TIDMFSF
RNS Number : 0011D
Foresight Sustain. Forestry Co PLC
17 October 2022
17 October 2022
Foresight Sustainable Forestry Company Plc
("FSF" or "the Company")
Five acquisitions adding c.700 hectares to the Company's
portfolio and trading update
Foresight Sustainable Forestry Company Plc, an investment
company that invests in UK forestry and afforestation assets, today
announces five acquisitions and provides a trading update.
Acquisitions
Over the last two months FSF deployed GBP7.9 million (inclusive
of tax and transaction costs) into four afforestation properties
and one forestry property, all of which are in Scotland. The
acquisitions increase the portfolio by approximately 700 hectares
and FSF's total portfolio now covers 9,751 hectares.
Each afforestation acquisition is well suited for the
establishment of a woodland creation scheme and has design
allocations to native broadleaves alongside commercially productive
forestry and open ground. The Company is also exploring natural
capital potential, including peatland and wetland restoration, for
the properties. Once planted, the properties are anticipated to be
awarded approximately 77,000 voluntary carbon units for the
additional CO2 sequestered over the project lifetime.
The single forestry property provides the Company with a good
opportunity to harvest, re-design and re-stock the site in the
medium term. Once the harvesting programme has occurred, a new tree
species composition will be incorporated to fully capture the
property's upside potential. Well located in relation to other
portfolio assets, sawmills and timber processors, the property
further expands FSF's Scottish portfolio.
Additional property details can be found in the appendix.
Trading update
In light of the current volatility, the Investment Manager and
the Company will ensure a carefully prioritised allocation of
capital until the shifting macro-economic market conditions are
fully understood.
The Company has not utilised its Revolving Credit Facility
("RCF") and therefore has no direct exposure to rising debt base
rates (Sterling Over Night Index Average, SONIA). A prudent
approach to the utilisation of the RCF will be taken during these
uncertain times given the rapidly increasing cost of debt.
During times of financial market turbulence, UK forestry asset
prices have historically proved resilient. UK forestry is commonly
acquired and owned without the use of debt which, in the view of
the Company, provides an element of insulation against base rate
increases relative to other asset classes where leverage is more
frequently used.
Richard Kelly and Robert Guest, Co-Heads of Foresight
Sustainable Forestry Company, commented:
"We are delighted to have added these five high quality assets
to the portfolio. Afforestation properties are a great opportunity
for capital appreciation and unlocking additional value as the
woodland creation schemes reach development milestones. They also
make a significant contribution to the removal of carbon from the
atmosphere.
Recent market volatility has created increased uncertainty
within equity and debt markets. Whilst we believe that UK forestry
is relatively resilient to market turbulence, it is of course
important that we consider all potential impacts in our strategic
decisions and as we carefully grow our UK portfolio. We will be
closely monitoring market developments and remaining dynamic in our
approach to the management of the Company."
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
)
Jos Bieneman ( jos.bieneman@citigatedewerogerson.com +44 7768 981763
) +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.
Appendix
Acquisitions: asset specific information
Name Acquisition Location Asset Type Acquisition Size of Anticipated
date cost asset sequestration
(including (hectares) of additional
tax and other CO2 equivalent
transaction (tonnes)
costs, GBPm)
Dumfries
16 August and Galloway,
Knock Fell 2022 Scotland Afforestation 1.6 305 40,000
-------------- ---------------- --------------- --------------- --------------- ----------------
Chesterknowes 19 August Midlem,
Wood 2022 Scotland Afforestation 0.9 55 8,000
-------------- ---------------- --------------- --------------- --------------- ----------------
1 September Peebles,
Windylaws 2022 Scotland Afforestation 1.0 59 10,000
-------------- ---------------- --------------- --------------- --------------- ----------------
13 September Peebles,
Liddel Water 2022 Scotland Afforestation 3.4 147 19,000
-------------- ---------------- --------------- --------------- --------------- ----------------
12 October Inverness,
Bogbain Wood 2022 Scotland Forestry 1.0 133 N/A
-------------- ---------------- --------------- --------------- --------------- ----------------
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