FSF buys three Scottish properties for £8.3m and expands its portfolio

LONDON, UK: Foresight Sustainable Forestry Company Plc (FSF), an investment company that focuses on UK forestry and afforestation assets, has bought three properties in Scotland for £8.3 million (including tax and transaction costs). The portfolio of FSF grows by 819 hectares and now covers 12,545 hectares across 68 properties.

The acquisitions, which are 4.4% of the last reported NAV (31 March 2023: £186.6m), were funded by using the Company’s RCF, which has £10.4 million left. The borrowings will be repaid by harvesting timber and selling non-core or other assets. The Company aims to keep interest charges low and have enough cash for ongoing capital expenditure and a strategic cash reserve.

The three investments are good value in the current market and are expected to deliver high returns, considering the higher interest rate environment. These properties are mostly for FSF’s 2024/25 planting program and no more major additions to the portfolio are planned for this year. A summary of the acquisitions is below and more details are in the appendix.

• Toun Hill: This 230-hectare property will create a commercial afforestation scheme of about 166 hectares. It also has a non-core residential property that will be sold later.
• Threepwood Hill: This 59-hectare property will create a commercial afforestation scheme of 43 hectares. It is close (1.5 miles) to Chatto Craig, another afforestation property owned by FSF. These properties have good potential for increasing their value together.
• Carlinden Burn: This 530-hectare property adds to FSF’s cluster of properties in Aberdeenshire and is a mixed afforestation and forestry opportunity, with 216 hectares of afforestation potential and 102 hectares of existing forestry. It also has some non-core residential property and land that will be sold later.

Planting afforestation assets is a key factor for increasing the value of the Company, as shown in the latest NAV update. The Company is on track to plant a large number of afforestation projects during the next winter and complete planting and recognising voluntary carbon on many of its Development Stage and Planting Stage afforestation projects by spring 2024.