Half Year Results

Woodbois Limited

29 September 2023

 

29^th September 2023

Woodbois Limited

("Woodbois", the "Group" or the "Company")

Half-year results for the six months to 30 June 2023 (unaudited)

Q3 Update and Board changes

Woodbois, the African focused sustainable forestry, reforestation, carbon sequestration and timber trading company, announces its unaudited results for the half year ended 30 June 2023, Q3 update and Board changes.

Non-Executive Chair, Graeme Thomson said

"I am pleased to announce that the Company has progressively and successfully dealt with the previously announced triple key challenges it has encountered in the year-to-date. In particular, the Company settled certain bank and other debts at a substantial discount following the successful fund raise at the end of June. With debt now reduced by approximately two-thirds since the end of 2022, Woodbois is now fully focussed on rebooting operations and identifying and delivering on the optimum strategy to maximise value from its carbon-credit, trading and forestry activities.

It has been a great pleasure to welcome our two new key cornerstone investors, Hugh Wade-Jones (21.7% shareholder via CHCH) and John Scott (10.85% shareholder), who together funded the £6m equity raise in June. Debts of c$2.25m were also converted into equity by our strategic adviser, Miles Pelham (via Rhino Ventures, owner of 100% of the non-voting shares).  Work is active with our new partners as together we look to make a step change from the past in order to re-define and accelerate the delivery of our strategic goals.

I am optimistic that Q4 onwards will see a marked upturn in activity as we solidify new relationships, finalise and vigorously execute on our strategy. This will be spearheaded by our new CEO, David Rothschild, who has been a director for almost two years and is an experienced veteran of West African activities. In parallel, our on-going optimisation of each of the business segments and the formulation of the future strategy to maximise value is progressing well. Our AGM will be convened shortly where this will be presented.

I am aware that 2023 has been a tough one for all those involved with our Company. We have encountered events that could not have been foreseen, but we emerge from these challenging times with our balance-sheet considerably stronger, strategic focus and drive embedded in our ethos, a streamlined and energetic executive team, new strong shareholders and partners with whom to deliver on the outstanding promise which this business and our sectors hold.  I thank you all for your support, patience and perseverance: we know what we have to do and are working hard to deliver on it." 

Highlights

Financial

Cash balance $6.0m as at 30 June 2023 after settling, on discounted terms, the unexpectedly withdrawn $6.0m bank working capital facility and $1.0m of other debts

Balance sheet strengthened with Group borrowings reduced to $5.6m at 30 June 2023, having fallen by $9.5m from $15.1m at 31 Dec 2022

Period end working capital** of $9.0m of which inventory was $2.1m and excluding borrowings

H1 2023 Revenue $4.8m vs H1 2022 $11.3m

H1 2023 Group gross profit $0.5m vs H1 2021 $2.7m

H1 2023 EBITDAS* $(2.8m) vs H1 2022 $1.1m

H1 Operations

Activity greatly reduced owing to effects of the previously announced unseasonal Q1 weather, as well as of the unexpected withdrawal in April of a fully-drawn $6m working capital line (which was followed by a subsequent capital raise and facility reorganisation announced on 28 June 2023)

H1 Sawn timber production of approximately 3,700m3 (H1 2022 9,565m3), partly reflecting inventory draw-down

H1 veneer production of approximately 2,000m3 (H1 2022 2,740m3)

Q3 Update

Comprehensive review of business lines is proceeding on time

Trading finance facility talks in the final stages of due diligence and are expected to close in the near future

Carbon credit documentation re 50,000 hectares in Gabon progressing well

New government in place following disputed elections and a popular August coup: activities started to return towards normal from mid-September

David Rothschild, highly experienced in West African operations, appointed as CEO

Cash balance currently $3.7m and borrowings and leases of $4.7m as at 28 September 2023

Q3 sawn timber production of approximately 1,700m3; veneer production not yet restarted

David Rothschild, CEO, commented:

"2023 has been a very difficult year for the Company thus far, but having weathered some pretty severe challenges and having re-built the Company's balance sheet, we now are rebuilding production, performance and profitability across the Company's divisions.

We see near-term opportunities to return the business to positive EBITDAS and profitability in 2024 on the back of modest capital needs. We will always manage our significant forest concessions responsibly and are driving to return to optimal production levels in our factories, as well as to significantly scale our international trading business. At the same time, we are initiating our ambitious afforestation and carbon capture project on savanna land in South West Gabon. We will continually strive to deliver long-term responsible growth from each of these business units and to ensure we focus resources on the best opportunities to create shareholder value."

H1 Summary and Q3 Update

In its previous releases, the Company had announced that the first half activity was adversely affected by two events. The shut-down of operations to allow for implementation of re-ordering of work-flows and processes was brought forward to February-March since abnormal weather conditions were causing supply chain disruption between forest and sawmill. The significant increase in production volumes during 2022 had put pressure on warehouse storage space and the downtime was also used to reduce inventory and free up space.

The Company also had to deal with the unexpected withdrawal of its $6m credit line by a Danish bank by raising new equity and entering a debt for equity swap, thereby reducing total borrowing by around two-thirds. The knock-on effect of this was a working capital shortfall which led to much lower production outputs, profit and loss and effects on other performance measures. Cash conservation was paramount whilst a solution was found to this financing issue and which was announced at the end of June.

In Q3 operations also have had to be restricted in the lead-up to disputed elections which was followed by a popular military-led coup in Gabon in late August. The effects of this are now easing as the country gets back-to-normal: a largely civilian transitional government was announced by the new President of Gabon and having ceased all operations upon the initial announcement, the Company is now in the process of a phased re-start of its forestry activities with the initial emphasis on sawn timber.

Cash conservation measures have naturally been prioritised due to these various disruptions, including minimising operational activities and expense, both of which are reflected in the financial results for the six months to 30 June 2023 (which are set out below). As management brings the business back on-line, emphasis is now on the planning required for a return to operational profitability and resumption of growth in 2024, with the benefit of a significantly reduced debt burden, and on minimising operating losses for 2023 caused by the aforementioned disruptions. Customers have remained supportive in spite of delays to our delivery schedules and despite the weakening macro-environment we continue to experience robust levels of demand for our products due to the global reach of our sales team.

The newly installed government in Gabon has emphasised the need to distribute the country's wealth more evenly than was previously the case, and is making efforts to reassure both local and international businesses of the country's future stability as it seeks to generate additional employment opportunities for its youthful and growing population.

This should be positive for the Company as we seek to engage with the new government and commence our initial large-scale 50,000 hectares afforestation project with all of the resulting long-term benefits that it offers to Gabon. The detailed documentation is being prepared and, although the change in government will cause some delays, we expect to be able to conclude this with the government as soon-as-practicable.

Directorate changes

David Rothschild has today been appointed as CEO. David has been a Non-Executive Director for almost two years and has an intimate knowledge of the Group.

David's experience in managing large-scale agricultural projects in Africa, along with his McKinsey background, means that he brings a strong practical and analytical approach to the role. His French language skills are of great benefit in Francophone Africa and the extremely high standards that he sets for himself will need to be matched throughout the organisation.

As previously disclosed, after seven years with the Company, Paul Dolan has now stepped-down as CEO and will be a non-independent non-executive Director until an independent replacement is found. The search for two independent non-executive directors is progressing.

On behalf of the shareholders, the Board wishes to record our thanks to Paul for his unstinting efforts on behalf of the Company and for supporting and inspiring members of staff at all levels throughout his tenure. Paul will also act as a consultant to the Company until at least the end of 2023.

Also, after six years as a Deputy Chair, Hadi Ghossein is stepping down from the Board and as Head of Gabon at the start of November 2023. We would like to thank Hadi for his significant contribution throughout his time at the Company, most notably the increased scale of our forest concessions and the development of both of our factories in Mouila, Gabon. Hadi will continue to act as an advisor to the Board from within Gabon and remains a shareholder. David Rothschild will assume his responsibilities in Gabon until the comprehensive review is completed.

Enquiries

Woodbois Limited Graeme Thomson, Non-Executive Chair David Rothschild, CEO Carnel Geddes, CFO	[phone]
Canaccord Genuity, Nominated Adviser and Joint Broker Henry Fitzgerald O'Connor, Harry Pardoe, Gordon Hamilton	[phone]
Novum Securities, Joint Broker Colin Rowbury, Jon Bellis	[phone]

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

*Non-IFRS measures

The Company uses certain measures to assess the financial performance of the company. These terms may be defined as "non-IFRS measures" as they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS. They also may not be calculated using financial measures that are in accordance with IFRS. These non-IFRS measures include the Company's EBITDAS.

The Company uses such measures to measure and monitor performance and liquidity, in presentations to the Board and as a basis for strategic planning and forecasting. The directors believe that these and similar measures are used widely by market participants, stakeholders, and other interested parties as supplemental measures of performance and liquidity.

The non-IFRS measures may not be directly comparable to other similarly titled measures used by other companies and may have limited use as an analytical tool. This should not be considered in isolation or as a substitute for analysis of the Company's operating results as reported under IFRS.

The Company does not regard these non-IFRS measures as a substitute for, or superior to, the equivalent measures calculated and presented in accordance with IFRS or those calculated using financial measures that are calculated in accordance with IFRS.

** Working capital comprises cash and cash equivalents, trade & other receivables, inventory less trade & other payable and provisions

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2023

		Notes	Six months to 30 June 2023 (Unaudited) $'000	Six months to 30 June 2022 (Unaudited) $'000	Year to            31 December 2022 (Audited) $'000
Turnover			4,853	11,318	23,108
Cost of sales			(4,363)	(8,665)	(17,244)
Gross profit			490	2,653	5,864
Other income		14	1,399	-	-
Operating costs			(3,496)	(1,576)	(4,166)
Administrative expenses			(490)	(750)	(1,288)
Depreciation			(972)	(137)	(222)
Share based payment expense			37	(175)	(418)
(Loss)/gain on fair value of biological assets			-	-	(156,983)
Operating profit/(loss)			(3,032)	15	(157,213)
Reclassification of Foreign Currency Translation Reserve on deregistered entities			-	-	(1,529)
Foreign exchange gain/(loss)			317	(63)	904
Finance costs		4	(636)	(441)	(1,029)
(Loss)/profit before tax			(3,351)	(489)	(158,867)
Taxation		5	(13)	(44)	47,676
(Loss)/profit for the period			(3,364)	(533)	(111,191)
Other comprehensive income:
Items that will not be reclassified to profit or loss
Revaluation of land and buildings, net of tax			-	-	-
Items that may be reclassified subsequently to profit or loss
Currency translation differences			(1,448)	(2,053)	(1,612)
Reclassification of FCTR[1] on deregistered entities		15	-	-	1,529
Total comprehensive (loss)/income for the period			(4,812)	(2,586)	(111,274)
Basic (loss)/earnings per share (cents)		6	(0.13)	(0.02)	(4.47)
Diluted (loss)/earnings per share (cents)			(0.13)	(0.02)	(4.47)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2023

	Notes						30 June 2023 (Unaudited)	30 June 2022 (Unaudited)	31 December 2022 (Audited)
							$'000	$'000	$'000
ASSETS
Non-current assets
Biological assets							179,815	336,798	179,815
Property, plant and equipment							31,339	29,293	32,226
Total non-current assets							211,154	366,091	212,041
Current assets
Trade and other receivables	7						5,016	4,777	6,330
Inventory							2,074	6,382	4,606
Cash and cash equivalents							6,088	2,091	2,296
Total current assets							13,178	13,250	13,232
TOTAL ASSETS							224,332	379,341	225,273
LIABILITIES
Non-current liabilities
Borrowings	9						(3,201)	(5,208)	(5,665)
Deferred tax	5						(58,680)	(106,475)	(58,675)
Total non-current liabilities							(61,881)	(111,683)	(64,340)
Current liabilities
Trade and other payables	8						(4,007)	(3,351)	(3,547)
Borrowings	9						(1,560)	(7,162)	(8,603)
Provisions							(130)	(130)	(130)
Convertible bonds - host liability	10						(763)	(712)	(748)
Total current liabilities							(6,460)	(11,355)	(13,028)
TOTAL LIABILITIES					(68,341)			(123,038)	(77,368)
NET ASSETS					155,991			256,303	147,905
EQUITY
Share capital		11			35,799			32,601	32,625
Share premium			12		75,310			65,475	65,549
Convertible bonds - equity component		10			24			24	24
Foreign exchange reserve					(9,854)			(10,376)	(8,406)
Share based payment reserve					765			610	802
Revaluation reserve					6,254			6,254	6,254
Retained earnings					47,693			161,715	51,057
TOTAL EQUITY						155,991		256,303	147,905

Approved by the board and authorised for issue on 28 September 2023.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended 30 June 2023
	Share capital	Share premium	Convertible bonds	Foreign exchange reserve	Share based payment reserve	Revaluation reserve	Retained Earnings	Total equity
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Balance at 1 January 2022	32,528	65,254	52	(8,323)	435	6,254	162,248	258,447
Loss for the period	-	-	-	-	-	-	(533)	(533)
Other comprehensive income	-	-	-	(2,053)	-	-	-	(2,053)
Total comprehensive loss for the period	-	-	-	(2,053)	-	-	(533)	(2,586)
Transactions with owners:
Redemption of convertible bonds (note 10)	73	220	(28)	-	-	-	-	265
Share based payment expense	-	-	-	-	175	-	-	175
Balance at 30 June 2022	32,601	65,474	24	(10,376)	610	6,254	161,715	256,302
Loss for the period	-	-	-	-	-	-	(110,658)	(110,658)
Other comprehensive income	-	-	-	1,970	-	-	-	1,970
Total comprehensive loss for the period	-	-	-	1,970	-	-	(110,658)	(108,688)
Transactions with owners:
Issue of ordinary shares	24	75	-	-	(51)	-	-	48
Share based payment expense	-	-	-	-	243	-	-	243
Balance at 31 December 2022	32,625	65,549	24	(8,406)	802	6,254	51,057	147,904
Loss for the period	-	-	-	-	-	-	(3,364)	(3,364)
Other comprehensive income	-	-	-	(1,448)	-	-	-	(1,448)
Total comprehensive loss for the period	-	-	-	(1,448)	-	-	(3,364)	(4,811)
Transactions with owners:
Issue of ordinary shares	3,174	9,761	-	-	-	-	-	12,935
Share based payment expense	-	-	-	-	(37)	-	-	(37)
Balance at 30 June 2023	35,799	75,310	24	(9,854)	765	6,254	47,693	155,991

CONDENSED CONSOLIDATED STATEMENT CASH FLOWS For the six months ended 30 June 2023
			Six months to 30 June 2023 (Unaudited)	Six months to 30 June 2022 (Unaudited)	Year to 31 December 2022 (Audited)
Cash flows from operating activities			$'000	$'000	$'000
Loss before taxation			(3,351)	(489)	(158,867)
Adjustment for:
Foreign exchange			(317)	63	(904)
Reclassification of FCTR on deregistered entities			-	-	1,529
Depreciation of property, plant and equipment			1,364	976	2,181
Fair value adjustment of biological asset			-	-	156,983
Transaction costs deducted from equity			(638)	-	-
Share based payment expense			(37)	175	418
Finance costs			636	441	1,029
Accrued expense			91	222	322
Other income			(1,399)	-	-
Decrease/(increase) in trade and other receivables			1,314	(161)	(632)
Increase/(decrease) in trade and other payables			460	(768)	(1,714)
Decrease/(increase) in inventory			2,532	(223)	1,553
Cash inflow from operations			655	236	1,898
Income taxes paid			(2)	(8)	(2)
Finance cost paid			(253)	(306)	(759)
Net cash inflow/(outflow) from operating activities			400	(78)	1,137
Cash flows from investing activities
Expenditure on property, plant and equipment			(477)	(2,267)	(3,907)
Settlement of deferred consideration			-	(250)	(250)
Investment in acquired subsidiary			-	(214)	(341)
Net cash outflow from investing activities			(477)	(2,731)	(4,498)
Cash flows from financing activities
Proceeds from loans and borrowings			180	5,300	6,193
Repayment of loans and borrowings			(7,284)	(1,287)	(1,470)
Proceeds from the issue of ordinary shares			10,973	-	47
Net cash inflow from financing activities			3,869	4,013	4,770
Net increase in cash and cash equivalents			3,792	1,204	1,409
Cash and cash equivalents at the start of period			2,296	887	887
Cash and cash equivalents at the end of the period			6,088	2,091	2,296

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2023

1. BASIS OF PREPARATION

The condensed consolidated interim financial statements ('interim financial statements') for the six months ended 30 June 2023 have been prepared in accordance with the requirements of the AIM Rules for Companies. As permitted, the Group has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information. The interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2022, which have been prepared in accordance with international accounting standards in accordance with the requirements of the Companies (Guernsey) Law 2008 applicable to Companies reporting under IFRS as adopted by the United Kingdom (UK). The interim financial statements have been prepared under the historical cost convention except for biological assets and certain financial assets and liabilities, which have been measured at fair value.

The interim financial statements of Woodbois Limited are unaudited financial statements for the six months ended 30 June 2023. These include unaudited comparatives for the six-month ended 30 June 2022 together with audited comparatives for the year to 31 December 2022. The condensed financial statements do not constitute statutory accounts, as defined under section 244 of the Companies (Guernsey) Law 2008. The statutory accounts for the period to 31 December 2022, which were approved by the Board of Directors on 9 June 2023, have been reported on by the Group's auditors and have been delivered to the Guernsey Registrar of Companies. The report of the auditors on those financial statements was unqualified, and contained a material uncertainty in relation to going concern owing to the c$6m working capital facility termination event that occurred in April 2023 and the fact that, at the time that the financial statements were issued, the Company had not yet completed its refinancing and restructuring which the Company announced  it had closed on 28 July 2023. See note 11.

The accounting policies applied in preparing these financial statements are in terms of IFRS and are consistent with those applied in the previous annual financial statements for the year ended 31 December 2022.

The interim financial statements for the six months ended 30 June 2023 were approved by the Board of Directors on 28 September 2023.

Going Concern:

The interim financial statements have been prepared assuming that the Group will continue as a going concern in accordance with the recognition and measurement criteria of IFRS.

Under this assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor necessity of liquidation, ceasing trading or seeking protection from creditors for at least 12 months from the date of the signing of the financial statements.

An assessment of going concern is made by the Directors at the date they Directors approve the interim financial statements, taking into account the relevant facts and circumstances at that date including:

• The current state of the Group's life cycle;

• Review of profit and cash flow forecasts;

• Review of actual results against forecast;

• Timing of cash flows and expected availability of capital including trade finance;

• Financial or operational risks; and

•The current impact of the coup in Gabon in August 2023

The Directors have a reasonable expectation that the Group has or will have adequate resources to continue in operational existence for the foreseeable future, being 12 months from the date of approval of these interim financial statements and have therefore adopted the going concern basis of preparation in the interim financial statements.

2. CRITICAL ACCOUNTING ESTIMATES AND AREAS OF JUDGEMENT

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions concerning the future. It also requires management to exercise judgment in applying the Company's accounting policies and the reported amounts of assets and liabilities, revenue and expenses, and related disclosures.

Estimates and judgments are continually evaluated and are based on current facts, historical experience and other factors, including expectations of future events that are believed are reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results.

Except for the additional disclosure as noted above, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual report.

3. SEGMENT REPORTING

Segmental information is presented on the basis of the information provided to the Chief Operating Decision Maker ("CODM"), which is the Executive Board. 

The Group is currently focused on Forestry, Timber Trading and Carbon Solutions. These are the Group's primary reporting segments, operating in Gabon, Mozambique, Denmark, London, Guernsey and head operating office in Mauritius.  Certain support services are performed in the UK.

The Group's CEO and CFO review the internal management reports of each division at least weekly, and the Board monthly.

There are varying levels of integration between the Forestry and Trading segments. This integration includes transfers of sawn timber and veneer, respectively. Inter-segment pricing is determined on an arm's length basis.

Information relating to each reportable segment is set out below. Segment profit/(loss) before tax is used to measure performance, because management believes that this information is the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industry. All amounts are disclosed after taking into account any intra-segment and intra-group eliminations.

The following table shows the segment analysis of the Group's loss before tax for the six months period and net assets as at 30 June 2023:

	Forestry	Trading	Carbon Solutions	Total
	$000	$000	$000	$000
INCOME STATEMENT
Turnover	4,456	397	-	4,853
Cost of Sales	(3,960)	(403)	-	(4,363)
Gross profit	496	(6)	-	490
Other income	-	1,399	-	1,399
Operating costs	(2,662)	(641)	(193)	(3,496)
Administrative expenses	(138)	(176)	(176)	(490)
Depreciation	(909)	(63)	-	(972)
Share based payment expense	15	11	11	37
Segment operating (loss)/profit	(3,198)	524	(358)	(3,032)
Foreign exchange	291	26	-	317
Finance costs	(351)	(285)	-	(636)
(Loss)/profit before taxation	(3,258)	265	(358)	(3,351)
Taxation expense	(13)	-	-	(13)
(Loss)/profit for the period	(3,271)	265	(358)	(3,364)
NET ASSETS
Assets:	218,024	6,308	-	224,332
Liabilities:	(4,957)	(4,704)	-	(9,661)
Deferred tax liability	(58,680)	-	-	(58,680)
Net assets	154,387	1,604	-	155,991

The following table shows the segment analysis of the Group's loss before tax for the six months to and net assets at 30 June 2022:

	Forestry		Trading	Carbon Solutions	Total
	$000		$000	$000	$000
INCOME STATEMENT
Turnover		5,553	5,765	-	11,318
Cost of Sales		(3,757)	(4,908)	-	(8,665)
Gross profit		1,796	857	-	2,653
Operating costs		(614)	(585)	(377)	(1,576)
Administrative expenses		(211)	(182)	(357)	(750)
Depreciation		(137)	-	-	(137)
Share based payment expense		(44)	(44)	(87)	(175)
Segment operating profit/(loss)		790	46	(821)	15
Foreign exchange		(218)	155	-	(63)
Finance costs		(148)	(293)	-	(441)
Profit/(loss) before taxation		424	(92)	(821)	(489)
Taxation expense		(44)	-	-	(44)
Profit/(loss) for the period		380	(92)	(821)	(533)
NET ASSETS
Assets:	369,694		9,647	-	379,341
Liabilities:	(4,920)		(11,643)	-	(16,563)
Deferred tax liability	(106,475)		-	-	(106,475)
Net assets	258,260		(1,996)	-	256,303

4.  FINANCE COST

	6 months to 30 June 2023 (Unaudited)	6 months to 30 June 2022 (Unaudited)	Year to  31 December 2022 (Audited)
	$'000	$'000	$'000
Interest on bank facilities and finance leases	390	306	741
Interest on trade finance facilities	74	71	-
Working capital facility interest	128	-	206
Interest on convertible bonds	16	48	82
Other finance costs	28	16	-
Total	636	441	1,029

5.  TAXATION

The prevailing tax rates in the geographies here the Group operates range between 3% and 32%. A rate of 19% best represents the weighted average tax rate experienced by the Group. As at 31 December 2022, the Group had estimated losses of $26 million (2021: $28 million) available to carry forward against future taxable profits. No deferred tax asset has been raised on these estimated losses.

The Group has recognised a net deferred tax liability of $58.7 million at 30 June 2023 (30 June 2022: $106.5 million, 31 December 2022: $58.7 million) and which mainly arose on the revaluation of biological assets and owner occupied land and buildings. This would only be payable on the sale of these assets at their book value.

6.  EARNINGS PER SHARE

			6 months to      30 June 2023 (Unaudited)	6 months to 30 June 2022 (Unaudited)
			$'000	$'000
Loss attributable to equity shareholders			(3,364)	(533)
Weighted average number of ordinary shares in issue ('000)			2,651,565	2,482,464
Basic and diluted loss per share (cents)			(0.13)	(0.02)

The Company has incurred a loss in the six-month period to 30 June 2023, and therefore the diluted earnings per share is the same as the basic loss per share as the loss has an anti-dilutive effect.

Reconciliation of shares in issue to weighted average number of ordinary shares:

		6 months 30 June 2023 (Unaudited)	6 months 30 June 2022 (Unaudited)
		$'000	$'000
Shares in issue at beginning of period		2,489,989	2,482,117
Shares issued during the period weighted for period in issue (note 11)		145,836	347
Weighted average number of ordinary shares in issue for the period		2,635,825	2,482,464

7. TRADE AND OTHER RECEIVABLES

	30 June 2023 (Unaudited)	30 June 2022 (Unaudited)	31 December 2022 (Audited)
	$'000	$'000	$'000
Trade receivables	3,571	2,632	4,561
Other receivables	12	12	12
Deposits	123	127	128
Current tax receivable	15	15	16
VAT receivable	286	666	174
Prepayments	1,009	1,325	1,439
Total	5,016	4,777	6,330

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.

8. TRADE AND OTHER PAYABLES

	30 June 2023 (Unaudited)	30 June 2022 (Unaudited)	31 December 2022 (Audited)
	$'000	$'000	$'000
Trade payables	2,288	1,106	1,213
Contract liabilities (prepayments received)	508	872	892
Accruals	493	766	309
Current tax payable	379	105	190
Other payables	326	459	920
Debt due to concession holders	13	43	23
Total	4,007	3,351	3,547

The Directors consider that the carrying amount of trade and other payables approximates to their fair value.

9.  BORROWINGS

	30 June 2023 (Unaudited)	30 June 2022 (Unaudited)	31 December 2022 (Audited)
	$'000	$'000	$'000
Non-current liabilities
Business loans	528	1,269	1,757
Working capital facility	2,673	3,939	3,908
	3,201	5,208	5,665
Current liabilities
Business loans	770	545	888
Bank facility	390	233	196
Working capital facility	400	6,384	7,519
	1,560	7,162	8,603
Total borrowings	4,761	12,370	14,268

The decrease in borrowings in the six months to 30 June 2023 is mainly due to the following:

· Settlement of $6m revolving working capital facility at a discount (see note 15).

· Conversion of $2.25m working capital loan owing to Rhino Ventures to non-voting equity (see note 11).

· Settlement of short term, $1m working capital facility owed to Lombard Odier (see note 14).

10. CONVERTIBLE BONDS

	30 June     2023 (Unaudited)	30 June      2022 (Unaudited)	31 December 2022 (Audited)
	$'000	$'000	$'000
Convertible bonds: Liability component	739	712	748
Convertible bonds: Equity component	24	24	24
Total	763	736	772
Convertible bond liability	477	477	477
Interest accrued	262	235	271
Total	739	712	748

During the first half of 2022, $293,591 of the 2023 0% Convertible Bonds were converted into 5,871,820 Voting Ordinary Shares. The Convertible Bond terms specify conversion is at an exchange rate of £:$1.25 and 4p per Ordinary Share. The Bonds were repaid on 5 July 2023.

11. SHARE CAPITAL 

	Number	$'000
Authorised:
Ordinary shares of 0.01p pence each*	Unlimited	Unlimited*
Allotted, issued and fully paid: Ordinary shares of 0.01p each*
At 1 January 2022	2,482,117,053	32,528
Shares issued (note 10)	7,871,820	97
At 31 December 2022	2,489,988,873	32,625
Issued in the period (note 10)	1,800,000,000	3,174
At 30 June 2023	4,289,988,873	35,799

* See note below: nominal value of ordinary shares reduced from 1.0p in June 2023 to 0.01p and a deferred share of 0.99p. The deferred shares were redeemed at no cost by the Company.

Balances classified as share capital represent the nominal value on issue of the Company's equity share capital, comprising ordinary shares of 1p each.

The total number of Ordinary Shares in issue as at the date of this report is 4,289,988,873, which consists of 3,685,850,726 Voting Ordinary Shares, 19,138,147 Treasury Shares and 585,000,000 Non-Voting Ordinary Shares.

TREASURY SHARES

In January 2023 following a final adjustment in relation to the 2017 purchase of Woodbois International Aps, the Company received 19,138,147 ordinary voting shares which have been taken into Treasury.

ORDINARY SHARES

On 13 March 2023 the Company announced that gross proceeds of c$3.6m had been raised by way of a conditional placing of 250,000,000 new ordinary shares of 1p each in the Company at a price of 1.2 pence per New Ordinary Share. 

On 30 May 2023, the Company announced that, as a result of the unexpected termination of a fully drawn c$6.0m bank facility with Sydbank (see note 15), who had also unilaterally offset c$3.1m of the Company's cash in part repayment of the facility, the Company's share price had fallen below its then nominal value of 1p. As the Company's Articles of Association prohibit the issuance of shares at a discount to nominal value, there was a need to re-designate the nominal value.  The directors convened a General Meeting for the purpose of proposing and voting on resolutions to reduce the nominal value of the ordinary shares to 0.01p and deferred share of 0.99p, but which did not change the number of ordinary shares in issue, as well as for the renewal and widening of the waiver of pre-emption rights to enable the Company to meet these exceptional circumstances.

On 16 June 2023 at the General Meeting, shareholders voted and all resolutions passed with >97% of votes in favour. The deferred shares were subsequently redeemed at nil cost by the Company.

On 28 June 2023, the Company announced that it has raised £6 million by way of a subscription for new ordinary shares at a price of 0.5 pence (the "Subscription"). This satisfied the cash shortfall created when the $6m working capital facility was withdrawn (see note 15), allowing the Company the flexibility to discharge its remaining obligations to the bank, whilst also benefiting from an agreed financial incentive for such repayment.

The Subscription formed part of a wider financing package, including a debt-for-equity swap of £1.75m and including the issuance of warrants:

·      Subscription for £6 million:

A Subscription for 1,200,000,000 new ordinary shares of 0.01 pence each in the Company ("Ordinary Shares") (the "Subscription Shares"), raising £6 million, at an issue price of 0.5 pence per Ordinary Share.

800,000,000 Subscription Shares were subscribed for by CHCH Ventures FZ-LLP and 400,000,000 Subscription Shares were purchased by John Scott (together the "Subscribers").

·      Conversion of existing debt to non-voting ordinary shares  and issuance of a convertible loan

Woodbois had a loan outstanding with Rhino Ventures Limited ("RVL") (see note 9), with a balance outstanding of $2.25 million (inclusive of all accrued interest). Under the terms of a Deed of Capitalisation, the loan was capitalised, at the price of 0.5 pence per share, into 350,000,000 Non-Voting Ordinary Shares (the "Non-Voting Conversion Shares") and a redemption payment will be made of £25,590.

The Company has also entered into a Commission Agreement with RVL, in respect of Miles Pelham's assistance in procuring the Subscription, under which RVL can elect to receive 60,000,000 new Voting Ordinary Shares (the "Commission Shares") and, subject to the passing of resolutions at a Company General Meeting, to grant Directors further authority to allot new shares on a non pre-emptive basis (the "Commission Fee"). The Commission Fee equates to a 5% commission on the funds raised through the Subscription. Should the resolutions allowing the Commissions Shares to be issued not be approved then the Commission Fee will be settled in cash.

·    Issuance of Warrants

The Company issued 1,200,000,000 share warrants to the Subscribers on a 1 for 1 basis, in respect of the Subscription Shares. Each Warrant gives the holder the right to subscribe for one new Voting Ordinary Share at a price of 1 pence per Voting Ordinary Share, at any time until 29 June 2025 (the "Warrants").

Under the terms of the Deed of Capitalisation and conditional on the passing of certain resolutions at a Company General Meetings as described above, RVL will also be issued with 350,000,000 Warrants on a 1 for 1 basis, in respect of the 350,000,000 Non Voting Conversion Shares. These Warrants are over Non-Voting Ordinary Shares in Woodbois.  Subject to the passing of those same resolutions, RVL can also elect under the Commission Agreement to receive 60,000,000 Warrants over Voting Ordinary Shares in the Company.

12. SHARE PREMIUM                                                                                                               

		$'000
At 1 January 2022		65,254
Issued in the period		295
At 31 December 2022		65,549
Issued in the period (note 11)		9,761
At 30 June 2023		75,310

Balances classified as share premium include the net proceeds in excess of the nominal share capital on issue of the Company's equity share capital.

13. RELATED PARTY TRANSACTIONS

As set out in note 9 above, the short-term facility owed to Lombard Odier of $1.0m was settled in June 2023.

As noted above, the unsecured facility from RVL was converted to equity (see notes 9 and 11).

In June 2023 a commission agreement (see note 11) was entered into between the Company and RVL.

14.  OTHER INCOME

Other income represents settlement gains realised on termination of banking and other facilities.

On 19 April 2023, the Company announced that Woodgroup Aps, a wholly owned subsidiary of the Company, had received a notice from a Danish bank, that it was terminating a $6 million debt facility.  The $6m facility was fully utilised and had an ancillary account with a cash balance of $3.1 million. The bank had a floating charge against the assets of Woodgroup ApS and have offset this $3.1 million in partial repayment of the facility.  The reason cited by the bank for terminating the facility was that Woodgroup ApS generated a loss in Q1 2023. The bank believed that, as a consequence, the circumstances of Woodgroup ApS had changed significantly to their detriment.  Management did not agree with the bank's conclusion and, whilst acknowledging the poor performance in Q1, believed the Company had been well placed to deliver a very positive performance for the remainder of the year. As reported by the Company on 6 June 2023, the Company had reached an agreement with the bank to settle the balance by no later than 29 December 2023.  The Company settled the outstanding balance on 28 June 2023, thereby taking advantage of an early settlement incentive which gave rise to c$1.4m of other income.  All security arrangements were cancelled upon settlement.

As noted above, the Lombard Odier loan was also settled in the period.

15.  Reclassification of foreign currency translation differences on deregistered entities

The Group formally completed the deregistration of three dormant entities located in Tanzania. These three entities include Wami Agriculture Co. Limited, Magole Agriculture Limited and Milama processing Company Limited.  As required by IFRS, the Group reclassified the foreign currency translation differences that arose on historical consolidation of those entities from the FCTR (equity) to profit or loss.

16. EVENTS OCCURING AFTER THE REPORTING DATE

The convertible bonds (see note 10) were repaid in July 2023.

On 30 August 2023 there was a military coup in Gabon. Operations in-country are increasingly able to revert to normal and a new government has been formed.

17.  INTERIM FINANCIAL STATEMENTS

A copy of this interim report as well as the full Annual Report for the year ended 31 December 2022 can be found on the Company's website at www.woodbois.com.

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[1] Foreign Currency Translation Reserve

 

END