TIDMFSF
RNS Number : 8678S
Foresight Sustain. Forestry Co PLC
09 November 2023
For immediate publication. This announcement contains
information that is inside information.
9 November 2023
Foresight Sustainable Forestry Company Plc
("FSF" or "the Company")
Operational Performance for the 6 months period ended 30
September 2023
and Unaudited Net Asset Value at 30 September 2023
Foresight Sustainable Forestry Company Plc, an investment
company that invests in UK forestry and afforestation assets, today
announces an update on its operational performance for the 6 month
period to 30 September 2023 and its unaudited Net Asset Value
("NAV") for its financial year ended 30 September 2023 ahead of the
release of its annual results in early December 2023.
Portfolio Performance (full year to 30 September 2023)
-- Operational performance across the portfolio is tracking within budget.
-- 18 attractive new assets acquired for a total of GBP38.4m
(inc. tax and transaction costs) with opportunistic purchasing
strategy employed during the financial year to capture favourable
pricing window.
-- Completed planting on 4 afforestation schemes, benefitting
from the associated voluntary carbon credit value creation and
bringing total number of planted schemes to 6.
-- Strong progress on development pipeline of 37 afforestation
schemes with the planting season now underway, with the expectation
remaining that many schemes will complete planting by the spring of
2024 with the remainder by spring 2025.
Investment Market (six months to 30 September 2023)
-- Increasing inflation and interest rates have led to a
weakening of the forestry and planting land investment market over
the last 6 months, characterised by a higher proportion of
distressed vendors of non-prime forestry and afforestation
properties.
-- Lower prices paid across a relatively small transaction volume.
-- The value of UK forestry assets sold in the first nine month
period of 2023 (to 30 September) represents 12% of the annual
average of the value of assets sold in 2021 and 2022.
-- Established forestry and voluntary carbon credit prices have
both been more resilient versus afforestation land values.
Valuation (six months to 30 September 2023)
-- As at 30 September 2023 the Company's unaudited NAV was
GBP169.2 million (31 March 2023: GBP186.6 million), resulting in a
NAV per Ordinary Share of 98.4 pence, equivalent to a 9.3%
reduction.
-- The independent third-party valuer has completed its
valuation in accordance with the Royal Institute of Chartered
Surveyors ("RICS") Red Book Fair Value methodology which primarily
utilises comparable market values of similar heritable title /
freehold forestry and afforestation assets from recent transactions
in the UK market.
-- The valuation methodology of the afforestation assets
excludes the development progress made.
-- During the period, the company completed four non-core asset
disposals totalling, GBP1.6m of net proceeds, made at book
value.
Company Outlook
-- Despite the challenging market conditions, the Board is
disappointed to see the share price trade at a discount to NAV.
-- The Company has a strong platform to build from and the
fundamental under-supply of land, sustainable timber and voluntary
carbon remains.
-- The Company has a GBP30m Revolving Credit Facility ("RCF")
which reaches maturity in July 2025. The RCF was drawn up to
GBP10.4m to complete three acquisitions in Scotland as announced on
13 October 2023. The current acquisition programme is now
substantially complete and servicing/repayment of the RCF will be
made through a combination of timber harvesting and the planned
disposal of non-core assets.
-- The Board and Investment Manager are focussed on protecting
the Company's existing value and exploiting the ongoing
opportunities in this market including:
o Reviewing planting and harvesting timetables to optimise cash
flow s.
o Advancing non-core asset disposals, including various
residential properties attached to existing afforestation
assets.
o Maximising allocation to afforestation and voluntary carbon
where possible.
o Positioning the Company for rapid growth when equity market
conditions improve.
A summary of the key unaudited NAV drivers from 31 March 2023 to
30 September 2023 are as follows:
Item p/share movement % change
to 31 March
2023 NAV /
cost (as applicable)
NAV at 31 March 2023 108.5 N/A
----------------- ---------------------
Acquisitions* 0.3 5.6%
----------------- ---------------------
Standing Forestry (existing at 31 March
2023) ** (3.1) (6.5%)
----------------- ---------------------
Afforestation (existing at 31 March
2023) ** (4.7) (11.2%)
----------------- ---------------------
Mixed Forestry (existing at 31 March
2023) ** (1.2) (8.4%)
----------------- ---------------------
Existing Carbon Credit valuation 0.1 8.6%
----------------- ---------------------
Fund costs including RCF expense (0.8) N/A
----------------- ---------------------
Forest operational costs and working (0.7) N/A
capital
----------------- ---------------------
NAV at 30 September 2023 98.4 N/A
----------------- ---------------------
*The change represents mark-to-market gains between the
consideration paid (inc. tax and transactions costs), and the 30
September 2023 Red Book Valuation.
** On a like-for-like basis, excluding any acquisitions,
disposals and harvesting.
Richard Davidson, Chair of Foresight Sustainable Forestry
Company Plc,
"Despite the challenging macroeconomic backdrop, we are pleased
with the Company's operational performance and the delivery of the
business plan in the year to 30 September 2023.
"Against this positive operational performance, increasing
inflation and interest rates have led to a weakening of the
investment market and consequent falls in the independent valuation
of FSF's assets, primarily driven by lower prices paid across a
much smaller volume of transactions.
"Shareholders can take comfort from our disciplined strategy of
purchasing high-quality assets, attention to cash flow and balance
sheet management and focus on delivery of the afforestation
development pipeline which positions us well to weather this period
of elevated market volatility and uncertainty."
For further information, please contact:
Foresight Sustainable Forestry Company Plc
Robert Guest
Richard Kelly
fsfc@foresightgroup.eu +44 20 3667 8100
Jefferies International Limited
Tom Yeadon
Will Soutar
Harry Randall +44 20 7029 8000
SEC Newgate
Elisabeth Cowell
fsf@secnewgate.co.uk
About the Company
Foresight Sustainable Forestry Company Plc ("the Company") is an
externally managed investment company investing in a diversified
portfolio of UK forestry and afforestation assets. Targeting a net
total return of more than CPI +5% per annum on a rolling five-year
basis, the Company provides investors with the opportunity for real
returns and capital appreciation driven by the prevailing global
imbalance between supply and demand for timber; the
inflation-protection qualities of UK land freeholds; and biological
tree growth of 3% to 4% not correlated to financial markets. It
also offers outstanding sustainability and ESG attributes and
access to carbon units related to carbon sequestration from new
afforestation planting. The Company targets value creation as the
afforestation projects successfully achieve development milestones
in the process of converting open ground into established
commercial forest and woodland areas. The Company is seeking to
make a direct contribution in the fight against climate change
through forestry and afforestation carbon sequestration initiatives
and to preserve and proactively enhance natural capital and
biodiversity across its portfolio. It is managed by Foresight Group
LLP.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NAVEADFPEDPDFAA
(END) Dow Jones Newswires
November 09, 2023 02:00 ET (07:00 GMT)
Foresight Sustainable Fo... (LSE:FSF)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Foresight Sustainable Fo... (LSE:FSF)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
