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Woodbois refinances and looks forward to dividends

Snapshot

  • Forestry and timber trading company
  • Operates 1mln acres of forest in Gabon and Mozambique
  • New kilns and sawmill to improve profitability and margins
trees

Quick facts: Woodbois Limited

Price: 2.5 GBX

LSE:WBI
Market: LSE
Market Cap: £35.77 m
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What it does

Woodbois Limited (LON:WBI) is an Africa-focused forestry and timber trading company.

It is involved in the production, processing, manufacture and supply of sustainable African hardwood (i.e. beech and blackwood) and hardwood products.

The AIM-listed company manages and operates around 1mln acres of natural forest concessions in Gabon and Mozambique, where it also has manufacturing facilities.

Its products are transported all around the world and used for things such as boat building.

As well as harvesting and producing its own products, Woodbois also sources softwood (pine and redwood) and hardwood products and sells them across the globe.

Change of name reflects a change in focus

Formerly known as Obtala, the company sold off its agriculture business in Tanzania in 2019.

That was part of a move to double-down on the timber trading and production arm of the business, which bosses thought would help attract new investors and trade finance partners.

How it’s doing

Woodbois has raised £13.1mln from existing investors, retail investors - via the PrimaryBid platform - and institutions as part of a debt restructuring and refinancing.

Through the debt restructuring, holders agreed to convert 75% of US$30mln of outstanding convertible bonds into new ordinary shares and new non-voting shares. 

The African timber firm’s first-half revenue was impacted by the coronavirus (COVID-19) pandemic lockdown measures, amounting to US$8.6mln versus US$9.3mln in the same period in 2019.

It nonetheless saw its negative underlying earnings (EBITDA) narrow to US$794,000, compared to US$1.45mln in the first half of last year.

As a result of a transformational fundraise and debt restructuring, net debt decreased to US$1.1mln from US$49.9mln, Woodbois noted.

What the boss says: Paul Dolan, chairman and chief executive

"The fundraise and debt restructuring will transform the prospects for the company.

The placing allows for the parallel conversion of approximately US$30mln of debt and obligations into equity, as well as the full elimination of the high cost 11.5% ITF [trade facility], with consequent benefit to our cash flow and profitability.

"It enables the company to also drive its growth by expanding capacity and margins in Gabon, rapidly grow its trading activities and profitability.

Inflexion points

  • Debt restructuring and placing 
  • Lombard Odier owns 27.6% after refinancing
  • Concert party including Paul Dolan will own 27%

 

 

 

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