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Hi all. Thanks for previous posts which I’ve found helpful. I’m a private prospective investor who knows a little about forests but little about FSF. Some points I’d appreciate thoughts on:
1. How do you view the board member share purchases in December - promising sign or desperate effort to pull up share price?
2. The company suggests its share price decline is in line with other investment trust declines and not anomalous?
3. They use a backward looking valuation not a DCF approach. Is this conservative or optimistic? I wonder what NAV a DCF would give?
4. Their carbon income projections seem partly dependent on them retaining future carbon rights from timberland sales. But I note this concept of separated carbon rights is unproven, for FSF at least.
5. I note you’ve suggested a timetable for monetising assets will be helpful. It would be nice to know when they expect their first sale or timber harvest to occur.
6. Some Scottish plantation managers have been criticised for spruce monoculture’s adverse impacts on biodiversity and communities. From a biodiversity perspective I’d like to see at least 20% ideally 33% native broadleaf. Also preferable for the broadleaf areas to be for high value long term timber - as well as nature.
7. I note they have only £3m cash so future acquisitions seem challenging given expensive debt facility. They could issue more shares but previous experiences I had with dilution on another stock impacted my returns substantially.
8. There have been promising outcomes from latest COP which appear to have been reflected in EU ETS prices.
I realise these are points which the company need to answer but I’d appreciate any insights on these, or additional questions people may have!
Cheers
Just watched the year end presentation. They are commited to addressing the share price. Also positive on next two years planting. No plans to sell carbon credits until 2030 onwards.
As previously stated , a slow burn. Although, now could be the low?
GLA.
Tygra,
Agreed it's still early to dive in deep with FSF, bearing in mind the direction of the SP graph. Hopefully, it will bottom out soon. I'll look out for the RNS re Christmas trees!
Damonhill
No probs mate, I hope it starts going the right way for us soon.
All the best
Telf
Thanks, no I didn't see that so nice one for pointing it out. Agreed, we know what they are doing and that naturally trees take time to grow, but all in all the management are performing incredibly poorly. The money now spent to acquire all of the forests and new plots is gone (or most of it) so at some point the fund will need to start earning, or it's nothing more than a jam tomorrow investment and as the UK stock market shows, tomorrow never comes for many.
I'll have a listen to that later, but for now, I would be more inclined to think the price 'might' flirt with the £100 million market capitalisation level so I'm holding off from putting cash back in here. I want it to do well because I like trees. I also like the prices that can be achieved for UK hardwood timber (some of the established forests can provide good quality building standard timber, so I would like to see a timescaled plan to monetise portions of what we already own).
A lot of self builders in the UK prefer timber framed houses and panelled houses. Good quality timber that doesn't have to be shipped from Germany, Denmark, Norway etc would be very welcome in the self build community, particularly if it's UK sourced. I would build a timber framed panelled house myself if I had the cash (and plot) but alas, the reddies aren't there just yet.
Thanks again for the link, I'll throw £500 in here at the end of the month, maybe an RNS will land saying we're now in the Christmas Tree business.
All the best
Tygra
Thank you for your insite
Regards DH
Tygra,
Not sure if you've listened to this recent UK Investor Magazine interview with a manager of the trust:
https://ukinvestormagazine.co.uk/capital-appreciation-a-compelling-discount-and-uncorrelated-diversification-with-foresight-sustainable-forestry/
It's about half an hour long, so they do cover quite a lot. He does indicate how revenue might come in from forests after being planted for a couple of years. As I recall, he doesn't say whether those funds will be reinvested or distributed as dividends, or both!
Damonhill
I can only assume it's people selling their shares for any number of reasons such as seeing better growth elsewhere or they basically just want out. The fund seemed very happy to RNS splashing cash here there and everywhere buying up plots and woodlands, but there's no indication of how the revenue is going to be generated anytime soon.
Sticking trees in the ground means it's many years before they can be used for sellable timber, and the plots already purchased don't seem to be front and centre regarding communication of how they are to be monetised. All in all, it appears to be yet another 'Eco virtue signalling' fund that offers nothing but promises of long dated future revenues, while spraying toxic soil destructive chemicals all over their plots, just like the government and councils do in our cities.
It is on its way to dropping below the £100 million market capitalisation and if/when that happens, I suspect further sells will occur. The management are completely silent, and there's no plans in place or marketing (Q & As, videos, interviews etc) to attract investment into the fund. The volume is mainly tiny buys and a few larger sells most days, and the volume itself is incredibly low so the appetite to invest is not there.
Investors need a path to revenue, the fund manager has decided not to share one.
All the best
Does anyone out there understand why the SP has dropped so much?
TIA. DH
Forget I said that - they dealt with it amazingly quickly.
Despite having my IPO shares in my account with Jarvis X-O, they won't let me add to it while the price is down, because they don't have the KIID - despite me sending them a copy.
Thank you for the explanation CC2015. Looks like you will get it sorted, one way or the other.
It's the standard introducing brokers commission of 0.5%. If you apply through AJ Bell, it's part of AJ Bell's profits. If you apply through HL, HL kindly give the commission to the investor. HL do this on some IPO's but not all of them. Seems to be most of them though.
With FSF something seems to have gone wrong. I've not received my cash bonus as expected. I haven't persued it yet. I do have a copy of the HL offer terms for the IPO which contractually ties them to paying me. Possibly they are still discussing with Foresight whether it is cash or shares. HL are saying FSF have reneged on providing shares and want to provide cash. I cannot figure it out. Given they shares are 93p to buy, Foresight could just go and buy them in the market and save themselves some money. Oh, and also help pull up the share price in the process!
Just as a matter of interest, what were the bonus shares ?
If 130m shares were issued at £1 each, and £130m was raised, where did they come from and who got them ?
Has anyone had their Bonus Shares or cash in lieu of them. Hargreaves Lansdown not allocated either to my account and do not seem to have any idea when its going to happen. Hope they Will not renege on this as it puts them and FSF in the position of breaching the contract
I assume it is someone who bought the shares on margin in the IPO to stag them and it's gone wrong.
Possibly they got caught out by the Omicron fall and they were using too much margin.
Got to be a margin call issue imho because even if you knew you decided you'd made a mistake you wouldn't be driving the price down like this, you'd be far more patient and trying to get a better price.
My additional sense that it is a margin call is because a MM isn't artificially supporting the price ot help out a valued customer, instead they are just letting the customer get screwed.
The trade at 89.2p which hasn't appeared yet is a buy btw.
Who buys into an IPO and then immediately sells at a 10% loss??
Registrar was late getting shares to HL just looked now at 14.25 hrs and shares now on my account but currently selling below IPO price.@ 96p
*shares not share - I did get more than one!
To all holders.
Just wondering if anyone else has had their share credited to their actual account? Had confirmation of success from the IPO from HL, and was told shares would show from yesterday - they haven’t yet. Guess they will later this morning when trading starts, not that I will be looking to sell anytime soon.
LTH here, lets hope this will be a wise investment.