HIGHLAND TIMBER PLC

18 May 2007

SALE OF FOREST ASSETS

Highland Timber PLC ("the Company") announces that it has entered into an
agreement for the sale of the Company's forest assets to FIM Timber Growth Fund
IV for a total cash consideration of GBP9,900,000 ("the Transaction").

Completion of the Transaction is subject to shareholder approval being obtained
at an Extraordinary General Meeting ("the EGM") to be held no later than 30
June 2007.

The effect of the proposed Transaction will be to divest the Company of all of
its trading activities and, as such, following completion of the Transaction
the Company will become an investing company pursuant to Rule 15 of the AIM
Rules. Therefore, the Company will submit to Shareholders at the EGM an
ordinary resolution seeking approval of the Company's proposed investing
strategy.

A circular, setting out details of the proposed Transaction and the Company's
investing strategy, together with a notice of EGM, will be posted to
Shareholders in due course.

Profits/(losses) before taxation attributable to the assets comprising the
Transaction, excluding interest receivable on cash balances held by the
Company, were GBP(21,000) and GBP577,000 in respect of the 6 months to 30 June
2006 and 12 months to 31 December 2006 respectively. The net book values
attributable to the assets comprising the Transaction were GBP5,316,000 and
GBP5,933,000 at 30 June 2006 and 31 December 2006 respectively.

Commenting on the Transaction, Oliver Waring, Chief Executive of the Company
said:

"The sale of Highland Timber's forest assets represents a reversal of the long
term decline in asset values suffered by the Company's shareholders to 20th May
2005, the date on which the new Board of Directors of the Company implemented
its strategy to halt losses and focus on delivering value to Shareholders.

The cash consideration of GBP9,900,000 represents, before transaction related
expenses, a 67% premium to the net book value of the forest assets of
GBP5,933,000 at 31 December 2006.

Following completion of the transaction, the Company will retain cash balances
of approximately GBP12,500,000. It is intended that these resources will be
applied in pursuance of the investing strategy to be submitted to Shareholders
at the EGM.

The Company is now able to assess its future with a strong balance sheet and a
track record of both protecting its assets and delivering growth in value."

Enquiries:

Highland Timber PLC 020 7937 0755

Oliver Waring, Chief Executive Officer

Arbuthnot Securities 020 7012 2100

Graham Swindells

Richard Johnson