TIDMWBI
RNS Number : 0746O
Woodbois Limited
29 September 2023
29(th) September 2023
Woodbois Limited
("Woodbois", the "Group" or the "Company")
Half-year results for the six months to 30 June 2023
(unaudited)
Q3 Update and Board changes
Woodbois, the African focused sustainable forestry,
reforestation, carbon sequestration and timber trading company,
announces its unaudited results for the half year ended 30 June
2023, Q3 update and Board changes.
Non-Executive Chair, Graeme Thomson said
"I am pleased to announce that the Company has progressively and
successfully dealt with the previously announced triple key
challenges it has encountered in the year-to-date. In particular,
the Company settled certain bank and other debts at a substantial
discount following the successful fund raise at the end of June.
With debt now reduced by approximately two-thirds since the end of
2022, Woodbois is now fully focussed on rebooting operations and
identifying and delivering on the optimum strategy to maximise
value from its carbon-credit, trading and forestry activities.
It has been a great pleasure to welcome our two new key
cornerstone investors, Hugh Wade-Jones (21.7% shareholder via CHCH)
and John Scott (10.85% shareholder), who together funded the GBP6m
equity raise in June. Debts of c$2.25m were also converted into
equity by our strategic adviser, Miles Pelham (via Rhino Ventures,
owner of 100% of the non-voting shares). Work is active with our
new partners as together we look to make a step change from the
past in order to re-define and accelerate the delivery of our
strategic goals.
I am optimistic that Q4 onwards will see a marked upturn in
activity as we solidify new relationships, finalise and vigorously
execute on our strategy. This will be spearheaded by our new CEO,
David Rothschild, who has been a director for almost two years and
is an experienced veteran of West African activities. In parallel,
our on-going optimisation of each of the business segments and the
formulation of the future strategy to maximise value is progressing
well. Our AGM will be convened shortly where this will be
presented.
I am aware that 2023 has been a tough one for all those involved
with our Company. We have encountered events that could not have
been foreseen, but we emerge from these challenging times with our
balance-sheet considerably stronger, strategic focus and drive
embedded in our ethos, a streamlined and energetic executive team,
new strong shareholders and partners with whom to deliver on the
outstanding promise which this business and our sectors hold. I
thank you all for your support, patience and perseverance: we know
what we have to do and are working hard to deliver on it."
Highlights
Financial
Cash balance $6.0m as at 30 June 2023 after settling, on
discounted terms, the unexpectedly withdrawn $6.0m bank working
capital facility and $1.0m of other debts
Balance sheet strengthened with Group borrowings reduced to
$5.6m at 30 June 2023, having fallen by $9.5m from $15.1m at 31 Dec
2022
Period end working capital** of $9.0m of which inventory was
$2.1m and excluding borrowings
H1 2023 Revenue $4.8m vs H1 2022 $11.3m
H1 2023 Group gross profit $0.5m vs H1 2021 $2.7m
H1 2023 EBITDAS* $(2.8m) vs H1 2022 $1.1m
H1 Operations
Activity greatly reduced owing to effects of the previously
announced unseasonal Q1 weather, as well as of the unexpected
withdrawal in April of a fully-drawn $6m working capital line
(which was followed by a subsequent capital raise and facility
reorganisation announced on 28 June 2023)
H1 Sawn timber production of approximately 3,700m3 (H1 2022
9,565m3), partly reflecting inventory draw-down
H1 veneer production of approximately 2,000m3 (H1 2022
2,740m3)
Q3 Update
Comprehensive review of business lines is proceeding on time
Trading finance facility talks in the final stages of due
diligence and are expected to close in the near future
Carbon credit documentation re 50,000 hectares in Gabon
progressing well
New government in place following disputed elections and a
popular August coup: activities started to return towards normal
from mid-September
David Rothschild, highly experienced in West African operations,
appointed as CEO
Cash balance currently $3.7m and borrowings and leases of $4.7m
as at 28 September 2023
Q3 sawn timber production of approximately 1,700m3; veneer
production not yet restarted
David Rothschild, CEO, commented:
"2023 has been a very difficult year for the Company thus far,
but having weathered some pretty severe challenges and having
re-built the Company's balance sheet, we now are rebuilding
production, performance and profitability across the Company's
divisions.
We see near-term opportunities to return the business to
positive EBITDAS and profitability in 2024 on the back of modest
capital needs. We will always manage our significant forest
concessions responsibly and are driving to return to optimal
production levels in our factories, as well as to significantly
scale our international trading business. At the same time, we are
initiating our ambitious afforestation and carbon capture project
on savanna land in South West Gabon. We will continually strive to
deliver long-term responsible growth from each of these business
units and to ensure we focus resources on the best opportunities to
create shareholder value."
H1 Summary and Q3 Update
In its previous releases, the Company had announced that the
first half activity was adversely affected by two events. The
shut-down of operations to allow for implementation of re-ordering
of work-flows and processes was brought forward to February-March
since abnormal weather conditions were causing supply chain
disruption between forest and sawmill. The significant increase in
production volumes during 2022 had put pressure on warehouse
storage space and the downtime was also used to reduce inventory
and free up space.
The Company also had to deal with the unexpected withdrawal of
its $6m credit line by a Danish bank by raising new equity and
entering a debt for equity swap, thereby reducing total borrowing
by around two-thirds. The knock-on effect of this was a working
capital shortfall which led to much lower production outputs,
profit and loss and effects on other performance measures. Cash
conservation was paramount whilst a solution was found to this
financing issue and which was announced at the end of June.
In Q3 operations also have had to be restricted in the lead-up
to disputed elections which was followed by a popular military-led
coup in Gabon in late August. The effects of this are now easing as
the country gets back-to-normal: a largely civilian transitional
government was announced by the new President of Gabon and having
ceased all operations upon the initial announcement, the Company is
now in the process of a phased re-start of its forestry activities
with the initial emphasis on sawn timber.
Cash conservation measures have naturally been prioritised due
to these various disruptions, including minimising operational
activities and expense, both of which are reflected in the
financial results for the six months to 30 June 2023 (which are set
out below). As management brings the business back on-line,
emphasis is now on the planning required for a return to
operational profitability and resumption of growth in 2024, with
the benefit of a significantly reduced debt burden, and on
minimising operating losses for 2023 caused by the aforementioned
disruptions. Customers have remained supportive in spite of delays
to our delivery schedules and despite the weakening
macro-environment we continue to experience robust levels of demand
for our products due to the global reach of our sales team.
The newly installed government in Gabon has emphasised the need
to distribute the country's wealth more evenly than was previously
the case, and is making efforts to reassure both local and
international businesses of the country's future stability as it
seeks to generate additional employment opportunities for its
youthful and growing population.
This should be positive for the Company as we seek to engage
with the new government and commence our initial large-scale 50,000
hectares afforestation project with all of the resulting long-term
benefits that it offers to Gabon. The detailed documentation is
being prepared and, although the change in government will cause
some delays, we expect to be able to conclude this with the
government as soon-as-practicable.
Directorate changes
David Rothschild has today been appointed as CEO. David has been
a Non-Executive Director for almost two years and has an intimate
knowledge of the Group.
David's experience in managing large-scale agricultural projects
in Africa, along with his McKinsey background, means that he brings
a strong practical and analytical approach to the role. His French
language skills are of great benefit in Francophone Africa and the
extremely high standards that he sets for himself will need to be
matched throughout the organisation.
As previously disclosed, after seven years with the Company,
Paul Dolan has now stepped-down as CEO and will be a
non-independent non-executive Director until an independent
replacement is found. The search for two independent non-executive
directors is progressing.
On behalf of the shareholders, the Board wishes to record our
thanks to Paul for his unstinting efforts on behalf of the Company
and for supporting and inspiring members of staff at all levels
throughout his tenure. Paul will also act as a consultant to the
Company until at least the end of 2023.
Also, after six years as a Deputy Chair, Hadi Ghossein is
stepping down from the Board and as Head of Gabon at the start of
November 2023. We would like to thank Hadi for his significant
contribution throughout his time at the Company, most notably the
increased scale of our forest concessions and the development of
both of our factories in Mouila, Gabon. Hadi will continue to act
as an advisor to the Board from within Gabon and remains a
shareholder. David Rothschild will assume his responsibilities in
Gabon until the comprehensive review is completed.
Enquiries
Woodbois Limited
Graeme Thomson, Non-Executive Chair
David Rothschild, CEO
Carnel Geddes, CFO +44 (0) 20 7099 1940
Canaccord Genuity, Nominated Adviser and Joint Broker
Henry Fitzgerald O'Connor, Harry Pardoe, Gordon Hamilton +44 (0) 20 7523 8000
Novum Securities, Joint Broker
Colin Rowbury, Jon Bellis +44 (0) 20 7399 9427
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 which forms part of UK
law by virtue of the European Union (Withdrawal) Act 2018
("MAR").
*Non-IFRS measures
The Company uses certain measures to assess the financial
performance of the company. These terms may be defined as "non-IFRS
measures" as they exclude amounts that are included in, or include
amounts that are excluded from, the most directly comparable
measure calculated and presented in accordance with IFRS. They also
may not be calculated using financial measures that are in
accordance with IFRS. These non-IFRS measures include the Company's
EBITDAS.
The Company uses such measures to measure and monitor
performance and liquidity, in presentations to the Board and as a
basis for strategic planning and forecasting. The directors believe
that these and similar measures are used widely by market
participants, stakeholders, and other interested parties as
supplemental measures of performance and liquidity.
The non-IFRS measures may not be directly comparable to other
similarly titled measures used by other companies and may have
limited use as an analytical tool. This should not be considered in
isolation or as a substitute for analysis of the Company's
operating results as reported under IFRS.
The Company does not regard these non-IFRS measures as a
substitute for, or superior to, the equivalent measures calculated
and presented in accordance with IFRS or those calculated using
financial measures that are calculated in accordance with IFRS.
** Working capital comprises cash and cash equivalents, trade
& other receivables, inventory less trade & other payable
and provisions
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the six months ended 30 June 2023
Six months
to 30
June
Six months Year to
to 30 31 December
2023 June 2022
Notes 2022
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
------------------------------------------ -------- -------------- -------------- -------------
Turnover 4,853 11,318 23,108
Cost of sales (4,363) (8,665) (17,244)
------------------------------------------ -------- -------------- -------------- -------------
Gross profit 490 2,653 5,864
------------------------------------------ -------- -------------- -------------- -------------
Other income 14 1,399 - -
Operating costs (3,496) (1,576) (4,166)
Administrative expenses (490) (750) (1,288)
Depreciation (972) (137) (222)
Share based payment expense 37 (175) (418)
(Loss)/gain on fair value of biological
assets - - (156,983)
------------------------------------------ -------- -------------- -------------- -------------
Operating profit/(loss) (3,032) 15 (157,213)
Reclassification of Foreign Currency
Translation Reserve on deregistered
entities - - (1,529)
Foreign exchange gain/(loss) 317 (63) 904
Finance costs 4 (636) (441) (1,029)
------------------------------------------ -------- -------------- -------------- -------------
(Loss)/profit before tax (3,351) (489) (158,867)
Taxation 5 (13) (44) 47,676
------------------------------------------ -------- -------------- -------------- -------------
(Loss)/profit for the period (3,364) (533) (111,191)
------------------------------------------ -------- -------------- -------------- -------------
Other comprehensive income:
Items that will not be reclassified
to profit or loss
Revaluation of land and buildings,
net of tax - - -
Items that may be reclassified
subsequently to profit or loss
Currency translation differences (1,448) (2,053) (1,612)
Reclassification of FCTR [1] on
deregistered entities 15 - - 1,529
Total comprehensive (loss)/income
for the period (4,812) (2,586) (111,274)
------------------------------------------ -------- -------------- -------------- -------------
Basic (loss)/earnings per share
(cents) 6 (0.13) (0.02) (4.47)
------------------------------------------ -------- -------------- -------------- -------------
Diluted (loss)/earnings per share
(cents) (0.13) (0.02) (4.47)
------------------------------------------ -------- -------------- -------------- -------------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Notes 30 June 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
------------------------------- -------------- -------------- -------------- -------------
ASSETS
Non-current assets
Biological assets 179,815 336,798 179,815
Property, plant and equipment 31,339 29,293 32,226
------------------------------- -------------- -------------- -------------- -------------
Total non-current assets 211,154 366,091 212,041
------------------------------- -------------- -------------- -------------- -------------
Current assets
Trade and other receivables 7 5,016 4,777 6,330
Inventory 2,074 6,382 4,606
Cash and cash equivalents 6,088 2,091 2,296
------------------------------- -------------- -------------- -------------- -------------
Total current assets 13,178 13,250 13,232
TOTAL ASSETS 224,332 379,341 225,273
------------------------------- -------------- -------------- -------------- -------------
LIABILITIES
Non-current liabilities
Borrowings 9 (3,201) (5,208) (5,665)
Deferred tax 5 (58,680) (106,475) (58,675)
------------------------------- -------------- -------------- -------------- -------------
Total non-current liabilities (61,881) (111,683) (64,340)
------------------------------- -------------- -------------- -------------- -------------
Current liabilities
Trade and other payables 8 (4,007) (3,351) (3,547)
Borrowings 9 (1,560) (7,162) (8,603)
Provisions (130) (130) (130)
Convertible bonds - host
liability 10 (763) (712) (748)
------------------------------- -------------- -------------- -------------- -------------
Total current liabilities (6,460) (11,355) (13,028)
------------------------------- -------------- -------------- -------------- -------------
TOTAL LIABILITIES (68,341) (123,038) (77,368)
------------------------------- ----- ----------------------- -------------- -------------
NET ASSETS 155,991 256,303 147,905
------------------------------- ----- ----------------------- -------------- -------------
EQUITY
Share capital 11 35,799 32,601 32,625
Share premium 12 75,310 65,475 65,549
Convertible bonds - equity
component 10 24 24 24
Foreign exchange reserve (9,854) (10,376) (8,406)
Share based payment reserve 765 610 802
Revaluation reserve 6,254 6,254 6,254
Retained earnings 47,693 161,715 51,057
------------------------------- ----- ----------------------- -------------- -------------
TOTAL EQUITY 155,991 256,303 147,905
------------------------------- ----- ----------------------- -------------- -------------
Approved by the board and authorised for issue on 28 September
2023.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2023
Share
Foreign based
Share Share Convertible exchange payment Revaluation Retained Total
capital premium bonds reserve reserve reserve Earnings equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
--------------- ---------- ---------- ------------- --------- --------- ------------- ---------- -------------
Balance at 1
January 2022 32,528 65,254 52 (8,323) 435 6,254 162,248 258,447
Loss for the
period - - - - - - (533) (533)
Other
comprehensive
income - - - (2,053) - - - (2,053)
Total
comprehensive
loss for the
period - - - (2,053) - - (533) (2,586)
Transactions
with owners:
Redemption of
convertible
bonds (note
10) 73 220 (28) - - - - 265
Share based
payment
expense - - - - 175 - - 175
Balance at 30
June 2022 32,601 65,474 24 (10,376) 610 6,254 161,715 256,302
Loss for the
period - - - - - - (110,658) (110,658)
Other
comprehensive
income - - - 1,970 - - - 1,970
Total
comprehensive
loss for the
period - - - 1,970 - - (110,658) (108,688)
Transactions
with owners:
Issue of
ordinary
shares 24 75 - - (51) - - 48
Share based
payment
expense - - - - 243 - - 243
Balance at 31
December 2022 32,625 65,549 24 (8,406) 802 6,254 51,057 147,904
Loss for the
period - - - - - - (3,364) (3,364)
Other
comprehensive
income - - - (1,448) - - - (1,448)
Total
comprehensive
loss for the
period - - - (1,448) - - (3,364) (4,811)
Transactions
with owners:
Issue of
ordinary
shares 3,174 9,761 - - - - - 12,935
Share based
payment
expense - - - - (37) - - (37)
Balance at 30
June 2023 35,799 75,310 24 (9,854) 765 6,254 47,693 155,991
--------------- ---------- ---------- ------------- --------- --------- ------------- ---------- -------------
CONDENSED CONSOLIDATED STATEMENT CASH FLOWS
For the six months ended 30 June 2023
Six months
to 30 June
Six months Year to
to 30 June 31 December
2023 2022 2022
(Unaudited) (Unaudited) (Audited)
Cash flows from operating activities $'000 $'000 $'000
------------------------------------------- ---- -------------- -------------- -------------
Loss before taxation (3,351) (489) (158,867)
Adjustment for:
Foreign exchange (317) 63 (904)
Reclassification of FCTR on deregistered
entities - - 1,529
Depreciation of property, plant
and equipment 1,364 976 2,181
Fair value adjustment of biological
asset - - 156,983
Transaction costs deducted from
equity (638) - -
Share based payment expense (37) 175 418
Finance costs 636 441 1,029
Accrued expense 91 222 322
Other income (1,399) - -
Decrease/(increase) in trade and
other receivables 1,314 (161) (632)
Increase/(decrease) in trade and
other payables 460 (768) (1,714)
Decrease/(increase) in inventory 2,532 (223) 1,553
Cash inflow from operations 655 236 1,898
------------------------------------------- ---- -------------- -------------- -------------
Income taxes paid (2) (8) (2)
Finance cost paid (253) (306) (759)
Net cash inflow/(outflow) from
operating activities 400 (78) 1,137
Cash flows from investing activities
Expenditure on property, plant
and equipment (477) (2,267) (3,907)
Settlement of deferred consideration - (250) (250)
Investment in acquired subsidiary - (214) (341)
Net cash outflow from investing
activities (477) (2,731) (4,498)
------------------------------------------- ---- -------------- -------------- -------------
Cash flows from financing activities
Proceeds from loans and borrowings 180 5,300 6,193
Repayment of loans and borrowings (7,284) (1,287) (1,470)
Proceeds from the issue of ordinary
shares 10,973 - 47
Net cash inflow from financing
activities 3,869 4,013 4,770
------------------------------------------- ---- -------------- -------------- -------------
Net increase in cash and cash
equivalents 3,792 1,204 1,409
Cash and cash equivalents at the
start of period 2,296 887 887
------------------------------------------- ---- -------------- -------------- -------------
Cash and cash equivalents at the
end of the period 6,088 2,091 2,296
------------------------------------------- ---- -------------- -------------- -------------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2023
1. BASIS OF PREPARATION
The condensed consolidated interim financial statements
('interim financial statements') for the six months ended 30 June
2023 have been prepared in accordance with the requirements of the
AIM Rules for Companies. As permitted, the Group has chosen not to
adopt IAS 34 "Interim Financial Statements" in preparing this
interim financial information. The interim financial statements
should be read in conjunction with the annual financial statements
for the year ended 31 December 2022, which have been prepared in
accordance with international accounting standards in accordance
with the requirements of the Companies (Guernsey) Law 2008
applicable to Companies reporting under IFRS as adopted by the
United Kingdom (UK). The interim financial statements have been
prepared under the historical cost convention except for biological
assets and certain financial assets and liabilities, which have
been measured at fair value.
The interim financial statements of Woodbois Limited are
unaudited financial statements for the six months ended 30 June
2023. These include unaudited comparatives for the six-month ended
30 June 2022 together with audited comparatives for the year to 31
December 2022. The condensed financial statements do not constitute
statutory accounts, as defined under section 244 of the Companies
(Guernsey) Law 2008. The statutory accounts for the period to 31
December 2022, which were approved by the Board of Directors on 9
June 2023, have been reported on by the Group's auditors and have
been delivered to the Guernsey Registrar of Companies. The report
of the auditors on those financial statements was unqualified, and
contained a material uncertainty in relation to going concern owing
to the c$6m working capital facility termination event that
occurred in April 2023 and the fact that, at the time that the
financial statements were issued, the Company had not yet completed
its refinancing and restructuring which the Company announced it
had closed on 28 July 2023. See note 11.
The accounting policies applied in preparing these financial
statements are in terms of IFRS and are consistent with those
applied in the previous annual financial statements for the year
ended 31 December 2022.
The interim financial statements for the six months ended 30
June 2023 were approved by the Board of Directors on 28 September
2023.
Going Concern:
The interim financial statements have been prepared assuming
that the Group will continue as a going concern in accordance with
the recognition and measurement criteria of IFRS.
Under this assumption, an entity is ordinarily viewed as
continuing in business for the foreseeable future with neither the
intention nor necessity of liquidation, ceasing trading or seeking
protection from creditors for at least 12 months from the date of
the signing of the financial statements.
An assessment of going concern is made by the Directors at the
date they Directors approve the interim financial statements,
taking into account the relevant facts and circumstances at that
date including:
-- The current state of the Group's life cycle;
-- Review of profit and cash flow forecasts;
-- Review of actual results against forecast;
-- Timing of cash flows and expected availability of capital
including trade finance;
-- Financial or operational risks; and
--The current impact of the coup in Gabon in August 2023
The Directors have a reasonable expectation that the Group has
or will have adequate resources to continue in operational
existence for the foreseeable future, being 12 months from the date
of approval of these interim financial statements and have
therefore adopted the going concern basis of preparation in the
interim financial statements.
2. CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT
The preparation of financial statements in conformity with IFRS
requires management to make estimates and assumptions concerning
the future. It also requires management to exercise judgment in
applying the Company's accounting policies and the reported amounts
of assets and liabilities, revenue and expenses, and related
disclosures.
Estimates and judgments are continually evaluated and are based
on current facts, historical experience and other factors,
including expectations of future events that are believed are
reasonable under the circumstances. Accounting estimates will, by
definition, seldom equal the actual results.
Except for the additional disclosure as noted above, 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 described in the last annual report.
3. SEGMENT REPORTING
Segmental information is presented on the basis of the
information provided to the Chief Operating Decision Maker
("CODM"), which is the Executive Board.
The Group is currently focused on Forestry, Timber Trading and
Carbon Solutions. These are the Group's primary reporting segments,
operating in Gabon, Mozambique, Denmark, London, Guernsey and head
operating office in Mauritius. Certain support services are
performed in the UK.
The Group's CEO and CFO review the internal management reports
of each division at least weekly, and the Board monthly.
There are varying levels of integration between the Forestry and
Trading segments. This integration includes transfers of sawn
timber and veneer, respectively. Inter-segment pricing is
determined on an arm's length basis.
Information relating to each reportable segment is set out
below. Segment profit/(loss) before tax is used to measure
performance, because management believes that this information is
the most relevant in evaluating the results of the respective
segments relative to other entities that operate in the same
industry. All amounts are disclosed after taking into account any
intra-segment and intra-group eliminations.
The following table shows the segment analysis of the Group's
loss before tax for the six months period and net assets as at 30
June 2023:
Forestry Trading Carbon Solutions Total
$000 $000 $000 $000
--------------------------------- --------- -------- ----------------- ---------
INCOME STATEMENT
Turnover 4,456 397 - 4,853
Cost of Sales (3,960) (403) - (4,363)
--------------------------------- --------- -------- ----------------- ---------
Gross profit 496 (6) - 490
--------------------------------- --------- -------- ----------------- ---------
Other income - 1,399 - 1,399
Operating costs (2,662) (641) (193) (3,496)
Administrative expenses (138) (176) (176) (490)
Depreciation (909) (63) - (972)
Share based payment expense 15 11 11 37
Segment operating (loss)/profit (3,198) 524 (358) (3,032)
Foreign exchange 291 26 - 317
Finance costs (351) (285) - (636)
--------------------------------- --------- -------- ----------------- ---------
(Loss)/profit before taxation (3,258) 265 (358) (3,351)
Taxation expense (13) - - (13)
--------------------------------- --------- -------- ----------------- ---------
(Loss)/profit for the period (3,271) 265 (358) (3,364)
--------------------------------- --------- -------- ----------------- ---------
NET ASSETS
Assets: 218,024 6,308 - 224,332
Liabilities: (4,957) (4,704) - (9,661)
Deferred tax liability (58,680) - - (58,680)
Net assets 154,387 1,604 - 155,991
--------------------------------- --------- -------- ----------------- ---------
The following table shows the segment analysis of the Group's
loss before tax for the six months to and net assets at 30 June
2022:
Forestry Trading Carbon Solutions Total
$000 $000 $000 $000
--------------------------------- ---------- --------- ----------------- ----------
INCOME STATEMENT
Turnover 5,553 5,765 - 11,318
Cost of Sales (3,757) (4,908) - (8,665)
--------------------------------- ---------- --------- ----------------- ----------
Gross profit 1,796 857 - 2,653
--------------------------------- ---------- --------- ----------------- ----------
Operating costs (614) (585) (377) (1,576)
Administrative expenses (211) (182) (357) (750)
Depreciation (137) - - (137)
Share based payment expense (44) (44) (87) (175)
Segment operating profit/(loss) 790 46 (821) 15
--------------------------------- ---------- --------- ----------------- ----------
Foreign exchange (218) 155 - (63)
Finance costs (148) (293) - (441)
--------------------------------- ---------- --------- ----------------- ----------
Profit/(loss) before taxation 424 (92) (821) (489)
Taxation expense (44) - - (44)
--------------------------------- ---------- --------- ----------------- ----------
Profit/(loss) for the period 380 (92) (821) (533)
--------------------------------- ---------- --------- ----------------- ----------
NET ASSETS
Assets: 369,694 9,647 - 379,341
Liabilities: (4,920) (11,643) - (16,563)
Deferred tax liability (106,475) - - (106,475)
--------------------------------- ---------- --------- ----------------- ----------
Net assets 258,260 (1,996) - 256,303
--------------------------------- ---------- --------- ----------------- ----------
4. FINANCE COST
Year to
31 December
6 months to 30 June 2023 6 months to 30 June 2022 2022
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
------------------------------------------------ ------------------------- ------------------------- --------------
Interest on bank facilities and finance leases 390 306 741
Interest on trade finance facilities 74 71 -
Working capital facility interest 128 - 206
Interest on convertible bonds 16 48 82
Other finance costs 28 16 -
------------------------------------------------ ------------------------- ------------------------- --------------
Total 636 441 1,029
------------------------------------------------ ------------------------- ------------------------- --------------
5. TAXATION
The prevailing tax rates in the geographies here the Group
operates range between 3% and 32%. A rate of 19% best represents
the weighted average tax rate experienced by the Group. As at 31
December 2022, the Group had estimated losses of $26 million (2021:
$28 million) available to carry forward against future taxable
profits. No deferred tax asset has been raised on these estimated
losses.
The Group has recognised a net deferred tax liability of $58.7
million at 30 June 2023 (30 June 2022: $106.5 million, 31 December
2022: $58.7 million) and which mainly arose on the revaluation of
biological assets and owner occupied land and buildings. This would
only be payable on the sale of these assets at their book
value.
6. EARNINGS PER SHARE
6 months to 30 June 2023 6 months to 30 June 2022
(Unaudited) (Unaudited)
$'000 $'000
Loss attributable to equity shareholders (3,364) (533)
Weighted average number of ordinary shares in issue ('000) 2,651,565 2,482,464
Basic and diluted loss per share (cents) (0.13) (0.02)
---------------------------------------------------------------- ------------------------- -------------------------
The Company has incurred a loss in the six-month period to 30
June 2023, and therefore the diluted earnings per share is the same
as the basic loss per share as the loss has an anti-dilutive
effect.
Reconciliation of shares in issue to weighted average number of
ordinary shares:
6 months 30 June 2023 6 months 30 June 2022
(Unaudited) (Unaudited)
$'000 $'000
----------------------------------------------------------------- --- ---------------------- ----------------------
Shares in issue at beginning of period 2,489,989 2,482,117
Shares issued during the period weighted for period in issue (note
11) 145,836 347
Weighted average number of ordinary shares in issue for the period 2,635,825 2,482,464
---------------------------------------------------------------------- ---------------------- ----------------------
7. TRADE AND OTHER RECEIVABLES
30 June 31 December
2023 30 June 2022 2022
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
------------------------ ------------- ------------- ------------
Trade receivables 3,571 2,632 4,561
Other receivables 12 12 12
Deposits 123 127 128
Current tax receivable 15 15 16
VAT receivable 286 666 174
Prepayments 1,009 1,325 1,439
------------------------ ------------- ------------- ------------
Total 5,016 4,777 6,330
------------------------ ------------- ------------- ------------
The Directors consider that the carrying amount of trade and
other receivables approximates to their fair value.
8. TRADE AND OTHER PAYABLES
30 June 31 December
2023 30 June 2022 2022
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
--------------------------------------------- ------------- ------------- ------------
Trade payables 2,288 1,106 1,213
Contract liabilities (prepayments received) 508 872 892
Accruals 493 766 309
Current tax payable 379 105 190
Other payables 326 459 920
Debt due to concession holders 13 43 23
--------------------------------------------- ------------- ------------- ------------
Total 4,007 3,351 3,547
--------------------------------------------- ------------- ------------- ------------
The Directors consider that the carrying amount of trade and
other payables approximates to their fair value.
9. BORROWINGS
30 June 31 December
2022 2022
30 June 2023 (Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
-------------------------- -------------------------- ------------- ------------
Non-current liabilities
-------------------------- -------------------------- ------------- ------------
Business loans 528 1,269 1,757
Working capital facility 2,673 3,939 3,908
-------------------------- -------------------------- ------------- ------------
3,201 5,208 5,665
-------------------------- -------------------------- ------------- ------------
Current liabilities
-------------------------- -------------------------- ------------- ------------
Business loans 770 545 888
Bank facility 390 233 196
Working capital facility 400 6,384 7,519
-------------------------- -------------------------- ------------- ------------
1,560 7,162 8,603
-------------------------- -------------------------- ------------- ------------
Total borrowings 4,761 12,370 14,268
-------------------------- -------------------------- ------------- ------------
The decrease in borrowings in the six months to 30 June 2023 is
mainly due to the following:
-- Settlement of $6m revolving working capital facility at a
discount (see note 15).
-- Conversion of $2.25m working capital loan owing to Rhino
Ventures to non-voting equity (see note 11).
-- Settlement of short term, $1m working capital facility owed
to Lombard Odier (see note 14).
10. CONVERTIBLE BONDS
31 December
30 June 2023 30 June 2022 2022
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
---------------------------------------- ------------- ------------- ------------
Convertible bonds: Liability component 739 712 748
Convertible bonds: Equity component 24 24 24
---------------------------------------- ------------- ------------- ------------
Total 763 736 772
---------------------------------------- ------------- ------------- ------------
Convertible bond liability 477 477 477
Interest accrued 262 235 271
---------------------------------------- ------------- ------------- ------------
Total 739 712 748
---------------------------------------- ------------- ------------- ------------
During the first half of 2022, $293,591 of the 2023 0%
Convertible Bonds were converted into 5,871,820 Voting Ordinary
Shares. The Convertible Bond terms specify conversion is at an
exchange rate of GBP:$1.25 and 4p per Ordinary Share. The Bonds
were repaid on 5 July 2023.
11. SHARE CAPITAL
Number $'000
-------------------------------------- -------------- -----------
Authorised:
Ordinary shares of 0.01p pence each* Unlimited Unlimited*
-------------------------------------- -------------- -----------
Allotted, issued and fully paid:
Ordinary shares of 0.01p each*
At 1 January 2022 2,482,117,053 32,528
Shares issued (note 10) 7,871,820 97
-------------------------------------- -------------- -----------
At 31 December 2022 2,489,988,873 32,625
Issued in the period (note 10) 1,800,000,000 3,174
-------------------------------------- -------------- -----------
At 30 June 2023 4,289,988,873 35,799
-------------------------------------- -------------- -----------
* See note below: nominal value of ordinary shares reduced from
1.0p in June 2023 to 0.01p and a deferred share of 0.99p. The
deferred shares were redeemed at no cost by the Company.
Balances classified as share capital represent the nominal value
on issue of the Company's equity share capital, comprising ordinary
shares of 1p each.
The total number of Ordinary Shares in issue as at the date of
this report is 4,289,988,873, which consists of 3,685,850,726
Voting Ordinary Shares, 19,138,147 Treasury Shares and 585,000,000
Non-Voting Ordinary Shares.
TREASURY SHARES
In January 2023 following a final adjustment in relation to the
2017 purchase of Woodbois International Aps, the Company received
19,138,147 ordinary voting shares which have been taken into
Treasury.
ORDINARY SHARES
On 13 March 2023 the Company announced that gross proceeds of
c$3.6m had been raised by way of a conditional placing of
250,000,000 new ordinary shares of 1p each in the Company at a
price of 1.2 pence per New Ordinary Share.
On 30 May 2023, the Company announced that, as a result of the
unexpected termination of a fully drawn c$6.0m bank facility with
Sydbank (see note 15), who had also unilaterally offset c$3.1m of
the Company's cash in part repayment of the facility, the Company's
share price had fallen below its then nominal value of 1p. As the
Company's Articles of Association prohibit the issuance of shares
at a discount to nominal value, there was a need to re-designate
the nominal value. The directors convened a General Meeting for the
purpose of proposing and voting on resolutions to reduce the
nominal value of the ordinary shares to 0.01p and deferred share of
0.99p, but which did not change the number of ordinary shares in
issue, as well as for the renewal and widening of the waiver of
pre-emption rights to enable the Company to meet these exceptional
circumstances.
On 16 June 2023 at the General Meeting, shareholders voted and
all resolutions passed with >97% of votes in favour. The
deferred shares were subsequently redeemed at nil cost by the
Company.
On 28 June 2023, the Company announced that it has raised GBP6
million by way of a subscription for new ordinary shares at a price
of 0.5 pence (the "Subscription"). This satisfied the cash
shortfall created when the $6m working capital facility was
withdrawn (see note 15), allowing the Company the flexibility to
discharge its remaining obligations to the bank, whilst also
benefiting from an agreed financial incentive for such
repayment.
The Subscription formed part of a wider financing package,
including a debt-for-equity swap of GBP1.75m and including the
issuance of warrants:
-- Subscription for GBP6 million:
A Subscription for 1,200,000,000 new ordinary shares of 0.01
pence each in the Company ("Ordinary Shares") (the "Subscription
Shares"), raising GBP6 million, at an issue price of 0.5 pence per
Ordinary Share.
800,000,000 Subscription Shares were subscribed for by CHCH
Ventures FZ-LLP and 400,000,000 Subscription Shares were purchased
by John Scott (together the "Subscribers").
-- Conversion of existing debt to non-voting ordinary shares and
issuance of a convertible loan
Woodbois had a loan outstanding with Rhino Ventures Limited
("RVL") (see note 9), with a balance outstanding of $2.25 million
(inclusive of all accrued interest). Under the terms of a Deed of
Capitalisation, the loan was capitalised, at the price of 0.5 pence
per share, into 350,000,000 Non-Voting Ordinary Shares (the
"Non-Voting Conversion Shares") and a redemption payment will be
made of GBP25,590.
The Company has also entered into a Commission Agreement with
RVL, in respect of Miles Pelham's assistance in procuring the
Subscription, under which RVL can elect to receive 60,000,000 new
Voting Ordinary Shares (the "Commission Shares") and, subject to
the passing of resolutions at a Company General Meeting, to grant
Directors further authority to allot new shares on a non
pre-emptive basis (the "Commission Fee"). The Commission Fee
equates to a 5% commission on the funds raised through the
Subscription. Should the resolutions allowing the Commissions
Shares to be issued not be approved then the Commission Fee will be
settled in cash.
-- Issuance of Warrants
The Company issued 1,200,000,000 share warrants to the
Subscribers on a 1 for 1 basis, in respect of the Subscription
Shares. Each Warrant gives the holder the right to subscribe for
one new Voting Ordinary Share at a price of 1 pence per Voting
Ordinary Share, at any time until 29 June 2025 (the
"Warrants").
Under the terms of the Deed of Capitalisation and conditional on
the passing of certain resolutions at a Company General Meetings as
described above, RVL will also be issued with 350,000,000 Warrants
on a 1 for 1 basis, in respect of the 350,000,000 Non Voting
Conversion Shares. These Warrants are over Non-Voting Ordinary
Shares in Woodbois. Subject to the passing of those same
resolutions, RVL can also elect under the Commission Agreement to
receive 60,000,000 Warrants over Voting Ordinary Shares in the
Company.
12. SHARE PREMIUM
$'000
-------------------------------- -------
At 1 January 2022 65,254
Issued in the period 295
--------------------------------- -------
At 31 December 2022 65,549
Issued in the period (note 11) 9,761
--------------------------------- -------
At 30 June 2023 75,310
--------------------------------- -------
Balances classified as share premium include the net proceeds in
excess of the nominal share capital on issue of the Company's
equity share capital.
13. RELATED PARTY TRANSACTIONS
As set out in note 9 above, the short-term facility owed to
Lombard Odier of $1.0m was settled in June 2023.
As noted above, the unsecured facility from RVL was converted to
equity (see notes 9 and 11).
In June 2023 a commission agreement (see note 11) was entered
into between the Company and RVL.
14. OTHER INCOME
Other income represents settlement gains realised on termination
of banking and other facilities.
On 19 April 2023, the Company announced that Woodgroup Aps, a
wholly owned subsidiary of the Company, had received a notice from
a Danish bank, that it was terminating a $6 million debt facility.
The $6m facility was fully utilised and had an ancillary account
with a cash balance of $3.1 million. The bank had a floating charge
against the assets of Woodgroup ApS and have offset this $3.1
million in partial repayment of the facility. The reason cited by
the bank for terminating the facility was that Woodgroup ApS
generated a loss in Q1 2023. The bank believed that, as a
consequence, the circumstances of Woodgroup ApS had changed
significantly to their detriment. Management did not agree with the
bank's conclusion and, whilst acknowledging the poor performance in
Q1, believed the Company had been well placed to deliver a very
positive performance for the remainder of the year. As reported by
the Company on 6 June 2023, the Company had reached an agreement
with the bank to settle the balance by no later than 29 December
2023.
The Company settled the outstanding balance on 28 June 2023,
thereby taking advantage of an early settlement incentive which
gave rise to c$1.4m of other income. All security arrangements were
cancelled upon settlement.
As noted above, the Lombard Odier loan was also settled in the
period.
15. Reclassification of foreign currency translation differences on deregistered entities
The Group formally completed the deregistration of three dormant
entities located in Tanzania. These three entities include Wami
Agriculture Co. Limited, Magole Agriculture Limited and Milama
processing Company Limited. As required by IFRS, the Group
reclassified the foreign currency translation differences that
arose on historical consolidation of those entities from the FCTR
(equity) to profit or loss.
16. EVENTS OCCURING AFTER THE REPORTING DATE
The convertible bonds (see note 10) were repaid in July
2023.
On 30 August 2023 there was a military coup in Gabon. Operations
in-country are increasingly able to revert to normal and a new
government has been formed.
17. INTERIM FINANCIAL STATEMENTS
A copy of this interim report as well as the full Annual Report
for the year ended 31 December 2022 can be found on the Company's
website at www.woodbois.com .
[1] Foreign Currency Translation Reserve
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IR FLFVDAIITFIV
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