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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cambium Global Timberland Limited | LSE:TREE | London | Ordinary Share | JE00B1NNWQ21 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 6.75 | 6.00 | 7.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMTREE
RNS Number : 1846L
Cambium Global Timberland Limited
20 December 2018
20 December 2018
Cambium Global Timberland Limited (the "Company")
Net Asset Value, Interim Results
Net Asset Value
The Company announces that the Net Asset Value per share as at 31 October 2018 is 19.7p.
Interim Results
The Company announces that the Interim Report and Unaudited Condensed Consolidated Interim Financial Statements (the "Interim Report") for the six months ended 31 October 2018 are available and set out in full below.
An electronic copy of the Interim Report is also 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
WH Ireland Limited
James Joyce/Chris Viggor
020 7220 1666
Sub-Administrator and Company Secretary
Praxis Fund Services Limited
Matt Falla/Gemma Woods
01481 737600
Inside information
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014). Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.
LEI: 213800YGRM8HG1S74M46
Cambium Global Timberland Limited
Interim Report and Unaudited Condensed Consolidated Interim Financial Statements
for the six months ended 31 October 2018
Cambium Global Timberland Limited
Chairman's statement
Assets and values
The Company's Net Asset Value ("NAV") as of 31 October 2018 is 19.7p per share compared with 20.2p as at 30 April 2018, a decrease of 2.4% in the period.
Currency movements accounted for an increase in the NAV of +1.5%. Net expenditure on forestry and other costs accounted for -3.6% and accrued interest on the loan from Peter Gyllenhammar AB (announced on 21 December, 2017) accounted for -0.3%.
The Board's view on land values remains unchanged. In Tocantins State, Brazil (the 3R plantation) the wood growing on the land (including the coppice re-growth referred to in the Operations Manager's Report) enhances plantation values There is a small uplift in the value of the 3R plantations due to capitalisation of expenditure relating to the re-growing coppice.
In Minas Gerais State, resumed pig iron production has revitalised the demand for charcoal. Previous tentative interest from prospective purchasers of wood has translated, during the period at Agua Santa and post-period end at Ribeirao do Gado, into signed contracts for the harvesting and sale of wood from the estates.
The Board continually monitors the Group's cash position. As at the period end the Company and its subsidiaries had cash reserves of GBP2.5 million. The purchaser of the Group's Hawaiian properties continues to make timely payment of lease rental, resulting in corresponding sums being released to the Group from the rental escrow. The Group expects to receive, out of the rental escrow, in the region of US$59,500 (GBP46,900) per quarter until January 2020 and US$ 21,400 (GBP16,900) per quarter from April to October 2020. At 3R in Brazil, the purchaser of the harvested wood made payment close to the final 10% of the contract price due in July 2018. Discussions are continuing to correct the shortfall, understood to be due to harvested pulpwood being accounted and paid for by the purchaser as if it were charcoal wood.
In light of the foregoing, the Company has determined that, notwithstanding the Share Buy-back programme mentioned below, it will still retain sufficient reserves to meet outgoings for the foreseeable future.
Costs
Cost curtailment efforts continue. There will be a need though for some expenditure at 3R to protect the value in the coppice re-growth.
Administrative expenses are down 17.1% on the corresponding prior period (note 4).
Forestry expenses (notes 5 and 6) again show a meaningful fall against the prior period, assisted by the disposal of the Hawaii assets in the prior period, but nevertheless this result demonstrates ongoing effort to curtail costs in a way that continues to protect the Group's remaining assets ahead of disposal.
The net result, allowing for the impact of currency fluctuations, is that total costs, including finance costs, for the period in Sterling terms amounted to GBP0.64 million, as compared with GBP0.73 million for the same period last year.
Return of funds to shareholders
In view of the recognised illiquidity in the market in the Company's shares, I was delighted that the Company was able to facilitate the Share Buy-back programme now underway and earmark initially up to GBP1,000,000 for return to Shareholders, to benefit those desiring to sell their holdings at prices below NAV and thereby benefit NAV per share for those remaining.
Conclusions
The period saw stable land values, with expectations that the next movement is more likely to be upwards than downwards, tentative plantation value recoveries (and time will tell if this is the start of an upward trend), the approaches from wood purchasers that led to signed contracts following period end, demonstrable progress in containing costs, completion of the harvest at 3R of the wood sold to Suzano, and last but not least the first step towards the objective of returning capital to Shareholders, which we were able to achieve without depleting prudent cash reserves needed for the next stage of the journey.
The wait continues with a certain hopeful optimism for the work preparing assets for sale to translate into further actual sales to bring the journey to a conclusion on the best terms sensibly achievable, and in the meantime to continue to keep expenditure down. I am pleased with the events the Company has been able to announce and I look forward to completing the process, and to reporting further in due course.
Antony R Gardner-Hillman
Chairman
20 December 2018
Cambium Global Timberland Limited
Operations Manager's report
For the six months ended 31 October 2018
Total returns for the period covered by these financial statements were a loss of GBP0.41 million compared to a profit of GBP0.43 million in the same period last year. The portfolio returns were primarily impacted by operating costs, partially offset by FX translation gains from the increased value of the Brazilian Real compared to the pound.
Below is a summary of the results by geographic area.
Brazil
The Brazilian portfolio now represents 100% of the total physical assets and 93% of the overall net assets.
During the period the removal of the felled charcoal wood at 3R was completed and most of the payments due from Suzano were received. Discussions continue over a small balance that remains outstanding. The main operations have been the tending of 1,600 hectares of coppice which have regrown well after the harvest and have the potential to produce an economic second rotation crop.
In Minas Gerais, contracts have been signed to sell the wood from two of the company's three properties in the State and harvesting has started in one of these since the period end. These operations will generate cash flow over the next four years and enhance the overall marketability of the properties. Negotiations are also underway to sell the wood from the third property where a fence has been erected to allow cattle grazing on the unplanted land.
With the conclusion of the Presidential elections it is hoped that uncertainty will be reduced, land market activity will resume and that the properties can be sold.
Security, fire protection and insurance will continue to be required to protect the Company's assets.
United States - Hawaii
Cambium records the balance of outstanding rental payments in escrow as an asset which represents 2% of the total net assets. The new owners of the plantations have been paying rent to the landlords, so allowing the release of escrow funds to Cambium as scheduled.
Conclusion
The operational focus is on generating cash flow from the Brazilian assets to offset the Company's costs, build cash surpluses for distribution and demonstrate the commercial value to potential buyers of the properties. It is hoped that the conclusion of the Presidential elections will bring an end to a very long period of political and economic turmoil in Brazil and result in the market confidence required for Cambium to sell its forest land on advantageous terms.
Robert Rickman
Operations Manager
20 December 2018
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of comprehensive income
For the six months ended 31 October 2018
Hot Features
Premium
For the For the
six six
months months
ended ended
31 October 31 October
2018 2017
Unaudited Unaudited
Continuing operations Notes GBP GBP
------------------------------------------------- ------ ------------- -------------
Finance costs (44,819) (2,117)
Net foreign exchange loss (18) -
------------------------------------------------- ------ ------------- -------------
Net finance costs (44,837) (2,117)
------------------------------------------------- ------ ------------- -------------
Administrative expenses 4 (230,748) (229,885)
Loss for the period from continuing operations (275,585) (232,002)
------------------------------------------------- ------ ------------- -------------
Discontinued operations
------------------------------------------------- ------ ------------- -------------
Revenue - 119,724
(Loss)/profit on sale of assets held for sale (7,228) 663,006
Decrease in fair value of assets and disposal
group held for sale and investment property
and plantations 3 - (2,079,374)
Administrative expenses 4 (38,517) (95,092)
Forestry management expenses 5 (1,334) (3,794)
Other operating forestry expenses 6 (324,104) (392,274)
Reversal of provisions 13 - 3,275,550
(363,955) 2,784,390
------------------------------------------------------------------------ -------------
Operating (loss)/profit from discontinued
operations (371,183) 1,487,746
------------------------------------------------- --------------------- -------------
Finance costs (868) (2,651)
Net foreign exchange loss - (2,724)
------------------------------------------------- --------------------- -------------
Net finance costs (868) (5,375)
------------------------------------------------- --------------------- -------------
(Loss)/profit before taxation from discontinued
operations (372,051) 1,482,371
Taxation charge 7 - -
------------------------------------------------- ------ ------------- -------------
(Loss)/profit for the period from discontinued
operations (372,051) 1,482,371
------------------------------------------------- --------------------- -------------
Total (loss)/profit for the period (647,636) 1,250,369
------------------------------------------------- --------------------- -------------
Other comprehensive (loss)/income
Items that are or may be reclassified to profit or loss, net of tax
Foreign exchange gain/(loss) on translation
of discontinued foreign operations 12 242,360 (820,295)
Other comprehensive income/(loss) for the
period 242,360 (820,295)
------------------------------------------------- ------ ------------- -------------
Total comprehensive (loss)/income for the period (405,276) 430,074
--------------------------------------------------------- ------------- -------------
Basic and diluted (loss)/earnings per share 8 (0.79) pence 1.52 pence
------------------------------------------------- ------ ------------- -------------
Basic and diluted loss per share from continuing 8 (0.34) pence (0.28) pence
operations
------------------------------------------------- ------ ------------- -------------
Basic and diluted (loss)/profit per share 8 (0.45) pence 1.80 pence
from discontinued operations
------------------------------------------------- ------ ------------- -------------
All (losses)/profits from continuing and discontinued operations are attributable to the equity holders of the parent Company. There are no minority interests.
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of financial position
At 31 October 2018
31 October 30 April
2018 2018
Unaudited Audited
Notes GBP GBP
------------------------------- ------ ------------- -------------
Current assets
Assets held for sale 11 15,026,971 14,774,260
Trade and other receivables 314,370 391,800
Cash and cash equivalents 2,469,099 3,071,863
Total assets 17,810,440 18,237,923
------------------------------ ------ ------------- -------------
Current liabilities
Liabilities held for
sale 11 109,283 165,731
Loan payable to related
party 1,487,631 1,444,272
Trade and other payables 54,805 63,923
Total liabilities 1,651,719 1,673,926
------------------------------ ------ ------------- -------------
Net assets 16,158,721 16,563,997
------------------------------ ------ ------------- -------------
Equity
Stated capital 14 2,000,000 2,000,000
Distributable reserve 15 83,589,060 83,589,060
Translation reserve 12,15 3,861,488 3,619,128
Retained loss (73,291,827) (72,644,191)
------------------------------ ------ ------------- -------------
Total equity 16,158,721 16,563,997
------------------------------ ------ ------------- -------------
Net asset value per
share 9 0.197 0.202
------------------------------ ------ ------------- -------------
These unaudited condensed consolidated interim financial statements were approved and authorised for issue on 20 December 2018 by the Board of Directors.
Antony R Gardner-Hillman Chairman
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of changes in equity
For the six months ended 31 October 2018
Share Distributable Translation Retained
Unaudited Capital reserve reserve loss Total
GBP GBP GBP GBP GBP
For the six months ended
31 October 2018
------------------------------------------------ -------------- ------------ ------------- -----------
At 30 April 2018 2,000,000 83,589,060 3,619,128 (72,644,191) 16,563,997
Total comprehensive income/(loss)
for the period
Loss for the period - - - (647,636) (647,636)
Other comprehensive income
Foreign exchange gain
on translation of discontinued
foreign operations (note
12) - - 242,360 - 242,360
------------------------------------ ---------- -------------- ------------ ------------- -----------
Total comprehensive income/(loss) - - 242,360 (647,636) (405,276)
------------------------------------ ---------- -------------- ------------ ------------- -----------
At 31 October 2018 2,000,000 83,589,060 3,861,488 (73,291,827) 16,158,721
------------------------------------ ---------- -------------- ------------ ------------- -----------
Share Distributable Translation Retained
Unaudited Capital reserve reserve loss Total
GBP GBP GBP GBP GBP
For the six months ended
31 October 2017
------------------------------------------------ -------------- ------------ ------------- -----------
At 30 April 2017 2,000,000 83,589,060 6,700,256 (76,618,027) 15,671,289
Total comprehensive loss
for the period
Profit for the period - - - 1,250,369 1,250,369
Other comprehensive loss
Foreign exchange loss
on translation of discontinued
foreign operations (note
12) - - (820,295) - (820,295)
------------------------------------ ---------- -------------- ------------ ------------- -----------
Total comprehensive (loss)/income - - (820,295) 1,250,369 430,074
------------------------------------ ---------- -------------- ------------ ------------- -----------
At 31 October 2017 2,000,000 83,589,060 5,879,961 (75,367,658) 16,101,363
------------------------------------ ---------- -------------- ------------ ------------- -----------
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of cash flows
For the six months ended 31 October 2018
For the six
For the six months ended
months ended 31 October
31 October 2018 2017
Unaudited Unaudited
Note GBP GBP
------------------------------------------------------- ----------------- ---------------
Cash flows from operating activities
Total (loss)/profit for the period (647,636) 1,250,369
Adjustments for:
Decrease in fair value of assets and disposal
group held for sale 11 - 2,079,374
Decrease in provision 13 - (3,275,550)
Loss/(profit) on sale of assets held for
sale 7,228 (663,006)
Net finance costs, excluding foreign exchange
movements -
continuing operations 44,819 2,117
Net finance costs, excluding foreign exchange
movements - discontinued operations 868 2,651
Decrease/(increase) in trade and other
receivables 19,197 (434,170)
Decrease in trade and other payables (65,566) (95,670)
---------------------------------------------- ------------------------ ---------------
(641,090) (1,133,885)
Tax paid - -
-------------------------------------------------- ---------------------- ---------------
Net cash used in operating activities (641,090) (1,133,885)
-------------------------------------------------- ---------------------- ---------------
Cash flows from investing activities - discontinued operations
Net proceeds from sale of assets held for
sale 11 165,034 2,444,011
Cost capitalised to land and plantations (150,381) -
Net cash from investing activities 14,653 2,444,011
------------------------------------------------ ------------------------ ---------------
Cash flows from financing activities
Net finance costs, excluding foreign exchange
movements (2,328) (4,768)
Net cash used in financing activities (2,328) (4,768)
------------------------------------------------ ------------------------ ---------------
Net (decrease)/increase in cash and cash
equivalents (628,765) 1,305,358
Foreign exchange movements 26,001 (262,704)
Balance at the beginning of the period 3,071,863 2,272,028
------------------------------------------------ ------------------------ ---------------
Balance at the end of the period 2,469,099 3,314,682
------------------------------------------------ ----- ----------------- ---------------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended 31 October 2018
1. General information
The Company and its subsidiaries, including special purpose entities ("SPEs") controlled by the Company (together the "Group"), own a portfolio of forestry based properties which are managed on an environmentally and socially sustainable basis. Assets are managed for timber production. As at the period end date, the Group owned forestry assets located in Brazil.
The Company is a closed-ended company with limited liability, incorporated in Jersey, Channel Islands on 19 January 2007. The address of its registered office is Charter Place, 23-27 Seaton Place, St Helier, Jersey JE1 1JY.
These unaudited condensed consolidated interim financial statements (the "interim financial statements") were approved and authorised for issue on 20 December 2018 and signed by Antony Gardner-Hillman on behalf of the Board.
The Company is listed on AIM, a market of the London Stock Exchange.
2. Basis of preparation
The interim financial statements for the six months ended 31 October 2018 have been prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting" and with applicable regulatory requirements of the AIM Rules. They do not include all of the information required for full annual financial statements. The interim financial statements should be read in conjunction with the Group's annual report and financial statements for the year ended 30 April 2018, which were prepared in accordance with International Financial Reporting Standards ("IFRS"). The comparative numbers used for the unaudited condensed consolidated interim statement of comprehensive income, unaudited condensed consolidated interim statement of changes in equity and unaudited condensed consolidated interim statement of cash flows are those of the six month period ended 31 October 2017, which is considered a comparable period as per IAS 34. The comparatives used in the unaudited condensed consolidated statement of financial position are those of the previous financial year to 30 April 2018.
The accounting policies applied by the Group in these interim financial statements are the same as those applied by the Group in its financial statements as at and for the year ended 30 April 2018.
The interim financial statements have been prepared in Sterling, which is the presentational currency and functional currency of the Company, and under the historical cost convention, except for investment property, plantations, buildings, assets and liabilities held for sale and certain financial instruments which are carried either at fair value, fair value less cost to sell or fair value less subsequent accumulated depreciation and subsequent accumulated impairment loss.
The preparation of the financial statements requires Directors to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the interim financial statements. If in the future such estimates and assumptions, which are based on the Directors' best judgement at the date of the interim financial statements, deviate from actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change.
In preparing the interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements as at, and for the year ended, 30 April 2018. The main area of the interim financial statements where significant judgements have been made by the Directors is in determining the fair value of the assets held for sale as disclosed in note 11.
The Company has identified that the Group's Brazilian expenses (with the exception of insurance premia) have been accounted for on a cash rather than an accrual basis. In view of the fact that expenses are paid in the normal course by the end of the month following the month in which the supplier's invoice is received, by and large the end of year financial statements will report Brazilian expenses (other than insurance premia) submitted to the Group in the previous April to March (rather than May to April) and the interim financial statements will report expenses submitted to the Group in the previous April to September (rather than May to October). The Directors do not believe there is any material effect in either case and do not plan to make any change.
Going concern and assets and liabilities held for sale
On 30 November 2012, the Independent Directors announced the outcome of the strategic review initiated in June 2012. The Directors proposed and recommended a change of investment policy with a view to implementing an orderly realisation of the Group's investments in a manner which maximises value for shareholders, and returning surplus cash to shareholders over time through ad hoc returns of capital. This proposal was approved by shareholders at an Extraordinary General Meeting ("EGM") on 22 February 2013. There is no set period for the realisation of the portfolio.
Since the EGM, the portfolio has been reviewed by the Directors with a view to an orderly sale of the assets in such a manner as to enable their inherent value to be realised. As part of this process, the assets in Georgia, Australia and Hawaii have been sold and the Directors plan to sell the remaining assets when acceptable offers are received. As at 31 October 2018, the remaining portfolio of assets, located in Brazil, is classified as held for sale and its transactions for the period as discontinued operations.
As at the date of approval of these financial statements, the Directors have no intention to instigate a winding-up of the Company, a course of action that would require the approval of shareholders. As a result, as at 31 October 2018 the assets and liabilities of the Company pertaining to the Jersey operations have not been classified as held for sale and its Jersey operations continue to be treated as continuing.
Going concern and assets and liabilities held for sale
The Directors consider that the Group has sufficient resources available to pay its liabilities as they fall due and believe it is appropriate to prepare the interim financial statements on a going concern basis.
New, revised and amended standards
At the date of authorisation of these interim financial statements, the following relevant standards and interpretations, which have not been applied in these interim financial statements, were in issue but not yet effective:
-- IAS 12 (amended), "Income Taxes" (amendments resulting from the IASB's Annual Improvements 2015-2017 Cycle project regarding the income tax consequences of dividends, effective for periods commencing on or after 1 January 2019);
-- IFRS 9 (amended), "Financial Instruments" (amendments regarding prepayment features with negative compensation and modifications of financial liabilities, effective for periods commencing on or after 1 January 2019);
-- IFRS 17, "Insurance Contracts" (effective for periods commencing on or after 1 January 2021).
In addition, the IASB completed its Annual Improvements 2015-2017 Cycle project in December 2017. This project has amended certain existing standards and interpretations effective for accounting periods commencing on or after 1 January 2019.
The Directors do not anticipate that the adoption of these standards in future periods will have a material impact on the financial statements of the Group.
New accounting policies effective and adopted
The following relevant amended standard has been applied for the first time in these interim financial statements:
-- IAS 39 (amended), " Financial Instruments: Recognition and Measurement" (amendments to permit an entity to elect to continue to apply the hedge accounting requirements in IAS 39 for a fair value hedge of the interest rate exposure of a portion of a portfolio of financial assets or financial liabilities when IFRS 9 is applied, and to extend the fair value option to certain contracts that meet the 'own use' scope exception, effective for periods commencing on or after 1 January 2018);
-- IFRS 4 (amended), "Insurance Contracts" (amendments regarding the interaction of IFRS 4 and IFRS 9, effective for periods commencing 1 January 2018);
-- IFRS 7 (amended), "Financial Instruments: Disclosures" (amendments relating to additional hedge accounting disclosures resulting from the introduction of the hedge accounting chapter in IFRS 9, effective for periods commencing on or after 1 January 2018);
-- IFRS 9, "Financial Instruments" (effective for periods commencing on or after 1 January 2018);
-- IFRS 15, "Revenue from Contracts with Customers" (effective for periods commencing on or after 1 January 2018).
In addition, the IASB completed its Annual Improvements 2014-2016 Cycle project in December 2016. This project has amended certain existing standards and interpretations effective for accounting periods commencing on or after 1 January 2018.
The adoption of these amended standards has had no material impact on the Financial Statements of the Company. In particular, the adoption of IFRS 9 has had no impact on the Financial Statements, as the Group's financial instruments have all previously been measured at amortised cost under IAS 39 and continue to be so under the terms of IFRS 9. The changes in IFRS 9 related to the recognition of expected credit losses have had no material impact as the Group's financial assets are all of a short-term nature.
Exchange rates
The following exchange rates have been applied in these interim financial statements to convert foreign currency balances to Sterling:
31 October 31 October 30 April 31 October 31 October
2018 2018 2018 2017 2017
closing rate average rate closing closing rate average
rate rate
---------------------- ------------- ------------- --------- ------------- -----------
Brazilian Real 4.7534 5.0373 4.8252 4.3475 4.1641
United States Dollar 1.2766 1.3147 1.3763 1.3283 1.3030
---------------------- ------------- ------------- --------- ------------- -----------
3. Operating segments
The Board of Directors is charged with setting the Company's investment strategy in accordance with the Shareholder Update announcement made on 6 October 2015. The Board of Directors, as the Chief Operating Decision Maker ("CODM"), had, until 16 October 2014, delegated the day to day implementation of its then investment strategy to its Investment Manager and, with effect from 16 October 2014, to its Operations Manager, but retains responsibility to ensure that adequate resources of the Company are directed in accordance with its decisions. The day-to-day decisions of the Investment Manager and Operations Manager have been and are reviewed on a regular basis to ensure compliance with the policies and legal responsibilities of the Board.
Whilst the Operations Manager may make the operational decisions on a day to day basis, any changes to the investment strategy, major allocation decisions or any asset dispositions or material timber contracts have to be approved by the Board, even though they may be proposed by the Operations Manager. The Board therefore retains full responsibility for and control over the major allocation decisions made on an ongoing basis.
The Operations Manager will always act under the terms of the Prospectus and the Board-approved investment strategy.
As at 31 October 2018, the Group operates in three geographical locations, which the CODM has identified as one non-operating segment, Jersey, and two operating segments, Hawaii and Brazil. Timberlands located in Hawaii were disposed of during the period and those remaining are located in Brazil. During the period, all segments, apart from Jersey, have been classified as discontinued operations (see note 11). The accounting policies of each operating segment are the same as the accounting policies of the Group, therefore no reconciliation has been performed.
Jersey Hawaii Brazil Total
31 October 2018 (unaudited) GBP GBP GBP GBP
------------------------------------- ---------- -------- ----------- -----------
Assets and disposal group held for
sale (note 11) - - 15,026,971 15,026,971
Other assets 2,337,872 286,246 159,351 2,783,469
------------------------------------- ---------- -------- ----------- -----------
Total assets 2,337,872 286,246 15,186,322 17,810,440
------------------------------------- ---------- -------- ----------- -----------
Total liabilities 1,542,436 - 109,283 1,651,719
------------------------------------- ---------- -------- ----------- -----------
Jersey Hawaii Brazil Total
30 April 2018 (audited) GBP GBP GBP GBP
------------------------------------- ---------- -------- ----------- -----------
Assets and disposal group held for
sale (note 11) - - 14,774,260 14,774,260
Other assets 2,687,789 366,003 409,871 3,463,663
------------------------------------- ---------- -------- ----------- -----------
Total assets 2,687,789 366,003 15,184,131 18,237,923
------------------------------------- ---------- -------- ----------- -----------
Total liabilities 1,508,195 - 165,731 1,673,926
------------------------------------- ---------- -------- ----------- -----------
Jersey Hawaii Brazil Total
31 October 2018 (unaudited) GBP GBP GBP GBP
----------------------------------------- -------- -------- -------- --------
Loss on disposal of assets and disposal
group held for sale - - (7,228) (7,228)
----------------------------------------- -------- -------- -------- --------
Forestry management expenses - - 1,334 1,334
----------------------------------------- -------- -------- -------- --------
Other operating forestry expenses - - 324,104 324,104
----------------------------------------- -------- -------- -------- --------
Jersey Hawaii Brazil Total
31 October 2017 (unaudited) GBP GBP GBP GBP
-------------------------------------------- -------- -------- ------------ ------------
Segment revenue - 119,724 - 119,724
-------------------------------------------- -------- -------- ------------ ------------
Segment gross
profit - 119,724 - 119,724
--------------------------------------- ------------ -------- ------------ ------------
Gains on disposal of assets - 663,006 - 663,006
-------------------------------------------- -------- -------- ------------ ------------
Decrease in fair value of assets and
disposal group held for sale - - (2,079,374) (2,079,374)
-------------------------------------------- -------- -------- ------------ ------------
Forestry management expenses - - 3,794 3,794
-------------------------------------------- -------- -------- ------------ ------------ Other operating forestry expenses - 52,327 339,947 392,274 -------------------------------------------- -------- -------- ------------ ------------
As at 31 October 2018 and 30 April 2018 the Group owned four distinct parcels of land in one geographical area.
There was no revenue in the period ended 31 October 2018. The majority of the revenues in the period ended 31 October 2017 arose from other income received in Hawaii.
The Group's investments will be realised in an orderly manner (that is, with a strategy of achieving a balance between returning cash to shareholders and maximising value). In view of this, there will be no specific investment restrictions applicable to the Group's portfolio going forward.
This policy will involve a continuing evaluation of the portfolio in order to assess the most appropriate strategy for each investment.
This will be flexible and may need to be altered to reflect changes in the circumstances of a particular investment or in the prevailing market conditions. The Group will, in relation to each investment, seek to create competition amongst a range of interested parties. The net cash proceeds from realisations of assets will be applied to the payments of tax or other liabilities as the Board thinks fit prior to making payments to shareholders.
4. Administrative expenses
For the
6 months
For the 6 months ended
ended 31 October
31 October 2018 2017
Unaudited Unaudited
GBP GBP
----------------------------------------------- ------------
Continuing operations
Operations Manager's fees (note 16) 51,333 48,000
Directors' fees (note 16) 47,667 45,000
Auditor's fees 16,665 9,813
Professional & other fees 115,083 127,072
230,748 229,885
Discontinued operations
Professional & other fees 22,409 69,572
Administration of subsidiaries 16,108 25,520
------------------------------------- -------- ------------
38,517 95,092
Total administration expenses 269,265 324,977
------------------------------------- -------- ------------
Administration of subsidiaries includes statutory fees, accounting fees and administrative expenses in regard to the asset holding subsidiaries.
5. Forestry management expenses
For the
6 months
For the 6 months ended
ended 31 October
31 October 2018 2017
Unaudited Unaudited
GBP GBP
----------------------- ------------
Valuation fees 1,334 3,794
1,334 3,794
----------------------- ------------
6. Other operating forestry expenses
For the
6 months
For the 6 months ended
ended 31 October
31 October 2018 2017
Unaudited Unaudited
GBP GBP
------------------------------------------------ ------------
Property management fees and expenses 96,047 179,307
Property taxes - (2,818)
Lease payments - 34,586
Road maintenance 28,033 20,282
Fencing maintenance 10,184 -
Inventory fees 4,477 4,299
Pest control 56,083 -
Forest protection and insurance 121,448 146,266
Consultancy fees 1,200 6,159
Other 6,632 4,193
-------------------------------------- -------- ------------
324,104 392,274
------------------------------------------------ ------------
For further information relating to the analysis of expenditure contained in this note, please refer to the final two paragraphs of the 'Basis of preparation' section of note 2.
7. Taxation
Taxation on profit on ordinary activities
Entities within the Group made no taxable profits during the period and there was no tax charge for the period. A reconciliation of the Group's pre-tax profit/(losses) to the tax charge is shown below.
For the
6 months
For the 6 months ended 31
ended 31 October October
2018 2017
Unaudited Unaudited
GBP GBP
----------------------------------------------------------------------- -----------
Tax charge reconciliation
Loss for the period from continuing operations before
taxation (275,585) (232,002)
(Loss)/profit for the period from discontinued operations
before taxation (372,051) 1,482,371
----------------------------------------------------------- ---------- -----------
Total (loss)/profit for the period before taxation (647,636) 1,250,369
----------------------------------------------------------- ---------- -----------
Tax (credit)/charge using the average of the tax rates
in the jurisdictions in which the Group operates (119,487) 527,945
Effects of:
Tax exempt income - -
Operating losses for which no deferred tax asset is
recognised 119,487 206,555
Capital and operating losses utilised - (734,500)
Tax charge for the period - -
----------------------------------------------------------- ---------- -----------
The average tax rate is a blended rate calculated using the weighted average applicable tax rates of the jurisdictions in which the Group operates. The average of the tax rates in the jurisdictions in which the Group operates in the period was 18.45% (31 October 2017: 28.46%). The effective tax rate in the period was 0% (31 October 2017: 0%).
At the period end date, the Group has unused operational and capital tax losses. No deferred tax asset has been recognised in respect of these losses due to the unpredictability of future taxable profits and capital gains available against which they can be utilised. Tax losses arising in the United States can be carried forward for up to 20 years; those arising in Brazil can be carried forward indefinitely.
Operational tax losses for which deferred tax assets have not been recognised in the consolidated financial statements
For the
For the 6 months year ended
ended 30 April
31 October 2018 2018
Unaudited Audited
GBP GBP
------------------------------------------------------------------------- ------------
Balance at beginning of the period/year 5,368,406 10,608,215
Brought forward operating losses utilised - (1,259,125)
Current period/year operating losses for which no
deferred tax asset is recognised 383,901 368,715
Operating losses written off on liquidation of subsidiaries - (3,477,643)
Exchange rate movements 73,839 (871,756)
------------------------------------------------------------- ---------- ------------
Balance at the end of the period/year 5,826,146 5,368,406
------------------------------------------------------------- ---------- ------------
Accumulated operating losses at 31 October 2018 and 30 April 2018 in the table above relate entirely to discontinued operations The value of deferred tax assets not recognised in regard to operational losses amounted to GBP1,604,942 (30 April 2018: GBP1,456,321), all of which related to discontinued operations.
Accumulated operating losses relating to continuing operations at the period end amounted to GBP27,707,744 (30 April 2018: GBP27,432,159). No deferred tax assets arose in respect of these losses.
At the period end the Group had accumulated capital losses of GBP1,496,047 (30 April 2018: GBP1,473,786). The accumulated capital losses at 31 October 2018 and 30 April 2018 related entirely to discontinued operations. The value of deferred tax assets not recognised in respect of these capital tax losses amounted to GBP508,656 (30 April 2018: GBP501,087), all of which related to discontinued operations.
Deferred taxation
As at 31 October 2018 and 30 April 2018 the Group had no deferred tax liabilities or recognised deferred tax assets.
8. Basic and diluted loss per share
The calculation of the basic and diluted loss per share in total and for continuing and discontinued operations is based on the following loss attributable to shareholders and weighted average number of shares outstanding.
For the
6 months
For the 6 months ended
ended 31 October
31 October 2018 2017
Unaudited Unaudited
GBP GBP
---------------------------------------------------------------------- ------------
(Loss)/profit for the purposes of basic and diluted
earnings per share being net (loss)/profit for
the period (647,636) 1,250,369
---------------------------------------------------------- ---------- ------------
Loss for the purposes of basic and diluted earnings
per share being net loss for the period from continuing
operations (275,585) (232,002)
---------------------------------------------------------- ---------- ------------
(Loss)/profit for the purposes of basic and diluted
earnings per share being net (loss)/profit for
the period from discontinued operations (372,051) 1,482,371
---------------------------------------------------------- ---------- ------------
31 October 2018 31 October
Unaudited 2017
Weighted average number of shares Unaudited
--------------------------------------------------------------- ----------------- -------------
Issued shares brought forward and carried forward (note
13) 82,130,000 82,130,000
Weighted average number of shares in issue during the
period 82,130,000 82,130,000
---------------------------------------------------------------- ---------------- -------------
Basic and diluted (loss)/earnings per share (0.79) 1.52 pence
pence
---------------------------------------------------------------- ---------------- -------------
Basic and diluted loss per share from continuing operations (0.34) (0.28) pence
pence
---------------------------------------------------------------- ---------------- -------------
Basic and diluted (loss)/earnings per share from discontinued (0.45) 1.80 pence
operations pence
---------------------------------------------------------------- ---------------- -------------
9. Net asset value
31 October 30 April
2018 2018
Unaudited Audited
Total assets 17,810,440 18,237,923
Total liabilities 1,651,719 1,673,926
-------------------------------------- ----------- -----------
Net asset value 16,158,721 16,563,997
-------------------------------------- ----------- -----------
Number of shares in issue (note 13) 82,130,000 82,130,000
-------------------------------------- ----------- -----------
Net asset value per share 0.197 0.202
-------------------------------------- ----------- -----------
10. Investment property and plantations
The Group's investment property and plantations are classified as disposal group and assets held for sale.
The Group engages external independent professional valuers to estimate the market values of the investment properties and plantations on an annual basis, with the Operations Manager providing a desktop update valuation for the purposes of the Group's Interim Financial Statements.
The investment property is carried at its estimated fair value and plantations are carried at their estimated fair values less costs to sell as at 31 October 2018 and 30 April 2018, as determined by the Directors, taking into consideration the external independent professional valuers' valuations, the Operations Manager's desktop update valuations, the latest offers received for the investment property and plantations and the Directors' assessment of transaction execution risk. The fair value measurements of investment properties and plantations have been categorised as Level 3 fair values based on the inputs to the valuation techniques used.
Notwithstanding the results of the independent valuations, the Directors make their own judgement on the valuations of the Group's investment property and plantations, with reference to the views of the Operations Manager, other advisors and the latest offers received.
As at 31 October 2018, the estimated fair values of the 3R Tocantins and Minas Gerais investment properties and plantations are based on the Operations Manager's desktop valuations in consultation with the Directors, as disclosed below.
The independent valuer last valued the investment property held for sale in 3R Tocantins at 30 April 2018 at BRL 33.7 million (31 October 2018: GBP7.1 million, 30 April 2018: GBP7.0 million). However the almost complete lack of comparable land sales in the region in recent years has led to the Directors taking a prudent view of the valuer's estimated bare land values, including taking into account the most recent offer for the land in the year ended 30 April 2016, and they have accordingly applied a discount of approximately 48% (BRL 16.2 million (31 October 2018 and 30 April 2018: GBP3.4 million)) to the independent valuation, resulting in a carrying value of BRL 17.5 million (31 October 2018: GBP3.7 million, 30 April 2018: GBP3.6 million) for the 3R Tocantins land.
During the prior year, the Group agreed the sale of the entire standing tree crop at 3R Tocantins to Suzano, a publicly owned Brazilian pulp and paper company. The majority of the trees sold had been harvested and paid for at 30 April 2018, and the remaining trees were removed and largely paid for during the period, with only an amount of BRL 360,000 (GBP76,000) remaining for settlement. Ownership of the trees passed to Suzano upon harvesting and removal from 3R Tocantins' property.
In addition, at 30 April 2018 the independent valuer valued the regrowth in the plantations at 3R Tocantins since harvesting at BRL 1.3 million (GBP0.3 million). At 31 October 2018 the plantations have been valued at BRL 2.0 million (GBP0.4 million), including costs capitalised during the period, which the Directors believe represents a reasonable estimation of the fair value of the plantations as at 31 October 2018 before estimated selling costs, due to improvements in the timber market in Brazil during the period.
The independent valuer last valued the investment property held for sale in Minas Gerais at 30 April 2018 at BRL 40.7 million (31 October 2018: GBP8.6 million, 30 April 2018: GBP8.4million). However, in view of the continued lack of market activity for bare land in Minas Gerais, the Directors consider it prudent to discount the independent valuation by approximately 35% (BRL 14.2 million (31 October 2018: GBP3.0 million, 30 April 2018: GBP2.9 million)), which takes into account the most recent offer in the year ended 30 April 2015 and the uncertainty of being granted the necessary forestry or agricultural licence required to achieve the level of productivity assumed by the valuer, resulting in a carrying value of BRL 26.5 million (31 October 2018: GBP5.6 million, 30 April 2018: GBP5.5 million) for the Minas Gerais land.
The independent valuer has valued the plantations at Minas Gerais at BRL 25.7 million (31 October 2018: GBP5.4 million, 30 April 2018: GBP5.3 million). As at 31 October 2018 and 30 April 2018, due to improvements in the timber market in Brazil, the Directors believe that the independent valuation represents a reasonable estimation of the fair value of the plantations before estimated selling costs.
In arriving at the adjusted valuations of the land at 3R Tocantins and Minas Gerais, the Directors have considered the current wood prices prevailing in those regions as an indicator of the economic potential of the land and therefore implicitly of its value. In this context the Directors noted that whilst wood prices have remained fairly stagnant in the period since the land was purchased in 2009 (when there was an active land market in Brazil), the independent valuer's estimations of the value of the land show an increase of approximately 75% over purchase price in Minas Gerais and of approximately 92% in 3R Tocantins. This supports the Directors' view that the independent valuers have been much too optimistic about the economic potential of the Minas Gerais and 3R Tocantins land, and believe that their valuations, which mark the value of the land much more closely to its original purchase price, represent a more realistic view of its fair value in the current market. The Directors have also considered the fact that certain areas of the 3R Tocantins and Minas Gerais properties remain unplantable, and have explored possible alternative uses of these areas to generate value from the land. The Directors believe that these adjusted valuations, after applying estimated selling costs of the plantations of GBP0.3 million (30 April 2018: GBP0.3 million), provide the best estimates of fair value as at 31 October 2018 and 30 April 2018.
The following tables show the valuation techniques used by the valuers in arriving at their estimates of the market values of investment properties and plantations in Brazil, as well as the significant unobservable inputs used by the valuers and their effects on the estimated market values as at 31 October 2018 and 30 April 2018.
Brazil - 3R Tocantins - 31 October 2018 and 30
April 2018
------------------------------------------------------------------------------- ----------------------------------------------------------
Valuation Significant unobservable Inter-relationship
technique inputs between key unobservable
inputs and fair value
measurement
-------------- --------------------------------------------------------------- ----------------------------------------------------------
The 3R The estimated fair
Tocantins * Comparable land sales prices per hectare: BRL 2,335 - value would increase/(decrease)
property BRL 3,821 if:
in Brazil was * comparable land sales prices were higher/(lower)
valued by
Holtz * Regeneration costs: BRL 808.36 per hectare
Consultoria
Ltda.
A desktop * Estimate of costs to sell the plantation: 5%
valuation was
carried out
at 30 April
2018. A
desktop
valuation
does not
include a
physical
inspection of
the property
by the
valuer,
however
in the
opinion of
the
Directors,
carrying out
a full
valuation
as at 30
April 2018,
as
opposed to a
desktop
valuation,
would not
have resulted
in a material
difference
in valuation.
The valuation
method
applied for
the
bare land
appraisal was
the sales
comparison
approach.
The analysis
considered
the bare land
price from
comparable
transactions,
soil quality,
topography
of the land,
access and
distance from
cities and
the
proportion of
the property
which could
be used for
cultivation.
At the prior
year end, a
small
quantity
of mature
plantations
were
subject to a
sale
agreement
and were
valued at
their
agreed sale
price. The
remaining
planted
forests
are valued
using the
reproduction
cost method.
-------------- --------------------------------------------------------------- ----------------------------------------------------------
Brazil - Minas Gerais - 31 October 2018 and 30
April 2018
---------------------------------------------------------------------------- -------------------------------------------------------------
Valuation Significant unobservable Inter-relationship
technique inputs between key unobservable
inputs and fair value
measurement
--------------- ----------------------------------------------------------- -------------------------------------------------------------
The three The estimated fair
properties in * Land value per hectare: BRL 1,000 - BRL 5,500 value would increase/(decrease)
Minas Gerais if:
in Brazil * land values were higher/(lower)
were valued by * Estimated future log prices per m3, being standing
Holtz prices with the buyer absorbing all the costs of
Consultoria harvesting and haulage: BRL 43.29 * estimated log prices were higher/(lower)
Ltda. A
desktop
valuation * Estimated future overhead costs per planted hectare: * estimated future overhead costs were lower/(higher)
was carried BRL 206.25
out at 30
April * estimated yields were higher/(lower)
2018. A * Estimated yields in m3 per hectare per year:
desktop 26.5-34.5
valuation * estimated establishment costs were lower/(higher)
does not
include a * Estimated total establishment costs per hectare: BRL
physical 5,329 for first cycle, BRL 2,606 for subsequent * the risk-adjusted discount rate were lower/(higher)
inspection of cycles
the property
by the valuer, * estimated costs to sell were lower/(higher)
however * Risk-adjusted discount rate: 10.0%
in the opinion
of the
Directors, * Estimate of costs to sell the plantations: 5%
carrying out a
full valuation
as at 30 April
2018, as
opposed to a
desktop
valuation,
would not have
resulted
in a material
difference
in valuation.
As at 30
April 2018,
the valuation
method applied
for the
bare land
appraisal was
the sales
comparison
approach.
The analysis
considered
the bare land
price from
comparable
transactions,
soil quality,
topography
of the land,
access and
distance from
cities and
the proportion
of the
property
which could be
used for
cultivation.
Planted
forests,
all of which
are over 1
year old, are
valued using
the discounted
cash flow
method. This
method
considers
the present
value of the
net cash flows
expected
to be
generated by
the
plantation at
maturity,
the expected
additional
biological
transformation
and the risks
associated
with the
asset; the
expected
net cash flows
are discounted
using a
risk-adjusted
discount
rate.
--------------- ----------------------------------------------------------- -------------------------------------------------------------
The Group is exposed to a number of risks related to its tree plantations:
Regulatory and environmental risks
The Group is subject to laws and regulations in the countries in which it operates. The Group has established environmental policies and procedures aimed at compliance with local environmental and other laws. The Operations Manager performs regular reviews to identify environmental risks and to ensure that the systems in place are adequate to manage those risks.
Supply and demand risk
The Group is exposed to risks arising from fluctuations in the price and sales volume of trees. The Group intends to manage this risk by aligning its harvest volume to market supply and demand. The Operations Manager performs regular industry trend analyses to ensure that the Group's pricing structure is in line with the market and to ensure that projected harvest volumes are consistent with the expected demand.
Climate and other risks
The Group's plantations are exposed to the risk of damage from climatic changes, diseases, forest fires and other natural forces. The Group has processes in place aimed at monitoring and mitigating those risks, including regular forest health inspections and industry pest and disease surveys.
11. Disposal group and assets held for sale and discontinued operations
During the period, the Group continued its strategy for orderly realisation of the remaining assets in Brazil, in accordance with the Shareholder Update announcement made on 6 October 2015.
The assets in Brazil are ultimately likely to be sold through a disposal of the entities owning the assets. Accordingly, as at 31 October 2018, the Group's Brazil segment is presented as a disposal group held for sale.
The Brazil disposal group comprises the following assets and liabilities held for sale:
Liabilities 30 April
Assets held for 31 October 2018
held for sale sale 2018 Unaudited Audited
GBP GBP GBP GBP
----------------------------- --------------- ------------ ---------------- -----------
Investment property 9,249,481 - 9,249,481 9,111,848
Plantations 5,566,464 - 5,566,464 5,581,128
Trade and other receivables 211,026 - 211,026 81,284
Trade and other payables - (109,283) (109,283) (165,731)
15,026,971 (109,283) 14,917,688 14,608,529
----------------------------- --------------- ------------ ---------------- -----------
A gain of GBP214,005 (2017: loss of GBP806,800) related to the Brazil disposal group, representing foreign exchange translation of discontinued operations, is included in other comprehensive income (see note 12).
Total assets held for sale in the statement of financial position are as follows:
31 October 2018 30 April
Unaudited 2018
Audited
GBP GBP
--------------------------------------------------------------------- ------------
Balance brought forward 14,774,260 18,673,356
Costs capitalised to plantations 150,381 -
Proceeds of disposal of assets held for sale (236,543) (2,621,100)
(Loss)/profit on disposal of assets held for sale (7,228) 709,845
Increase/(decrease) in trade and other receivables 129,742 (41,225)
Increase in the fair value of assets and disposal group
held for sale and investment property and plantations - 691,396
Foreign exchange effect 216,359 (2,638,012)
-------------------------------------------------------- ----------- ------------
15,026,971 14,774,260
--------------------------------------------------------------------- ------------
As at 31 October 2018 and 30 April 2018, the assets held for sale were all located in Brazil.
The fair value measurement of GBP15,026,971 has been categorised as a Level 3 fair value based on the appraised fair values of the investment property and the appraised fair values of the plantations less costs to sell. These assets were measured using the methods outlined in note 10. The fair value of other assets and liabilities within the disposal group is not significantly different from their carrying amounts.
Net cash flows attributable to the discontinued operations were as follows:
For the 6 months For the
ended 6 months
31 October ended
2018 31 October
Unaudited 2017
Unaudited
GBP GBP
----------------------------------------------------------------------------- ------------
Operating activities
(Loss)/profit for the year before taxation (372,051) 1,482,371
Adjustments for:
Decrease in fair value of assets and disposal
group held for sale and investment property
and plantations - 2,079,374
Loss/(profit) on disposal of assets held
for sale 7,228 (663,006)
Decrease in provisions - (3,275,550)
Net finance costs 868 2,651
Decrease/(increase) in trade and other
receivables 9,674 (449,163)
Decrease in trade and other payables (56,448) (56,821)
Net cash used in operating activities (410,729) (880,144)
Net cash from investing activities (proceeds of disposal
of assets held for sale less costs capitalised to plantations) 14,653 2,444,011
Net cash used in financing activities (net finance costs) (868) (2,651)
Foreign exchange movements 26,019 (262,704)
Net cash flow for the period (370,925) 1,298,512
----------------------------------------------------------------- ---------- ------------
12. Foreign exchange effect
The translation reserve movement in the period, all of which was derived from discontinued operations, has arisen as follows:
Exchange Exchange
rate at rate at Translation
31 October 30 April reserve movement
31 October 2018 2018 2018 Unaudited
------------------------- ------------ ---------- ------------------
Discontinued operations
Brazilian Real 4.7534 4.8252 214,005
United States Dollar 1.2766 1.3763 28,355
------------------------- ------------ ---------- ------------------
242,360
--------------------------------------------------- ------------------
Exchange Exchange Translation
rate at rate at reserve
31 October 30 April movement
31 October 2017 2017 2017 Unaudited
Discontinued operations
Brazilian Real 4.3475 4.1140 (806,800)
United States Dollar 1.3283 1.2951 (13,495)
------------------------- ------------ ---------- ------------
(820,295)
--------------------------------------------------- ------------
13. Stated capital
31 October 2018 30 April
Unaudited 2018
Audited
GBP GBP
--------------------------------------------------------- ----------
Balance brought forward and carried forward 2,000,000 2,000,000
--------------------------------------------- ---------- ----------
The total authorised share capital of the Company is 250 million shares of no par value. On initial placement 104,350,000 shares were issued at 100 pence each. Shares carry no automatic rights to fixed income but the Company may declare dividends from time to time to which shareholders are entitled. Each share is entitled to one vote at meetings of the Company.
On 22 February 2007, a special resolution was passed by the Company to reduce the stated capital account from GBP104,350,000 to GBP2,000,000. Approval was sought from the Royal Court of Jersey and was granted on 29 June 2007. The balance of GBP102,350,000 was transferred to a distributable reserve on that date.
The Company was granted authority by shareholders on 15 August 2008 to make market purchases of its own shares, an authority which was renewed on 4 October 2010, 12 October 2011, 8 October 2012, 16 October 2013, 16 October 2014, 30 September 2015 and 21 September 2016.
On 27 January 2015, shareholders approved a resolution to distribute GBP5,000,000 of cash via a tender offer at 25 pence per share, resulting in the buy-back and cancellation of 20,000,000 shares.
On 1 November 2018, the Company announced a Proposed Share Buy-back, which was approved by Shareholders at an Extraordinary General Meeting on 3 December 2018.
As part of the Buy-back programme, the Company acquired 185,000 of its own shares at a price of 11.385p per share on 4 December 2018, 250,000 shares at a price of 11.75p per share on 7 December 2018, and 611,000 Shares at 11.75p per Share on 12 December 2018. These shares have been cancelled.
Movements of shares in issue
For the 6 months For the
ended 6 months
31 October 2018 ended
Unaudited 31 October
2017
Unaudited
Number Number
------------------------------------------------------------- ------------
In issue at 31 October and 30 April fully paid 82,130,000 82,130,000
------------------------------------------------ ----------- ------------
14. Reserves
The movements in the reserves for the Group are shown on the statement of changes in equity. .
Translation reserve
The translation reserve contains exchange differences arising on consolidation of the Group's foreign operations.
Distributable reserve
On 22 February 2007, the Company reduced its stated capital account and a balance of GBP102,350,000 was transferred to distributable reserves. This reserve would be utilised if the Company wished to purchase its own shares and for the payment of dividends.
15. Net asset value reconciliation
For the year For the 6
For the 6 months ended months ended
ended 30 April 31 October
31 October 2018 2018 2017
Unaudited Audited Unaudited
GBP GBP GBP
--------------------------------------------------------- ------------- --------------
Net asset value brought forward 16,563,997 15,671,289 15,671,289
Translation differences 242,360 (3,081,128) (820,295)
Increase/(decrease) in the fair value
of investment property and plantations - 691,396 (2,079,374)
(Loss)/profit on disposal of assets held
for sale (7,228) 709,845 663,006
Reversal of provisions - 3,191,119 3,275,550
Net finance costs and exchange differences
- continuing operations (44,837) (35,455) (2,117)
Net finance costs and exchange differences
- discontinued operations (868) 625,119 (5,375)
Loss before above items (594,703) (1,208,188) (601,321)
Net asset value carried forward 16,158,721 16,563,997 16,101,363
-------------------------------------------- ----------- ------------- --------------
16. Related party transactions
During the period the Directors received the following remuneration in the form of fees from the Company:
For the 6 months For the
ended 6 months
31 October 2018 ended
Unaudited 31 October
2017
Unaudited
GBP GBP
------------------------------ ------------
Tony Gardner-Hillman 22,667 20,000
Svante Adde 12,500 12,500
Roger Lewis 12,500 12,500
47,667 45,000
------------------------------ ------------
Robert Rickman was paid GBP51,333 (2017: GBP48,000) in the period as remuneration in his role as Operations Manager (see note 4).
At the period end, Directors held the following interests in the shares of the Company:
31 October 2018 30 April
Unaudited 2018
Audited
Number Number
---------------------- ---------
Svante Adde 160,840 160,840
160,840 160,840
---------------------- ---------
17. Loan payable to related party
On 21 December 2017, the Company accepted a loan from Peter Gyllenhammar AB ("PGAB"), the Company's largest shareholder, in the sum of GBP1,413,874. This loan was provided to assist the Group in settling the outstanding mortgages over the Group's 3R property. The interest rate on the loan is 6% for the first 12 months, and thereafter 8%. Interest charged in the period amounted to GBP43,359. PGAB has agreed not to have recourse against the Group's existing cash balances. There is no specified repayment date (and consequently no default interest rate) and the Company is only required to repay the loan or pay interest out of cash flow from the land and/or timber assets presently held in Brazil which is surplus to requirements. The loan agreement contains borrower covenants requiring lender consent for the Company to return to shareholders in excess of approximately GBP2,000,000 of the cash presently held, to purchase own shares for more than 12p per share, to declare or pay any dividend, or to make any significant new investment.
18. Events after the reporting period
On 1 November 2018, the Company announced a Proposed Share Buy-back, which was approved by Shareholders at an Extraordinary General Meeting on 3 December 2018.
As part of the Buy-back programme, the Company acquired 185,000 of its own Shares at a price of 11.385p per Share on 4 December 2018, 250,000 Shares at a price of 11.75p per Share on 7 December 2018, and 611,000 Shares at 11.75p per Share on 12 December 2018. These Shares have been cancelled.
As part of the 1 November 2018 announcement, the Company issued a Trading Update, in which it announced that a contract had been signed to sell approximately 470,000m(3) of timber at its Agua Santa property in Minas Gerais at a price in the region of BRL 41.50 per m(3) , to be harvested and paid for over four years, and that it was in negotiation to sell approximately 115,000 m(3) of timber at its Ribeirao do Gado property, also in Minas Gerais, at a price in the region of BRL 40.00 per m(3) , to be harvested and paid for over two years. On 19 December 2018, the Company announced that the Ribeirao do Gado contract had also been signed, and that harvesting had begun at Agua Santa.
There were no other significant events after the period end which, in the opinion of the Directors, require disclosure in these financial statements.
Directors Registered Office of the Company
Antony R Gardner-Hillman (Chairman) Charter Place
Svante Adde 23/27 Seaton Place
Roger Lewis St Helier
Jersey JE1 1JY
Operations Manager
Robert Rickman
Belsyre Court
57 Woodstock Road
Oxford OX2 6HJ
Sub-Administrator
Praxis Fund Services Limited
PO Box 296
Sarnia House
St Peter Port
Guernsey GY1 4NA
Administrator and Company Secretary
PraxisIFM Trust Limited
Charter Place
23/27 Seaton Place
St Helier
Jersey JE1 1JY
Auditor
KPMG Channel Islands Limited
37 Esplanade
St Helier
Jersey JE4 8WQ
Registrar, Paying Agent and Transfer Agent
Link Market Services (Jersey) Limited
(formerly Capita Registrars (Jersey) Limited
PO Box 378
Jersey JE4 0FF
Corporate Broker and Nominated Adviser for AIM
WH Ireland Limited
24 Martin Lane
London EC4R 0DR
Property Valuers
Holtz Consultoria Ltda
Republica Argentina Av. 452
Curitiba
Agua Verde 80240-210
Brazil
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR BLBDDLSDBGIG
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December 20, 2018 11:50 ET (16:50 GMT)
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