Foresight Sustainable Forestry has updated on progress over the six months ended 30 September 2023. The board says that it is disappointed to see the share price trade at a discount to NAV. Together with the investment manager it says that it is:
- Reviewing planting and harvesting timetables to optimise cash flows.
- Advancing non-core asset disposals, including various residential properties attached to existing afforestation assets.
- Maximising allocation to afforestation and voluntary carbon where possible.
- Positioning the company for rapid growth when equity market conditions improve.
Talking about the market for forestry assets, it says:
- Increasing inflation and interest rates have led to a weakening of the forestry and planting land investment market over the last 6 months, characterised by a higher proportion of distressed vendors of non-prime forestry and afforestation properties.
- Lower prices have been paid across a relatively small transaction volume (the value of UK forestry assets sold in the first nine months of 2023 represents 12% of the annual average of the value of assets sold in 2021 and 2022).
- Established forestry and voluntary carbon credit prices have both been more resilient versus afforestation land values.
FSF : Foresight Sustainable Forestry update notes widening discount