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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
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Forestry & Paper 0.0 -0.2 -1.1 - 4

Cambium Global Timberland Limited Half-year Report

17/01/2020 5:00pm

UK Regulatory (RNS & others)


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TIDMTREE

RNS Number : 2289A

Cambium Global Timberland Limited

17 January 2020

17 January 2020

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 2019 is 17.6p.

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 2019 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

020 7220 1698

Administrator and Company Secretary

Praxis Fund Services (Jersey) Limited

01534 835835

Cambium Global Timberland Limited

Interim Report and Unaudited Condensed Consolidated Interim Financial Statements

for the six months ended 31 October 2019

 
 
 
 

Cambium Global Timberland Limited

Chairman's statement

Assets and values

The Company's Net Asset Value per share ("NAVPS") as of 31 October 2019 is 17.6p, compared with 18.8p as at 30 April 2019, a decrease of 6.4% in the period.

The change in NAVPS comprised currency movements (-1.8%), net expenditure on forestry and other costs (-4.4%), accrued interest on the loan from Peter Gyllenhammar AB (announced on 21 December 2017) (-0.4%) and the accretive effect of buying back shares at a discount to NAV (+0.2%).

It is a reality of the market, in the absence of foreign investor participation in land purchases and of bank appetite to provide finance, that sales have to be vendor-financed, in our case, at Agua Santa over two years and at Ribeirao do Gado over three years. At Forquilha we are talking to interested parties and taking a realistic look at opportunities to enhance attractiveness to them by dividing land titles between areas better suited respectively to tree cultivation and to cattle grazing.

All in all, effort has produced forward motion, but slowly, in keeping with the constraints of a market that continues to be challenging.

The Board continues constantly to monitor the Group's cash position. As at the period end the Company and its subsidiaries had cash reserves of GBP1.0 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. At 3R in Brazil, discussions with the purchaser of the harvested wood on calculation of the final instalment of the contract price have concluded and no further sums are recoverable, resulting in a write-off in the period of the remaining debtor balance recorded at the prior year end, as noted in the Operations Manager's Report in the 2019 annual financial statements.

The Share buy-back programme is in abeyance pending review when further significant cash comes in, and in the meantime the board is comfortable that the Company retains sufficient reserves to meet outgoings for the foreseeable future.

Costs

Cost curtailment efforts continue, which will be aided of course by land sales. There will be a need though for some further expenditure at 3R to protect the value in the coppice re-growth.

Administrative expenses are up 3.3% on the corresponding prior period (note 4), principally due to increased legal and administrative costs in Brazil.

However, forestry expenses (notes 5 and 6) again show a meaningful fall against the prior period, down 22.5%, demonstrating the ongoing effort to curtail costs, but 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, but excluding bad debts, for the period in Sterling terms amounted to GBP0.59 million, as compared with GBP0.64 million for the same period last year.

Conclusions

The period showed land values holding their own rather than increasing in any significant way, supported perhaps by signs of interest from ranchers in light of a recovery in beef prices, but saw plantation values struggling in light of the subdued demand for both pig iron and pulp.

The journey to exit Brazil, our only remaining location, continues to move in the direction of a conclusion. The ongoing frustrations are all to do with lack of urgency in the market, but we continue to look sensibly for the terms that will provide overall the best exit outcome for our loyal shareholders.

I am pleased with the events the Company has been able to announce, although I do wish we could have announced more, and I continue to look forward to completing the process, and to reporting further in due course.

Antony R Gardner-Hillman

Chairman

17 January 2020

Cambium Global Timberland Limited

Operations Manager's report

For the six months ended 31 October 2019

The total loss for the period covered by these financial statements, excluding translation differences, was GBP0.65 million, compared to a loss of GBP0.65 million in the corresponding prior year period. The portfolio returns were primarily impacted by operating costs and foreign exchange losses arising on translation.

Below is a summary of the results by geographic area.

Brazil

The Brazilian portfolio now represents 100% of the physical assets and 95% of the total assets.

At 3R, the good 1,600 hectares of coppice regrowth are growing well and demonstrating the potential of the site when planted with the right clone and well tended. Regrowth of other clones is much poorer and does not justify expenditure on control of leaf eating ants and weeds. Given the lack of activity in the local land market, discussions are underway to lease the property to a local forestry company, which will allow Cambium to reduce management costs while maintaining an interest in a future revival of liquidity and land values.

In Minas Gerais, payments were received for harvesting at Agua Santa and, after the period end, at Ribeirao do Gado. Charcoal prices, on which the wood sale prices are based, have fallen in the last six months, but remain above contract minima. This fall has been caused by plentiful supply of wood, and of charcoal for the modest level of demand for pig iron. Indirectly, the subdued market for paper pulp is also diverting wood into charcoal production so increasing charcoal supply and holding down prices. The previously announced sale of Agua Santa for R$30 million, less the value of wood harvested under the current wood sale contract, will close shortly after a delay due to unexpected minor environmental compliance issues, which have now been resolved. Negotiations remain under way to sell Ribeirao do Gado. At Forquilha, discussions remain underway with potential farming purchasers for the majority of the land and with charcoal companies for the plantation area.

An upturn in the Brazilian forestry land market activity remains elusive. There are some signs that improved beef prices worldwide and in Brazil are being reflected in increased interest from farmers in non-forest land such as much of Forquilha and possibly 3R, but prices and market activity remain subdued.

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 less than 1% of the total assets. The owners of the plantations continue to pay the rent to the landlords, so allowing the release of the small remaining amount of escrow funds to Cambium as scheduled.

Conclusion

The focus remains one of realising cash from wood and asset sales while selling or, if necessary, leasing properties to reduce the considerable costs of management, maintenance, fire control and insurance. This is being achieved, albeit slowly, despite the fact that an upturn in economic activity in general and the land market in particular still has not yet occurred.

Robert Rickman

Operations Manager

17 January 2020

Cambium Global Timberland Limited

Unaudited condensed consolidated interim statement of comprehensive income

For the six months ended 31 October 2019

 
                                                                   For the        For the 
                                                                       six            six 
                                                                    months         months 
                                                                     ended          ended 
                                                                31 October     31 October 
                                                                      2019           2018 
                                                                 Unaudited      Unaudited 
 Continuing operations                                Notes            GBP            GBP 
---------------------------------------------------  ------  -------------  ------------- 
 Finance costs                                                    (57,891)       (44,819) 
 Net foreign exchange gain/(loss)                                    1,349           (18) 
---------------------------------------------------  ------  -------------  ------------- 
 Net finance costs                                                (56,542)       (44,837) 
---------------------------------------------------  ------  -------------  ------------- 
 Administrative expenses                                  4      (228,208)      (230,748) 
 Loss for the period from continuing operations                  (284,750)      (275,585) 
---------------------------------------------------  ------  -------------  ------------- 
 
 Discontinued operations 
---------------------------------------------------  ------  -------------  ------------- 
 Loss on sale of assets held for sale                             (12,798)        (7,228) 
 
 Administrative expenses                                  4       (49,882)       (38,517) 
 Forestry management expenses                             5        (5,013)        (1,334) 
 Other operating forestry expenses                        6      (247,226)      (324,104) 
 Bad debt written off                                             (56,288)              - 
                                                                 (358,409)      (363,955) 
--------------------------------------------------------------------------  ------------- 
 Operating loss from discontinued operations                     (371,207)      (371,183) 
---------------------------------------------------  ---------------------  ------------- 
 Finance costs                                                       (970)          (868) 
 Net foreign exchange gain                                           2,546              - 
---------------------------------------------------  ---------------------  ------------- 
 Net finance income/(costs)                                          1,576          (868) 
---------------------------------------------------  ---------------------  ------------- 
 Loss before taxation from discontinued operations               (369,631)      (372,051) 
 Taxation charge                                          7              -              - 
---------------------------------------------------  ------  -------------  ------------- 
 Loss for the period from discontinued operations                (369,631)      (372,051) 
---------------------------------------------------  ---------------------  ------------- 
 
 Total loss for the period                                       (654,381)      (647,636) 
---------------------------------------------------  ---------------------  ------------- 
 Other comprehensive (loss)/income 
 Items that are or may be reclassified to profit or loss, net of tax 
 Foreign exchange (loss)/gain on translation 
  of discontinued foreign operations                     12      (256,244)        242,360 
 Other comprehensive (loss)/income for the 
  period                                                         (256,244)        242,360 
---------------------------------------------------  ------  -------------  ------------- 
 Total comprehensive loss for the period                         (910,625)      (405,276) 
-----------------------------------------------------------  -------------  ------------- 
 
 Basic and diluted loss per share                         8   (0.89) pence   (0.79) pence 
---------------------------------------------------  ------  -------------  ------------- 
 Basic and diluted loss per share from continuing         8   (0.39) pence   (0.34) pence 
  operations 
---------------------------------------------------  ------  -------------  ------------- 
 Basic and diluted loss per share from discontinued       8   (0.50) pence   (0.45) pence 
  operations 
---------------------------------------------------  ------  -------------  ------------- 
 

All (losses)/profits from continuing and discontinued operations are attributable to the equity holders of the parent Company. There are no minority interests.

The notes on pages 8 to 21 form an integral part of these unaudited condensed consolidated interim financial statements.

Cambium Global Timberland Limited

Unaudited condensed consolidated interim statement of financial position

At 31 October 2019

 
                                                                        31 October       30 April 
                                                                              2019           2019 
                                                                         Unaudited        Audited 
                                                              Notes            GBP            GBP 
-----------------------------------------------------------  ------  -------------  ------------- 
 Current assets 
 Assets held for sale                                            11     13,692,922     14,292,311 
 Trade and other receivables                                               123,363        208,641 
 Cash and cash equivalents                                               1,031,490      1,137,281 
 Total assets                                                           14,847,775     15,638,233 
--------------------------------  -------------------------  ------  -------------  ------------- 
 
 Current liabilities 
 Liabilities held for 
  sale                                                           11        216,171         74,072 
 Loan payable to related 
  party                                                                  1,595,702      1,539,237 
 Trade and other payables                                                   44,063         77,529 
 Total liabilities                                                       1,855,936      1,690,838 
--------------------------------  -------------------------  ------  -------------  ------------- 
 
 Net assets                                                             12,991,839     13,947,395 
--------------------------------  -------------------------  ------  -------------  ------------- 
 
 Equity 
 Stated capital                                                  13      2,000,000      2,000,000 
 Distributable reserve                                           14     82,603,312     82,648,243 
 Translation reserve                                          12,14      2,545,981      2,802,225 
 Retained loss                                                        (74,157,454)   (73,503,073) 
--------------------------------  -------------------------  ------  -------------  ------------- 
 Total equity                                                           12,991,839     13,947,395 
--------------------------------  -------------------------  ------  -------------  ------------- 
 Net asset value per                                              9     17.6 pence     18.8 pence 
  share 
--------------------------------  -------------------------  ------  -------------  ------------- 
 
 

These unaudited condensed consolidated interim financial statements were approved and authorised for issue on 17 January 2020 by the Board of Directors.

 
 Antony R Gardner-Hillman 
 Chairman 
 

The notes on pages 8 to 21 form an integral part of these unaudited condensed consolidated interim financial statements.

Cambium Global Timberland Limited

Unaudited condensed consolidated interim statement of changes in equity

For the six months ended 31 October 2019

 
                                           Share   Distributable   Translation       Retained 
 Unaudited                               Capital         reserve       reserve           loss        Total 
                                             GBP             GBP           GBP            GBP          GBP 
 For the six months ended 
  31 October 2019 
------------------------------------------------  --------------  ------------  -------------  ----------- 
 At 30 April 2019                      2,000,000      82,648,243     2,802,225   (73,503,073)   13,947,395 
 Total comprehensive loss 
  for the period 
 Loss for the period                           -               -             -      (654,381)    (654,381) 
 
 Other comprehensive income 
 Foreign exchange loss 
  on translation of discontinued 
  foreign operations (note 
  12)                                          -               -     (256,244)              -    (256,244) 
------------------------------------  ----------  --------------  ------------  -------------  ----------- 
 Total comprehensive loss                      -               -     (256,244)      (654,381)    (910,625) 
------------------------------------  ----------  --------------  ------------  -------------  ----------- 
 
 Transactions with owners 
 Share buy-backs                               -        (44,931)             -              -     (44,931) 
 
 At 31 October 2019                    2,000,000      82,603,312     2,545,981   (74,157,454)   12,991,839 
------------------------------------  ----------  --------------  ------------  -------------  ----------- 
 
 
 
                                             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 loss 
  for the period 
 Loss for the period                             -               -             -      (647,636)    (647,636) 
 
 Other comprehensive loss 
 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 
--------------------------------------  ----------  --------------  ------------  -------------  ----------- 
 
 

The notes on pages 8 to 21 form an integral part of these unaudited condensed consolidated interim financial statements.

Cambium Global Timberland Limited

Unaudited condensed consolidated interim statement of cash flows

For the six months ended 31 October 2019

 
 
                                                                                   For the six 
                                                                  For the six     months ended 
                                                                 months ended       31 October 
                                                              31 October 2019             2018 
                                                                    Unaudited        Unaudited 
                                                      Note                GBP              GBP 
----------------------------------------------------------  -----------------  --------------- 
 Cash flows from operating activities 
 Total loss for the period                                          (654,381)        (647,636) 
 Adjustments for: 
    Loss on sale of assets held for sale                               12,798            7,228 
    Net finance costs, excluding foreign exchange 
     movements - 
     continuing operations                                             57,891           44,819 
    Net finance costs, excluding foreign exchange 
     movements - discontinued operations                                  970              868 
    Bad debt written off                                               56,288                - 
    (Increase)/decrease in trade and other 
     receivables                                                     (25,171)           19,197 
    Increase/(decrease) in trade and other 
     payables                                                         108,633         (65,566) 
   ----------------------------------------------  --------------------------  --------------- 
                                                                    (442,972)        (641,090) 
 Tax paid                                                                   -                - 
--------------------------------------------------------  -------------------  --------------- 
 Net cash used in operating activities                              (442,972)        (641,090) 
--------------------------------------------------------  -------------------  --------------- 
 Cash flows from investing activities - discontinued operations 
 Net proceeds from sale of assets held for 
  sale                                                  11            399,054          165,034 
 Costs capitalised to land and plantations                                  -        (150,381) 
 Net cash from investing activities                                   399,054           14,653 
-------------------------------------------------  --------------------------  --------------- 
 Cash flows from financing activities 
 Share buy backs                                                     (44,931)                - 
 Net finance costs, excluding foreign exchange 
  movements                                                           (2,396)          (2,328) 
 Net cash used in financing activities                               (47,327)          (2,328) 
-------------------------------------------------  --------------------------  --------------- 
 Net decrease in cash and cash equivalents                           (91,245)        (628,765) 
 Foreign exchange movements                                          (14,546)           26,001 
 Balance at the beginning of the period                             1,137,281        3,071,863 
-------------------------------------------------  --------------------------  --------------- 
 Balance at the end of the period                                   1,031,490        2,469,099 
-------------------------------------------------  -------  -----------------  --------------- 
 
 

The notes on pages 8 to 21 form an integral part of these unaudited condensed consolidated interim financial statements.

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements

For the six months ended 31 October 2019

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 entirely 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 17 January 2020 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 2019 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 2019, 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 2018, which is considered a comparable period in accordance with IAS 34. The comparatives used in the unaudited condensed consolidated statement of financial position are those of the previous financial year to 30 April 2019.

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 for the year ended 30 April 2019.

The interim financial statements have been presented in Sterling, which is also the 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 are the same as those that applied to the financial statements for the year ended 30 April 2019. 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 10.

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 2019, 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 2019 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.

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

2. Basis of preparation (continued)

Going concern and assets and liabilities held for sale (continued)

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.

Amended Accounting Standards applicable to future reporting periods

In September 2019, the IASB completed its Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) project, which has amended those standards to require additional disclosures around uncertainty arising from the interest rate benchmark reform, effective for periods commencing on or after 1 January 2020.

The Directors do not anticipate that the adoption of these amended standards in future periods will have a material impact on the financial statements of the Company.

New accounting policies effective and adopted

-- IFRS 9 (amended), "Financial Instruments" (amendments regarding prepayment features with negative compensation and modification of financial liabilities, effective for periods commencing on or after 1 January 2019).

In addition, the IASB completed its Annual Improvements 2015-2017 Cycle project in December 2017. This project has amended a number of existing standards and interpretations effective for accounting periods commencing on or after 1 January 2019.

The adoption of these amended standards has had no material impact on the financial statements of the Company.

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 
                                 2019           2019       2019           2018         2018 
                         closing rate   average rate    closing   closing rate      average 
                                                           rate                        rate 
----------------------  -------------  -------------  ---------  -------------  ----------- 
 Brazilian Real                5.2017         4.9814    5.1067          4.7534       5.0373 
 United States Dollar          1.2942         1.2528    1.3032          1.2766       1.3147 
----------------------  -------------  -------------  ---------  -------------  ----------- 
 

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"), delegates the day to day implementation of its investment strategy 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 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. The Board therefore retains full responsibility for and control over the major allocation decisions made on an ongoing basis.

The Operations Manager is required to act in accordance with the Prospectus and the Board-approved investment strategy.

As at 31 October 2019, the Group operates in two geographical locations, which the CODM has identified as one non-operating segment, Jersey, and one operating segment, Brazil. All remaining timberlands are located in Brazil. 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.

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

3. Operating segments (continued)

 
                                           Jersey    Hawaii       Brazil        Total 
 31 October 2019 (unaudited)                  GBP       GBP          GBP          GBP 
-------------------------------------  ----------  --------  -----------  ----------- 
 Assets and disposal group held for 
  sale (note 11)                                -         -   13,692,922   13,692,922 
 Other assets                             509,381   195,186      450,286    1,154,853 
-------------------------------------  ----------  --------  -----------  ----------- 
 Total assets                             509,381   195,186   14,143,208   14,847,775 
-------------------------------------  ----------  --------  -----------  ----------- 
 Total liabilities                      1,638,065     1,700      216,171    1,855,936 
-------------------------------------  ----------  --------  -----------  ----------- 
 
 
                                           Jersey    Hawaii       Brazil        Total 
 30 April 2019 (audited)                      GBP       GBP          GBP          GBP 
-------------------------------------  ----------  --------  -----------  ----------- 
 Assets and disposal group held for 
  sale (note 11)                                -         -   14,292,311   14,292,311 
 Other assets                           1,008,862   193,838      143,222    1,345,922 
-------------------------------------  ----------  --------  -----------  ----------- 
 Total assets                           1,008,862   193,838   14,435,533   15,638,233 
-------------------------------------  ----------  --------  -----------  ----------- 
 Total liabilities                      1,616,766         -       74,072    1,690,838 
-------------------------------------  ----------  --------  -----------  ----------- 
 
 
                                             Jersey    Hawaii     Brazil      Total 
 31 October 2019 (unaudited)                    GBP       GBP        GBP        GBP 
-----------------------------------------  --------  --------  ---------  --------- 
 Loss on disposal of assets and disposal 
  group held for sale                             -         -   (12,798)   (12,798) 
-----------------------------------------  --------  --------  ---------  --------- 
 Forestry management expenses                     -         -      5,013      5,013 
-----------------------------------------  --------  --------  ---------  --------- 
 Other operating forestry expenses                -         -    247,226    247,226 
-----------------------------------------  --------  --------  ---------  --------- 
 
 
                                             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 
-----------------------------------------  --------  --------  --------  -------- 
 

As at 31 October 2019 and 30 April 2019 the Group owned four distinct parcels of land in one geographical area.

There was no revenue in the periods ended 31 October 2019 or 31 October 2018.

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.

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

4. Administrative expenses

 
                                                                     For the 
                                                                  six months 
                                                   For the six         ended 
                                                  months ended    31 October 
                                               31 October 2019          2018 
                                                     Unaudited     Unaudited 
                                                           GBP           GBP 
--------------------------------------------------------------  ------------ 
 Continuing operations 
 Operations Manager's fees (note 16)                    53,000        51,333 
 Directors' fees (note 16)                              49,000        47,667 
 Auditor's fees                                         21,361        16,665 
 Professional & other fees                             104,847       115,083 
                                                       228,208       230,748 
 Discontinued operations 
 Professional & other fees                              26,329        22,409 
 Administration of subsidiaries                         23,553        16,108 
----------------------------------------------------  --------  ------------ 
                                                        49,882        38,517 
 
 Total administration expenses                         278,090       269,265 
----------------------------------------------------  --------  ------------ 
 
 

Administration of subsidiaries includes statutory fees, accounting fees and administrative expenses in regard to the asset holding subsidiaries.

5. Forestry management expenses

 
                                                                    For the 
                                                                 six months 
                                                  For the six         ended 
                                                 months ended    31 October 
                                              31 October 2019          2018 
                                                    Unaudited     Unaudited 
                                                          GBP           GBP 
-------------------------------------------------------------  ------------ 
 Valuation fees                                         5,013         1,334 
                                                        5,013         1,334 
-------------------------------------------------------------  ------------ 
 
 

6. Other operating forestry expenses

 
                                                       For the 
                                                    six months 
                                     For the six         ended 
                                    months ended    31 October 
                                 31 October 2019          2018 
                                       Unaudited     Unaudited 
                                             GBP           GBP 
------------------------------------------------  ------------ 
 Property management fees and expenses   104,118        96,047 
 Property taxes                           23,395             - 
 Road maintenance                              -        28,033 
 Fencing maintenance                           -        10,184 
 Inventory fees                                -         4,477 
 Pest control                              1,044        56,083 
 Forest protection and insurance          92,778       121,448 
 Environmental consultancy fees           22,126         1,200 
 Other                                     3,765         6,632 
--------------------------------------  --------  ------------ 
                                         247,226       324,104 
------------------------------------------------  ------------ 
 

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 on page 8.

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

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 
                                                                         six months 
                                                          For the six         ended 
                                                         months ended    31 October 
                                                      31 October 2019          2018 
                                                            Unaudited     Unaudited 
                                                                  GBP           GBP 
---------------------------------------------------------------------  ------------ 
 Tax charge reconciliation 
 Loss for the period from continuing operations before 
  taxation                                                  (284,750)     (275,585) 
 Loss for the period from discontinued operations before 
  taxation                                                  (369,631)     (372,051) 
---------------------------------------------------------  ----------  ------------ 
 Total loss for the period before taxation                  (654,381)     (647,636) 
---------------------------------------------------------  ----------  ------------ 
 Tax credit using the average of the tax rates in the 
  jurisdictions in which the Group operates                 (116,413)     (119,487) 
 Effects of: 
 Operating losses for which no deferred tax asset is 
  recognised                                                  114,136       119,487 
 Capital losses for which no deferred tax asset is 
  recognised                                                    2,277             - 
 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 17.79% (31 October 2018: 18.45%). The effective tax rate in the period was 0% (31 October 2018: 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 six    year ended 
                                                   months ended      30 April 
                                                31 October 2019          2019 
                                                      Unaudited       Audited 
                                                            GBP           GBP 
---------------------------------------------------------------  ------------ 
 Balance at beginning of the period/year              5,883,902     5,368,406 
 Current period/year operating losses for which no 
  deferred tax asset is recognised                      347,277       759,533 
 Exchange rate movements                               (92,337)     (244,037) 
---------------------------------------------------  ----------  ------------ 
 Balance at the end of the period/year                6,138,842     5,883,902 
---------------------------------------------------  ----------  ------------ 
 

Accumulated operating losses at 31 October 2019 and 30 April 2019 in the table above relate entirely to discontinued operations The value of deferred tax assets not recognised in regard to operational losses amounted to GBP1,697,825 (30 April 2019: GBP1,620,097), all of which related to discontinued operations.

Accumulated operating losses relating to continuing operations at the period end amounted to GBP28,391,910 (30 April 2019: GBP28,107,160). No deferred tax assets arose in respect of these losses.

At the period end the Group had accumulated capital losses of GBP803,148 (30 April 2019: GBP818,089). The accumulated capital losses at 31 October 2019 and 30 April 2019 related entirely to discontinued operations. The value of deferred tax assets not recognised in respect of these capital tax losses amounted to GBP273,070 (30 April 2019: GBP278,150), all of which related to discontinued operations.

Deferred taxation

As at 31 October 2019 and 30 April 2019 the Group had no deferred tax liabilities or recognised deferred tax assets.

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

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 
                                                                            six months 
                                                             For the six         ended 
                                                            months ended    31 October 
                                                         31 October 2019          2018 
                                                               Unaudited     Unaudited 
                                                                     GBP           GBP 
------------------------------------------------------------------------  ------------ 
 Loss for the purposes of basic and diluted earnings 
  per share being net loss for the period                      (654,381)     (647,636) 
------------------------------------------------------------  ----------  ------------ 
 Loss for the purposes of basic and diluted earnings 
  per share being net loss for the period from continuing 
  operations                                                   (284,750)     (275,585) 
------------------------------------------------------------  ----------  ------------ 
 Loss for the purposes of basic and diluted earnings 
  per share being net loss for the period from discontinued 
  operations                                                   (369,631)     (372,051) 
------------------------------------------------------------  ----------  ------------ 
 
 
                                                              31 October 2019     31 October 
                                                                    Unaudited           2018 
 Weighted average number of shares                                                 Unaudited 
---------------------------------------  ------------------------------------  ------------- 
 Issued shares brought forward (note 13)                           74,117,299     82,130,000 
 Issued shares carried forward (note 13)                           73,728,284     82,130,000 
 Weighted average number of shares in issue during the 
  period                                                           73,806,510     82,130,000 
----------------------------------------------------------------  -----------  ------------- 
 
 Basic and diluted loss per share                                      (0.89)   (0.79) pence 
                                                                        pence 
----------------------------------------------------------------  -----------  ------------- 
 Basic and diluted loss per share from continuing operations           (0.39)   (0.34) pence 
                                                                        pence 
----------------------------------------------------------------  -----------  ------------- 
 Basic and diluted loss per share from discontinued                    (0.50)   (0.45) pence 
  operations                                                            pence 
----------------------------------------------------------------  -----------  ------------- 
 
 

9. Net asset value

 
                                         31 October     30 April 
                                               2019         2019 
                                          Unaudited      Audited 
 Total assets                            14,847,775   15,638,233 
 Total liabilities                        1,855,936    1,690,838 
--------------------------------------  -----------  ----------- 
 Net asset value                         12,991,839   13,947,395 
--------------------------------------  -----------  ----------- 
 Number of shares in issue (note 13)     73,728,284   74,117,299 
--------------------------------------  -----------  ----------- 
 Net asset value per share               17.6 pence   18.8 pence 
--------------------------------------  -----------  ----------- 
 

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

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 in Brazil 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 2019 and 30 April 2019, as determined by the Directors taking into consideration the external independent professional valuers' valuations, the latest offers received for the investment property and plantations and the Directors' assessment of other factors that may influence prospective purchasers.

The fair value measurements of investment properties and plantations have been categorised as Level 3 fair values based on the unobservable nature of significant 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.

In forming their conclusions of the fair value of the investment property and plantations, the Directors have considered the following factors:

(i) Plantations

 
 Property         Fair value      Valuation technique                    Significant unobservable                                          Inter-relationship 
                                                                                   inputs                                                between key unobservable 
                                                                                                                                             inputs and fair 
                                                                                                                                            value measurement 
                  31       30 
                October   April 
                 2019     2019 
                 GBPm     GBPm 
               --------  ------ 
 
  a) & b)                          31 October 2019 
  Minas                            and 
  Gerais                           30 April 2019           *    Sale prices agreed/subject to final agreement           The estimated 
  -Agua                            In accordance with                                                                   fair value would 
  Santa/           2.3      2.7    sale agreements                                                                      increase/(decrease) 
  Ribeirao                         completed (Agua         *    Discount rate: 10%                                      if: 
  do Gado          0.8      0.8    Santa) or in                                                                          *    the agreed sale prices were higher/(lower) 
                                   discussion 
                                   (Ribeirao do Gado) 
                                   after the period                                                                      *    the discount rate were lower/(higher) 
                                   end, discounted 
                                   to adjust for 
                                   partially 
                                   deferred 
                                   settlement 
               --------  ------  --------------------  ------------------------------------------------------------  -------------------------------------------------------------- 
 
   c) Minas        0.8      0.9    31 October 2019 
   Gerais                          and 
   -Forquilha                      30 April 2019          *    Estimated log prices per m3, being standing prices                 The estimated 
                                   Market approach,            with the buyer absorbing all the costs of harvesting               fair value would 
                                   using prices and            and haulage: BRL 33.00 - BRL 38.00                                 increase/(decrease) 
                                   other information                                                                              if: 
                                   generated by                                                                                    *    estimated log prices were higher/(lower) 
                                   identical              *    Estimate of costs to sell the plantations: 5% 
                                   or comparable 
                                   market                                                                                          *    estimated costs to sell were lower/(higher) 
                                   transactions 
               --------  ------  --------------------  ------------------------------------------------------------  -------------------------------------------------------------- 
 
  d) 3R            0.3      0.3     31 October 2019 
  Tocantins                         and 
                                    30 April 2019          *    Regeneration costs: BRL 1,046.22 per hectare (2018:     The estimated 
                                    Reproduction cost           808.36 per hectare)                                     fair value would 
                                    method                                                                              increase/(decrease) 
                                                                                                                        if: 
                                                           *    Estimate of costs to sell the plantation: 5% (2018:      *    regeneration costs were higher/(lower) 
                                                                5%) 
 
                                                                                                                         *    estimated costs to sell were lower/(higher) 
               --------  ------  --------------------  ------------------------------------------------------------  -------------------------------------------------------------- 
 Total            4.2      4.7 
               --------  ------  --------------------  ------------------------------------------------------------  -------------------------------------------------------------- 
 

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

10. Investment property and plantations (continued)

(i) Plantations (continued)

(i) a) Plantations - Agua Santa

During the prior year, the Group agreed a contract to sell the plantations at the Agua Santa farm. The Group has provisionally agreed a contract to sell the entire Agua Santa property to the same buyer for GBP5.8 million (BRL 30.0 million), with settlement to take place over 24 months, this contract superseding the previously agreed contract for the sale of the plantations alone. The Board has determined that the plantations should be valued on the basis of this later contract, less an appropriate discount for deferred settlement, less amounts received for trees already harvested and removed, and accordingly the Agua Santa plantations are valued in these financial statements at GBP2.4 million (BRL 12.6 million) (30 April 2019: GBP2.9 million (BRL 14.6 million)) before estimated selling costs of GBP0.12 million (30 April 2019: GBP0.14 million).

(i) b) Plantations -Ribeirao do Gado

During the prior year, the Group also agreed a contract to sell the plantations at the Ribeirao do Gado farm. During the period, the Group has been in discussions with the buyer of the Ribeirao do Gado plantations to similarly convert the plantations sale contract into a sale of the entire property for GBP1.5 million (BRL 7.8 million). The Board has determined that the plantations should be valued on the basis of this later agreement in negotiation, less an appropriate discount for deferred settlement, and accordingly the Ribeirao do Gado plantations are valued in these financial statements at GBP0.8 million (BRL 4.2 million) (30 April 2019: GBP0.8 million (BRL 4.2 million)) before estimated selling costs of GBP0.04 million (30 April 2019: GBP0.04 million).

(i) c) Plantation - Forquilha

The Operations Manager has valued the Forquilha plantations at GBP0.9 million ((BRL 4.7 million) (30 April 2019: independent valuer's valuation of GBP0.9 million (BRL 4.7 million)), which the Directors believe represents a reasonable estimation of the fair value of the plantations as at 31 October 2019 before estimated selling costs of GBP0.05 million (30 April 2019: GBP0.05 million).

(i) d) Plantation - 3R Tocantins

The Operations Manager has valued the regrowth in the plantations at 3R Tocantins since harvesting at GBP0.3 million (BRL 1.7 million) (30 April 2019: independent valuer's valuation of GBP0.3 million (BRL1.7 million)), which the Directors believe represents a reasonable estimation of the fair value of the plantations as at 30 April 2019 before estimated selling costs of GBP0.02 million (30 April 2019: GBP0.02 million).

(ii) Investment property

 
 Property       Fair value        Valuation                   Significant unobservable                                Inter-relationship 
                                  technique                            inputs                                       between key unobservable 
                                                                                                                        inputs and fair 
                                                                                                                       value measurement 
                31       30 
              October   April 
               2019     2019 
               GBPm     GBPm 
             --------  ------ 
 a) & b)                        31 October 
 Minas                          2019 
 Gerais          2.2      2.2   and               *    Sale prices agreed/subject to final agreement    The estimated 
 -Agua                          30 April 2019                                                           fair value would 
 Santa/          0.5      0.6   In accordance                                                           increase/(decrease) 
 Ribeirao                       with sale         *    Discount rate: 10%                               if: 
 do Gado                        agreements                                                               *    the agreed sale prices were higher/(lower) 
                                completed 
                                after 
                                the year end                                                             *    the discount rate were lower/(higher) 
                                and 
                                potential 
                                indicative 
                                offer, 
                                respectively, 
                                discounted to 
                                adjust for 
                                partially 
                                deferred 
                                settlement 
             --------  ------  --------------  -----------------------------------------------------  -------------------------------------------------- 
 c) Minas                       31 October 
 Gerais                         2019 
 -Forquilha      3.2      3.3   and               *    Land value per hectare: BRL 1,426 - BRL 4,455     The estimated 
                                30 April 2019                                                            fair value would 
                                Sales                                                                    increase/(decrease) 
                                comparison                                                               if: 
                                approach.                                                                 *    land values were higher/(lower) 
                                Considers 
                                the bare land 
                                price from 
                                comparable 
                                transactions, 
                                soil quality, 
                                and 
                                topography 
                                of the land, 
                                access 
                                and distance 
                                from 
                                cities and 
                                the 
                                proportion of 
                                the property 
                                which 
                                could be used 
                                for 
                                cultivation. 
             --------  ------  --------------  -----------------------------------------------------  -------------------------------------------------- 
 

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

10. Investment property and plantations (continued)

(ii) Investment property (continued)

 
 Property       Fair value        Valuation                        Significant unobservable                                 Inter-relationship 
                                  technique                                  inputs                                      between key unobservable 
                                                                                                                              inputs and fair 
                                                                                                                             value measurement 
                31       30 
              October   April 
               2019     2019 
             --------  ------ 
               GBPm     GBPm 
             --------  ------ 
 d) 3R          3.4      3.4    31 October 
 Tocantins                      2019 
                                and                  *    Comparable land sales prices per hectare: BRL 2,335 -    The estimated 
                                30 April 2019             BRL 3,821                                                fair value would 
                                Sales                                                                              increase/(decrease) 
                                comparison                                                                         if: 
                                approach.                                                                           *    land values were higher/(lower) 
                                Considers 
                                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. 
             --------  ------  --------------  ----------------------------------------------------------------  --------------------------------------- 
 Total          9.3      9.5 
             --------  ------  ------------------------------------------------------------------------------------------------------------------------- 
 

(ii) a) Investment property - Agua Santa

During the prior year, the Group agreed a contract to sell the plantations at the Agua Santa farm in Minas Gerais. During the period the Group provisionally agreed a contract to sell the entire Agua Santa property to the same buyer for GBP5.8 million (BRL 30.0 million), this contract superseding the previously agreed contract for the sale of the plantations alone, with settlement to take place over 24 months. The Board has determined that the investment property at Agua Santa should be valued on the basis of this later contract, less an appropriate discount for deferred settlement, and accordingly the Agua Santa investment property is valued in these financial statements at GBP2.2 million (BRL 11.5 million) (30 April 2019: GBP2.2 million (BRL 11.5 million)).

(ii) b) Investment property - Ribeirao do Gado

During the prior year, the Group also agreed a contract to sell the plantations at the Ribeirao do Gado farm in Minas Gerais. During the period, the Group has been in discussions with the same buyer to similarly convert the plantations sale contract into a sale of the entire property for GBP1.5 million (BRL 7.8 million), with settlement to take place over 36 months. The Board has determined that the investment property at Ribeirao do Gado should be valued on the basis of this agreement in negotiation, less an appropriate discount for deferred settlement, and accordingly the Ribeirao do Gado investment property is valued in these financial statements at GBP0.5 million (BRL 2.8 million) (30 April 2019: GBP0.6 million (BRL 2.8 million)).

(ii) c) Investment property - Forquilha

At the prior year end, the independent valuer valued the investment property held for sale in Forquilha, the third farm in the Minas Gerais property, at GBP4.0 million (BRL 20.6 million). However, in view of the high proportion of unproductive land in the property, at 31 October 2019 the Operations Manager and the Directors consider it prudent to discount the independent valuation by approximately 19% (BRL 3.8 million (GBP0.8 million)) (30 April 2019: 19% (BRL 3.8 million (GBP0.7 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, and accordingly the Forquilha land is valued in these financial statements at GBP3.2 million (BRL 16.8 million) (30 April 2019: GBP3.3 million (BRL 16.8 million)).

In arriving at the adjusted valuation of the land at Forquilha, the Directors have considered the current wood prices prevailing in the region 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 estimation of the value of the land shows an increase of approximately 76% over purchase price in Minas Gerais. This, and the land values implicit in the prices that the Group was able to negotiate for the sale of the Agua Santa and Ribeirao do Gado farms, support the Directors' view that the independent valuers have been too optimistic about the economic potential of the Forquilha land, and believe that their valuation, which marks the value of the land more closely to its original purchase price, represents a more realistic view of its fair value in the current market. The Directors have also considered the fact that certain areas of the Forquilha property remain unplantable, and have explored possible alternative uses of these areas to generate value from the land. The Directors believe that these adjusted valuations provide the best estimates of fair value of the Forquilha land as at 31 October 2019 and 30 April 2019.

However, given the almost complete lack of comparable land sales in the region in recent years, the Directors recognise the continuing inherent uncertainty of the valuation process of the Forquilha investment property and that the fair value may differ materially from the actual value that would be realised if this were sold.

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

10. Investment property and plantations (continued)

(ii) d) Investment property - 3R Tocantins

At the prior year end, the independent valuer valued the investment property held for sale in 3R Tocantins at GBP6.8 million (BRL 34.5 million). However in view of the almost complete lack of comparable land sales in the region in recent years, at 31 October 2019 the Operations Manager and the Directors consider it prudent to discount the independent valuation by approximately 49% (BRL 17.0 million (GBP3.3 million)) (30 April 2019: 49% (BRL 17.0 million (GBP3.3 million)), which takes into account the most recent offer for the land in the year ended 30 April 2016, and accordingly the 3R Tocantins land is valued in these financial statements at GBP3.4 million (BRL 17.5 million) (30 April 2019: GBP3.4 million (BRL 17.5 million)).

In arriving at the adjusted valuation of the land at 3R Tocantins, the Directors have considered the current wood prices prevailing in the region 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 estimation of the value of the land shows an increase of approximately 91% over purchase price in 3R Tocantins. This, and the land values implicit in the prices that the Group was able to negotiate for the sale of the Agua Santa and Ribeirao do Gado farms, support the Directors' view that the independent valuers have been too optimistic about the economic potential of 3R Tocantins land, and believe that their valuations, which mark the value of the land 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 land remain unplantable, and have explored possible alternative uses of these areas to generate value from the land. The Directors believe that these adjusted valuations provide the best estimates of fair value of the 3R land as at 31 October 2019 and 30 April 2019.

However, given the almost complete lack of comparable land sales in the region in recent years, the Directors recognise the continuing inherent uncertainty of the valuation process of the 3R Tocantins investment property and that the fair value may differ materially from the actual value that would be realised if this were sold.

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 2019, 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         2019 
                                 held for sale          sale    2019 Unaudited      Audited 
                                           GBP           GBP               GBP          GBP 
-----------------------------  ---------------  ------------  ----------------  ----------- 
 Investment property                 9,332,356             -         9,332,356    9,505,966 
 Plantations                         4,203,236             -         4,203,236    4,683,176 
 Trade and other receivables           157,330             -           157,330      103,169 
 Trade and other payables                    -       216,171         (216,171)     (74,072) 
                                    13,692,922       216,171        13,476,751   14,218,239 
-----------------------------  ---------------  ------------  ----------------  ----------- 
 

A loss of GBP256,300 (2018: gain of GBP214,005) related to the Brazil disposal group, representing foreign exchange translation of discontinued operations, is included in other comprehensive income (see note 12).

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

11. Disposal groups and assets held for sale and discontinued operations (continued)

Total assets held for sale in the statement of financial position are as follows:

 
                                                      31 October 2019     30 April 
                                                            Unaudited         2019 
                                                                           Audited 
                                                                  GBP          GBP 
---------------------------------------------------------------------  ----------- 
 Balance brought forward                                   14,292,311   14,774,260 
 Increase in trade and other receivables                       54,161       21,885 
 Costs capitalised to land and plantations                          -      151,776 
 Net proceeds received from disposals of assets held 
  for sale                                                  (399,054)    (353,801) 
 Loss on disposal of assets held for sale                    (12,798)     (72,556) 
 Increase in the fair value of disposal group and assets 
  held for sale                                                     -      587,773 
 Foreign exchange effect                                    (241,698)    (817,026) 
--------------------------------------------------------  -----------  ----------- 
                                                           13,692,922   14,292,311 
---------------------------------------------------------------------  ----------- 
 

As at 31 October 2019 and 30 April 2019, the assets held for sale were all located in Brazil.

The fair value measurement of GBP13,692,922 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 six       For the 
                                                                   months ended    six months 
                                                                     31 October         ended 
                                                                           2019    31 October 
                                                                      Unaudited          2018 
                                                                                    Unaudited 
                                                                            GBP           GBP 
-------------------------------------------------------------------------------  ------------ 
 Operating activities 
    Loss for the period before taxation                               (369,631)     (372,051) 
    Adjustments for: 
  Loss on disposal of assets held for sale                               12,798         7,228 
  Net finance costs                                                         970           868 
  Bad debt written off                                                   56,288             - 
  (Increase)/decrease in trade and other 
   receivables                                                         (39,337)         9,674 
  Increase/(decrease) in trade and other 
   payables                                                             130,193      (56,448) 
 Net cash used in operating activities                                (208,719)     (410,729) 
 Net cash from investing activities (proceeds of disposal 
  of assets held for sale less costs capitalised to plantations)        399,054        14,653 
 Net cash used in financing activities (net finance costs)                (970)         (868) 
 Foreign exchange movements                                            (15,895)        26,019 
 Net cash flow for the period                                           173,470     (370,925) 
-------------------------------------------------  ----------------------------  ------------ 
 
 

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

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 2019                   2019        2019           Unaudited 
-------------------------  ------------  ----------  ------------------ 
 Discontinued operations 
 Brazilian Real                  5.2017      5.1067           (256,300) 
 United States Dollar            1.2942      1.3032                  56 
-------------------------  ------------  ----------  ------------------ 
                                                              (256,244) 
---------------------------------------------------  ------------------ 
 
 
                               Exchange    Exchange   Translation 
                                rate at     rate at       reserve 
                             31 October    30 April      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 
---------------------------------------------------  ------------ 
 

13. Stated capital

 
                                                  31 October 2019    30 April 
                                                        Unaudited        2019 
                                                                      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 has been renewed annually thereafter, most recently on 19 September 2019.

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.

During the period, the Company made a market purchase of 389,015 of its own shares at a price of 11.55p per share. The total cost of this share buy-back was GBP44,931, which was charged to the Company's Distributable reserve (see note 14). These shares have been cancelled.

Movements of shares in issue

 
                                     For the six       For the 
                                    months ended    six months 
                                 31 October 2019         ended 
                                       Unaudited    31 October 
                                                          2018 
                                                     Unaudited 
                                          Number        Number 
------------------------------------------------  ------------ 
 Brought forward                      74,117,299    82,130,000 
 Share buy-backs during the period     (389,015)             - 
 In issue at 31 October fully paid    73,728,284    82,130,000 
-----------------------------------  -----------  ------------ 
 

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

14. Reserves

The movements in the reserves for the Group are shown on page 6.

Translation reserve

The translation reserve contains exchange differences arising on consolidation of the Group's foreign operations (see note 12).

Distributable reserve

In June 2007, the Company reduced its stated capital account and a balance of GBP102,350,000 was transferred to distributable reserves. This reserve has been utilised by the Company to purchase its own shares (as at 31 October 2019: GBP7,237,888; as at 30 April 2019: GBP7,192,957) and for the payment of dividends (during the period: GBPNil; as at 30 April 2019: GBP12,508,800), leaving a balance at 31 October 2019 of GBP82,603,312 (30 April 2019: GBP82,648,243).

15. Net asset value reconciliation

 
                                                            For the year     For the six 
                                              For the six          ended    months ended 
                                             months ended       30 April      31 October 
                                          31 October 2018           2019            2018 
                                                Unaudited        Audited       Unaudited 
                                                      GBP            GBP             GBP 
---------------------------------------------------------  -------------  -------------- 
 Net asset value brought forward               13,947,395     16,563,997      16,563,997 
 Translation differences                        (256,244)      (816,903)         242,360 
 Loss on disposal of assets held for sale        (12,798)       (72,556)         (7,228) 
 Increase in the fair value of investment 
  property and plantations                              -        587,773               - 
 Net finance costs and exchange differences 
  - continuing operations                        (56,542)      (100,011)        (44,837) 
 Share buy-backs                                 (44,931)      (940,817)               - 
 Net finance costs and exchange differences 
  - discontinued operations                         1,576        (3,350)           (868) 
 Bad debt written off                            (56,288)              -               - 
 Loss before above items                        (530,329)    (1,270,738)       (594,703) 
 Net asset value carried forward               12,991,839     13,947,395      16,158,721 
--------------------------------------------  -----------  -------------  -------------- 
 

16. Related party transactions

During the period the Directors received the following remuneration in the form of fees from the Company:

 
                     For the six       For the 
                    months ended    six months 
                 31 October 2019         ended 
                       Unaudited    31 October 
                                          2018 
                                     Unaudited 
                             GBP           GBP 
--------------------------------  ------------ 
 Antony Gardner-Hillman   24,000        22,667 
 Svante Adde              12,500        12,500 
 Roger Lewis              12,500        12,500 
                          49,000        47,667 
--------------------------------  ------------ 
 

Robert Rickman was paid GBP53,000 (2018: GBP51,333) 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 2019   30 April 
                                                    Unaudited       2019 
                                                                 Audited 
                                                       Number     Number 
-------------------------------------------------------------  --------- 
 Svante Adde                                          160,840    160,840 
                                                      160,840    160,840 
-------------------------------------------------------------  --------- 
 
 

Cambium Global Timberland Limited

Notes to the unaudited condensed consolidated interim financial statements (continued)

For the six months ended 31 October 2019

17. Loan payable to related party

On 21 December 2017, the Group agreed an unsecured loan funding facility with Peter Gyllenhammar AB ('PGAB'), the Company's largest shareholder, for approximately GBP1.4 million, in order to enable the Group to remove outstanding mortgages over the Group's 3R Tocantins property without depleting existing cash balances.

The interest rate on the loan was 6% for the first 12 months and thereafter 8%. PGAB agreed not to have recourse against the 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 held at the date of the agreement, to purchase own shares for more than 12p per share, to declare or pay any dividend, or to make any significant new investment (not including asset maintenance or repair costs). During the period, no repayments of principal or interest were made.

18. Events after the reporting period

There were no other significant events after the period end which, in the opinion of the Directors, require disclosure in these financial statements.

Cambium Global Timberland Limited

 
 Directors 
 Antony R Gardner-Hillman (Chairman) 
 Svante Adde 
 Roger Lewis 
 
 Registered Office of the Company 
 Charter Place 
 23-27 Seaton Place 
 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 
 Praxis Fund Services (Jersey) 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 Limited 
 6(th) Floor, 65 Gresham Street 
 London EC2V 7NQ 
 
 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

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