TIDMFSF
8 March 2022
Foresight Sustainable Forestry Company Plc
Completion of seed assets transaction and update on
portfolio
Foresight Sustainable Forestry Company Plc ("FSF", "the
Company"), an investment company that invests in UK forestry and
afforestation assets, today announces the completion of its UK-wide
seed assets portfolio transaction, the acquisition of an
afforestation site at Maescastell in Wales, and the commencement of
planting at Mountmill Burn, an afforestation site in Scotland.
Together, these developments represent a materially significant
milestone in FSF's development.
Seed Portfolio Transaction
On 7 March 2022, FSF completed the seed assets portfolio
transaction to acquire Blackmead Forestry Limited ("BFL") and
Blackmead Forestry II Limited ("BFL II") from Foresight Inheritance
Tax Solution for a total cost (inclusive of tax and other
transaction costs) of GBP113.4 million. FSF has acquired 27 sites
in total; the portfolio consists of 11 afforestation sites, 15
forestry sites and one site which is both afforestation and
forestry. By value, the acquired portfolio consists of 29%
afforestation sites and 71% forestry sites. By area, the acquired
portfolio consists of 41% afforestation sites and 59% forestry
sites. The portfolio is located across the United Kingdom and by
area is split between Scotland (80%), Wales (13%) and England (7%).
The total area of the acquired portfolio extends over 8,117
hectares, of which 4,182 hectares is stocked or stockable with
commercial conifer trees. A full breakdown of the portfolio asset
list can be found in the Appendix.
FSF continues to actively seek further opportunities in the
market and is in exclusivity and transacting upon several
additional afforestation sites. Once the acquisition of this
immediate pipeline is complete, the percentage by value of
afforestation sites in the portfolio will increase to 34%. At this
point, FSF will also be substantially invested. Successfully
developing land for afforestation (which drives returns through
capital appreciation and access to voluntary carbon credits) is a
core part of FSF's strategy.
Portfolio Update -- Maescastell Acquisition
FSF stated in its announcement of 25 January 2022 that the seed
assets transaction consisted of 26 sites. Since that announcement
and before the completion of the seed assets transaction, BFL
acquired Maescastell, an afforestation site, for a total cost
(inclusive of tax and other transaction costs) of GBP0.5 million.
Following this acquisition, the total number of FSF seed assets to
be acquired from BFL and BFL II increased to 27.
Maescastell adds to a synergistic collection of afforestation
properties in Carmarthenshire, Wales. The site is located within
1km of land acquired from Cwmban Fawr Farm and Pistyll South, both
existing properties in the portfolio. The total area of all three
sites is 177 hectares, of which 158 hectares is plantable with new
forest and woodland.
Consulting closely with the local community, FSF will now
further develop the preferred planting design across the three
sites and will continue the development and application process in
line with national and regional regulations. As with all FSF's
afforestation schemes in Wales, no arable land will be planted on
and a diverse species mix across the sites is expected to consist
of c.75% varied commercial tree species (the trees which create
maximum climate change impact) and c.25% non-commercial broadleaves
(including rare and endangered species). Each scheme will also
include un-planted open ground areas providing additional diversity
of natural habitat, complementing the forest and woodland areas.
Under FSF's ownership, the sites are expected to deliver material
biodiversity improvements. An independent ecologist will be
appointed to evaluate the impact on biodiversity of the finalised
scheme's design using the UK Government's Department for
Environment, Food and Rural Affairs' Biodiversity Metric 3.0
methodology. Following completion of the above, planting at all
three sites is planned to commence later this year.
Wales is one of the least forested countries in Europe with
c.14.5% of land area tree covered in 2020. As a result, Welsh
timber production is insufficient to support domestic demand, with
80% of timber imported from outside the UK. The three sites will
contribute towards the Welsh Government's aim to increase tree
cover in the country to c.17.8% - 20.7% by 2050. The Welsh
Government, as part of its 2050 Net Zero plan and in response to
the climate emergency which has been declared by the Environment
Minister in Wales, has a stated target to increase tree planting to
at least 2,000 hectares per year.
Portfolio Update - Commencement of Planting at Mountmill
Burn
Mountmill Burn, located in Oxton, Scotland, has now received
full planning approval and confirmation of grant funding from the
Scottish Government. These are key development milestones which
have allowed planting activities to commence. Mountmill Burn
consists of 119 hectares and has a plantable area of 101 hectares.
Planting at the site commenced in February 2022 and is expected to
take 6-8 weeks. The project aims to plant approximately 240,485
trees and the commercial tree planting is forecast to deliver
51,000 tonnes of sustainable timber production for each c.35-year
rotation. The scheme is registered on the UK Land Carbon Registry
and the Woodland Carbon Code ("WCC"). Once planting is complete,
the process for full accreditation and award of carbon units by the
WCC can take place. Once fully established, the site is expected to
sequester 21,000 tCO2 and generate associated voluntary carbon
credits.
Richard Davidson, Chairman of Foresight Sustainable Forestry
Company, said:
"We are delighted to have acquired the seed assets portfolio,
the Company's most significant milestone since listing last
November. The Company is now 87% invested, with a higher allocation
to afforestation properties than we anticipated at IPO and with an
exciting immediate pipeline of attractive additional acquisitions.
FSF's diverse portfolio (around half of which comprises land which
is or can be planted with a variety of commercial tree species to
produce home-grown sustainable timber) will directly contribute to
the afforestation targets of governments across the UK and will
generate material biodiversity net gain, and we will continue to
work hard to ensure it delivers tangible benefits to local
communities."
Richard Kelly and Robert Guest, Co-Heads of Foresight
Sustainable Forestry Company, added:
"The completion of the seed assets transaction demonstrates
execution of a crucial aspect of the early stage business plan and
secures high quality sustainable real assets for the Company. We
are also very pleased to announce the acquisition of Maescastell.
Its location and afforestation capabilities align perfectly with
our strategy and we look forward to working with the local
community to develop plans for the sites. The commencement of
planting at Mountmill Burn is another key development for the
Company and takes the total number of trees to be planted since IPO
to nearly half a million."
Appendix: FSF seed assets portfolio
Name Asset Type Country Location Hectares
Fordie Estate Mixed Scotland Perthshire 2,150
Whiteburn Forestry England Northumberland 484
Dumfries and
Auchenbrack Afforestation Scotland Galloway 470
Shorthope Forestry Scotland Scottish Borders 462
Aberarder Forestry Scotland Inverness 448
Frongoch, Brynglas
& Esgair Hir Afforestation Wales Carmarthenshire 416
Central Scotland
Portfolio Forestry Scotland Central Scotland 383
Coull Forestry Scotland Aberdeenshire 371
Auchensoul Afforestation Scotland South Ayrshire 350
Dumfries and
Upper Barr Afforestation Scotland Galloway 343
Donside Forestry
Collection Forestry Scotland Aberdeenshire 339
Dumfries and
Annefield Afforestation Scotland Galloway 303
Dumfries and
W&C Forestry Scotland Galloway 301
Camps Woodlands Forestry Scotland South Lanarkshire 201
Banc Farm Afforestation Wales Carmarthenshire 150
Dumfries and
Glass Rigg Forestry Scotland Galloway 139
Mountmill Burn Afforestation Scotland Scottish Borders 119
Ellenber Farm Afforestation England North Yorkshire 95
Cwmban Fawr Farm Afforestation Wales Carmarthenshire 94
Drumelzie Forestry Scotland West Lothian 76
Waun Maenllyd Forestry Wales Carmarthenshire 74
South Dairy Forestry Wales Pembrokeshire 71
Derry Lodge Forestry Wales Ceredigion 71
Bronnant Forestry Wales Gwynedd 65
Craigwell Wood Forestry Scotland South Ayrshire 56
Maescastell Afforestation Wales Carmarthenshire 49
Pistyll South Afforestation Wales Carmarthenshire 36
Total 8,117
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/
For further information, please contact:
Foresight Sustainable Forestry Company Plc
Robert Guest
Richard Kelly
fsfc@foresightgroup.eu +44 20 3667 8100
Jefferies International Limited
Neil Winward
Will Soutar +44 20 7029 8000
Citigate Dewe Rogerson
Toby Moore (toby.moore@citigatedewerogerson.com) +44 7768 981763
Dominic Tonner (dominic.tonner@citigatedewerogerson.com) +44 7540 203471
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.
(END) Dow Jones Newswires
March 08, 2022 02:00 ET (07:00 GMT)
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