Full deployment of equity and eleven acquisitions
19 January 2023
Foresight Sustainable Forestry Company Plc
( " FSF " or " the Company " )
Full deployment of equity, eleven acquisitions adding c.1,464 hectares to the Company's
portfolio and a planting update
Foresight Sustainable Forestry Company Plc, an investment company that invests in UK forestry and afforestation assets, today announces its June 2022 equity fundraising proceeds are fully deployed following the completion of eleven acquisitions and provides an update on the development of afforestation properties in the portfolio.
New acquisitions
FSF has deployed a further £19.2 million (inclusive of tax and transaction costs) into nine afforestation properties and two forestry properties, ten of which are in Scotland and one in Wales. The acquisitions increase the portfolio by approximately 1,464 hectares and FSF's total portfolio now covers 11,215 hectares, with afforestation properties now accounting for 43% of the portfolio's value. The Company continues to increase its allocation to afforestation in line with the 40-50% target set out at the time of IPO.
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. Once planted, the afforestation properties are anticipated to be awarded approximately 236,800 voluntary carbon units for the additional CO2 sequestered over the project lifetime.
The two forestry properties provide the Company with a good opportunity to harvest, re-design and re-stock the sites in the medium term and add to the Company's cluster of properties in Aberdeenshire, Scotland. The sites are well located in relation to sawmills and timber processors which means that the timber harvested will benefit from a cost effective and carbon-efficient route to market.
Where the properties acquired are smaller than average for the Company, they are located in close proximity to other properties within the portfolio to create marriage value, and/or have been secured at particularly favorable pricing.
Additional details about the properties can be found in the appendix to this announcement.
Permission secured at three afforestation sites
The Company is pleased to report that it has secured the necessary planning permission, full consents and grant contracts for three Scottish afforestation properties in the portfolio. Planting at Upper Bar, Auchensoul and Redding Farm is expected to start imminently and is scheduled to complete at all three sites before the end of April 2023.
In aggregate, the properties cover 765 hectares and have a plantable area of 387 hectares. The Company aims to plant approximately 880,000 trees and the commercial tree planting is estimated to deliver 220,000 tonnes of sustainable timber production for each c.35-40-year rotation.
All schemes are registered with 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 sites are expected to permanently sequester 98,800 tCO2 over each projects' lifetime and generate associated voluntary carbon credits.
An additional four schemes, covering 502 hectares, are currently progressing through the application process and are estimated to begin planting this calendar year.
Richard Kelly and Robert Guest, Co-Heads of Foresight Sustainable Forestry Company, commented:
"We are delighted to have added another eleven high quality assets to FSF's portfolio and to be able to report further good progress, particularly across the afforestation side of the business. Our carefully designed woodland creation schemes will make an important contribution to the removal of carbon from the atmosphere and increase the supply of sustainable home-grown UK timber for future generations. We are also delighted to have fully deployed the equity proceeds from FSF's June 2022 placing within 6 months, delivering on a key commitment we made to investors at the time. Our ambition remains to grow FSF and we continue to pursue a pipeline of attractive NAV accretive investment opportunities. We have available funding through our RCF, which at the current time remains fully undrawn and available. We are also pleased to have received all the necessary planning permissions and approvals to now commence planting at three more of our afforestation sites in Scotland. Successfully developing afforestation sites remains the engine room of FSF's returns and sustainable impact."
About the Company
Foresight Sustainable Forestry Company Plc 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 Tom Yeadon Will Soutar Harry Randall
|
+44 20 7029 8000
|
|
Citigate Dewe Rogerson Toby Moore ( toby.moore@citigatedewerogerson.com )
|
+44 7768 981763
|
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 date |
Location |
Asset Type |
Acquisition cost (including tax and other transaction costs, £m) |
Size of asset (hectares) |
Anticipated sequestration of additional CO2 equivalent (tonnes) |
|
Glendyne Wood |
19/10/2022 |
Scotland, Dumfries & Galloway |
Afforestation |
1.67 |
142 |
31,162 |
|
Bruntaburn Forest |
04/11/2022 |
Scotland, Scottish Borders |
Afforestation |
1.95 |
123 |
27,850 |
|
Goukstane Wood |
09/11/2022 |
Scotland, Scottish Borders |
Afforestation |
1.90 |
112 |
20,619 |
|
Redding Farm |
11/11/2022 |
Scotland, Aberdeenshire |
Afforestation |
0.94 |
71 |
15,859 |
|
Cessnock Wood |
11/11/2022 |
Scotland, Ayrshire |
Afforestation |
1.72 |
109 |
24,455 |
|
Allanton Farm |
17/11/2022 |
Scotland, North Lanarkshire |
Afforestation |
1.24 |
78 |
15,669 |
|
Newnoth Forest |
13/12/2022 |
Scotland, Aberdeenshire |
Forestry |
0.79 |
80 |
N/A |
|
Coed y Garreg |
22/12/2022 |
Wales, Carmarthenshire |
Afforestation |
1.58 |
80 |
19,540 |
|
Upper Senwick |
11/01/2023 |
Scotland, Dumfries & Galloway |
Afforestation |
1.40 |
102 |
20,158 |
|
Highside Wood |
12/01/2023 |
Scotland, Scottish Borders |
Afforestation |
3.59 |
197 |
40,834 |
|
Bedehouse & East Bennachie |
12/01/2023 |
Scotland, Aberdeenshire |
Forestry |
2.42 |
370 |
20,688 |
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