TIDMWBI
RNS Number : 2589F
Woodbois Limited
11 July 2019
11 July 2019
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014.
Woodbois Limited
("Woodbois", the "Group" or the "Company")
(AIM: WBI)
Quarterly Update
Woodbois, the African focused forestry and timber trading
company, is pleased to provide a quarterly update on operations for
the three months ended 30 June 2019 (Q2 of the Group's 2019
financial year); based on unaudited management information.
-- $4.7m Group revenue in Q2 2019. Record quarter
-- $9.2m Group revenue in H1 2019 vs $6.6m in H1 2018 (39% increase YOY)
-- $3.2m trading revenue in Q2 2019 vs $2m in Q2 2018 (60% increase YOY)
-- Perpetual preference share to be re-structured into 4% convertible bond
-- 2018 Sustainability Report released
-- Kevin Milne becomes acting Chairman as Miles Pelham steps down
-- Graeme Thomson joins board as NED
The strong start to 2019 gathered momentum in Q2 2019 with a new
quarterly revenue record of $4.7m. Total H1 2019 revenues of $9.2m
confirm the Group's growth path with a 39% revenue increase over
the previous year. The additional quarterly growth was achieved
despite the context of a slower quarter for revenues from our own
production. This was due to prevention of the shipping of timber
from Gabon during May and June 2019 following the discovery of the
attempted illegal shipping of Kevazingo logs by a Chinese
company.
Kevazingogate
Gabon banned the export of the Kevazingo species in 2018, but in
March 2019 300 containers of the species were discovered at Owendo
port. This abuse was taken seriously by the government and led to
the dismissal of both the vice-President and the Forestry Minister,
as well as multi-level changes within the Customs Department. In an
encouraging move for ethical operators, Professor Lee White, a UK
national and committed environmentalist who was previously in
charge of the national parks of Gabon was announced as the new
Minister of Forests, Environment and the Sea on 10 June 2019. We
very much look forward to meeting Professor White in order to
present our sustainable operating credentials and to learn about
his vision for Gabon's forestry sector. In the meantime, timber
exports have now been approved to re-commence so our logistics team
in Libreville can look forward to a busy summer ahead.
Trading and sales
The shortfall in revenues from export of our own production in
Gabon was compensated for by growth in trading, which was supported
by inflows to our Internal Trading Fund (ITF) detailed in the Q1
report. The final remaining tranche of $2.5m of previously reported
ITF subscription was drawn down at the beginning of June 2019.
Volumes with existing suppliers increased during Q2 to a record
$3.2m, a 60% YOY increase vs Q2 2018 trading revenues. The increase
in volumes has come largely from existing suppliers, but with
available trade finance firepower now in place, we continue to seek
relationships with reliable, high quality suppliers across the
Congo basin to match the global demand for traceable, sustainable
hardwood products generated by our sales team.
Tanzania
Envision, the Tanzanian entity which purchased the Tanzanian
agriculture business from us, has not yet paid the initial proceeds
in accordance with the payment schedule agreed in the SPA. We are
currently in discussions with Envision to restructure the payment
schedule. The Group has no ongoing cost commitment in Tanzania.
Further corporate structure consolidation
The company is proposing to restructure the 5% perpetual
preference shares in Woodbois subsidiary Argento by buying it back
and issuing its holders instead with a convertible bond issued by
Woodbois. The Woodbois convertible bond will have a 5 year tenure,
4% coupon and conversion price of 8p. Preference shareholders are
currently being asked to commit to this transaction and thus far
96.69% have accepted the switch terms. The switch is from a
preference share with variable conversion terms linked to a
subsidiary company, to a bond convertible into Woodbois common
stock at a fixed rate. This simplifies the capital structure and
serves to more closely align management, bondholders and
shareholders' interest, as well as making the company more
investible and easier to value for institutional investors. The
Company is in discussions with the Panel on Takeovers and Mergers
as to whether the transaction should be subject to a 'whitewash'
waiver from the provisions of Rule 9 of the Takeover Code, which
would include a shareholder vote. The Company will make a separate
announcement upon entering into definitive documentation and the
transaction is expected to complete in September 2019 and full
details of the convertible bond will be available on our website at
www.woodbois.com thereafter.
Sawmill
Installation of our new Techdry kilns is now underway and is
expected to be completed on time before the end of September. The
new line of sawmilling equipment from China and Slovenia is also
scheduled to arrive in Gabon during Q3 and is expected to be
operational before the year end. Production at the sawmill has
suffered minimal disruption and will continue to operate throughout
this major upgrading of facilities.
Veneer factory
The new equipment that arrived at the end of Q1, namely a
debarking machine, two hydraulic lifters and a hydraulic press,
have all been commissioned and are operational. Research continues
into optimizing the veneer factory via an additional veneer line or
plywood line, but analysis of several months' worth of data from
the factory while working at full capacity must first be undertaken
in order for decisions to be made.
Miles Pelham to step down, Kevin Milne to become interim
Chairman
Woodbois announces that it has received notice from its
Non-Executive Chairman, Miles Pelham, that he will be stepping down
with immediate effect. Since leaving banking in 2017 Miles has
built Diginex Limited, his start-up blockchain company, into a
diversified global leader in the blockchain arena. Its growth is
such that it will now be listed on the Nasdaq with Miles serving as
its Executive Chairman. Miles remains fully committed to Woodbois'
future success and remains its largest stakeholder but feels that
he cannot adequately service the needs of the company with another
Chairmanship of a listed entity. The Board has appointed Kevin
Milne as interim Chairman whilst candidates are vetted and a
replacement found. The company does not expect this change to have
any material effect on the performance of the company. Kevin, who
has been NED since August 2015 is a Chartered Fellow of the CISI
and has held leadership and senior management positions in the UK,
Europe, Asia and Australia. Kevin has extensive experience
operating in highly regulated environments including being a member
of the Executive Committee of the London Stock Exchange Group.
Graeme Thomson to join the board
I am pleased report that after a wide search Graeme Thomson has
agreed to become Independent Non-Executive Director and Chairman of
the audit committee. Graeme, 62, is a Fellow of the Institute of
Chartered Accountants in England and Wales and has been a public
company director for many decades, as a CEO, CFO/Company Secretary
and as a Non-Executive. His varied commercial experience, including
of Audit and Remuneration Committees, as well as internationally
and of financial matters, will be of considerable benefit to the
Company as we expand.
Sustainability report released
Alongside the quarterly business update, we are also pleased to
announce the release of the Woodbois Sustainability Report for
2018. The publication of a yearly report is something we had
committed to in 2017 and we feel that this year's report builds on
the excellent foundation laid down by last year's version. It can
be found on our website at www.woodbois.com.
The modus operandi at Woodbois has always been to operate in a
sustainable way, engaging with all relevant stakeholders while
building a commercially and developmentally successful business.
The report aims to be informative, enhance transparency and provide
data relating to the economic, environmental and social impacts of
our operations. The report also serves to establish a clear link
between the values driving our business and the ways in which our
operations contribute to achieving the United Nations Sustainable
Development Goals. The publication helps to identify areas that, as
a business, we can improve on to further establish Woodbois as a
leader in the sustainable timber space. As management continues to
grow the business, we remain keen to be at the forefront of
transparency within the forestry industry.
I look forward to presenting the consolidated 2019 half-year
results in full in due course.
Paul Dolan
CEO
The following information is disclosed pursuant to Schedule Two,
paragraph (g) of the AIM Rules for Companies:
Full name: Graeme Paul Thomson
Age: 62
Current Directorships / Partnerships: Sydenham Garden
Past Directorships / Partnerships (past 5 years): Tower
Resources plc, Tower Resources (Namibia) Holdings Limited, Tower
Resources (Namibia) Limited, Tower Resources Namibia Limited, Tower
Resources Cameroon Limited, Tower Resources Cameroon SA, Rift
Petroleum UK Limited, Rift Petroleum Holdings Limited, Rift
Petroleum Limited, Tower Resources (Kenya) Limited, Tower Resources
(UK) Limited, Wilton Petroleum Limited, Neptune Petroleum Limited,
Neptune Petroleum (Uganda) Limited, Comet Petroleum Limited, Comet
Petroleum (SADR) Limited.
Woodbois Limited
Miles Pelham - Chairman
Paul Dolan - CEO
www.woodbois.com +44 (0)20 7099 1940
Arden Partners Plc (Nominated adviser and broker)
Tom Price
Maria Gomez de Olea +44 (0)20 7614 5900
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END
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