REG - Foresight Sustain. - Half-year Results

Foresight Sustainable ForestryAnnouncement

25/06/2024 07:00

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RNS Number : 6748T  Foresight Sustain. Forestry Co PLC  25 June 2024

25 June 2024

 

Foresight Sustainable Forestry Company Plc

 

("FSF" or "the Company")

 

Announcement of half-year results for the six months ended 31 March 2024

 

 

Foresight Sustainable Forestry Company Plc, an investment company that invests
in UK forestry and afforestation assets, is pleased to announce the
publication of its unaudited Interim Results (the "Interim Results") for the
six months ended 31 March 2024.

 

 

Financial highlights

 

-      The Company recorded a profit for the period of £6.6 million (30
September 2023: loss of £11.3 million).

-      Net Asset Value ("NAV") has increased to £175.8 million (30
September 2023: £169.2 million).

-     NAV per Ordinary Share has increased to 102.2 pence, a NAV per share
return of 3.9% since 30 September 2023.

-   The key drivers of the uplift are the upwards revaluation of FSF's
properties (+3.7p) and carbon credit recognition (+3.7p), driven by the
completion of planting c.2.9 million trees at 13 properties.

-     The Company has delivered a total NAV return of 4.2%¹ since IPO.

-     As at 31 March 2024, the Company had £2.0 million of cash available
and had drawn £18.3 million on the RCF - a gearing ratio of 9.4% of Gross
Asset Value.

 

Key metrics

 

                                As at 31 March 2024
 Net Asset Value                £175.8 million
 NAV per Share                  102.2 pence
 Total NAV return since IPO ¹   4.2%
 Profit for the period          £6.6 million

 

¹ Calculated with IPO costs netted off

 

Summary of NAV key movements in the six months ended 31 March 2024

 

 Item                                         p/share
 NAV at 30 September 2023                     98.4
 Net Afforestation & Restock Expenditure      (1.1)
 Portfolio revaluation gains                  3.7
 Voluntary carbon credit valuation gains      3.7
 Asset Level Operating Expenditure            (1.0)
 Fund Operating Expenditure                   (1.5)
 NAV at 31 March 2024                         102.2

 

Portfolio highlights and outlook

 

Portfolio highlights

-       Approximately 2.9 million trees were planted at 13 afforestation
properties during the period.

-       4.3 million trees have been planted across 19 planting
properties to 31 March 2024 since IPO in November 2021.

-       An additional c.334,000 carbon credits associated with new
planting have been recognised on FSF's balance sheet, taking the total number
of carbon credits to c.478,000.

-     As at 31 March 2024, the total value ascribed towards the creation of
carbon credits was £9.2 million (30 September 2023: £2.7 million).

-      The property revaluation delivered a gain of £6.4 million in the
six month period to 31 March 2024.

 

Outlook

-    Between 31 March 2024 and 10 May 2024, the Company planted an
additional c.650,000 trees at four afforestation properties.

-   From 10 May 2024 to 30 September 2024, the Company intends to plant c.2.1
million trees at seven afforestation properties.

-     From 1 October 2024 to 31 March 2025, the Company intends to plant
c.2.3 million trees at 14 afforestation properties.

-    By spring 2025, the Company expects to have planted c.9.4 million trees
over a total forest area of 5,379 hectares since IPO.

 

Post period end update

On 29 May 2024, the Board announced that FSF had reached agreement on the
terms of a recommended acquisition, pursuant to which Arizona Bidco Limited, a
wholly owned indirect subsidiary of Averon Park Limited ("Averon Park"), will
acquire the entire issued and to be issued Ordinary Share capital of FSF that
Averon Park's group does not already own (the "Acquisition").  Full details
of the Acquisition, including the strategic rationale and recommendation of
the Directors, can be found here: https://fsfc.foresightgroup.eu/offer-fsfc
(https://url.uk.m.mimecastprotect.com/s/rr7xCpgwyTz7NymtPO2fM?domain=fsfc.foresightgroup.eu)
.

 

Interim Report

 

A copy of the Interim Report has been submitted to the National Storage
Mechanism and will shortly be available at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . The Interim Report
can also be seen on the Company website (https://fsfc.foresightgroup.eu
(https://fsfc.foresightgroup.eu) ), where you can find all the information
about the Company.

 

Richard Davidson, Chair of Foresight Sustainable Forestry Company Plc,
commented:

 

"We are proud of the achievements the Company has made since its IPO. FSF has
amassed and developed a nationally significant afforestation portfolio in a
short space of time. The Company has delivered on its objectives to increase
domestic timber supply, sequester carbon dioxide from the atmosphere, enhance
biodiversity and has created hundreds of jobs within rural communities where
it operates. We are pleased with the Company's performance to 31 March 2024,
which has seen an unaudited NAV gain of 3.8 pence per share, an increase of
3.9% for the six-month period, due to the successful progress of our planting
programme."

 

For further information, please contact:

 

 Foresight Sustainable Forestry Company Plc  +44 20 3667 8100

 Robert Guest

 Richard Kelly

 fsfc@foresightgroup.eu

 Stifel Nicolaus Europe Limited              +44(0) 20 7663 3227

 Edward Gibson-Watt

 Bruno Benega

 Rajpal Padam

 Catriona Neville

 SEC Newgate

 Elisabeth Cowell                            +44 (0)20 3757 6882

 Alice Cho                                   fsf@secnewgate.co.uk

 Harry Handyside

 

About the Company

Foresight Sustainable Forestry Company Plc 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.

 

The Company 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.

 

The Company is managed by Foresight Group LLP.
https://fsfc.foresightgroup.eu/ (https://fsfc.foresightgroup.eu/)

 

Notes

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.

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