TIDMFSF

Foresight Sustain. Forestry Co PLC

20 December 2022

Foresight Sustainable Forestry (FSF)

20/12/2022

Results analysis from Kepler Trust Intelligence

Foresight Sustainable Forestry (FSF) has reported its results for the period ending 30/09/2022. In a tough year for markets, FSF's positive performance stands out. From its initial public offering (IPO) on 24/11/2022 until the period end, the trust saw a total NAV return of 5.0% and a share price total return of 8.2%.

The trust raised GBP130m at IPO and a further GBP45m from equity issuance in June. The managers deployed capital ahead of schedule and had fully invested the IPO proceeds by the time of June's equity issuance. They also achieved their target of having at least 40% of the portfolio invested in afforestation sites by August. These are plots of land which can be turned into new forest and woodland, as opposed to existing forests.

FSF Chairman Richard Davidson said: "FSF is well placed to benefit from a future increase in timber and voluntary carbon credit prices and remains focused on a significant amount of new forestry planting. We will continue to deploy our capital advantageously."

Kepler View

Foresight Sustainable Forestry (FSF) is the only investment company listed in the UK to focus solely on forestry and is the first fund to be accredited with the London Stock Exchange's Voluntary Carbon Market (VCM) designation. The managers invest in existing forestry sites, afforestation sites, and other sites that are a mixture of the two. The trust's investments should theoretically not be correlated with equity or bond markets and have generated positive returns this year. Returns for the trust have three main drivers - revaluations to land, sales of timber and the creation of voluntary carbon credits.

The first of these is likely to be the primary driver of the trust's total returns, particularly in afforestation sites. Indeed, one of the main arguments the managers had made prior to IPO was that repurposing land for forestry was likely to substantially increase its value. This has been illustrated by the period under review. In cash terms, the increase in NAV totalled GBP11.5m. Of that amount, GBP7.5m was due to revaluations of afforestation sites.

Several tailwinds are currently working in the UK timber market's favour as well. The UK typically imports approximately 80% of its timber but a devalued pound has made domestic timber more attractive to UK buyers. Growing demand for sustainable timber, as well as the desire to 'onshore' supply chains, is also likely to make the timber FSF's sites produce more appealing to buyers. At the same time, Russia, Ukraine and Belarus are now effectively off limits due to sanctions imposed following the former's invasion of Ukraine. According to Investment Monitor, those three countries accounted for 25% of global timber trade prior to the war, a figure which is certain to drop in 2022.

Another key objective of FSF is to generate voluntary carbon credits and the trust became the first investment company to receive the London Stock Exchange's VCM designation in December. Carbon credits are generated by projects that help reduce carbon or equivalent greenhouse gas emissions, either by removing them from the atmosphere or preventing their emission in the first place. FSF's capital is on track to produce 1 million carbon credits in its current investment cycle. Credits that FSF produces can be paid out as dividends to shareholders (i.e. share of credits delivered in place of their cash value) or sold with any related dividend paid in cash.

CLICK HERE TO READ THE FULL REPORT

Visit Kepler Trust Intelligence for more high quality independent investment trust research.

Important information

This report has been issued by Kepler Partners LLP. The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions.

The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm's internal rules. A copy of the firm's Conflict of Interest policy is available on request.

PLEASE SEE ALSO OUR TERMS AND CONDITIONS

Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 70 Conduit Street, London W1S 2GF with registered number OC334771.

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. 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.

Reach is a non-regulatory news service. By using this service an issuer is confirming that the information contained within this announcement is of a non-regulatory nature. Reach announcements are identified with an orange label and the word "Reach" in the source column of the News Explorer pages of London Stock Exchange's website so that they are distinguished from the RNS UK regulatory service. Other vendors subscribing for Reach press releases may use a different method to distinguish Reach announcements from UK regulatory news.

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

NRAFBLFLLLLZFBQ

(END) Dow Jones Newswires

December 20, 2022 06:51 ET (11:51 GMT)

Foresight Sustainable Fo... (LSE:FSF)
Graphique Historique de l'Action
De Fév 2024 à Mar 2024 Plus de graphiques de la Bourse Foresight Sustainable Fo...
Foresight Sustainable Fo... (LSE:FSF)
Graphique Historique de l'Action
De Mar 2023 à Mar 2024 Plus de graphiques de la Bourse Foresight Sustainable Fo...