TIDMTREE
RNS Number : 2406A
Cambium Global Timberland Limited
22 December 2017
22 December 2017
Cambium Global Timberland Limited (the "Company")
Net Asset Value, Interim Results, Asset Revaluation
Net Asset Value
The Company announces that the Net Asset Value per share as at
31 October 2017 is 19.6p.
Interim Results
The Company announces that the Interim Report and Unaudited
Condensed Consolidated Interim Financial Statements (the "Interim
Report") for the six months ended 31 October 2017 are available and
set out in full below.
An electronic copy of the Interim Report is also available on
the Company's website at www.cambium.je.
Asset Revaluation
The Board has agreed a significant downward revaluation of the
3R property in the Tocantins State, Brazil from R$28.4 million
(GBP6.9 million) to R$19.8 million (GBP4.5 million). The
revaluation has been more than offset by a significant decrease in
the provision for the liabilities relating to the mortgage over the
Group's 3R property, from R$19.9 million (GBP4.8 million) to R$6.3
million (GBP1.4 million). The revaluation and the write-down of the
provision, and an explanation thereof, have been included in the
Interim Report.
For further enquiries please contact:
Chairman
Tony Gardner-Hillman
01534 486980
Broker and Nominated Adviser
WH Ireland Limited
James Joyce/Alex Bond
020 7220 1666
Sub-Administrator and Delegate Company Secretary
Praxis Fund Services Limited
Matt Falla/Poppy Tolcher
01481 737600
Inside information
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014). Upon the
publication of this announcement via Regulatory Information Service
this inside information is now considered to be in the public
domain.
LEI: 213800YGRM8HG1S74M46
Cambium Global Timberland Limited
Interim Report and Unaudited Condensed Consolidated Interim
Financial Statements
for the six months ended 31 October 2017
Cambium Global Timberland Limited
Chairman's statement
The Company's Net Asset Value ("NAV") as of 31 October 2017 is
19.6p per share compared with 19.1p as at 30 April 2017, an
increase of 3%. The sale of the Hawaii properties contributed +4%;
currency movements -5%; net expenditure on forestry and other costs
a further -4%; and a partial reversal of the provision for the
liability to Banco da AmazĂ´nia S.A. ("BASA") +21%.
The remaining -13% relates to the downwards revaluation of the
3R property in Tocantins State, Brazil from GBP6.9 million to
GBP4.5 million. The directors consider the revaluation to be
appropriate in light of the continuing market uncertainty in the
region, the absence of comparable property transactions, and the
costs which may be necessary to remove stumps if, in order to
attract a buyer, the land was to be converted to agriculture or
replanted with different eucalyptus clones.
The impact of that revaluation on the NAV has been offset by the
significant decrease in the provision for the liability to BASA.
That liability related to mortgages over 3R in place when Cambium
bought the property, which remained in place after our purchase as
part of the deal negotiated by our then investment manager, albeit
counter-balanced by a limited indemnity in favour of Cambium over
the vendors' properties at Lizarda. The liability to BASA under the
mortgages has now been crystallised at a significantly lower figure
than the accrued amount previously provided. Closing the settlement
transaction with BASA enables the Group also to remove the previous
provision for the sum of BRL 1.0 million withheld from the purchase
price at the time Cambium bought 3R and assumed the mortgages. For
what it may be worth, the Group continues to benefit, as a set-off
against its crystallised liability to BASA, from the Lizarda
indemnity.
The Board is greatly appreciative of the financial support for
the release of the mortgages provided by the Company's largest
shareholder Peter Gyllenhammar AB ("PGAB") by way of loan funding
covering 100% of the costs of the BASA transaction. The loan was
provided on what the board sees as fair and supportive commercial
terms enabling the Company to avoid depleting the Group's existing
cash balances. PGAB has agreed not to have recourse against those
cash balances in respect of its loan, only against the Group's
future revenues from Brazil. The Board sees the removal of the BASA
mortgages as a positive step towards the eventual disposal of
3R.
The Board continually monitors the Group's cash position, and
with the balance of the income about to be received from the sale
of the timber at 3R, announced on 7 November 2016, the Company
expects to have sufficient reserves to meet outgoings for the
foreseeable future.
Your Board continues to focus on asset disposals and costs.
Asset disposals
I was pleased the Company was able to report the sale of the
timber at 3R following protracted negotiations. We are presently
liaising with the purchaser, Suzano, over the removal from site of
the final cut timber following which the Company will shortly
become entitled to receive the final 20% payment. The wood sale
process has also resolved the legal claim on the use of tree
clones. In addition, as a further step to ease the eventual
disposal of the land at 3R, we are delighted now to have resolved
with BASA the historic issue of the mortgages over the land
(referred to above), and that we have achieved that without having
to utilise any of the Company's own cash to fund the settlement. We
are now better positioned to complete the disposal process when a
purchaser steps forwards.
I am delighted that the complex and drawn out process for the
sale of the Group's Hawaiian assets finally concluded successfully
during the period. In your Board's view this transaction was a
sound commercial deal, successfully concluded against a difficult
backdrop of complex issues between the local players, and the
conclusion vindicated our decision to commit to renewing the
property leases in 2016. To obtain landlord's approval remaining
lease payments in respect of both properties had to be left in an
escrow account. As the new owner pays the rent, the corresponding
sums are being released to the Company.
Costs
Cost curtailment efforts continue, assisted of course by
elimination of costs in Hawaii as from August 2017 following the
sale.
Administrative expenses are slightly down across the board (Note
4).
Forestry expenses (Notes 5 and 6) show a meaningful fall against
the same period in the previous year against every heading (other
than an insignificant sum spent in the current period on inventory
fees related to the sale in 3R). This represents the Board's
ongoing effort to curtail costs but in a way that continues to
protect the Group's remaining assets and prepare them for
disposal.
The net result, allowing for the impact of currency
fluctuations, is that total costs, including finance costs, for the
period in Sterling terms amounted to GBP0.7 million, as compared
with GBP1.1 million for the same period last year.
Conclusions
For your Board and the Operations Manager, significant steps
along the way have been taken but a lot more remains to be done,
and naturally the assets that remain towards the end of a process
of realisation are not the easiest ones to dispose of.
My unaltered ongoing role is to bring the orderly realisation of
assets to a conclusion, and in the meantime to continue to keep
expenditure down. I am pleased with the events the Company has been
able to announce and I look forward to announcing more as further
opportunities open up.
Antony R Gardner-Hillman
Chairman
22 December 2017
Cambium Global Timberland Limited
Operations Manager's report
For the six months ended 31 October 2017
Total returns for the period covered by these financial
statements was 2.7%. Of the total, foreign exchange losses due to
sterling appreciation contributed -5.3%. Returns from the portfolio
contributed 12.6% to the total return with administrative expenses
contributing the remaining -4.6%. The portfolio returns were
primarily impacted by the successful sale of the Hawaiian assets
and the agreement to settle the lien on 3R at substantially less
than the previously accrued liability.
Below is a summary of the results by geographic area.
Brazil
The Brazilian portfolio represents 88% of the total net assets.
Total returns for the year were 5.9% in local currency.
During the period it proved possible to negotiate the payment of
the lien on the 3R property held by BASA for BRL 6.3 million
including fees compared to the previously accrued value of BRL 19.9
million. Although this transaction had not closed as at 31 October
it has subsequently been settled. At the same time the property
managers have been informally marketing the property without
success. As a result the Board has concluded that a further write
down in the valuation is appropriate. Overall the effect has been
to increase the net carrying value of the 3R Tocantins property by
BRL 5.0 million.
Suzano completed the harvesting of the trees on 3R during the
period. In accordance with the contract they are due to pay the
final 20% once the wood has all been removed from the property. As
expected some wood was still stacked on site as at the period end
and therefore the final payment remains as a receivable. Cambium
has remained responsible for the maintenance, insurance and fire
control on the property during the dry season so that expenditure
has continued at significant levels during the last six months of
the dry season.
The majority of the crops in the Minas Gerais properties
continue to grow well and have benefited from adequate rainfall.
However, timber markets in the region and property values continue
to be impacted by the economic and political turmoil in Brazil,
which has reduced land and timber values as evidenced by the lack
of interest of potential buyers. Now that the crops are reaching
maturity opportunistic small scale harvesting into local markets
will be undertaken when profitable prices can be achieved. The
carrying value of the properties remains unchanged since April
2017.
Expenditure was incurred during the period on the process to
evict the squatters camp that had been established on the unstocked
land of the Forquilha property. A successful and peaceful removal
of the squatters was undertaken after the period end. Management,
security, fire protection and insurance will continue to be
required to protect the company's assets. In addition the
exceptionally bureaucratic and litigious regulatory environment
requires ongoing expenditure.
United States Hawaii
The closing of sale of the Hawaii plantations during the period
required landlords' approval. This was only achieved through
Cambium leaving an amount in escrow to cover the rents due until
the ends the leases. Amounts are released from the escrows when the
new plantation owner pays the rent due. To date this has been
happening as scheduled. Cambium records the balance in escrow as an
asset which represents 3% of the total net assets.
Conclusion
The focus remains firmly on achieving liquidity from the
remaining Brazilian assets. However the property market in
Tocantins and Cambium's area of Minas Gerais remains virtually
inactive so that there is currently no plan to instigate an
expensive active marketing campaign ahead of evidence of an upturn
in sentiment and activity. At 3R further work will be undertaken to
identify and prove the potential for more profitable land uses such
as soya bean production as well as maintaining those areas where
the previous eucalyptus crop is regrowing well from the coppice
stumps. With the Minas Gerais properties the emphasis will be on
maintaining the healthy crops and developing markets for sales of
wood where acceptable prices can be achieved. Where cost effective,
the necessary investments needed to maintain the health and vigour
of the forests will continue to be made to protect shareholders'
interests.
Robert Rickman
Operations Manager
22 December 2017
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of
comprehensive income
For the six months ended 31 October 2017
For the For the
six six
months months
ended ended
31 October 31 October
2017 2016
Unaudited Unaudited
Continuing operations Notes GBP GBP
------------------------------------------ ------ ------------ ------------
Finance income - 172
Finance costs (2,117) (3,963)
Net foreign exchange gain - 650
------------------------------------------ ------ ------------ ------------
Net finance costs (2,117) (3,141)
------------------------------------------ ------ ------------ ------------
Administrative expenses 4 (229,885) (245,065)
Loss for the period from continuing
operations (232,002) (248,206)
------------------------------------------ ------ ------------ ------------
Discontinued operations
------------------------------------------ ------ ------------ ------------
Revenue 119,724 3,141
Profit on sale of assets held for
sale 663,006 -
(Decrease)/increase in fair value
of assets and disposal group held
for sale and investment property
and plantations 3 (2,079,374) 71,862
Administrative expenses 4 (95,092) (132,202)
Forestry management expenses 5 (3,794) (11,067)
Other operating forestry expenses 6 (392,274) (692,649)
Reversal of provisions/(provisions) 13 3,275,550 (321,675)
2,784,390 (1,157,593)
---------------------------------------------------------------- ------------
Operating profit/(loss) from discontinued
operations 1,487,746 (1,082,590)
------------------------------------------ -------------------- ------------
Finance income - 1
Finance costs (2,651) (2,306)
Net foreign exchange loss (2,724) (5,343)
------------------------------------------ -------------------- ------------
Net finance costs (5,375) (7,648)
------------------------------------------ -------------------- ------------
Profit/(loss) before taxation from
discontinued operations 1,482,371 (1,090,238)
Taxation charge 7 - -
------------------------------------------ ------ ------------ ------------
Profit/(loss) for the period from
discontinued operations 1,482,371 (1,090,238)
------------------------------------------ -------------------- ------------
Total profit/(loss) for the period 1,250,369 (1,338,444)
------------------------------------------ -------------------- ------------
Other comprehensive (loss)/income
Items that are or may be reclassified to profit or
loss, net of tax
Foreign exchange (loss)/gain on
translation of discontinued foreign
operations 12 (820,295) 3,845,903
Other comprehensive (loss)/income
for the period (820,295) 3,845,903
------------------------------------------ ------ ------------ ------------
Total comprehensive income for the period 430,074 2,507,459
-------------------------------------------------- ------------ ------------
Basic and diluted earnings/(loss) 8 1.52 pence (1.63)
per share pence
------------------------------------------ ------ ------------ ------------
Basic and diluted loss per share 8 (0.28) (0.30)
from continuing operations pence pence
------------------------------------------ ------ ------------ ------------
Basic and diluted profit/(loss) 8 1.80 pence (1.33)
per share from discontinued operations pence
------------------------------------------ ------ ------------ ------------
All losses from continuing and discontinued operations are
attributable to the equity holders of the parent Company. There are
no minority interests.
The accompanying notes form an integral part of these unaudited
condensed consolidated interim financial statements.
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of financial
position
At 31 October 2017
31 October 30 April
2017 2017
Unaudited Audited
Notes GBP GBP
----------------------- ------ ------------- -------------
Current assets
Assets held for
sale 11 14,031,341 18,673,356
Trade and other
receivables 481,139 46,969
Cash and cash
equivalents 3,314,682 2,272,028
Total assets 17,827,162 20,992,353
---------------------- ------ ------------- -------------
Current liabilities
Liabilities held
for sale 11 1,691,777 5,191,372
Trade and other
payables 34,022 129,692
Total liabilities 1,725,799 5,321,064
---------------------- ------ ------------- -------------
Net assets 16,101,363 15,671,289
---------------------- ------ ------------- -------------
Equity
Stated capital 14 2,000,000 2,000,000
Distributable
reserve 15 83,589,060 83,589,060
Translation reserve 12,15 5,879,961 6,700,256
Retained loss (75,367,658) (76,618,027)
---------------------- ------ ------------- -------------
Total equity 16,101,363 15,671,289
---------------------- ------ ------------- -------------
Net asset value
per share 9 0.20 0.19
---------------------- ------ ------------- -------------
These unaudited condensed consolidated interim financial
statements were approved and authorised for issue on 22 December
2017 by the Board of Directors.
Antony R Gardner-Hillman
Chairman
The accompanying notes form an integral part of these unaudited
condensed consolidated interim financial statements.
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of changes in
equity
For the six months ended 31 October 2017
Share Distributable Translation Retained
Unaudited Capital reserve reserve loss Total
GBP GBP GBP GBP GBP
For the period 1 May 2017
to
31 October 2017
--------------------------------------- -------------- ------------ ------------- -----------
At 30 April 2017 2,000,000 83,589,060 6,700,256 (76,618,027) 15,671,289
Total comprehensive
income/(loss) for
the period
Profit for the period - - - 1,250,369 1,250,369
Other comprehensive
income
Foreign exchange
gain on translation
of discontinued foreign
operations (note
12) - - (820,295) - (820,295)
--------------------------- ---------- -------------- ------------ ------------- -----------
Total comprehensive
income/(loss) - - (820,295) 1,250,369 430,074
--------------------------- ---------- -------------- ------------ ------------- -----------
At 31 October 2017 2,000,000 83,589,060 5,879,961 (75,367,658) 16,101,363
--------------------------- ---------- -------------- ------------ ------------- -----------
Share Distributable Translation Retained
Unaudited Capital reserve reserve loss Total
GBP GBP GBP GBP GBP
For the period 1 May 2016
to
31 October 2016
--------------------------------------- -------------- ------------ ------------- ------------
At 30 April 2016 2,000,000 83,589,060 3,776,602 (73,818,201) 15,547,461
Total comprehensive
loss for the period
Loss for the period - - - (1,338,444) (1,338,444)
Other comprehensive
loss
Foreign exchange
loss on translation
of discontinued foreign
operations (note
12) - - 3,845,903 - 3,845,903
--------------------------- ---------- -------------- ------------ ------------- ------------
Total comprehensive
loss - - 3,845,903 (1,338,444) 2,507,459
--------------------------- ---------- -------------- ------------ ------------- ------------
At 31 October 2016 2,000,000 83,589,060 7,622,505 (75,156,645) 18,054,920
--------------------------- ---------- -------------- ------------ ------------- ------------
The accompanying notes form an integral part of these unaudited
condensed consolidated interim financial statements.
Cambium Global Timberland Limited
Unaudited condensed consolidated interim statement of cash
flows
For the six months ended 31 October 2017
For the
For the six six months
months ended ended
31 October 31 October
2017 2016
Unaudited Unaudited
Note GBP GBP
----------------------------------------------- -------------- -------------
Cash flows from operating activities
Total profit/(loss) for the period 1,250,369 (1,338,444)
Adjustments for:
Decrease/(increase) in fair
value of assets and disposal
group held for sale 11 2,079,374 (71,862)
(Decrease)/increase in provision 13 (3,275,550) 321,675
Profit on sale of assets held
for sale (663,006) -
Net finance costs, excluding
foreign exchange movements -
continuing operations 2,117 3,791
Net finance costs, excluding
foreign exchange movements -
discontinued operations 2,651 2,305
Taxation charge 7 - -
Increase in trade and other
receivables (434,170) (15,078)
Decrease in trade and other
payables (95,670) (6,461)
-------------------------------------- --------------------- -------------
(1,133,885) (1,104,074)
Tax paid - -
------------------------------------------ ------------------- -------------
Net cash used in operating activities (1,133,885) (1,104,074)
------------------------------------------ ------------------- -------------
Cash flows from investing activities - discontinued
operations
Net proceeds from sale of assets
held for sale 11 2,444,011 -
Net cash used in investing activities 2,444,011 -
---------------------------------------- --------------------- -------------
Cash flows from financing activities
Net finance costs, excluding
foreign exchange movements (4,768) (6,096)
Net cash used in financing activities (4,768) (6,096)
---------------------------------------- --------------------- -------------
Net increase/(decrease) in cash
and cash equivalents 1,498,565 (1,110,170)
Foreign exchange movements (262,704) (40,127)
Balance at the beginning of the
period 2,272,028 1,573,138
---------------------------------------- --------------------- -------------
Balance at the end of the period 3,314,682 422,841
---------------------------------------- ----- -------------- -------------
The accompanying notes form an integral part of these unaudited
condensed consolidated interim financial statements.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements
For the six months ended 31 October 2017
1. General information
The Company and its subsidiaries, including special purpose
entities ("SPEs") controlled by the Company (together the "Group"),
own a portfolio of forestry based properties which are managed on
an environmentally and socially sustainable basis. Assets are
managed for timber production. As at the period end date, the Group
owned forestry assets located in Brazil.
The Company is a closed-ended company with limited liability,
incorporated in Jersey, Channel Islands on 19 January 2007. The
address of its registered office is Charter Place, 23-27 Seaton
Place, St Helier, Jersey JE1 1JY.
These unaudited condensed consolidated interim financial
statements (the "interim financial statements") were approved and
authorised for issue on 22 December 2017 and signed by Antony
Gardner-Hillman on behalf of the Board.
The Company is listed on AIM, a market of the London Stock
Exchange.
2. Basis of preparation
The interim financial statements for the six months ended 31
October 2017 have been prepared in accordance with International
Accounting Standard ("IAS") 34 "Interim Financial Reporting" and
with applicable regulatory requirements of the AIM Rules. They do
not include all of the information required for full annual
financial statements. The interim financial statements should be
read in conjunction with the Group's annual report and financial
statements for the year ended 30 April 2017, which were prepared in
accordance with International Financial Reporting Standards
("IFRS"). The comparative numbers used for the unaudited condensed
consolidated interim statement of comprehensive income, unaudited
condensed consolidated interim statement of changes in equity and
unaudited condensed consolidated interim statement of cash flows
are those of the six month period ended 31 October 2016, which is
considered a comparable period as per IAS 34. The comparatives used
in the unaudited condensed consolidated statement of financial
position are those of the previous financial year to 30 April
2017.
The accounting policies applied by the Group in these interim
financial statements are the same as those applied by the Group in
its financial statements as at and for the year ended 30 April
2017.
The interim financial statements have been prepared in Sterling,
which is the presentational currency and functional currency of the
Company, and under the historical cost convention, except for
investment property, plantations, buildings, assets and liabilities
held for sale and certain financial instruments which are carried
either at fair value, fair value less cost to sell or fair value
less subsequent accumulated depreciation and subsequent accumulated
impairment loss.
The preparation of the financial statements requires Directors
to make estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and the disclosure
of contingent liabilities at the date of the interim financial
statements. If in the future such estimates and assumptions, which
are based on the Directors' best judgement at the date of the
interim financial statements, deviate from actual circumstances,
the original estimates and assumptions will be modified as
appropriate in the period in which the circumstances change.
In preparing the interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the financial statements as at, and
for the year ended, 30 April 2017. The main area of the interim
financial statements where significant judgements have been made by
the Directors is in determining the fair value of the assets held
for sale as disclosed in note 11.
The Company has identified that the Group's Brazilian expenses
(with the exception of insurance premia) have been accounted for on
a cash rather than an accrual basis. In view of the fact that
expenses are paid in the normal course by the end of the month
following the month in which the supplier's invoice is received, by
and large the end of year financial statements will report
Brazilian expenses (other than insurance premia) submitted to the
Group in the previous April to March (rather than May to April) and
the interim financial statements will report expenses submitted to
the Group in the previous April to September (rather than May to
October). The Directors do not believe there is any material effect
in either case and do not plan to make any change.
Going concern and assets and liabilities held for sale
On 30 November 2012, the Independent Directors announced the
outcome of the strategic review initiated in June 2012. The
Directors proposed and recommended a change of investment policy
with a view to implementing an orderly realisation of the Group's
investments in a manner which maximises value for shareholders, and
returning surplus cash to shareholders over time through ad hoc
returns of capital. This proposal was approved by shareholders at
an Extraordinary General Meeting ("EGM") on 22 February 2013. There
is no set period for the realisation of the portfolio.
Since the EGM, the portfolio has been reviewed by the Directors
with a view to an orderly sale of the assets in such a manner as to
enable their inherent value to be realised. As part of this
process, the assets in Georgia, Australia and Hawaii have been sold
and the Directors plan to sell the remaining assets when acceptable
offers are received. As at 31 October 2017, the remaining portfolio
of assets, located in Brazil, is classified as held for sale and
its transactions for the period as discontinued operations.
As at the date of approval of these financial statements, the
Directors have no intention to instigate a winding-up of the
Company, a course of action that would require the approval of
shareholders. As a result, as at 31 October 2017 the assets and
liabilities of the Company pertaining to the Jersey operations have
not been classified as held for sale and its Jersey operations
continue to be treated as continuing.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
2. Basis of preparation (continued)
Going concern and assets and liabilities held for sale
The Directors have reviewed the Group's cash flow forecast,
which covers the period to 30 April 2019 and consider that the
Group has sufficient resources available to pay its liabilities as
they fall due. On the basis of the above, the Directors believe it
is appropriate to prepare the interim financial statements on a
going concern basis.
New, revised and amended standards
At the date of authorisation of these interim financial
statements, the following relevant standards and interpretations,
which have not been applied in these interim financial statements,
were in issue but not yet effective:
-- IAS 39 (amended), "Financial Instruments: Recognition and
Measurement" (amendments effective for periods commencing on or
after 1 January 2018 or on early adoption of IFRS 9);
-- IAS 40 (amended) "Investment Property" (amendments to clarify
transfers of property to or from investment property, effective for
periods commencing on or after 1 January 2018);
-- IFRS 9, "Financial Instruments" (effective for periods
commencing on or after 1 January 2018);
-- IFRS 15, "Revenue from Contracts with Customers" (effective
for periods commencing on or after 1 January 2018); and
-- IFRS 16, "Leases" (effective for periods commencing on or after 1 January 2019).
In addition, the IASB completed its Annual Improvements
2014-2016 Cycle project in December 2016. This project has amended
certain existing standards and interpretations effective for
accounting periods commencing on or after 1 January 2018.
The Directors do not anticipate that the adoption of these
standards in future periods will have a material impact on the
financial statements of the Group.
New accounting policies effective and adopted
The following relevant amended standard has been applied for the
first time in these interim financial statements:
-- IAS 7 (amended) "Statement of Cash Flows" (amendments arising
as a result of the disclosure initiative, effective for periods
commencing on or after 1 January 2017);
-- IAS 12 (amended), "Income Taxes" (amendments effective 1 January 2017).
In addition, the IASB completed its Annual Improvements
2014-2016 Cycle project in December 2016. This project has amended
certain existing standards and interpretations effective for
accounting periods commencing on or after 1 January 2017.
The adoption of these amended standards has had no material
impact on the Financial Statements of the Company.
Exchange rates
The following exchange rates have been applied in these interim
financial statements to convert foreign currency balances to
Sterling:
31 October 31 October 30 April 31 October 31 October
2017 2017 2017 2016 2016
closing average closing closing average
rate rate rate rate rate
---------------- ----------- ----------- --------- ----------- -----------
Brazilian Real 4.3475 4.1641 4.1140 3.9046 4.4548
United States
Dollar 1.3283 1.3030 1.2951 1.2242 1.3405
---------------- ----------- ----------- --------- ----------- -----------
3. Operating segments
The Board of Directors is charged with setting the Company's
investment strategy in accordance with the Shareholder Update
announcement made on 6 October 2015. The Board of Directors, as the
Chief Operating Decision Maker ("CODM"), had, until 16 October
2014, delegated the day to day implementation of its then
investment strategy to its Investment Manager and, with effect from
16 October 2014, to its Operations Manager, but retains
responsibility to ensure that adequate resources of the Company are
directed in accordance with its decisions. The day-to-day decisions
of the Investment Manager and Operations Manager have been and are
reviewed on a regular basis to ensure compliance with the policies
and legal responsibilities of the Board.
Whilst the Operations Manager may make the operational decisions
on a day to day basis, any changes to the investment strategy,
major allocation decisions or any asset dispositions or material
timber contracts have to be approved by the Board, even though they
may be proposed by the Operations Manager. The Board therefore
retains full responsibility for and control over the major
allocation decisions made on an ongoing basis.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
3. Operating segments (continued)
The Operations Manager will always act under the terms of the
Prospectus and the Board-approved investment strategy.
As at 31 October 2017, the Group operates in three geographical
locations, which the CODM has identified as one non-operating
segment, Jersey, and two operating segments, Hawaii and Brazil.
Timberlands located in Hawaii were disposed of during the period
and those remaining are located in Brazil. During the period, all
segments, apart from Jersey, have been classified as discontinued
operations (see note 11). The accounting policies of each operating
segment are the same as the accounting policies of the Group,
therefore no reconciliation has been performed.
Jersey Hawaii Brazil Total
31 October 2017 (unaudited) GBP GBP GBP GBP
------------------------------ ---------- -------- ----------- -----------
Assets and disposal group
held for sale (note 11) - - 14,031,341 14,031,341
Other assets 1,539,220 504,016 1,752,585 3,795,821
------------------------------ ---------- -------- ----------- -----------
Total assets 1,539,220 504,016 15,783,926 17,827,162
------------------------------ ---------- -------- ----------- -----------
Total liabilities 34,022 - 1,691,777 1,725,799
------------------------------ ---------- -------- ----------- -----------
Jersey Hawaii Brazil Total
30 April 2017 (audited) GBP GBP GBP GBP
---------------------------- ------- ---------- ----------- -----------
Assets and disposal group
held for sale (note 11) - 1,791,869 16,881,487 18,673,356
Other assets 77,156 34,455 2,207,386 2,318,997
---------------------------- ------- ---------- ----------- -----------
Total assets 77,156 1,826,324 19,088,873 20,992,353
---------------------------- ------- ---------- ----------- -----------
Total liabilities 72,871 56,821 5,191,372 5,321,064
---------------------------- ------- ---------- ----------- -----------
Jersey Hawaii Brazil Total
31 October 2017 (unaudited) GBP GBP GBP GBP
---------------------------------------- -------- -------- ------------ ------------
Segment
revenue - 119,724 - 119,724
---------------------------------------- -------- -------- ------------ ------------
Segment
gross profit - 119,724 - 119,724
------------------------------------ ----------- -------- ------------ ------------
Gains on disposal of assets
and disposal group held for
sale - 663,006 - 663,006
---------------------------------------- -------- -------- ------------ ------------
Decrease in fair value of
assets and disposal group
held for sale - - (2,079,374) (2,079,374)
---------------------------------------- -------- -------- ------------ ------------
Forestry management expenses - - 3,794 3,794
---------------------------------------- -------- -------- ------------ ------------
Other operating forestry expenses - 52,327 339,947 392,274
---------------------------------------- -------- -------- ------------ ------------
Jersey Hawaii Brazil Total
31 October 2016 (unaudited) GBP GBP GBP GBP
---------------------------------------- -------- -------- -------- --------
Segment
revenue - - 3,141 3,141
---------------------------------------- -------- -------- -------- --------
Segment
gross profit - - 3,141 3,141
------------------------------------ ----------- -------- -------- --------
Decrease in fair value of
assets and disposal group
held for sale - 71,862 - 71,862
---------------------------------------- -------- -------- -------- --------
Forestry management expenses - - 11,067 11,067
---------------------------------------- -------- -------- -------- --------
Other operating forestry expenses - 240,552 452,097 692,649
---------------------------------------- -------- -------- -------- --------
As at 31 October 2017 the Group owned four (30 April 2017: six)
distinct parcels of land in one (30 April 2017: two) geographical
areas.
The majority of the revenues in the period ended 31 October 2017
arose from other income received in Hawaii. The majority of the
revenues in the period ended 31 October 2016 arose from subsidies
received in Brazil.
The Group's investments will be realised in an orderly manner
(that is, with a strategy of achieving a balance between returning
cash to shareholders and maximising value). In view of this, there
will be no specific investment restrictions applicable to the
Group's portfolio going forward.
This policy will involve a continuing evaluation of the
portfolio in order to assess the most appropriate strategy for each
investment.
This will be flexible and may need to be altered to reflect
changes in the circumstances of a particular investment or in the
prevailing market conditions. The Group will, in relation to each
investment, seek to create competition amongst a range of
interested parties.
The net cash proceeds from realisations of assets will be
applied to the payments of tax or other liabilities as the Board
thinks fit prior to making payments to shareholders.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
4. Administrative expenses
For the
6 months
For the 6 months ended
ended 31 October
31 October 2017 2016
Unaudited Unaudited
GBP GBP
----------------------------------------------- ------------
Continuing operations
Operations Manager's fees (note 17) 48,000 48,000
Directors' fees (note 17) 45,000 45,000
Auditor's fees 9,813 13,196
Professional & other fees 127,072 138,869
229,885 245,065
Discontinued operations
Professional & other fees 69,572 99,931
Administration of subsidiaries 25,520 32,271
------------------------------------- -------- ------------
95,092 132,202
Total administration expenses 324,977 377,267
------------------------------------- -------- ------------
Administration of subsidiaries includes statutory fees,
accounting fees and administrative expenses in regard to the asset
holding subsidiaries.
5. Forestry management expenses
For the
6 months
For the 6 months ended
ended 31 October
31 October 2017 2016
Unaudited Unaudited
GBP GBP
----------------------- ------------
Valuation fees 3,794 11,067
3,794 11,067
----------------------- ------------
6. Other operating forestry expenses
For the
6 months
For the 6 months ended
ended 31 October
31 October 2017 2016
Unaudited Unaudited
GBP GBP
------------------------------------------------ ------------
Property management fees and expenses 179,307 208,921
Property taxes (2,818) 11,377
Lease payments 34,586 80,424
Road maintenance 20,282 126,282
Fencing maintenance - 19,316
Other repairs and maintenance - 19,060
Inventory fees 4,299 -
Pest control - 47,354
Forest protection and insurance 146,266 151,735
Consultancy fees 6,159 20,302
Other 4,193 7,878
-------------------------------------- -------- ------------
392,274 692,649
------------------------------------------------ ------------
For further information relating to the analysis of expenditure
contained in this note, please refer to the final two paragraphs of
the 'Basis of preparation' section of note 2.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
7. Taxation
Taxation on profit on ordinary activities
Entities within the Group made no taxable profits during the
period and there was no tax charge for the period. In the
comparative period the Group suffered current taxation in two
Hungarian subsidiaries at a rate of 19%. A reconciliation of the
Group's pre-tax profit/(losses) to the tax charge is shown
below.
For the
6 months
For the 6 months ended
ended 31 October 31 October
2017 2016
Unaudited Unaudited
GBP GBP
------------------------------------------------------------ ------------
Tax charge reconciliation
Loss for the period from continuing operations
before taxation (232,002) (248,206)
Profit/(loss) for the period from discontinued
operations before taxation 1,482,371 (1,090,238)
------------------------------------------------ ---------- ------------
Total profit/(loss) for the period before
taxation 1,250,369 (1,338,444)
------------------------------------------------ ---------- ------------
Tax charge/(credit) using the average
of the tax rates in the jurisdictions
in which the Group operates 527,945 (336,145)
Effects of:
Tax exempt income - (214)
Operating losses for which no deferred
tax asset is recognised 206,555 354,407
Capital and operating losses utilised (734,500) (18,048)
Tax charge for the period - -
------------------------------------------------ ---------- ------------
The average tax rate is a blended rate calculated using the
weighted average applicable tax rates of the jurisdictions in which
the Group operates. The average of the tax rates in the
jurisdictions in which the Group operates in the period was 28.46%
(31 October 2016: 24.85%). The effective tax rate in the period was
0% (31 October 2016: 0%).
At the period end date, the Group has unused operational and
capital tax losses. No deferred tax asset has been recognised in
respect of these losses due to the unpredictability of future
taxable profits and capital gains available against which they can
be utilised. Tax losses arising in the United States can be carried
forward for up to 20 years; those arising in Brazil can be carried
forward indefinitely.
Operational tax losses for which deferred tax assets have not
been recognised in the consolidated financial statements
For the
For the 6 months year ended
ended 30 April
31 October 2017 2017
Unaudited Audited
GBP GBP
-------------------------------------------------------------- ------------
Balance at beginning of the period/year 10,608,215 7,468,333
Brought forward operating losses utilised (1,739,571) -
Current period/year operating losses
for which no deferred tax asset is recognised 244,591 2,149,216
Exchange rate movements (322,754) 990,666
------------------------------------------------ ------------ ------------
Balance at the end of the period/year 8,790,481 10,608,215
------------------------------------------------ ------------ ------------
Accumulated operating losses at 31 October 2017 and 30 April
2017 in the table above relate entirely to discontinued operations
The value of deferred tax assets not recognised in regard to
operational losses amounted to GBP2,619,826 (30 April 2017:
GBP3,260,187), all of which related to discontinued operations.
Accumulated operating losses relating to continuing operations
at the period end amounted to GBP27,159,981 (30 April 2017:
GBP26,927,979). No deferred tax assets arose in respect of these
losses.
At the period end the Group had accumulated capital losses of
GBP12,662,013 (30 April 2017: GBP12,354,140). The accumulated
capital losses at 31 October 2017 and 30 April 2017 related
entirely to discontinued operations. The value of deferred tax
assets not recognised in respect of these capital tax losses
amounted to GBP4,305,084 (30 April 2017: GBP4,200,408), all of
which related to discontinued operations.
Deferred taxation
As at 31 October 2017 and 30 April 2017 the Group had no
deferred tax liabilities or recognised deferred tax assets.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
8. Basic and diluted loss per share
The calculation of the basic and diluted loss per share in total
and for continuing and discontinued operations is based on the
following loss attributable to shareholders and weighted average
number of shares outstanding.
For the
6 months
For the 6 months ended
ended 31 October
31 October 2017 2016
Unaudited Unaudited
GBP GBP
----------------------------------------------------- ------------
Profit/(loss) for the purposes of basic
and diluted earnings per share being
net profit/(loss) for the period 1,250,369 (1,338,444)
----------------------------------------- ---------- ------------
Loss for the purposes of basic and
diluted earnings per share being net
loss for the period from continuing
operations (232,002) (248,206)
----------------------------------------- ---------- ------------
Profit/(loss) for the purposes of basic
and diluted earnings per share being
net profit/(loss) for the period from
discontinued operations 1,482,371 (1,090,238)
----------------------------------------- ---------- ------------
31 October 2017 31 October
Weighted average number Unaudited 2016
of shares Unaudited
-------------------------------------------- ----------------- -----------
Issued shares brought forward and carried
forward (note 14) 82,130,000 82,130,000
Weighted average number of shares in issue
during the period 82,130,000 82,130,000
--------------------------------------------- ---------------- -----------
Basic and diluted earnings/(loss) per 1.52 (1.63)
share pence pence
--------------------------------------------- ---------------- -----------
Basic and diluted loss per share from (0.28) (0.30)
continuing operations pence pence
--------------------------------------------- ---------------- -----------
Basic and diluted earnings/(loss) per 1.80 (1.33)
share from discontinued operations pence pence
--------------------------------------------- ---------------- -----------
9. Net asset value
31 October 30 April
2017 2017
Unaudited Audited
Total assets 17,827,162 20,992,353
Total liabilities 1,725,799 5,321,064
---------------------------------- ----------- -----------
Net asset value 16,101,363 15,671,289
---------------------------------- ----------- -----------
Number of shares in issue (note
14) 82,130,000 82,130,000
---------------------------------- ----------- -----------
Net asset value per share 0.20 0.19
---------------------------------- ----------- -----------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
10. Investment property and plantations
The Group's investment property and plantations are classified
as disposal group and assets held for sale.
The Group engages external independent professional valuers to
estimate the market values of the investment properties and
plantations on an annual basis, with the Operations Manager
providing a desktop update valuation for the purposes of the
Group's Interim Financial Statements.
The investment property is carried at its estimated fair value
and plantations are carried at their estimated fair values less
costs to sell as at 31 October 2017 and 30 April 2017, as
determined by the Directors, taking into consideration the external
independent professional valuers' valuations, the Operations
Manager's desktop update valuations, the latest offers received for
the investment property and plantations and the Directors'
assessment of transaction execution risk. The fair value
measurements of investment properties and plantations have been
categorised as Level 3 fair values based on the inputs to the
valuation techniques used.
Notwithstanding the results of the independent valuations, the
Directors make their own judgement on the valuations of the Group's
investment property and plantations, with reference to the views of
the Operations Manager, other advisors and the latest offers
received.
As at 31 October 2017, the estimated fair values of the 3R
Tocantins investment properties and the Minas Gerais investment
properties and plantations are based on the Operations Manager's
desktop valuations in consultation with the Directors, as disclosed
below.
The independent valuer last valued the investment property held
for sale in 3R Tocantins at 30 April 2017 at BRL 32.8 million,
however the Directors took a more prudent view of the valuer's
estimated bare land values, including taking into account the most
recent offer for the land in the year ended 30 April 2015, and
accordingly applied a discount of approximately 20% for the
purposes of the annual financial statements. In light of the almost
complete lack of comparable land or plantation sales in the region
in recent years and recent unsuccessful attempts by the property
managers to market the property, the Directors have determined that
a further write-down at 31 October 2017 of approximately 27% (BRL
8.7 million) of the independent valuation would be appropriate,
resulting in a carrying value at 31 October 2017 of GBP4.0 million
(BRL 17.5 million) (30 April 2017: GBP6.4 million (BRL 26.2
million)) for the 3R Tocantins land.
During the prior year, the Group agreed the sale of the entire
standing tree crop at 3R Tocantins to Suzano, a publicly owned
Brazilian pulp and paper company. The majority of the trees sold
had been harvested and paid for at 31 October 2017 and 30 April
2017. Ownership of the trees passed to Suzano upon harvesting and
removal from 3R Tocantins' property. The remaining unharvested
trees have been valued at 31 October 2017 at their agreed sale
price of GBP0.5 million (BRL 2.3 million) (30 April 2017: GBP0.6
million (BRL 2.3 million)), which amount is payable once all the
wood has been removed.
The independent valuer last valued the investment property and
plantations assets held for sale in Minas Gerais at 30 April 2017
at BRL 60.4 million. However, in view of the continued lack of
market activity for standing wood, bare land or forest plantations
in Minas Gerais, the Directors consider it prudent to discount the
independent valuation by approximately 32% (BRL 19.4 million
(GBP4.5 million), which takes into account the most recent offer in
the year ended 30 April 2015, resulting in a carrying value of
GBP9.3 million (BRL 41.0 million) (30 April 2017: GBP10.0 million
(BRL 41.0 million)) for the Minas Gerais land and plantations
before estimated selling costs.
The Directors believe that these adjusted valuations, after
applying estimated selling costs of the plantations of BRL 0.5
million (31 October 2017: GBP112,000, 30 April 2017: GBP119,000),
provide the best estimates of fair value as at 31 October 2017 and
30 April 2017.
During the period, the Group completed the sales of the Pahala
and Pinnacle properties for a gross consideration of US$3,300,000,
recognising a gain over the 30 April 2017 valuations of GBP0.7
million. During the period the Group also received an additional
payment from the buyers of the properties of US$156,000
(GBP120,000) in relation to the extension of the completion date
for the transaction.
The following tables show the valuation techniques used by the
valuers in arriving at their estimates of the market values of
investment properties and plantations in Brazil, as well as the
significant unobservable inputs used by the valuers and their
effects on the estimated market values as at 31 October 2017 and 30
April 2017.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
10. Investment property and plantations (continued)
Brazil - 3R Tocantins - 31 October
2017 and 30 April 2017
------------------------------------------------------------------------------- ----------------------------------------------------------
Valuation Significant unobservable Inter-relationship
technique inputs between key unobservable
inputs and fair
value measurement
-------------- --------------------------------------------------------------- ----------------------------------------------------------
The 3R The estimated
Tocantins * Comparable land sales prices per hectare: BRL 2,273 - fair value would
property in BRL 3,719 increase/(decrease)
Brazil if:
was valued by * comparable land sales prices were higher/(lower)
Holtz * Estimated future log prices per m(3) , being standing
Consultoria prices with the buyer absorbing all the costs of
Ltda. harvesting and haulage: N/A
A desktop
valuation
was carried * Estimated future overhead costs per planted hectare:
out at N/A
30 April
2017. A
desktop * Estimated yields in m(3) per hectare per year: N/A
valuation
does not
include * Estimated total establishment costs per hectare: N/A
a physical (BRL 6,407 for first cycle, BRL 3,936 for subsequent
inspection cycles)
of the
property by
the valuer, * Risk-adjusted discount rate: N/A
however
in the
opinion of * Estimate of costs to sell the plantation: N/A
the
Directors,
carrying
out a full
valuation,
as opposed to
a desktop
valuation,
would
not have
resulted
in a material
difference
in valuation.
The
valuation
method
applied for
the bare
land
appraisal was
the sales
comparison
approach. The
analysis
considered
the bare
land price
from
comparable
transactions,
soil
quality,
topography
of the land,
access
and distance
from
cities and
the
proportion
of the
property
which
could be used
for
cultivation.
The
remaining
plantations
are valued at
their
agreed sale
price.
There is a
security
interest over
this
property, the
details
of which are
disclosed
in note 13.
-------------- --------------------------------------------------------------- ----------------------------------------------------------
Brazil - Minas Gerais - 31 October
2017 and 30 April 2017
------------------------------------------------------------------------------- -------------------------------------------------------------
Valuation Significant unobservable Inter-relationship
technique inputs between key unobservable
inputs and fair
value measurement
--------------- -------------------------------------------------------------- -------------------------------------------------------------
The three The estimated
properties * Land value per hectare: BRL 1,000 - BRL 5,500 fair value would
in Minas increase/(decrease)
Gerais in if:
Brazil were * Estimated future log prices per m(3) , being standin * land values were higher/(lower)
valued g
by Holtz prices with the buyer absorbing all the costs of
Consultoria harvesting and haulage: BRL 37.78 * estimated log prices were higher/(lower)
Ltda. A
desktop
valuation * Estimated future overhead costs per planted hectare: * estimated future overhead costs were lower/(higher)
was carried BRL 200.87
out at
30 April 2017. * estimated yields were higher/(lower)
A * Estimated yields in m(3) per hectare per year:
desktop 28.0-39.4
valuation * estimated establishment costs were lower/(higher)
does not
include * Estimated total establishment costs per hectare: BRL
a physical 5,238 for first cycle, BRL 2,642 for subsequent * the risk-adjusted discount rate were lower/(higher)
inspection cycles (BRL 6,407 for first cycle, BRL 3,936 for
of the subsequent cycles)
property by * estimated costs to sell were lower/(higher)
the valuer,
however * Risk-adjusted discount rate: 10.0%
in the opinion
of
the Directors, * Estimate of costs to sell the plantations: 5%
carrying
out a full
valuation,
as opposed to
a desktop
valuation,
would
not have
resulted
in a material
difference
in valuation.
The
valuation
method
applied for
the bare
land appraisal
was
the sales
comparison
approach. The
analysis
considered the
bare
land price
from
comparable
transactions,
soil
quality,
topography
of the land,
access
and distance
from
cities and the
proportion
of the
property which
could be used
for
cultivation.
Planted
forests, all
of which
are over 1
year old,
are valued
using
the discounted
cash
flow method.
This
method
considers
the present
value
of the net
cash flows
expected to be
generated
by the
plantation
at maturity,
the
expected
additional
biological
transformation
and the risks
associated
with the
asset; the
expected net
cash
flows are
discounted
using a
risk-adjusted
discount rate.
--------------- -------------------------------------------------------------- -------------------------------------------------------------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
10. Investment property and plantations (continued)
The Group is exposed to a number of risks related to its tree
plantations:
Regulatory and environmental risks
The Group is subject to laws and regulations in the countries in
which it operates. The Group has established environmental policies
and procedures aimed at compliance with local environmental and
other laws. The Operations Manager performs regular reviews to
identify environmental risks and to ensure that the systems in
place are adequate to manage those risks.
Supply and demand risk
The Group is exposed to risks arising from fluctuations in the
price and sales volume of trees. The Group intends to manage this
risk by aligning its harvest volume to market supply and demand.
The Operations Manager performs regular industry trend analyses to
ensure that the Group's pricing structure is in line with the
market and to ensure that projected harvest volumes are consistent
with the expected demand.
Climate and other risks
The Group's plantations are exposed to the risk of damage from
climatic changes, diseases, forest fires and other natural forces.
The Group has processes in place aimed at monitoring and mitigating
those risks, including regular forest health inspections and
industry pest and disease surveys.
As at 31 October 2017 and 30 April 2017, certain amounts of
timber harvested by Suzano in relation to the sale of the
plantations at 3R Tocantins had not yet been removed by Suzano and
were held on site. The Group retains certain insured risks relating
to the timber until it is removed off site by Suzano.
11. Disposal groups and assets held for sale and discontinued
operations
During the period, the Group continued its strategy for orderly
realisation of the remaining assets in Brazil and Hawaii, in
accordance with the Shareholder Update announcement made on 6
October 2015.
The assets in Brazil are ultimately likely to be sold through a
disposal of the entities owning the assets. Accordingly, as at 31
October 2017, the Group's Brazil segment is presented as a disposal
group held for sale.
The Brazil disposal group comprises the following assets and
liabilities held for sale:
Assets Liabilities 30 April
held for held 31 October 2017
sale for sale 2017 Unaudited Audited
GBP GBP GBP GBP
----------------------------- ----------- ------------ ---------------- ------------
Investment property and
plantations 13,867,215 - 13,867,215 16,758,978
Trade and other receivables 164,126 - 164,126 122,509
Provisions - (1,442,208) (1,442,208) (4,604,278)
Trade and other payables - (249,569) (249,569) (587,094)
14,031,341 (1,691,777) 12,339,564 11,690,115
----------------------------- ----------- ------------ ---------------- ------------
A loss of GBP806,800 (2016: gain of GBP3,532,660) related to the
Brazil disposal group, representing foreign exchange translation of
discontinued operations, is included in other comprehensive income
(see note 12).
The plantations in Hawaii were sold during the period, realising
a profit of GBP663,006. As at 30 April 2017 they were presented as
assets held for sale with a combined carrying value of
GBP1,791,869.
Total assets held for sale in the statement of financial
position are as follows:
31 October 2017 30 April
Unaudited 2017
Audited
GBP GBP
----------------------------------------------------------- ------------
Balance brought forward 18,673,356 17,664,353
Proceeds of disposal of assets held for
sale (2,444,011) -
Profit on disposal of assets held for sale 663,006 -
Increase/(decrease) in trade and other
receivables 41,617 (72,400)
Decrease in the fair value of assets and
disposal group held for sale and investment
property and plantations (2,079,374) (2,849,763)
Foreign exchange effect (823,253) 3,931,166
--------------------------------------------- ------------ ------------
14,031,341 18,673,356
----------------------------------------------------------- ------------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
11. Disposal groups and assets held for sale and discontinued
operations (continued)
31 October 2017 30 April
Unaudited 2017
Audited
Assets held for sale GBP GBP
by region
--------------------- ------------- -----------
Brazil 14,031,341 16,881,487
Hawaii - 1,791,869
14,031,341 18,673,356
------------------------------------ -----------
The fair value measurement of GBP14,031,341 has been categorised
as a Level 3 fair value based on the appraised fair values of the
investment property and the appraised fair values of the
plantations less costs to sell. These assets were measured using
the methods outlined in note 10. The fair value of other assets and
liabilities within the disposal group is not significantly
different from their carrying amounts.
Net cash flows attributable to the discontinued operations were
as follows:
For the 6 months For the
ended 6 months
31 October ended
2017 31 October
Unaudited 2016
Unaudited
GBP GBP
------------------------------------------------------------ ------------
Operating activities
Profit/(loss) for the year before
taxation 1,482,371 (1,090,238)
Adjustments for:
Decrease/(increase) in fair
value of assets and disposal
group held for sale and investment
property and plantations 2,079,374 (71,862)
Profit on disposal of assets
held for sale (663,006) -
(Decrease)/increase in provisions (3,275,550) 321,675
Net finance costs 2,651 2,305
Increase in trade and other
receivables (449,163) (681)
(Decrease)/increase in trade
and other payables (56,821) 44,625
Net cash used in operating activities (880,144) (794,176)
Net cash from investing activities (proceeds
of disposal of assets held for sale) 2,444,011 -
Net cash used in financing activities (net
finance costs) (2,651) (2,305)
Foreign exchange movements (262,704) (40,777)
Net cash flow for the period 1,298,512 (837,258)
---------------------------------------------- ------------ ------------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
12. Foreign exchange effect
The translation reserve movement in the period, all of which was
derived from discontinued operations, has arisen as follows:
Exchange Exchange
rate rate Translation
at at reserve
31 October 30 April movement
31 October 2017 2017 2017 Unaudited
------------------------- ------------ ---------- ------------
Discontinued operations
Brazilian Real 4.3475 4.1140 (806,800)
United States Dollar 1.3283 1.2951 (13,495)
------------------------- ------------ ---------- ------------
(820,295)
--------------------------------------------------- ------------
Exchange Exchange
rate rate Translation
at at reserve
31 October 30 April movement
31 October 2016 2016 2016 Unaudited
Discontinued operations
Brazilian Real 3.9046 5.0201 3,532,660
United States Dollar 1.2242 1.4612 313,243
------------------------- ------------ ---------- ------------
3,845,903
--------------------------------------------------- ------------
13. Provision
As at 31 October 2017, there existed a security interest on the
property owned by 3R Tocantins Florestais Ltda. ("3R Tocantins") to
cover a liability between the previous owners and Banco da Amazonia
(BASA), a financial institution which lent money to the previous
owners who used the property as collateral. In February 2009, BASA
filed a lawsuit against the previous owners of 3R Tocantins aiming
to foreclose on its mortgage and collect BRL 5.8 million (GBP1.5
million).
As at 30 April 2017, the estimated total liability was BRL 19.9
million (GBP4.8 million), including provisions for interest
payable, indexation, court penalties and attorney fees.
During the period, the Directors agreed a settlement in
principle with BASA to relieve the mortgage on the 3R property for
a sum of BRL 5.1 million, plus estimated costs of BRL 1.2 million,
a total of BRL 6.3 million (GBP1.4 million). As a result, a partial
reversal of the provision of BRL 13.6 million (GBP3.3 million) has
been recognised in these financial statements. The mortgage was
settled, on the terms agreed, on 21 December 2017.
The provision forms part of the Brazil disposal group and, at
the period end date, is classified in these financial statements as
a liability held for sale (see note 11).
14. Stated capital
31 October 2017 30 April
Unaudited 2017
Audited
GBP GBP
--------------------------------------------------------- ----------
Balance brought forward and carried forward 2,000,000 2,000,000
--------------------------------------------- ---------- ----------
The total authorised share capital of the Company is 250 million
shares of no par value. On initial placement 104,350,000 shares
were issued at 100 pence each. Shares carry no automatic rights to
fixed income but the Company may declare dividends from time to
time to which shareholders are entitled. Each share is entitled to
one vote at meetings of the Company.
On 22 February 2007, a special resolution was passed by the
Company to reduce the stated capital account from GBP104,350,000 to
GBP2,000,000. Approval was sought from the Royal Court of Jersey
and was granted on 29 June 2007. The balance of GBP102,350,000 was
transferred to a distributable reserve on that date.
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
14. Stated capital (continued)
The Company was granted authority by shareholders on 15 August
2008 to make market purchases of its own shares, an authority which
was renewed on 4 October 2010, 12 October 2011, 8 October 2012, 16
October 2013, 16 October 2014, 30 September 2015 and 21 September
2016.
On 27 January 2015, shareholders approved a resolution to
distribute GBP5,000,000 of cash via a tender offer at 25 pence per
share, resulting in the buy-back and cancellation of 20,000,000
shares.
Movements of shares in issue
For the 6 months For the
ended 6 months
31 October 2017 ended
Unaudited 31 October
2016
Unaudited
Number Number
-------------------------------------------------------- ------------
In issue at 31 October and 30 April fully
paid 82,130,000 82,130,000
------------------------------------------- ----------- ------------
15. Reserves
The movements in the reserves for the Group are shown in the
statement of changes in equity.
Translation reserve
The translation reserve contains exchange differences arising on
consolidation of the Group's foreign operations.
Distributable reserve
On 22 February 2007, the Company reduced its stated capital
account and a balance of GBP102,350,000 was transferred to
distributable reserves. This reserve would be utilised if the
Company wished to purchase its own shares and for the payment of
dividends.
16. Net asset value reconciliation
For the
For the 6 months
For the 6 months year ended ended
ended 30 April 31 October
31 October 2017 2017 2016
Unaudited Audited Unaudited
GBP GBP GBP
------------------------------------------------------ ------------ ------------
Net asset value brought forward 15,671,289 15,547,461 15,547,461
Translation of foreign exchange
differences (820,295) 2,923,654 3,845,903
(Decrease)/increase in the fair
value of investment property
and plantations (2,079,374) (129,919) 71,862
Profit/(loss) on disposal of
assets held for sale 663,006 (8,380) -
Reversal of provisions/(provisions) 3,275,550 (511,377) (321,675)
Net finance costs and exchange
differences - continuing operations (2,117) (5,112) (3,141)
Net finance costs and exchange
differences - discontinued operations (5,375) 1,066 (7,648)
Loss before above items (601,321) (2,146,104) (1,077,842)
Net asset value carried forward 16,101,363 15,671,289 18,054,920
---------------------------------------- ------------ ------------ ------------
17. Related party transactions
During the period the Directors received the following
remuneration in the form of fees from the Company:
For the 6 months For the
ended 6 months
31 October 2017 ended
Unaudited 31 October
2016
Unaudited
GBP GBP
------------------------------ ------------
Tony Gardner-Hillman 20,000 20,000
Svante Adde 12,500 12,500
Roger Lewis 12,500 12,500
45,000 45,000
------------------------------ ------------
Cambium Global Timberland Limited
Notes to the unaudited condensed consolidated interim financial
statements (continued)
For the six months ended 31 October 2017
17. Related party transactions (continued)
Robert Rickman was paid GBP48,000 (2016: GBP48,000) in the
period as remuneration in his role as Operations Manager (see note
4).
At the period end, Directors held the following interests in the
shares of the Company:
31 October 2017 30 April
Unaudited 2017
Audited
Number Number
---------------------- ---------
Svante Adde 160,840 160,840
160,840 160,840
---------------------- ---------
On 21 December 2017, the Company accepted a loan from Peter
Gyllenhammar AB ("PGAB"), the Company's largest shareholder, in the
sum of GBP1,413,874. This loan was provided to assist the Group in
settling the outstanding mortgages over the Group's 3R property.
The interest rate on the loan is 6% for the first 12 months, and
thereafter 8%. PGAB has agreed not to have recourse against the
Group's existing cash balances. There is no specified repayment
date (and consequently no default interest rate) and the Company is
only required to repay the loan or pay interest out of cash flow
from the land and/or timber assets presently held in Brazil which
is surplus to requirements. The loan agreement contains borrower
covenants requiring lender consent for the Company to return to
shareholders in excess of approximately GBP2,000,000 of the cash
presently held, to purchase own shares for more than 12p per share,
to declare or pay any dividend, or to make any significant new
investment.
18. Events after the reporting period
On 21 December 2017, the Company accepted a loan from PGAB, the
Company's largest shareholder, in the sum of GBP1,413,874 (see note
17). On the same date, the Group settled the outstanding mortgages
over the Group's 3R property, which covered a liability between the
previous owners and Banco da Amazonia ("BASA"), a financial
institution which lent money to the previous owners who used the
property as collateral, for the sum of BRL 6.3 million (GBP1.4
million), including costs (see note 13).
There were no other significant events after the period end
which, in the opinion of the Directors, require disclosure in these
financial statements.
Cambium Global Timberland Limited
Directors Registered Office of the Company
Antony R Gardner-Hillman (Chairman) Charter Place
Svante Adde 23/27 Seaton Place
Roger Lewis St Helier
Jersey JE1 1JY
Operations Manager
Robert Rickman Property Valuers
Belsyre Court Holtz Consultoria Ltda
57 Woodstock Road Republica Argentina Av. 452
Oxford OX2 6HJ Curitiba
Agua Verde 80240-210
Sub-Administrator Brazil
Praxis Fund Services Limited
PO Box 296
Sarnia House
St Peter Port
Guernsey GY1 4NA
Administrator and Company Secretary
PraxisIFM Trust Limited
Charter Place
23/27 Seaton Place
St Helier
Jersey JE1 1JY
Auditor
KPMG Channel Islands Limited
37 Esplanade
St Helier
Jersey JE4 8WQ
Registrar, Paying Agent and Transfer Agent
Capita Registrars (Jersey) Limited
PO Box 378
Jersey JE4 0FF
Corporate Broker and Nominated Adviser for AIM (until 5 December 2017)
Panmure Gordon (UK) Limited
1 New Change
London EC2M 9AF
Corporate Broker and Nominated Adviser for AIM (from 5 December 2017)
WH Ireland Limited
24 Martin Lane
London EC4R 0DR
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FLLFLDLFXFBL
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December 22, 2017 06:43 ET (11:43 GMT)
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