Foresight Sustain. - 31 March 2022 Net Asset Value and Portfolio Update

Foresight Sustainable Forestry

03/05/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220503:nRSC9503Ja&default-theme=true

RNS Number : 9503J  Foresight Sustain. Forestry Co PLC  03 May 2022

3 May 2022

 

Foresight Sustainable Forestry Company Plc

("FSF" or "the Company")

 

31 March 2022 Net Asset Value ("NAV") and Portfolio Update

 

Foresight Sustainable Forestry Company Plc, an investment company that invests
in UK forestry and afforestation assets, announces that as at 31 March 2022
its unaudited Net Asset Value ("NAV") was £135.5 million (post IPO: £127.6
million), resulting in a NAV per Ordinary Share of 104.2 pence, up 6.1 pence
from 98.1 pence immediately following the Company's IPO in November 2021.

 

Summary of NAV key drivers:

 

FSF saw gains across its portfolio of £7.9m (6.2%) over the period from the
first day of trading on 24 November 2021 to the period end on 31 March 2022.
The related valuations were performed on a property-by-property basis by an
independent third-party in accordance with the Royal Institute of Chartered
Surveyors ("RICS") Red Book Fair Value methodology.

 

Within the portfolio, the afforestation assets delivered a gain to FSF of 18%
during the period, with demand for afforestation and the associated voluntary
carbon credits particularly strong. In addition, several afforestation
properties achieved key development milestones in the period, including Banc
Farm, which completed planting activities, and Mountmill Burn, which commenced
planting activities. The established forestry aspect of the portfolio saw a
gain of 2% with notably few comparable transactions within the UK for mature
assets during the period, partly as a result of the impact of Storm Arwen.

 

Following the revaluation, FSF's split of afforestation assets (by value) has
increased by 3% to 36% of the total portfolio, moving FSF materially closer to
its stated target of 40-50% afforestation. The remaining 64% of value is in
established forestry assets.

 

Portfolio Update

 

Completion of planting at Banc Farm

 

At the end of March 2022, FSF completed planting at Banc Farm, with no
material deviations to the expected number of trees planted at c.229,300. This
is a key development milestone for the asset and driver of capital
appreciation for FSF.  In addition to the forecasted production of over
48,000 tonnes of sustainable timber on a c.35-year rotation, this project is
forecast to increase the baseline biodiversity net gain of the site (according
to DEFRA's Metric 3.0) by 60% over the next five years and sequester 21,218
tonnes of additional CO(2 ). Banc Farm will now undergo an independent
verification to confirm the number of voluntary carbon units that are
accredited to it.

 

Pipeline and deployment update

 

Following the expansion of FSF's mapping activity, the Company has identified
over 4,500 properties that meet its afforestation criteria, covering an area
in excess of 860,000 hectares. This activity has driven a material boost to
the pipeline of future investments and provides confidence in FSF's ability to
originate attractive, off-market afforestation properties going forward.

 

FSF is currently in the process of transacting twelve individual off-market
afforestation properties under exclusivity, extending over 2,700 hectares, for
an aggregated consideration (excluding transaction taxes and adviser costs) of
over £18 million, demonstrating FSF's continued ability to convert its
pipeline into live, executable deals.

 

Additionally, FSF is pleased to have entered into an option agreement, valid
until 31 December 2022, with Foresight Inheritance Tax Fund ("FITF") for an
additional eight forestry properties covering more than 3,000 hectares, with a
combined value of £27.6 million as of 30 September 2021. Afforestation assets
represent c.19% of these properties by value.

 

FSF has deployed 91% of IPO proceeds. It is estimated that FSF has £4.1m
available for further afforestation investments until the IPO proceeds will be
considered fully invested.

 

Richard Davidson, Chairman of Foresight Sustainable Forestry Company,
commented:

 

"We are delighted that FSF, the London Stock Exchange's first natural capital
investment vehicle, has delivered such a strong first NAV update which
illustrates how capital appreciation is achieved by acquiring and developing
afforestation sites, while also directly contributing to the twin fights
against climate change and biodiversity loss.

 

We are proud to have successfully completed planting at Banc Farm, one of
Wales's largest planting schemes this season and Foresight's first to reach
this milestone. The development of our afforestation pipeline, together with
the opportunity to execute on the option agreement over another eight forestry
sites, gives FSF an attractive pipeline of assets that positions us well to
deploy the small remaining IPO proceeds and deliver future growth for our
investors."

Looking forward, we intend to build on our good performance to date, adding
scale and leveraging the favourable macro tailwinds applicable to UK forestry
to continue to deliver strong investor returns."

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%,
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.
https://fsfc.foresightgroup.eu/ (https://fsfc.foresightgroup.eu/)

 

For further information, please contact:

 Foresight Sustainable Forestry Company Plc             +44 20 3667 8100

 Robert Guest

 Richard Kelly

 fsfc@foresightgroup.eu

 Jefferies International Limited                        +44 20 7029 8000

 Neil Winward

 Will Soutar

 Citigate Dewe Rogerson

 Toby Moore (toby.moore@citigatedewerogerson.com)       +44 7768 981763

 Jos Bieneman (jos.bieneman@citigatedewerogerson.com)   +44 7834 336650

 

 

This announcement does not constitute, and may not be construed as, an offer
to sell or an invitation to purchase investments of any description, or the
provision of investment advice by any party. No information set out in this
announcement is intended to form the basis of any contract of sale, investment
decision or any decision to purchase securities in the Company.

 

This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "may", "will",
"targeting" or "should" or, in each case, their negative or other variations
or comparable terminology. All statements other than statements of historical
facts included in this announcement, including, without limitation, those
regarding the Company's financial position, strategy, plans, proposed
acquisitions and objectives, are forward-looking statements.

 

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 (mailto:rns@lseg.com)
 or visit
www.rns.com (http://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 (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NAVPPUCPCUPPGQB