TIDMFSF
RNS Number : 8445P
Foresight Sustain. Forestry Co PLC
13 October 2023
13 October 2023
Foresight Sustainable Forestry Company Plc
Completion of three acquisitions
Foresight Sustainable Forestry Company Plc ("FSF", "the
Company"), an investment company that invests in UK forestry and
afforestation assets, today announces three acquisitions in
Scotland totaling GBP8.3 million (inclusive of tax and transaction
costs). Following the acquisitions, FSF's portfolio increases by
819 hectares and now covers a total area of 12,545 hectares across
68 properties.
Representing 4.4% of the last communicated Net Asset Value
("NAV") (31 March 2023: GBP186.6m), the acquisitions have been
funded through the utilisation of the Company's Revolving Credit
Facility ("RCF") which is now GBP10.4 million drawn. The repayment
of the borrowings will occur through a combination of timber
harvesting and the planned disposal of non-core or other assets.
The Company continues its intention to minimise exposure to
interest charges whilst also retaining a sufficient cash buffer via
the headroom on its debt facilities and free cash to fund ongoing
capital expenditure and operate a strategic cash reserve.
All three investments represent good value in the current market
and are forecast to deliver strong returns, given the higher
interest rate environment. These properties substantially complete
FSF's acquisition of land in preparation for its 2024/25 planting
program and there are no further material additions to the
portfolio currently expected within the calendar year. An overview
of the acquisitions can be found below with more detail listed in
the appendix.
-- Toun Hill : This asset extends 230 hectares and is expected
to create a c.166-hectare commercial afforestation scheme. The
acquisition also includes a non-core residential property which is
planned for subsequent disposal in due course.
-- Threepwood Hill: The investment, spanning 59 hectares, will
see the creation of a 43-hectare commercial afforestation scheme
and is located close (1.5 miles) to Chatto Craig, another
afforestation property in FSF's portfolio. Together, these
properties have good potential for upside marriage value
realisation.
-- Carlinden Burn : The 530-hectare property extends FSF's
cluster of properties in Aberdeenshire and is a mixed afforestation
and forestry opportunity, with 216 hectares of afforestation
potential and a further 102 hectares of existing forestry. The
acquisition also includes some non-core residential property and
land which is planned for disposal in due course.
As demonstrated in the Company's most recent NAV update,
planting of afforestation assets represents a key driver of
valuation uplift. The Company remains on track to deliver a
substantial planting program during the upcoming winter with a view
to completing planting and recognising voluntary carbon on many of
its Development Stage and Planting Stage afforestation projects by
the spring of 2024.
The current breakdown of the portfolio, post the acquisitions
above, is shown below:
Development Stage Afforestation Assets
(Hectares) 3,677
Planting Stage Afforestation Assets (Hectares) 151
-------
Establishment Stage Afforestation Assets
(Hectares) 1,024
-------
Established Forest Assets (Hectares) 5,612
-------
Other Land (Hectares) 2,081
-------
Total (Hectares) 12,545
-------
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 Foresty Assets - Trees stabilised and
established.
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
SEC Newgate
Elisabeth Cowell
( elisabeth.cowell@secnewgate.co.uk
) +44 20 3757 6882
Appendix - Acquisition information
Name Acquisition date Location Asset Type Size of asset Anticipated
(hectares) sequestration of
additional CO(2)
equivalent
(tonnes)
Heriot, Scottish
Toun Hill 29/09/2023 Borders Afforestation 230 35,845
------------------ -------------------- --------------- ------------------- -------------------
Galashiels,
Threepwood Hill 29/09/2023 Scottish Borders Afforestation 59 10,978
------------------ -------------------- --------------- ------------------- -------------------
Huntly,
Carlinden Burn 29/09/2023 Aberdeenshire Mixed 530 56,095
------------------ -------------------- --------------- ------------------- -------------------
Total 819 102,918
------------------- -------------------
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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END
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