TIDMTREE
RNS Number : 6534J
Cambium Global Timberland Limited
21 December 2015
21 December 2015
Cambium Global Timberland Limited (the "Company")
Net Asset Value, Amendment to Valuation Policy, Interim
Results
Net Asset Value
The Company announces that the Net Asset Value per share as at
31 October 2015 is 18p.
Amendment to Valuation Policy
The Board of Directors of the Company resolved on 17 December
2015 to amend the valuation policy of the Company as set out in the
Prospectus prepared for the Company. The purpose of this amendment
is to achieve cost reduction for the benefit of the Shareholders on
the basis that the original policy, which required twice yearly
valuations of the Company's assets by independent valuers, is no
longer necessary or appropriate when the Company is actively
seeking to sell its residual assets. In lieu, the Board has adopted
a new policy requiring one independent valuation per year only.
Accordingly the valuation policy set out on page 27 of the
Prospectus has been replaced with a new valuation policy set out in
the Prospectus Supplement published by the Company today and
available on the Company's website at www.cambium.je.
Click on the following link, or paste the link in your web
browser, to view the associated PDF document:
http://www.rns-pdf.londonstockexchange.com/rns/6534J_-2015-12-19.pdf
Interim Results
The Company announces the Interim Report and Unaudited Condensed
Consolidated Interim Financial Statements (the "Interim Report")
for the six months ended 31 October 2015 are available and attached
hereto.
An electronic copy of the Interim Report is available on the
Company's website at www.cambium.je.
For further enquiries please contact:
Chairman
Tony Gardner-Hillman
01534 486980
Broker and Nominated Adviser
Panmure Gordon
Paul Fincham/Jonathan Becher
0207 886 2500
Administrator and Secretary
Praxis Fund Services Limited
Janine Lewis/Matt Falla
01481 737600
Cambium Global Timberland Limited
Interim Report and Unaudited Condensed Consolidated Interim
Financial Statements
for the six months ended 31 October 2015
Cambium Global Timberland Limited
Chairman's statement
As your new Chairman I now present the unaudited interim
financial statements of the Company for the six months ended 31
October 2015.
The net asset value per share as at 31 October 2015 was GBP0.18
(30 April 2015: GBP0.23).
I was appointed to the Board on 31 July 2015, to the position of
Chairman in succession to Donald Adamson who stepped down from the
Board on the same day. It is my role to see to a conclusion the
policy of orderly realisation of assets adopted by shareholder vote
on 22 February 2013. Shareholders re-elected me to the Board at the
AGM on 30 September 2015. I then met with substantial shareholders
to listen. It was clear that shareholders do not expect a fire-sale
of assets and are willing to wait where haste would not achieve
best prices, but that they reject a continuation of past
expenditure levels.
Accordingly, your Board continues to take all sensible steps to
extract appropriate values from all its assets and to reduce
expenditure.
The up to date position is as follows:
1. In Brazil the iron-smelting industry continues to be
depressed, with the level of demand for wood that does exist in our
regions of operation coming from the pulp industry. The available
market is restricted due to the fact that major pulp mills tend to
own or otherwise control their own supplies.
2. However, opportunities do exist and discussions recently
began with a prospective buyer to realise value from the Company's
asset in Tocantins. Negotiations are ongoing and no deal has yet
been agreed. The asset ownership continues to be complicated by the
outstanding lien on the property (see note 18 to these financial
statements) and by legal proceedings commenced in May 2015 (which
the Company is challenging) alleging infringement of a third
party's plant breeder's rights. These complications have added to
the Company's costs burden but the Board is confident they do not
prevent the realisation of value and that the Board will find an
appropriate way through.
3. For the asset in Minas Gerais there is nothing new to report
since the Company's announcement dated 6 October 2015.
4. The Company has previously announced back-up plans to
commence harvesting at Tocantins and Minas Gerais from 2016
(capable of reaching break-even levels in 2017/18), and to follow
up on appropriate means to develop markets for the wood
harvested.
5. In relation to Hawaii the Company has received an offer to
buy its assets and is actively considering how best to maximise the
value to the Company from that. At this stage the Company continues
to consider the options of not renewing its lease (the current term
will expire on 31 December 2015) of the Pahala Estate where the
wood suffered catastrophic storm damage in January 2015 (see note
13 to these financial statements) and of selling its Pinnacle asset
only. There can be no certainty as to the offeror's time-scale and
appetite but the Board is hopeful it will be able to announce a
deal early in 2016.
In addition the Board is reviewing all the Group's supplier
arrangements to see where cost cuts can sensibly be made. This
process will be ongoing and comprises a number of strategies:
- terminating relationships with suppliers no longer needed, or
who can be replaced with lower cost alternatives,
- re-negotiating terms with continuing suppliers where lower
costs (in line with a lower level of demand from the Company) are
achievable,
- controlling more tightly the time-costs incurred by suppliers billing at hourly rates,
- bringing to a conclusion the winding up of redundant overseas subsidiaries,
- omitting an auditor's review of these (and subsequent) interim financial statements, and
- reducing third party asset valuations from two to one per annum.
I am confident that, for the current financial period compared
to the one before, shareholders will see a meaningful and
sustainable reduction in costs in line with the position the
Company finds itself in.
Your Board remains very aware that shareholders anticipate
distributions of excess cash expeditiously following the disposal
of assets.
Antony R Gardner-Hillman
Chairman
18 December 2015
Operations Manager's report
For the six months ended 31 October 2015
The focus has been on optimising the physical growth of the
crops and value of the assets while minimising cost. Forestry
operating and management costs of GBP427,324 show a significant
decline from GBP630,362 in the comparable period last year. Tight
cost control, crops requiring less maintenance expenditure as they
mature and the decline in the Brazilian currency have all
contributed.
Expenditure on the 3R Tocantins property in the period has been
mainly on fire and pest control. Despite the very dry conditions a
number of fires on neighbouring grazing land were prevented from
causing significant damage to the crops. Now that the wet season
has started some limited weed control may be necessary. There
continues to be legal expenditure on defending the company from the
injunction alleging unauthorised use of tree clones, where the
advice continues to be that the claim is groundless, and on dealing
with encroachment from squatters in unplanted areas.
In Minas Gerais the dry season has also ended leading to a
reduction in expenditure on fire and pest control. During the
period there was an infestation of defoliating beetle at one of the
properties that was controlled by timely spraying covered by the
contingency budget. The forest managers have also worked to ensure
that the property complies with changes in Brazilian environmental
law and that future owners can plant the so far unplanted land.
The Hawaiian properties have been managed to minimise
expenditure while positioning them to be attractive to possible
local biomass-orientated buyers. Lease rent, local taxes and
management fees, also covering presale crop inventory, have been
the main items of outgoings. There has been no further wind or
other damage to the crops during the period.
Robert Rickman
Operations Manager
18 December 2015
Unaudited condensed consolidated interim statement of
comprehensive income
For the six months ended 31 October 2015
For the For the
six six
months months
ended ended
31 October 31 October
2015 2014
Unaudited Unaudited
Continuing operations Notes GBP GBP
--------------------------------------------------------- ------- ------------- -------------
Finance income 8 1,196 5,329
Finance costs 9 (3,277) (3,169)
Net foreign exchange (loss)/gain (118) 2,908
--------------------------------------------------------- ------- ------------- -------------
Net finance (costs)/income (2,199) 5,068
--------------------------------------------------------- ------- ------------- -------------
Administrative expenses 5 (262,339) (567,531)
Loss for the period from continuing operations (264,538) (562,463)
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