Foresight Sustainable Fo... Share Discussion Threads

[c3479z] 15/12/2022 20:02

yes, but will the additionality hurdle represent a barrier to obtaining carbon credits or will the company be able to trade carbon credits independent of the WCC?

[jonwig] 15/12/2022 17:42

Thanks, here's the link:



I carbon credit = $40 - $80/t, and they expect to earn about 1 million in the first afforestation wave.

[c3479z] 15/12/2022 16:51

Interesting article about carbon credits on Kepler intelligence majoring on FSF.
Not sure I understand how this will work in practice if the WCC doesn't relent over the afforestation changes it has introduced.

[jonwig] 15/12/2022 08:24

FY results issued after hours yesterday:



Not best practice!

Looks good on a first reading. Includes a lot on carbon markets and climate-related issues, which I ought to be reading but haven't done!

[jonwig] 05/12/2022 08:37

Interesting RNS about the VCM. I'm not sure about its significance, but the company is pleased:

[jonwig] 17/11/2022 06:46

"Don't trust the SNP" - I'm shocked!

[jonwig] 16/11/2022 17:35

I'm hardly objective, I suppose, but I don't particularly favour a museum environment and community dependent on government subsidies as opposed to afforestation development which generates jobs, produce and climate benefit.

I don't think the Scots have the same level of opposition.

[c3479z] 16/11/2022 16:44

lengthy explanation of the biodiversity benefit of afforestation including the benefit of planting rare species in yesterday's update most probably in response to local opposition in parts of Wales to their plans, led in cwrt-y-cadno by the retired GP John Llewellyn, a year below at medical school, according to a report in the FT 5/11/22.
If the country wants to plant 30 000 ha a year then it has to make the choice between upland farm habitat preservation, which many would argue has a limited commercial future, and responsible afforestation.
At least the Welsh government say they are behind afforestation but time will tell and various local opposition bodies including the Farmer's trade association will have to be countered.

[jonwig] 15/11/2022 07:22

Updated NAV statement. (Link in header news section.)

Looks quite a significant increase to 105.0p. The "mark to market" aspect might be a bit dubious (market, what market?) but carbon credits seem to be playing a big part in the calculations.

I see the share price rose yesterday, so maybe there won't be more to go for today? I'm wondering if theyll be itching for another fundraising - last one was June.

REsults and presentation 14 December.

[jonwig] 07/11/2022 06:47

Actually, the discussion below the article is interesting. I contributed to it, and views were equally divided.

The point was made that forestry would provide jobs and training to areas which were largely hollowed-out: hill-farming is a museum piece, and holiday lets are hardly a thriving source of employment.

[gateside] 06/11/2022 22:07

Thanks jonwig

[jonwig] 06/11/2022 10:11

Dr John Llewellyn did not expect to be spending his retirement trying to block a tree-planting project close to his home in Cwrt-y-cadno, a sleepy village in the Welsh heartlands.

Yet, the retired GP has become one of the leaders of a campaign to halt a London-listed company that is seeking to develop land on Frongoch farm with financial backing from the Welsh government.

The clash speaks to a wider battle playing out in rural communities across the UK between new investors seeking to utilise state incentives for tree planting and residents, who fear such projects will harm local economies and ecology.

“I think it’s really upsetting to see companies coming from a distance, buying land in this area with the incentive to change the use of the land for short-term profit,” said Llewellyn, 64. “[They] are not taking into account the negative impacts that their policy and their plans have on the local environment.”

In 2021, the Welsh government formally adopted afforestation targets in an effort to reach its goal of net zero greenhouse gas emissions by 2050.

It aims to plant 43,000 hectares of mixed woodland in Wales by 2030 to remove CO₂ from the atmosphere — rising to 180,000 hectares by 2050.

The Welsh government has created a package of grants to encourage investment into tree planting, such as Glastir Woodland Creation, which has paid out more than £10mn so far. In September, it launched two further funding schemes for farmers and landowners worth £32mn.

In Cwrt-y-cadno village, Carmarthenshire, once an important interchange for local cattle drivers, Foresight Sustainable Forestry Company is one such company trying to seize the opportunity.
Cwrt-y-cadno sign with chapel in background
Cwrt-y-cadno has turned into an unlikely environmental battleground © John Wellings/FT

It has so far acquired about 50 land sites across the UK since its flotation on the London Stock Exchange last year, which raised £130mn.

In July 2021, Foresight initially applied for planning permission to plant on 60 hectares of land but has since scaled this back to 42.5 hectares, following a backlash from residents who argue that the introduction of a non-native species could damage local habitats, food production and their way of life.

The types of tree being planted has become a bone of contention. The company plans for almost three quarters of the trees to be conifers, which are an outside species. However, critics have said this threatens biodiversity and have demanded they plant solely native broadleaves.

Foresight’s proposed design is still under consideration by the Welsh government body Natural Resources Wales.

Opposition to the project has been supported by a coalition of organisations including the charities the Initiative for Nature Conservation Cymru, and Cambrian Mountains Society, the Countryside Alliance Wales, a political campaign group, and Farmers’ Union of Wales.
Dr John Llewellyn points towards the proposed development land next to Frongoch farm in Cart-y-cadno © John Wellings/FT

Rob Parry, chief executive of INCC, recognised that “tree planting is important” but added that many of the sites proposed “are incredibly important habitats themselves and we risk losing one habitat for another”.

Meanwhile, farmers are concerned that they could find themselves priced out of good quality land as they struggle to compete with wealthy companies, in a debate that has risen as high as parliament. In spring, the Welsh affairs committee published a report on the risks posed to family farms.

Llewellyn said: “Not only would Welsh language, culture, heritage and community disappear if this project was replicated elsewhere, but this poses an existential threat to upland sheep farming communities throughout Wales.”

However, Foresight said it had factored in local concerns and that an independent ecologist had assessed the plans and forecast an improvement in the biodiversity of the site over time using the Department for Environment, Food & Rural Affairs’ biodiversity metric, which calculates the net gain of such projects.

The Welsh government defended its efforts to tackle climate change: “We need to plant 86mn trees by the end of this decade if we are to meet our net zero target by 2050. Beyond addressing the climate and nature emergencies . . .̴1;tree planting offers a considerable opportunity to the rural economy.

“We will only fund woodland projects that are able to demonstrate they meet the high standards required by our schemes,” it added.
Newly planted trees in Wales
Tree planting has become a politically sensitive issue across Wales © Matthew Horwood/Getty Images

Many asset managers are jumping on a boom in the sale of units linked to the carbon stored in trees that are used to meet climate goals. Last year, Manulife, Gresham House and JPMorgan all launched or grew businesses around forestry offsets.

Carbon credits (or offsets) are each supposed to represent a tonne of carbon avoided or removed from the atmosphere, and are used by companies to compensate for their emissions.

The price per plantable hectare of land increased 48 per cent between 2020 and 2021, according to forestry management company Tilhill’s 2021 UK forest market report, which said that demand for suitable land from investors was “sky-high̶1;.

But some green campaigners have criticised carbon credits for opening the door to “greenwashing”, as buyers can purchase them without addressing their own output.
Stacks of commercially felled pine logs in Wales
Stacks of commercially felled pine logs in Wales © Paul Sampson/Alamy

In response, Richard Kelly, co-head of Foresight, denied the claims of greenwashing, saying the company would generate credits issued by the Woodland Carbon Code, a UK-government backed quality assurance standard for woodland creation projects that offers independent verification for carbon units.

He added that the company offered “many farmers an attractive exit” and paid a “premium above agricultural value” at a difficult time for the sector. The company has also launched a forestry skills training programme.

Rachel Evans, director for Wales at the Countryside Alliance, called for rural community impact assessments to be undertaken before permission is granted for such projects.

“We are not opposed to tree planting, absolutely not,” she said. “But it has to be the right tree in the right place, and it has to be for the right effect.”

[gateside] 06/11/2022 09:35

Needs a subscription.... Can you summarise what it says?

[jonwig] 06/11/2022 08:07

FT article today, protests in Wales:

[jonwig] 23/10/2022 06:54

Strong future demand expected for carbon credits, benefits to FSF:

[jonwig] 17/10/2022 06:25

Asset purchases and trading update (good):



Includes;

The Company has not utilised its Revolving Credit Facility and therefore has no direct exposure to rising debt base rates (Sterling Over Night Index Average, SONIA). A prudent approach to the utilisation of the RCF will be taken during these uncertain times given the rapidly increasing cost of debt.

During times of financial market turbulence, UK forestry asset prices have historically proved resilient. UK forestry is commonly acquired and owned without the use of debt which, in the view of the Company, provides an element of insulation against base rate increases relative to other asset classes where leverage is more frequently used.

[jonwig] 16/10/2022 08:53

Advantages of forestry investing and a useful video discussion:



It’s a relatively simple and very tangible investment. It has delivered impressive performance – better than most other asset classes – over one, five, 10 and 25 years and is largely uncorrelated to other assets.

(Article is about a new EIS fund, but is mostly an overview.)

FSF NAV increased by 4.2% over the first six months. A similar increase would mean 108.6p.

[jonwig] 26/9/2022 18:26

Foreigners with money will be keen to buy cheap UK property, including land assets. Great for valuations, tough for buyers faced with paying more.

FSF is around 50% invested.

[cc2014] 26/9/2022 10:50

I've sold mine this morning. GLA

[jonwig] 01/8/2022 06:38

More acquisitions and debt facility:



Further equity raises planned. (Surprise?)

[jonwig] 26/7/2022 06:21

Kepler Intelligence research:



EDIT: some interesting ideas, such as using carbon credits to pay dividends, but also paying them in credits rather than cash to corporate investors, enabling these to offset their own emissions.

Also - not a walkin the park: risks are well-explained.

[jonwig] 04/7/2022 17:51

Not immediately relevant, I think, but who knows?

SNP ministers would be able to block private sales of Scottish countryside estates and will attempt to compel lairds to publicly register their holdings under plans to curb the “excessive power” of landowners.

In a new consultation, the Scottish Government said that it planned to apply a “public interest test” to any large sale of land in Scotland, with the state to be granted unprecedented powers to block or attach conditions to a deal if a buyer or seller failed.

[gbcol] 24/6/2022 09:46

I don’t think it’s a bad result considering the financial climate. The initial IPO result was quite poor, raising only £130m (if I recall correctly), which was at the very low end of expectations.

I’m sure they will be back for more funding in 6 months or so but this one should allow them to make progress with the imminent pipeline.

I like the diversity this gives to my portfolio. I took part in this and the IPO and will look to add more when I can.

[jonwig] 24/6/2022 06:23

Result:

38,002,022 new ordinary shares (the " New Ordinary Shares ") will be issued pursuant to the Placing, and 4,054,052 New Ordinary Shares will be issued pursuant to the Offer for Subscription, at 107 pence per New Ordinary Share, raising combined gross proceeds of GBP45 million. The net proceeds of the Issue will be used to acquire further assets within the Company's Imminent Pipeline of opportunities.

So th retail offer was undersubscribed (max was €8m).
Their RCF is nearing completion, so they will need sufficient income to pay the interest. That might be a problem at this early stage.