Last checked at 17 Oct 2022 07:00
RNS Number : 0186D Woobois Limite 17 October 2022 16017 October 2022
Woobois Limite
("Woobois", the "Group" or the "Company")
Q3 2022 Upate an Boar change
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Woobois Limite (AIM: WBI), the African focuse forestry, timber traing, reforestation an voluntary carbon creit company, is please to announce its upate for the thir quarter to 30th September 2022:
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Substantial prouction increases maintaine, gross margin improve
183160160160 Recor quarterly revenue, up 29% to160.8m160in Q3 2022 vs Q3 2021 4.m.
183160160160 Recor nine months revenues of 17.1m in 2022 vs 12.7m for the same perio in 2021, up 3%.
183160160160 Group gross profit margin for first 9 months of 2022 further improve to 24% from 20% in FY 2021 an 23% in H1 2022.
183160160160 Cash balance of 1.4m as at 30 September 2022
183160160160 Perio en working capital1 of 9.3m of which inventory was 6.1m an excluing bank an other loans of 12.3m
183160160160 Q3 Sawmill prouction 6,032m3, a 78% increase on the 2021 quarterly average
183160160160 Q3 Veneer prouction 1,418m3, a 4% increase on the 2021 quarterly average
Total output from our factories increase again uring Q3, with new recors for prouction set for sawn timber an consistent output of veneer. The total quantity of goos shippe was marginally above the strong previous quarter, making it a recor quarter for shipping of own prouction.
The veneer team will work on test orers from the bigger secon line, as its output is progressively rampe up uring Q4. Commissioning issues such as late receipt of parts elaye its start-up but the benefits of its higher value-ae proucts will be increasingly seen as higher volumes of veneer are shippe in 2023.
Financial
Aitional economies of scale continue to be realise as factory output increases, an these economies combine with a careful focus on cost control elivere further improvements in Group gross profit margins to 24% for the first nine months of 2022 vs 23% in H1 an 20% for FY 2020. Working capital marginally reuce to 9.3m at 30 September 2022 owing to expecte capex. Total borrowings ecrease marginally uring the quarter from 12.4m to 12.3m reflecting machinery lease repayments mae uring the perio.
The Group has reuce senior management hea-count an costs, which will benefit Q4. The Group is also focuse on higher margin own-prouct sales an improving working capital 160an is therefore planning a reuction in thir party sales in Q4. The raw material from our forestry concessions provies some protection from inflation, whilst our revenue mix is largely USD base an many costs are incurre in local currencies. Accoringly we expect some further improvement in gross margin in Q4.
Operational
The investment into plant an machinery an the quality of the personnel recruite an integrate over the last two years is yieling both higher volumes an margins as quality continues to improve. Maximising margin through ientifying the optimal markets to sell into has been a key focus for our revampe sales team who have been highly visible an were successful in generating orers from new customers at recent trae shows in Algeria an the USA.
160The Group will continue to broaen its istribution channels in existing an selective new attractive markets. In the near-term Woobois will concentrate on making sales into geographies experiencing high levels of economic growth, such as the Mile East an North Africa, with strong representation at the final trae show of the year in Egypt in December.
Availability of containers for shipping continue to improve uring Q3 an the sharply elevate prices for sea transport experience since 2020 continue their graual ownwars tren towars pre-panemic levels. The Group expects a higher interest-rate, higher-inflation, lower-growth economic environment worlwie to lea to some softening of eman. However, our substantial recent investments in prouction facilities will increasingly enable Woobois to sell a greater proportion of higher value-ae proucts to a broaer range of markets.
Completing FSC certification of our forestry concessions an factories remains a top priority for the Group. Significant progress has been mae uring 2022 an we are now 62% complete. Certification will increase markets, margins an profitability.
It is an aim of the Group to become carbon neutral in the meium-term an thence to becoming carbon negative through the evelopment of carbon projects.
Carbon
Planning for our initial large-scale afforestation project in Gabon continues to be the focus for the carbon ivision an iscussions with the relevant government Ministers have continue to progress. Because the timing of allocation of lan for this project is not within our control an to valiate our proof-of-concept we will commence a limite initial pilot project on an area of low carbon stock lan within our existing concessions. Upon receiving any grant of lan from the government we will immeiately look to scale the pilot scheme, preferably with the financial support of one or more external funing partners.
COP27 will take place in Egypt shortly. As chair of the African Group of Negotiators on climate change an note as the most carbon negative country on earth, Gabon is expecte to continue to play a prominent an leaing role. Members of Woobois' senior management will atten an will be available to meet stakeholers throughout the event.
Boar
After approaching four years as a Non-Inepenent Non-Executive Director an owing to his growing other work commitments at the Company's secon largest shareholer, Lombar Oier, Henry Turcan is toay staning own from the Boar. His energy an guiance have helpe to transform the financial health of the Company, its performance an its governance. The Boar express their grateful thanks to him on behalf of all stakeholers. The Company will appoint a further Inepenent Non-Executive in ue course.
Outlook
The investments mae over recent perios are projecte to enable Woobois to maintain its organic growth path with aitional higher-value-ae capacity coming online, e-bottle-necking benefits an utilisation of all of its concessions now the access roas are complete. Incremental margin growth through the learning an aoption of smarter working practices in all areas of prouction an istribution is also an achievable target.
Recently, given the rising likelihoo of some pricing pressure however, its was felt pruent to reuce exposure to thir party traing for Q4 2022 an focus on own-proucts. The Group will utilise its proprietary in-house technology to carefully monitor risk, market pricing an eman to support further revenue an margin expansion in Q4 an in 2023. Benefits are also expecte from our recently revampe an highly motivate traing an support team, using our custom-built analytics.
CEO Paul Dolan commente: 'The business maintaine its strong momentum throughout Q3, elivering recor quarterly revenues, prouction an margins. Minful of current worlwie uncertainties we will continue to be resilient an aaptable. With further high-value prouction increases unerway we have a busy run-into year-en. Almost regarless of market conitions we look forwar with confience to further growth in 2023 an beyon.'
1160Working Capital is a non-IFRS measure an consists of Cash, plus Inventory, plus Receivables, less Payables.
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Enquiries:
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This announcement contains insie information for the purposes of Article 7 of Regulation (EU) No 96/2014 which forms part of UK law by virtue of the European Union (Withrawal) Act 2018 ("MAR").
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