TIDMFSF
RNS Number : 6969U
Foresight Sustain. Forestry Co PLC
30 March 2023
30 March 2023
Foresight Sustainable Forestry Company Plc
Completion of three acquisitions and operational update
Foresight Sustainable Forestry Company Plc ("FSF", "the
Company"), an investment company that invests in UK forestry and
afforestation assets, today announces three acquisitions and
provides an operational update.
New acquisitions
During March 2023, the Company deployed a further GBP9.9 million
(inclusive of tax and transaction costs) into three properties in
Scotland:
-- Newnoth Farm : This asset has strong afforestation potential
and is directly adjacent to Newnoth Forest, an existing mature
forestry property within the portfolio. Together, these properties
create a combined area of circa 234 hectares.
-- Balnagowan: Neighbouring the Company's existing asset Coull Woodlands,
this is a mature forest which creates an aggregate property area
of circa 461 hectares when combined with Coull Woodlands.
-- High Auldgirth : This is a sizeable property in its own right
(circa 288 hectares) with existing forestry on circa 60% of the
land and the remaining area having excellent afforestation potential.
The combination of properties at both Newnoth Farm and
Balnagowan has the potential for operational efficiencies and
marriage value for the Company.
The acquisitions have been funded from cash on the balance sheet
and to date the Company has not utilised its Revolving Credit
Facility ("RCF") although it expects to draw on the facility soon
for planned capital expenditure. The Company's intention is to
minimise exposure to interest charges whilst also retaining a
sufficient cash buffer.
Following these acquisitions, FSF's portfolio now covers a total
area of 11,743 hectares across 65 properties. The current breakdown
of the portfolio, post the acquisitions above, is shown below:
Development Stage Afforestation Assets
(Hectares*) 3,430
Planting Stage Afforestation Assets (Hectares*) 426
-------
Establishment Stage Afforestation Assets
(Hectares*) 264
-------
Established Forest Assets (Hectares*) 5,772
-------
Other Land (Hectares**) 1,851
-------
Total (Hectares) 11,743
-------
Definitions
Development Stage Afforestation Assets - Land prior to the
securing of planning permission and grant application.
Planting Stage Afforestation Assets - Planning permission and
grant application completed but initial planting of trees not yet
completed.
Establishment Stage Afforestation Assets - Initial planting of
site completed but trees establishing and stabilising (typically a
3-5 year period).
Established Forests Assets - Trees stabilised and
established.
* Hectares within woodland creation scheme boundary or managed
forest area boundary.
** Hectares not within woodland creation scheme boundary or
managed forest boundary. This Other Land is held as part of the
core Forestry Assets allocation and can accompany both
Afforestation and Established Forest Assets.
Planting Stage Afforestation Projects update
The Company is pleased to report that planting activities on
Auchensoul, Redding Farm, Upper Bar and Frongoch have all
commenced, with planting expected to be completed imminently.
All schemes are registered with the UK Land Carbon Registry and
the Woodland Carbon Code ("WCC") and once planting is complete, the
process for full accreditation and award of carbon units by the WCC
can take place.
These schemes will contribute to the Welsh and Scottish
governments' annual planting targets. The Scottish Government has
set particularly ambitious targets for afforestation and is
currently targeting at least 12,000 hectares planted per year,
increasing to 18,000 hectares per year from March 2024 through to
2030.
IPO target achieved with dual FSC and PEFC accreditations
secured
Following recent accreditations secured across the portfolio,
the Company is delighted to announce that it has achieved its IPO
target of having all its eligible commercial forestry projects
secure dual Forest Stewardship Council ("FSC") and Programme for
the Endorsement of Forest Certification ("PEFC") accreditation
within twelve months of acquisition or planting completion.
Trading Update
The Company expects to provide a further trading and NAV update
in May 2023, following an independent valuation of the portfolio
using the Royal Institute of Chartered Surveyors ("RICS") Red Book
valuation methodology for the period to 31 March 2023.
Robert Guest, Co-Head of Foresight Sustainable Forestry Company,
said:
"We are delighted to have added three new properties to the
portfolio and to be nearing completion of planting on four of our
afforestation sites. This adds to our track record of securing
attractive acquisition opportunities for FSF and demonstrates our
continued ability to deliver progress on the afforestation
development pipeline. Reaching the Establishment Stage is a major
milestone for Afforestation Assets, as by this point planning
permission and grant funding are secured and the Planting Stage has
been completed which means the asset is materially de-risked and
therefore more valuable."
Richard Kelly, Co-Head of Foresight Sustainable Forestry
Company, added:
"In our IPO objectives, and as part of our proprietary
silvicultural management approach, we outlined that FSF would seek
to secure and continuously maintain dual FSC and PEFC certification
on all FSF forests within 12 months of acquisition, to
significantly raise the industry bar on truly sustainable forest
management practices. This achievement represents the delivery of
another significant Company milestone. The certifications attest to
the priority we place on sustainable forest management and FSF's
role as a responsible custodian of local ecosystems and the wider
sustainable timber industry."
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 +44 20 7029 8000
Citigate Dewe Rogerson
Toby Moore (toby.moore@citigatedewerogerson.com) +44 7768 981763
Appendix - Acquisition information
Name Acquisition Location Asset Type Acquisition Size of asset Anticipated
date cost (hectares) sequestration
(including tax of additional
and other CO(2)
transaction equivalent
costs, GBPm) (tonnes)
Aberdeenshire,
Balnagowan 20/03/2023 Scotland Forestry 0.86 90 - -
---------------- ---------------- --------------- --------------- -------------- --------------
Aberdeenshire,
Newnoth Farm 10/03/2023 Scotland Afforestation 1.90 154 27,433
---------------- ---------------- --------------- --------------- -------------- --------------
Dumfries &
Galloway,
High Auldgirth 03/02/2023 Scotland Mixed 7.10 287 25,000
---------------- ---------------- --------------- --------------- -------------- --------------
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.
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/
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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