Highland Timber Share Discussion Threads

[energyi] 02/8/2006 08:37

Market Cap. 5.52 m
Shares In Issue 8.83 m
Prev. Close 62.50

By the year end, it had eliminated all borrowings and had a net cash surplus
of 2.681 mln stg.

[energyi] 02/8/2006 08:33

Highland Timber FY pretax profit 163,000 stg vs 385,000 loss; sees loss next yr
LONDON (AFX) - Highland Timber Plc said it turned to a pretax profit of
163,000 stg in the year ending Dec 31, 2005, from a pretax loss of 385,000 stg a
year earlier.
It said it turned an overall loss of 413,000 stg in the first half of the
year to 199,000 in the second half before capital and currency gains and
taxation.
Most of the reduction in the loss was caused by the lower level of
restocking in the second half in the UK and the higher receipt of grants. The
high value of the New Zealand dollar continued to make exporting very difficult
and held down prices, making continuing losses inevitable.
At the same time, this high value provided an opportunity to create a
profit, if the capital invested could be realised and returned to the UK. In
this way, Highland Timber made profit on sale of 775,000 stg in December, of
which 556,000 was from foreign exchange gains, resulting in an overall net
surplus for the year of 113,000 stg.
By the year end, it had eliminated all borrowings and had a net cash surplus
of 2.681 mln stg. It said it plans to invest the money over time, but has no
specific preferred areas for investment.
Sales in the full year rose to 1.400 mln stg from 1.299 mln
Highland Timber will continue focusing on reducing trading losses. It still
expects an overall loss to be incurred next year, although trading will be
helped by action taken, in particular to eliminate New Zealand losses. It will
also benefit from interest earned.
Highland Timber said it will stop felling in the UK unless it is of real
value or maturity requires it. Previously, it has on occasion carried out UK
felling to create cash flow, even when there was little profit.
[e-mail]
jsa

[energyi] 25/5/2005 17:20

LONDON (AFX) - Highland Timber PLC said that Zatto Group SA, a
Luxembourg-based investment holding company, will hold a 24.7 pct stake in the
company following a share subscription.
Zatto, which is ultimately controlled by trusts associated with the Waring
family, will subscribe for 2.94 mln new shares at a price of 53 pence per share.
The proceeds of 1.56 mln stg will be used to reduce the company's bank debt.
In conjunction, Oliver Waring has been appointed to the board as a
non-executive director and will become chief executive immediately following its
AGM.
Also, a resolution will be proposed to shareholders at the AGM to approve
the appointment of Ron Williams as non-executive director, and then be appointed
chairman.
Ian Henderson, current chairman of Highland Timber, said: "We welcome the
substantial injection of cash into Highland Timber, which will enable the
company to face the future with renewed confidence."
tc

[energyi] 25/5/2005 17:18

Warings... How long have they been involved?

[charlie] 20/5/2005 14:09

Waring family (founded Northgate plc) subscribe 25% of enlarged share capital at 53p. Open offer at same price for shareholders but no details yet. Oliver Waring age 33 to be paid £80k per annum as CEO, this seems excessive, it's still a small company and trees grow slowly, what is there to do?

[energyi] 12/5/2005 16:47

Big drop... is it an opportunity?

[charlie] 01/4/2005 22:23

UPDATE price has fallen mainly due to threat to delist in conjunction with raising more capital.

And a possible stratgic stake? Presumably means issue of shares to new stakeholder.

Don't know why Professor Congdon resigned. Looks very abrupt. He has nearly 3% of the shares. Maybe he disagrees with terms being discussed for the fundraising.

The chairman has 13% of the shares.

[charlie] 10/9/2004 14:04

FIM Timber Index +2.7% in 6m to 31/3/04

Starting to turn

[energyi] 12/2/2004 11:45

OPPORTUNITY?

"If you had a timber price index of 100 seven or eight years ago, UK prices would be down around 35 today. In the US we're looking at 300 to 400," said chairman Barry Gamble.

[energyi] 12/2/2004 11:43

Money can grow on trees
Timber Trades Journal, 09 August 2003 / By Mike Jeffree

A leading investment management specialist says structural reform is needed in UK forestry to achieve the returns made in the US industry

Summary:
- fountains manages 200,000 acres of woodland in the UK and 350,000 in the US.
- It believes the Forestry Commission helps devalue the UK timber market.
- It urges "commercialisation" of UK state forestry.
- Forestry in the US is attracting a wider range of investor.

"The way forward is commercialisation of these forests in public ownership"

Barry Gamble, chairman, fountains plc

There's not so much a gap between the commercial performance of UK forests and those of the north-eastern US, it's more of a chasm.
That's the verdict from forestry management specialist fountains plc.

"If you had a timber price index of 100 seven or eight years ago, UK prices would be down around 35 today. In the US we're looking at 300 to 400," said chairman Barry Gamble.

He acknowledged that we are not exactly comparing like with like here. The woodlands fountains manages for investors in the UK are predominantly softwood, while those in the northeast US are high-value hardwood. However, it says that softwood forestry in the US has also provided a return way ahead of the UK. "Our price experience compared to Europe, Australia, and New Zealand is also appalling."

Mr Gamble said there were a number of factors involved, but he's in no doubt where the blame for the transatlantic discrepancy chiefly lies. His finger points straight at the Forestry Commission (FC).

"It's something we've believed for a while, but we're now really coming out of the closet on the issue," he said. "The FC is a complete anachronism and its existence runs counter to the interests of private forest owners and, we feel, the entire UK timber chain."

...MORE: See BF's Link, above

[energyi] 12/2/2004 11:42

CURRENCY HEDGING

LONDON (AFX) - Highland Timber PLC said that in the six months to June its
pretax loss narrowed to 92,000 stg from 222,000.
The company said sales rose 33 pct from the previous year to 1.03 mln stg.
It said the recent weak sterling and strong New Zealand dollar has resulted
in some improved sentiment in the UK timber markets, while in New Zealand strong
domestic demand was offset by some weakening in export markets.
The company also said it is investigating the benefits of increasing the
amount of its New Zealand dollar borrowings in order to match more closely the
proportion of its assets held in New Zealand.
[e-mail]

[ben franklin] 11/8/2003 09:44

Below is a link to an article by Fountains Forestry in the Timber Trades Journal today. It sets out their view on the strongly negative impact the Forestry Commission is having on the UK timber market. The points made are highly relevant to any assessment of the prospects for Highland Timber's UK operations.



You may need to register to access the article, but registration is free.

Ben

[energyi] 15/7/2003 14:22

Working with Figures...

RESULTS................ -2000- -2001- -2001R -2002-
Turnover............... 1,132. 1,097. 1,097. 1,604.
Operating Profit/(Loss).. (89) ... 1.. (215). ( 84)
Exceptional item........ (409)... 46... 106.. (650)
Loss after taxation..... (672). (164). (321). (910)

PROPERTIES........... -2002->B/Sht> .Mkt. -2001-
..................... -Cost- Value. Value. MktVl
Freehold Forests (UK) 7,809. 6,795. 6,831. 7,996: sold F.w/ £896K cost
Freehold Forests (NZ) 2,306. 2,230. 2,763. 2,747
Forestry Rights .(NZ) 1,586. 1,567. 2,676. 2,217: sold F.w/ £720K cost
TOTAL Valuation..... 11,701 10,592 12,270 12,960: Sold A.w/£1616K cost
NAV per HTB share... ...... ....... 99.2P 101.2P
Term Bank Loan...... ...... . (750)
5% Conv.Unsec.LnStk. 6/03.. (1,350)
Other Creditors..... ...... (1,578)??
Net Assets.......... ....... 7,083: 8,592
Per Share (8.83mn).. ....... 80.2P: 99.2P 101.2P

One of the problems facing the Board over the next year is what recommendation
to put to shareholders when the future of the Company is determined at the
Annual General Meeting in 2004.

Borrowings

During the year, £500,000 5% Convertible Unsecured Loan Stock 2003 was redeemed
at 93p per £1 Stock which, after expenses, gave the Company a profit of £
33,000. The remaining £1,350,000 of Stock becomes repayable on 30 June 2003. To the extent that the sum due on the redemption of the Stock is not available
from current cash resources, the Company's UK bankers have agreed in principle
to increase the overdraft to cover the balance.

[energyi] 23/6/2003 10:48

BenF.,
Do you invest in the timber industry?
If so, I am studying an opportunity which may be of interest

Can I have your email please? I can tell you more.

[ben franklin] 03/6/2003 05:53

The latest release of the Coniferous Standing Sales Price Index (to end March 2003) was published in May by the Forestry Commission. The link to the press release is:


Prices (in nominal and real terms) showed a significant further fall on the already depressed March 2002 prices. Presumably this continues to impact the value of plantations (and the net asset value of companies like Highland).

Around the same time FPD Savills and Tilhill published their latest UK Forestry survey (available from the Tilhill website at The survey shows declining per hectare values for most categories of commercial plantation, including the types owned by Highland, based on completed plantation sales over the last 12 months.

With hefty debt repayments due at the end of this month, it will be interesting to see how they're refinanced. Definitely a candidate to be taken private at some point - Highland has absolutely no need to be a public company.

Recently the small volumes of shares coming on to the market seem to have been readily mopped up, but the current share price discount to NAV won't look anywhere near so large if the Savills/Tilhill survey results are closely reflected in the next accounts.

One bright spot in the woodland market was highlighted by Savills/Tilhill's parallel survey of small woodland sales (under 25 hectares in size) published at the same time (also on the Tilhill website). This showed a strong and apparently rising market in England & Wales, but especially in the South East, with per hectare values achieved in many cases well above those applicable to larger commercial plantations. The report ascribes this market's strength to increasing interest in small woodlands from a leisure perspective.

[energyi] 19/4/2003 15:16

TOUGH MARKET (in the UK)
Conifer Prices- to March
(Note: "Real" basis 1996)

Year....Price....Real
1985...£10.26..£17.32
1986....11.26...18.03
1987....12.62...19.60
1988....15.36...22.67
1989....15.80...21.84
1990....15.14...19.51
1991....13.75...16.44
1992....11.21...12.63
1993....12.33...13.42
1994....13.87...14.73
1995....17.28...18.09
1996....16.59...16.87
1997....15.92...15.68
1998....13.35...12.80
1999.... 8.44... 7.83
2000.... 8.13... 7.36
2001.... 7.78... 6.96
2002.... 6.38... 5.48
2003.... 5.74... 4.86

Compare:
01v95.. 45.0%.. 38.5%
Source:

Coniferous standing sales prices in Great Britain were 28.6 per cent lower in real terms in the year to September 2002, compared with the previous year

[energyi] 10/4/2003 14:18

Canadian Goodfellow...

Goodfellow Takes Q2 Loss
Goodfellow Inc., (TSX: T.GDL) Canada's largest remanufacturer and processor of lumber products, said on Wednesday it took a loss in the second quarter despite improved sales.



Goodfellow Reports Second-Quarter Sales and Earnings

DELSON, Quebec, Apr 09, 2003 (CNW Telbec via COMTEX) --
Goodfellow Inc. (TSE: GDL) has released its results for the second quarter, ended February 28, 2003, showing a loss of $403 thousand or $0.10 per share, compared to a second-quarter profit of $111 thousand or $0.03 per share, in the previous year. Sales increased 12.3% to $114 million from last year's $101 million.

For the first six months, net earnings were $3 thousand or $0.00 per share, compared to $1.3 million or $0.31 per share, in the first half of the previous fiscal year, while sales rose about 14.7% to $242 million this year from $211 million a year earlier.

'Despite the disappointing and unacceptable results in the first half of this fiscal year, Goodfellow normally earns most of its profit in the second half'commented Company's President Mr. Richard Goodfellow.

Goodfellow Inc. is Eastern Canada's largest independent re-manufacturer and distributor of lumber products and Canada's largest distributor of hardwood flooring products. Goodfellow's shares trade on the Toronto Stock Exchange under the symbol GDL.

GOODFELLOW INC. CONSOLIDATED STATEMENTS OF INCOME Six Months Three Months (in thousands of dollars, Ended February 28 Ended February 28 except earnings per share) 2003 2002 2003 2002 (unaudited) $ $ $ $ __________________________________________ Sales 241,750 210,935 113,713 101,279
LINK:

[ben franklin] 12/2/2003 00:48

I see in the timber trade press that we are now exporting timber to Scandinavia for use as pulp. This happened the last time the UK forestry market was in the doldrums. It was presented as a great benefit to the UK growers at the time. The reality then (and now) was that there was no realistic alternative market for short roundwood, and the prices the UK growers receive are very, very low.

Not good news for HTB who have a lot of debt to repay in just over 4 months time.

[ben franklin] 20/11/2002 19:46

Earlier this week the Forestry Commission published its latest Coniferous Standing Sales Price Index updated to September 2002. Full details are at the web page below.



The index shows a jaw-dropping year on year price fall of 28% (yes - twenty-eight per cent) in real terms compared with the year to September 2001!

In October FIM published their latest investment bulletin and a copy can be downloaded at

They comment that 2 institutions have decided to sell their timber assets, thus increasing supply at a time of weak demand. They also say that in Wales the Forestry Commission has increased harvesting causing oversupply. Moreover some private owners in Wales have also increased harvesting in response to the Shotton paper mill switching to recycled fibre in 2004. The combined effect has been to create a 'very weak market' in Wales.

FIM now feel that forestry asset prices have fallen as far as they're going to, as timber owners will simply switch off supply. They state timber values of £2,000 / £2,500 per hectare are in line with asking prices.

It's hard to see how these further price falls won't affect Highland's net asset value (well over £3,000 per hectare). Presumably they have to sell either timber or plantations to pay down their debts. If they harvest timber in Scotland (the better market) they will have to write down the properties in Wales to reflect the poor demand and selling prices and the forthcoming loss of Shotton mill as an outlet. If they are harvesting timber in Wales, they will realise poor prices anyway (and probably also have to write down the property values to some extent).

Highland's Corlae property is no longer advertised on the FIM site. It does still appear for sale on the Tilhill site, but sometimes these forestry websites get a bit out of date. Presumably Highland would have announced if it had been sold.

[energyi] 13/11/2002 17:37

Thanks for that, BenF

Here's what the ad describes:
A large scale commercial Sitka spruce forest
on a good quality site in South Scotland now in production
(The vast majority of the crop is Sitka spruce, planted
between 1969 and 1971, lthough there are two areas of
young spruce restocked in 1999 and 2001. The rate of growth
is high, with the spruce tyypically yield class 14 to 20)

Anticipated approval for harvesting 342.1 hectares over the next 10 years
Offers invited in the region of £1.4 million
NOTE:
Highland Timber (HTB) has 8.8 mn. shares O/S
Market Cap: £ 5.4mn a price of 61p

[ben franklin] 04/9/2002 21:02

One of Highland's largest plantations has been for sale for several months now. Details are at if anyone is interested. So far no indication of a sale.

Highland need to sell this or another large asset to get their borrowings under control. They paid off part of their convertible debt early at the end of June but there's still plenty to pay off by June next year.

There's a winding up resolution due in 2004 and the board seems intent on making no significant changes to the business until then. They cite differing tax positions of shareholders as the reason for this.

Might make sense to take it private given the costs of running a public company - listing fees, non-executive directors fees, interim and annual reporting, corporate adviser etc.

It'll be interesting to see if they can realise the Corlae property for close to book value - if so it would give some extra confidence about the values of the other UK plantations. Until that happens there seems no reason to rush in. The convertible debt repayment date is less than 10 months off, the UK plantation sales market seems very quiet, and the company's losing money and holding off timber sales as prices are so low.

Ben

[hybrasil] 03/9/2002 07:07

A bit like you energyi- merely following, if the price dips I will buy

[energyi] 23/8/2002 00:39

Any tree buyers out there?

[energyi] 21/6/2002 15:18

Ben. F,
I just saw your comments. The website is mine, and I have been
following this company and sector for some time. Not bought
any yet, but may if th eprice dips later this year