,051)
Adjustments for:
Loss on disposal of assets held for sale 12,798 7,228
Net finance costs 970 868
Bad debt written off 56,288 -
(Increase)/decrease in trade and other
receivables (39,337) 9,674
Increase/(decrease) in trade and other
payables 130,193 (56,448)
Net cash used in operating activities (208,719) (410,729)
Net cash from investing activities (proceeds of disposal
of assets held for sale less costs capitalised to plantations) 399,054 14,653
Net cash used in financing activities (net finance costs) (970) (868)
Foreign exchange movements (15,895) 26,019
Net cash flow for the period 173,470 (370,925)
------------------------------------------------- ---------------------------- ------------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
12. Foreign exchange effect
The translation reserve movement in the period, all of which was
derived from discontinued operations, has arisen as follows:
Exchange Exchange
rate at rate at Translation
31 October 30 April reserve movement
31 October 2019 2019 2019 Unaudited
------------------------- ------------ ---------- ------------------
Discontinued operations
Brazilian Real 5.2017 5.1067 (256,300)
United States Dollar 1.2942 1.3032 56
------------------------- ------------ ---------- ------------------
(256,244)
--------------------------------------------------- ------------------
Exchange Exchange Translation
rate at rate at reserve
31 October 30 April movement
31 October 2018 2018 2018 Unaudited
Discontinued operations
Brazilian Real 4.7534 4.8252 214,005
United States Dollar 1.2766 1.3763 28,355
------------------------- ------------ ---------- ------------
242,360
--------------------------------------------------- ------------
13. Stated capital
31 October 2019 30 April
Unaudited 2019
Audited
GBP GBP
----------------------------------------------------------------- ----------
Balance brought forward and carried forward 2,000,000 2,000,000
----------------------------------------------------- ---------- ----------
The total authorised share capital of the Company is 250 million
shares of no par value. On initial placement 104,350,000 shares
were issued at 100 pence each. Shares carry no automatic rights to
fixed income but the Company may declare dividends from time to
time to which shareholders are entitled. Each share is entitled to
one vote at meetings of the Company.
On 22 February 2007, a special resolution was passed by the
Company to reduce the stated capital account from GBP104,350,000 to
GBP2,000,000. Approval was sought from the Royal Court of Jersey
and was granted on 29 June 2007. The balance of GBP102,350,000 was
transferred to a distributable reserve on that date.
The Company was granted authority by shareholders on 15 August
2008 to make market purchases of its own shares, an authority which
has been renewed annually thereafter, most recently on 19 September
2019.
On 1 November 2018, the Company announced a Proposed Share
Buy-back, which was approved by Shareholders at an Extraordinary
General Meeting on 3 December 2018.
During the period, the Company made a market purchase of 389,015
of its own shares at a price of 11.55p per share. The total cost of
this share buy-back was GBP44,931, which was charged to the
Company's Distributable reserve (see note 14). These shares have
been cancelled.
Movements of shares in issue
For the six For the
months ended six months
31 October 2019 ended
Unaudited 31 October
2018
Unaudited
Number Number
------------------------------------------------ ------------
Brought forward 74,117,299 82,130,000
Share buy-backs during the period (389,015) -
In issue at 31 October fully paid 73,728,284 82,130,000
----------------------------------- ----------- ------------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
14. Reserves
The movements in the reserves for the Group are shown on page
6.
Translation reserve
The translation reserve contains exchange differences arising on
consolidation of the Group's foreign operations (see note 12).
Distributable reserve
In June 2007, the Company reduced its stated capital account and
a balance of GBP102,350,000 was transferred to distributable
reserves. This reserve has been utilised by the Company to purchase
its own shares (as at 31 October 2019: GBP7,237,888; as at 30 April
2019: GBP7,192,957) and for the payment of dividends (during the
period: GBPNil; as at 30 April 2019: GBP12,508,800), leaving a
balance at 31 October 2019 of GBP82,603,312 (30 April 2019:
GBP82,648,243).
15. Net asset value reconciliation
For the year For the six
For the six ended months ended
months ended 30 April 31 October
31 October 2018 2019 2018
Unaudited Audited Unaudited
GBP GBP GBP
--------------------------------------------------------- ------------- --------------
Net asset value brought forward 13,947,395 16,563,997 16,563,997
Translation differences (256,244) (816,903) 242,360
Loss on disposal of assets held for sale (12,798) (72,556) (7,228)
Increase in the fair value of investment
property and plantations - 587,773 -
Net finance costs and exchange differences
- continuing operations (56,542) (100,011) (44,837)
Share buy-backs (44,931) (940,817) -
Net finance costs and exchange differences
- discontinued operations 1,576 (3,350) (868)
Bad debt written off (56,288) - -
Loss before above items (530,329) (1,270,738) (594,703)
Net asset value carried forward 12,991,839 13,947,395 16,158,721
-------------------------------------------- ----------- ------------- --------------
16. Related party transactions
During the period the Directors received the following
remuneration in the form of fees from the Company:
For the six For the
months ended six months
31 October 2019 ended
Unaudited 31 October
2018
Unaudited
GBP GBP
-------------------------------- ------------
Antony Gardner-Hillman 24,000 22,667
Svante Adde 12,500 12,500
Roger Lewis 12,500 12,500
49,000 47,667
-------------------------------- ------------
Robert Rickman was paid GBP53,000 (2018: GBP51,333) in the
period as remuneration in his role as Operations Manager (see note
4).
At the period end, Directors held the following interests in the
shares of the Company:
31 October 2019 30 April
Unaudited 2019
Audited
Number Number
------------------------------------------------------------- ---------
Svante Adde 160,840 160,840
160,840 160,840
------------------------------------------------------------- ---------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2019
17. Loan payable to related party
On 21 December 2017, the Group agreed an unsecured loan funding
facility with Peter Gyllenhammar AB ('PGAB'), the Company's largest
shareholder, for approximately GBP1.4 million, in order to enable
the Group to remove outstanding mortgages over the Group's 3R
Tocantins property without depleting existing cash balances.
The interest rate on the loan was 6% for the first 12 months and
thereafter 8%. PGAB agreed not to have recourse against the
existing cash balances. There is no specified repayment date (and
consequently no default interest rate) and the Company is only
required to repay the loan or pay interest out of cash flow from
the land and/or timber assets presently held in Brazil which is
surplus to requirements. The loan agreement contains borrower
covenants requiring lender consent for the Company to return to
shareholders in excess of approximately GBP2,000,000 of the cash
held at the date of the agreement, to purchase own shares for more
than 12p per share, to declare or pay any dividend, or to make any
significant new investment (not including asset maintenance or
repair costs). During the period, no repayments of principal or
interest were made.
18. Events after the reporting period
There were no other significant events after the period end
which, in the opinion of the Directors, require disclosure in these
financial statements.
Cambium Global Timberland Limited
Directors
Antony R Gardner-Hillman (Chairman)
Svante Adde
Roger Lewis
Registered Office of the Company
Charter Place
23-27 Seaton Place
St Helier
Jersey JE1 1JY
Operations Manager
Robert Rickman
Belsyre Court
57 Woodstock Road
Oxford OX2 6HJ
Sub-Administrator
Praxis Fund Services Limited
PO Box 296
Sarnia House
St Peter Port
Guernsey GY1 4NA
Administrator and Company Secretary
Praxis Fund Services (Jersey) Limited
Charter Place
23-27 Seaton Place
St Helier
Jersey JE1 1JY
Auditor
KPMG Channel Islands Limited
37 Esplanade
St Helier
Jersey JE4 8WQ
Registrar, Paying Agent and Transfer Agent
Link Market Services Limited
6(th) Floor, 65 Gresham Street
London EC2V 7NQ
Corporate Broker and Nominated Adviser for AIM
WH Ireland Limited
24 Martin Lane
London EC4R 0DR
Property Valuers
Holtz Consultoria Ltda
Republica Argentina Av. 452
Curitiba
Agua Verde 80240-210
Brazil
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BLGDBLUBDGGR
(END) Dow Jones Newswires
January 17, 2020 12:00 ET (17:00 GMT)
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