TIDMFSF
RNS Number : 9503J
Foresight Sustain. Forestry Co PLC
03 May 2022
3 May 2022
Foresight Sustainable Forestry Company Plc
("FSF" or "the Company")
31 March 2022 Net Asset Value ("NAV") and Portfolio Update
Foresight Sustainable Forestry Company Plc, an investment
company that invests in UK forestry and afforestation assets,
announces that as at 31 March 2022 its unaudited Net Asset Value
("NAV") was GBP135.5 million (post IPO: GBP127.6 million),
resulting in a NAV per Ordinary Share of 104.2 pence, up 6.1 pence
from 98.1 pence immediately following the Company's IPO in November
2021.
Summary of NAV key drivers:
FSF saw gains across its portfolio of GBP7.9m (6.2%) over the
period from the first day of trading on 24 November 2021 to the
period end on 31 March 2022. The related valuations were performed
on a property-by-property basis by an independent third-party in
accordance with the Royal Institute of Chartered Surveyors ("RICS")
Red Book Fair Value methodology.
Within the portfolio, the afforestation assets delivered a gain
to FSF of 18% during the period, with demand for afforestation and
the associated voluntary carbon credits particularly strong. In
addition, several afforestation properties achieved key development
milestones in the period, including Banc Farm, which completed
planting activities, and Mountmill Burn, which commenced planting
activities. The established forestry aspect of the portfolio saw a
gain of 2% with notably few comparable transactions within the UK
for mature assets during the period, partly as a result of the
impact of Storm Arwen.
Following the revaluation, FSF's split of afforestation assets
(by value) has increased by 3% to 36% of the total portfolio,
moving FSF materially closer to its stated target of 40-50%
afforestation. The remaining 64% of value is in established
forestry assets.
Portfolio Update
Completion of planting at Banc Farm
At the end of March 2022, FSF completed planting at Banc Farm,
with no material deviations to the expected number of trees planted
at c.229,300. This is a key development milestone for the asset and
driver of capital appreciation for FSF. In addition to the
forecasted production of over 48,000 tonnes of sustainable timber
on a c.35-year rotation, this project is forecast to increase the
baseline biodiversity net gain of the site (according to DEFRA's
Metric 3.0) by 60% over the next five years and sequester 21,218
tonnes of additional CO (2) . Banc Farm will now undergo an
independent verification to confirm the number of voluntary carbon
units that are accredited to it.
Pipeline and deployment update
Following the expansion of FSF's mapping activity, the Company
has identified over 4,500 properties that meet its afforestation
criteria, covering an area in excess of 860,000 hectares. This
activity has driven a material boost to the pipeline of future
investments and provides confidence in FSF's ability to originate
attractive, off-market afforestation properties going forward.
FSF is currently in the process of transacting twelve individual
off-market afforestation properties under exclusivity, extending
over 2,700 hectares, for an aggregated consideration (excluding
transaction taxes and adviser costs) of over GBP18 million,
demonstrating FSF's continued ability to convert its pipeline into
live, executable deals.
Additionally, FSF is pleased to have entered into an option
agreement, valid until 31 December 2022, with Foresight Inheritance
Tax Fund ("FITF") for an additional eight forestry properties
covering more than 3,000 hectares, with a combined value of GBP27.6
million as of 30 September 2021. Afforestation assets represent
c.19% of these properties by value.
FSF has deployed 91% of IPO proceeds. It is estimated that FSF
has GBP4.1m available for further afforestation investments until
the IPO proceeds will be considered fully invested.
Richard Davidson, Chairman of Foresight Sustainable Forestry
Company, commented:
"We are delighted that FSF, the London Stock Exchange's first
natural capital investment vehicle, has delivered such a strong
first NAV update which illustrates how capital appreciation is
achieved by acquiring and developing afforestation sites, while
also directly contributing to the twin fights against climate
change and biodiversity loss.
We are proud to have successfully completed planting at Banc
Farm, one of Wales's largest planting schemes this season and
Foresight's first to reach this milestone. The development of our
afforestation pipeline, together with the opportunity to execute on
the option agreement over another eight forestry sites, gives FSF
an attractive pipeline of assets that positions us well to deploy
the small remaining IPO proceeds and deliver future growth for our
investors."
Looking forward, we intend to build on our good performance to
date, adding scale and leveraging the favourable macro tailwinds
applicable to UK forestry to continue to deliver strong investor
returns."
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
Jos Bieneman (jos.bieneman@citigatedewerogerson.com) +44 7834 336650
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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