Foresight Sustainable Forestry (FSF) has announced its annual results for the year ended 30 September 2023. NAV fell 6.3% for the year while shares were down 23%. The company noted that the key driver of the reduction in NAV per share has been the decline in land values, which was impacted by a significant reduction of comparable transactions observed by FSF’s independent valuer in the nine months to 30 September 2023.
Chair Richard Davidson noted that:
“FSF’s two-year journey since IPO has been full of positive milestones and I am pleased that the company ends the year in a position to deliver a nationally significant afforestation programme.
“Despite market volatility, FSF invests for the long term. However, the Board is currently acutely aware that the Company’s shares have fallen and moved to a discount to NAV over the last six months. The share price move during the period aligns with the broader pattern in the real assets investment trust sector, which has shown a notable sensitivity to higher interest rates.
“Our share price, at the time of writing, stands at a low since our IPO of 59.8 pence. Having traded in a 100‑110 pence range for most of the year, our stock moved down sharply from June onwards (despite a positive first half NAV announcement) as the dam burst on many investment trust share prices, especially real assets.
“The share price is, of course, not controlled by the Board and over the long term we believe it will return to levels that reflect the development of the Company’s NAV and the Company’s outlook and prospects more generally in its core markets of land, natural capital, timber and voluntary carbon.
“Accordingly, in the current environment, I would like to emphasise a few points:
“FSF is unique as the only UK forestry vehicle listed on the London Stock Exchange. The listed structure introduces a level of transparency, liquidity and accessibility that was previously unavailable in the forestry sector.
- FSF’s properties are all located in the UK and the products from our forests will be almost entirely used in the UK.
- FSF has, and intends to stay at, very limited levels of gearing (currently 5.8% of Gross Asset Value (“GAV”)).
- Our acquisition policy is long term and our afforestation land due for planting in 2024 and 2025 has already been acquired.
- We are fully invested but will manage our portfolio if opportunistic and accretive situations arose including to sell properties to employ capital to maximise Shareholder returns.
FSF is invested for the long term and doing what it set out to do at IPO.”
FSF : Falling land prices weigh on Foresight Sustainable Forestry