Foresight Sust Regulatory News (FSF)

13 October 2023

Foresight Sustainable Forestry Company Plc

Completion of three acquisitions

Foresight Sustainable Forestry Company Plc ("FSF", "the Company"), an investment company that invests in UK forestry and afforestation assets, today announces three acquisitions in Scotland totaling £8.3 million (inclusive of tax and transaction costs). Following the acquisitions, FSF's portfolio increases by 819 hectares and now covers a total area of 12,545 hectares across 68 properties.

Representing 4.4% of the last communicated Net Asset Value ("NAV") (31 March 2023: £186.6m), the acquisitions have been funded through the utilisation of the Company's Revolving Credit Facility ("RCF") which is now £10.4 million drawn. The repayment of the borrowings will occur through a combination of timber harvesting and the planned disposal of non-core or other assets. The Company continues its intention to minimise exposure to interest charges whilst also retaining a sufficient cash buffer via the headroom on its debt facilities and free cash to fund ongoing capital expenditure and operate a strategic cash reserve.

All three investments represent good value in the current market and are forecast to deliver strong returns, given the higher interest rate environment. These properties substantially complete FSF's acquisition of land in preparation for its 2024/25 planting program and there are no further material additions to the portfolio currently expected within the calendar year. An overview of the acquisitions can be found below with more detail listed in the appendix.

· Toun Hill: This asset extends 230 hectares and is expected to create a c.166-hectare commercial afforestation scheme. The acquisition also includes a non-core residential property which is planned for subsequent disposal in due course.

· Threepwood Hill: The investment, spanning 59 hectares, will see the creation of a 43-hectare commercial afforestation scheme and is located close (1.5 miles) to Chatto Craig, another afforestation property in FSF's portfolio. Together, these properties have good potential for upside marriage value realisation.

· Carlinden Burn: The 530-hectare property extends FSF's cluster of properties in Aberdeenshire and is a mixed afforestation and forestry opportunity, with 216 hectares of afforestation potential and a further 102 hectares of existing forestry. The acquisition also includes some non-core residential property and land which is planned for disposal in due course.

As demonstrated in the Company's most recent NAV update, planting of afforestation assets represents a key driver of valuation uplift. The Company remains on track to deliver a substantial planting program during the upcoming winter with a view to completing planting and recognising voluntary carbon on many of its Development Stage and Planting Stage afforestation projects by the spring of 2024.

The current breakdown of the portfolio, post the acquisitions above, is shown below:

Definitions:

Development Stage Afforestation Assets - Land prior to the securing of planning permission and grant application.

Planting Stage Afforestation Assets - Planning permission and grant application completed but initial planting of trees not yet completed.

Establishment Stage Afforestation Assets- Initial planting of site completed but trees establishing and stabilising (typically a 3-5 year period).

Established Foresty Assets - Trees stabilised and established.

For further information, please contact:

Appendix - Acquisition information

About the Company

Foresight Sustainable Forestry Company Plc ("the Company") is an externally managed investment company investing in a diversified portfolio of UK forestry and afforestation assets.

Targeting a net total return of more than CPI +5%, the Company provides investors with the opportunity for real returns and capital appreciation driven by the prevailing global imbalance between supply and demand for timber; the inflation-protection qualities of UK land freeholds; and biological tree growth of 3% to 4% not correlated to financial markets.

The Company also offers outstanding sustainability and ESG attributes and access to carbon units related to carbon sequestration from new afforestation planting.

The Company targets value creation as the afforestation projects successfully achieve development milestones in the process of converting open ground into established commercial forest and woodland areas.

The Company is seeking to make a direct contribution in the fight against climate change through forestry and afforestation carbon sequestration initiatives and to preserve and proactively enhance natural capital and biodiversity across its portfolio.

The Company is managed by Foresight Group LLP. https://fsfc.foresightgroup.eu/

Notes

This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase investments of any description, or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase securities in the Company.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will", "targeting" or "should" or, in each case, their negative or other variations or comparable terminology. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, proposed acquisitions and objectives, are forward-looking statements.