Phaunos Timber Fund Limited has announced its audited results for the year ended 31 December 2016. It made a net profit of US$18.3 million for the year compared to a net loss of US$10.5 million in the prior year. Total net assets now stand at US$301.3 million so that the NAV per share increased from US$0.49 as at 31 December 2015 to US$0.55 as at 31 December 2016, an increase of 12%. The share price increased from US$0.35 as at 31 December 2015 to US$0.41 as at 31 December 2016, an increase of 17% which meant that the discount to NAV reduced by 4% from 29% as at 31 December 2015 to 25% as at 31 December 2016. In addition to the interim dividend of 0.3 cents per share paid in December 2016, the Board is proposing a final dividend of 1.6 cents per share, amounting to a total dividend of 1.9 cents per share for the year.
Timber and investment operating expenses decreased from US$8.4 million in 2015 to US$7.3 million in 2016, a decrease of 13%, while revenue from timber operations and investment income decreased from US$16.3 million for 2015 to US$9.5 million for 2016. This decrease of 42% was a result of an exceptionally large one-off sale of standing timber from the Brazilian asset of Mata Mineira in 2015. As expected this one-off sale was not repeated in 2016. This was partially offset by increased dividends from Matariki.
Asset sales totalled US$27.6 million in 2016, consisting of US$16.8 million from the partial sale of the Boardman Tree Farm (part of GreenWood Tree Farm Fund), US$8.5 million from the sale of shares in Green Resources, and US$2.3 million from the sale of the standing timber at the Brazilian teak estate Alto Jauru. Net cash inflows increased from US$12.9 million as at 31 December 2015 to US$16.0 million as at 31 December 2016, an increase of 24%. Cash held has increased from US$25.6 million as at 31 December 2015 to US$45.6 million as at 31 December 2016.
Commenting on the results, Sir Henry Studholme, Chairman of Phaunos Timber Fund Limited said: “The Annual Report and Consolidated Financial Statements underline the continued progress and development which the Company has made over the year. Substantially all of the initial objectives set out by Stafford when they took over the management of the Company have been achieved with the portfolio rebalanced to contain primarily lower risk and higher yielding assets. The balance sheet is in a healthy position, and the Company is in a strong cash flow position. With the Company delivering a profit for the year, an interim dividend was paid to Shareholders, marking the first dividend payment since 2012. We now have a sound base so that looking forward, if Shareholders vote to continue the Company at the AGM we can commence the payment of regular dividends to Shareholders, and move to further diversify the portfolio towards investments in assets capable of generating both yield and capital growth.”
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