Foresight Sustain. - Announcement of acquisitions and trading update

Foresight Sustainable Forestry

17/10/2022 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:20221017:nRSQ0011Da&default-theme=true

RNS Number : 0011D  Foresight Sustain. Forestry Co PLC  17 October 2022

17 October 2022

 

Foresight Sustainable Forestry Company Plc

("FSF" or "the Company")

 

Five acquisitions adding c.700 hectares to the Company's portfolio and trading
update

 

Foresight Sustainable Forestry Company Plc, an investment company that invests
in UK forestry and afforestation assets, today announces five acquisitions and
provides a trading update.

 

Acquisitions

 

Over the last two months FSF deployed £7.9 million (inclusive of tax and
transaction costs) into four afforestation properties and one forestry
property, all of which are in Scotland. The acquisitions increase the
portfolio by approximately 700 hectares and FSF's total portfolio now covers
9,751 hectares.

 

Each afforestation acquisition is well suited for the establishment of a
woodland creation scheme and has design allocations to native broadleaves
alongside commercially productive forestry and open ground. The Company is
also exploring natural capital potential, including peatland and wetland
restoration, for the properties. Once planted, the properties are anticipated
to be awarded approximately 77,000 voluntary carbon units for the additional
CO2 sequestered over the project lifetime.

 

The single forestry property provides the Company with a good opportunity to
harvest, re-design and re-stock the site in the medium term. Once the
harvesting programme has occurred, a new tree species composition will be
incorporated to fully capture the property's upside potential. Well located in
relation to other portfolio assets, sawmills and timber processors, the
property further expands FSF's Scottish portfolio.

 

Additional property details can be found in the appendix.

 

Trading update

 

In light of the current volatility, the Investment Manager and the Company
will ensure a carefully prioritised allocation of capital until the shifting
macro-economic market conditions are fully understood.

 

The Company has not utilised its Revolving Credit Facility ("RCF") and
therefore has no direct exposure to rising debt base rates (Sterling Over
Night Index Average, SONIA). A prudent approach to the utilisation of the RCF
will be taken during these uncertain times given the rapidly increasing cost
of debt.

 

During times of financial market turbulence, UK forestry asset prices have
historically proved resilient. UK forestry is commonly acquired and owned
without the use of debt which, in the view of the Company, provides an element
of insulation against base rate increases relative to other asset classes
where leverage is more frequently used.

 

Richard Kelly and Robert Guest, Co-Heads of Foresight Sustainable Forestry
Company, commented:

 

"We are delighted to have added these five high quality assets to the
portfolio. Afforestation properties are a great opportunity for capital
appreciation and unlocking additional value as the woodland creation schemes
reach development milestones. They also make a significant contribution to the
removal of carbon from the atmosphere.

 

Recent market volatility has created increased uncertainty within equity and
debt markets. Whilst we believe that UK forestry is relatively resilient to
market turbulence, it is of course important that we consider all potential
impacts in our strategic decisions and as we carefully grow our UK portfolio.
We will be closely monitoring market developments and remaining dynamic in our
approach to the management of the Company."

 

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
 (mailto:toby.moore@citigatedewerogerson.com) )

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

 (mailto:jos.bieneman@citigatedewerogerson.com) )

 

 

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.

 

 

Appendix

 

Acquisitions: asset specific information

 

 Name                Acquisition date   Location                         Asset Type     Acquisition cost (including tax and other transaction costs, £m)   Size of asset (hectares)  Anticipated sequestration of additional CO2 equivalent (tonnes)
 Knock Fell          16 August 2022     Dumfries and Galloway, Scotland  Afforestation  1.6                                                                305                       40,000
 Chesterknowes Wood  19 August 2022     Midlem, Scotland                 Afforestation  0.9                                                                55                        8,000
 Windylaws           1 September 2022   Peebles, Scotland                Afforestation  1.0                                                                59                        10,000
 Liddel Water        13 September 2022  Peebles, Scotland                Afforestation  3.4                                                                147                       19,000
 Bogbain Wood        12 October 2022    Inverness, Scotland              Forestry       1.0                                                                133                       N/A

 

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  ACQEZLFFLBLZFBQ