TIDMWBI
RNS Number : 7215V
Woodbois Limited
11 April 2023
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 which forms part of UK
law by virtue of the European Union (Withdrawal) Act 2018
("MAR").
11 April 2023
Woodbois Limited
("Woodbois", the "Group" or the "Company")
Q1 2023 Update
Operational
-- Confirmation of conditional grant of 50,000 hectares received
from Government of Gabon for first voluntary carbon credit
afforestation project, as announced separately today.
-- Shipping - Own production goods shipped in Q1 2023 increased 10% from Q1 2022.
-- Veneer production of 1,400m(3) in Q1 2023 vs 1,100m(3) in Q1 2022, an increase of 27%.
o Gradual increase in production volumes with testing of
production combination between original and recently commissioned
lines ongoing.
-- Sawmill production of 1,800m (3) in Q1 2023 vs 4,200m (3) in Q1 2022, a decline of 57%.
o The shut-down planned for later in 2023 to allow for
implementation of re-ordering of work-flows and processes was
brought forward to February-March since abnormal weather conditions
were causing supply chain disruption between forest and sawmill.
The significant increase in production volumes during 2022 had put
pressure on warehouse storage space and the down-time was also used
to reduce inventory and free up space.
o Further efficiency and cost reduction measures to allow for
additional, profitable growth are planned, including some
reconfiguring of production lines, but these are anticipated to be
implemented during the annual closures in December 2023
-- External contract for consolidated forest management plan
mandated with work underway, providing next critical step towards
certification.
Financial
-- Q1 2023 own production sales of $3.0m vs $2.75m in Q1 2022
-- As announced in October 2022 the Group had been reducing
exposure to third party trading in Q4 2022 and this extended into a
temporary pause in Q1 2023 owing to potentially sub-optimal margins
and working capital constraints
-- Pause in third party trading contributed to total Q1 2023
revenue of $3m being reduced by 45% vs. Q1 2022
-- Total revenue for full year 2023 expected to exceed 2022: focus on margins and profitability
-- Q1 2023 gross profit margin 25%, in line with 2022
-- Cash balance $4.6m as at 31(st) March 2023, post $3.4m net placing
-- Period end working capital(1) of $10.4m of which inventory
was $2.6m and excluding bank and other loans of $14.1m
-- Company exploring sale and leaseback of its two unencumbered
real-estate production sites in Gabon valued at $15m in 2021
-- Company currently expects to deliver further growth in
profitability and to achieve positive operational cash flow during
2023
Financing
On 13 March 2023 the Company raised net proceeds of
approximately $3.4m by way of a placing of 250m new ordinary shares
in the Company at a price of 1.2 pence per share. Novum Securities
Limited acted as broker and placing agent in respect of the Placing
which was to new institutional and other investors. The Placing
Shares represented 10 per cent of the existing issued Ordinary
Share capital of the Company prior to the fundraise.
The Company has mandated a real estate broker in Gabon to
explore the potential for a sale and lease-back of its unencumbered
14 hectares of real-estate production sites in Mouila, Gabon. These
were independently valued at $15m in May 2021. This could enable
the Company to reduce some of its more expensive debt, to allocate
additional capital to business lines with the highest anticipated
IRRs and fund initial work on its afforestation project.
The Company expects to repay its $1.0m loan from Lombard Odier
by mid-year and to hold discussions with the holders of its $0.7m
of convertible loan stock with a view to extending its term or
conversion.
Carbon division
Our climate change carbon strategy has been developed with the
express intention of providing long-term profitable benefits to all
stakeholders. We are confident having conditionally been allocated
50,000 hectares in Gabon for our initial large-scale afforestation
project that various sources of project funding dedicated to
climate change mitigation in the region will be attracted by the
quality of this initial project. A separate RNS released today sets
out more details of this project.
CEO Paul Dolan said:
"Our priorities for 2023 are clear:
Deliver a first-class service and superior product to our
customers in order to generate consistent, positive cash-flow from
our core business while completing the capex and works necessary to
achieve full certification for our forests and factories;
We also aim to complete the necessary lease agreements on our
afforestation project thereby allowing us to commence its first
phase, as well as to progress its funding;
Build a higher-margin third-party trading pipeline and scale-up
as and when we receive appropriate market signals and secure access
to appropriate trading capital;
Appoint a new non-executive director to help in our
development.
As always, we therefore have a very busy period ahead. Whilst
staying continually alert to ongoing geo-political and
macro-economic uncertainties, we also have an exciting year of
growth and opportunities to look forward to."
(1) Working Capital is a non-IFRS measure and consists of Cash,
plus Inventory, plus Receivables, less Payables.
For further information contact:
Enquiries:
Woodbois Limited
Paul Dolan - CEO + 44 (0)20 7099 1940
Canaccord Genuity (Nominated Advisor
and Broker)
Henry Fitzgerald-O'Connor
Harry Pardoe
Gordon Hamilton +44 (0)20 7523 8000
Novum Securities Limited (Joint Broker)
Colin Rowbury
Jon Belliss +44 (0) 20 7399 9427
Background on Woodbois
Woodbois Limited (AIM:WBI) is an African-focused forestry
company, divided into three distinct, but highly complementary
divisions comprising the production and supply of sustainable
African hardwood products, the trading of timber and timber
products, and a reforestation and carbon credit division.
Woodbois' forestry division has production facilities in Gabon
and Mozambique, managing a total of c470,000 hectares of natural
forest concessions. The trading division comprises an experienced
team of timber specialists, who source and supply sustainable
timber to a global customer base. Its proprietary technology
developed in-house, captures, stores and presents data, providing a
matching engine to build scale and optimise trading opportunities
with its global customer base.
The Company's carbon sequestration and trading division aims to
generate voluntary carbon credits for corporate partners through
the delivery of large-scale reforestation projects. The conditional
lease announced today is its first project.
The Company's focus on the transparency and sustainability of
its timber operations has been recognised by The Zoological Society
of London, which ranked Woodbois joint eighth in its Sustainability
Policy Transparency Toolkit ('SPOTT") ESG policy transparency
assessments for the worldwide timber and pulp industries for
2022.
The Company agreed a new partnership with World Forest ID, which
will enhance the traceability and identification of timber,
originating from the company's forest concessions in Gabon. World
Forest ID is an international organisation which is revolutionizing
the protection of forests through the application of science-based
origin tracing and species identification. World Forest ID is
building an extensive global library of reference samples, from
various forest regions, for use in cross verification.
Please follow the Company on Twitter: @WoodboisLtd
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END
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