Cambium Global Timberland Limited Interim Report & Amendment to Valuation Policy (6534J)

TIDMTREE

RNS Number : 6534J

Cambium Global Timberland Limited

21 December 2015

21 December 2015

Cambium Global Timberland Limited (the "Company")

Net Asset Value, Amendment to Valuation Policy, Interim Results

Net Asset Value

The Company announces that the Net Asset Value per share as at 31 October 2015 is 18p.

Amendment to Valuation Policy

The Board of Directors of the Company resolved on 17 December 2015 to amend the valuation policy of the Company as set out in the Prospectus prepared for the Company. The purpose of this amendment is to achieve cost reduction for the benefit of the Shareholders on the basis that the original policy, which required twice yearly valuations of the Company's assets by independent valuers, is no longer necessary or appropriate when the Company is actively seeking to sell its residual assets. In lieu, the Board has adopted a new policy requiring one independent valuation per year only.

Accordingly the valuation policy set out on page 27 of the Prospectus has been replaced with a new valuation policy set out in the Prospectus Supplement published by the Company today and available on the Company's website at www.cambium.je.

Click on the following link, or paste the link in your web browser, to view the associated PDF document:

http://www.rns-pdf.londonstockexchange.com/rns/6534J_-2015-12-19.pdf

Interim Results

The Company announces the Interim Report and Unaudited Condensed Consolidated Interim Financial Statements (the "Interim Report") for the six months ended 31 October 2015 are available and attached hereto.

An electronic copy of the Interim Report is available on the Company's website at www.cambium.je.

For further enquiries please contact:

Chairman

Tony Gardner-Hillman

01534 486980

Broker and Nominated Adviser

Panmure Gordon

Paul Fincham/Jonathan Becher

0207 886 2500

Administrator and Secretary

Praxis Fund Services Limited

Janine Lewis/Matt Falla

01481 737600

Cambium Global Timberland Limited

Interim Report and Unaudited Condensed Consolidated Interim Financial Statements

for the six months ended 31 October 2015

Cambium Global Timberland Limited

Chairman's statement

As your new Chairman I now present the unaudited interim financial statements of the Company for the six months ended 31 October 2015.

The net asset value per share as at 31 October 2015 was GBP0.18 (30 April 2015: GBP0.23).

I was appointed to the Board on 31 July 2015, to the position of Chairman in succession to Donald Adamson who stepped down from the Board on the same day. It is my role to see to a conclusion the policy of orderly realisation of assets adopted by shareholder vote on 22 February 2013. Shareholders re-elected me to the Board at the AGM on 30 September 2015. I then met with substantial shareholders to listen. It was clear that shareholders do not expect a fire-sale of assets and are willing to wait where haste would not achieve best prices, but that they reject a continuation of past expenditure levels.

Accordingly, your Board continues to take all sensible steps to extract appropriate values from all its assets and to reduce expenditure.

The up to date position is as follows:

1. In Brazil the iron-smelting industry continues to be depressed, with the level of demand for wood that does exist in our regions of operation coming from the pulp industry. The available market is restricted due to the fact that major pulp mills tend to own or otherwise control their own supplies.

2. However, opportunities do exist and discussions recently began with a prospective buyer to realise value from the Company's asset in Tocantins. Negotiations are ongoing and no deal has yet been agreed. The asset ownership continues to be complicated by the outstanding lien on the property (see note 18 to these financial statements) and by legal proceedings commenced in May 2015 (which the Company is challenging) alleging infringement of a third party's plant breeder's rights. These complications have added to the Company's costs burden but the Board is confident they do not prevent the realisation of value and that the Board will find an appropriate way through.

3. For the asset in Minas Gerais there is nothing new to report since the Company's announcement dated 6 October 2015.

4. The Company has previously announced back-up plans to commence harvesting at Tocantins and Minas Gerais from 2016 (capable of reaching break-even levels in 2017/18), and to follow up on appropriate means to develop markets for the wood harvested.

5. In relation to Hawaii the Company has received an offer to buy its assets and is actively considering how best to maximise the value to the Company from that. At this stage the Company continues to consider the options of not renewing its lease (the current term will expire on 31 December 2015) of the Pahala Estate where the wood suffered catastrophic storm damage in January 2015 (see note 13 to these financial statements) and of selling its Pinnacle asset only. There can be no certainty as to the offeror's time-scale and appetite but the Board is hopeful it will be able to announce a deal early in 2016.

In addition the Board is reviewing all the Group's supplier arrangements to see where cost cuts can sensibly be made. This process will be ongoing and comprises a number of strategies:

- terminating relationships with suppliers no longer needed, or who can be replaced with lower cost alternatives,

- re-negotiating terms with continuing suppliers where lower costs (in line with a lower level of demand from the Company) are achievable,

   -      controlling more tightly the time-costs incurred by suppliers billing at hourly rates, 
   -      bringing to a conclusion the winding up of redundant overseas subsidiaries, 
   -      omitting an auditor's review of these (and subsequent) interim financial statements, and 
   -      reducing third party asset valuations from two to one per annum. 

I am confident that, for the current financial period compared to the one before, shareholders will see a meaningful and sustainable reduction in costs in line with the position the Company finds itself in.

Your Board remains very aware that shareholders anticipate distributions of excess cash expeditiously following the disposal of assets.

Antony R Gardner-Hillman

Chairman

18 December 2015

Operations Manager's report

For the six months ended 31 October 2015

The focus has been on optimising the physical growth of the crops and value of the assets while minimising cost. Forestry operating and management costs of GBP427,324 show a significant decline from GBP630,362 in the comparable period last year. Tight cost control, crops requiring less maintenance expenditure as they mature and the decline in the Brazilian currency have all contributed.

Expenditure on the 3R Tocantins property in the period has been mainly on fire and pest control. Despite the very dry conditions a number of fires on neighbouring grazing land were prevented from causing significant damage to the crops. Now that the wet season has started some limited weed control may be necessary. There continues to be legal expenditure on defending the company from the injunction alleging unauthorised use of tree clones, where the advice continues to be that the claim is groundless, and on dealing with encroachment from squatters in unplanted areas.

In Minas Gerais the dry season has also ended leading to a reduction in expenditure on fire and pest control. During the period there was an infestation of defoliating beetle at one of the properties that was controlled by timely spraying covered by the contingency budget. The forest managers have also worked to ensure that the property complies with changes in Brazilian environmental law and that future owners can plant the so far unplanted land.

The Hawaiian properties have been managed to minimise expenditure while positioning them to be attractive to possible local biomass-orientated buyers. Lease rent, local taxes and management fees, also covering presale crop inventory, have been the main items of outgoings. There has been no further wind or other damage to the crops during the period.

Robert Rickman

Operations Manager

18 December 2015

Unaudited condensed consolidated interim statement of comprehensive income

For the six months ended 31 October 2015

 
                                                                          For the        For the 
                                                                              six            six 
                                                                           months         months 
                                                                            ended          ended 
                                                                       31 October     31 October 
                                                                             2015           2014 
                                                                        Unaudited      Unaudited 
 Continuing operations                                       Notes            GBP            GBP 
---------------------------------------------------------  -------  -------------  ------------- 
 Finance income                                                  8          1,196          5,329 
 Finance costs                                                   9        (3,277)        (3,169) 
 Net foreign exchange (loss)/gain                                           (118)          2,908 
---------------------------------------------------------  -------  -------------  ------------- 
 Net finance (costs)/income                                               (2,199)          5,068 
---------------------------------------------------------  -------  -------------  ------------- 
 Administrative expenses                                         5      (262,339)      (567,531) 
 Loss for the period from continuing operations                         (264,538)      (562,463) 

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