Phaunos Investor Update 18 May 2016
Agenda Phaunos Mid-year Investor Update 1. Summary 2. Phaunos portfolio update 3. Asset overview 4. Conclusion Eucalyptus plantation, Pradera Roja 2
Disclaimer • Stafford Capital Partners Limited ("Stafford") is distributing this strategy presentation in its capacity as manager of Phaunos Timber Fund Limited (the "Company") The Company is a Guernsey domiciled Authorised Closed-ended investment scheme pursuant to section 8 of the Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended and rule 6.02 of the Authorised Closed-ended Investment Schemes Rules 2008. The Ordinary Shares of the Company are admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange’s main market. • In distributing this presentation Stafford is relying on the fact that all recipients are qualified investors' within the meaning of section 86(7).of FSMA who are also (i) investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (''FPO"); or (ii) high net worth companies within the meaning of Article 49 of the FPO; or.(iii) members of the Company within the meaning of Article 43(2) of the FPO; or (iv) certified high net worth individuals within the meaning of Article 48 of the FPO; or (v) certain sophisticated investors within the meaning of Article 50(1) of the FPO (each a "relevant person"). Persons who do not fall within any of these definitions should not rely on this document nor take any action upon it. The document is only exempt if it is distributed to the exempt categories of recipients. This document has not been approved as a financial promotion or otherwise by a person who is authorised under FSMA for the purposes of section 21 of FSMA and rules made under such legislation or any other applicable securities laws of any other territory. Approval will be required unless the recipient of this promotion is a relevant person. This presentation has not been, and will not be, reviewed or approved by the Financial Conduct Authority ("FCA") or any other authority or regulatory body. • Stafford is issuing this strategy presentation exclusively as manager of the Company and will not be responsible to anyone other than the Company for providing regulatory and legal protections afforded to customers (as defined in the rules of the Financial Conduct Authority) nor for providing advice in relation to the contents of this document on any matter, transaction or arrangement referred to in it. None of Stafford nor the Company, nor any of their respective directors, officers or employees of Stafford makes any representation or warranty, express or implied, as to the accuracy or completeness of the information or opinions contained in this strategy presentation . • Stafford is authorised and regulated by the FCA, but has not authorised the contents of, or any part of, this document. To the fullest extent permitted by law, none of Stafford nor the Company (nor their respective members, directors, officers, employees, agents or representatives) nor any other person accepts any liability whatsoever for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this document or its contents or otherwise in connection with the subject matter of this document. The contents of this strategy presentation are not to be construed as legal, financial or tax advice. This document should not be distributed in whole or in part to other parties. This strategy presentation is being supplied to shareholders solely for their information and does not constitute or contain any invitation or offer to any person to subscribe for, otherwise • acquire, or dispose of any Ordinary Shares in the Company or advise persons to do so in any jurisdiction. This strategy presentation does not constitute a recommendation regarding the Ordinary Shares of the Company. • Some statements contained in this presentation are or may be forward-looking statements, including without limitation any forecasts or projections. Actual results may differ from those expressed in such statements, depending on a variety of factors. Any forward-looking information contained in this strategy presentation has been prepared on the basis of a number of assumptions, only some of which are set out in the presentation , which may prove to be incorrect, and accordingly, actual results may vary. • For the avoidance of doubt, nothing in this strategy presentation is intended to constitute a profit forecast. • The value of any investment may fall over time and you may receive back less than you invested. 3
Summary • The current estimated NAV is USD 288.4m (May 2016) a USD 9.6m increase ¹ , including an unrealised FX gain of USD 5.3m and USD 4.3m uplift in the underlying assets • Cash held has increased to USD 46.6m ² (May 2016) from USD 25.6m (31 Dec 2015) • Asset sale programme is nearing completion, with agreements reached on all non-core assets • Ongoing focus on cost reduction, revenue maximisation and NAV improvement • Positive net cash flows, budget and moderate NAV growth expected for 2016 • Core mature timberland assets provide a solid base for growth beyond 2016 • Focus on improving share price through share buy-backs 1 to NAV at 31 December 2015 2 Cash held across all entities Loblolly pine planting, Aurora Forrestal 4
Phaunos portfolio update • NAV of USD 288.4m ¹ across 7 investments • 5 sale events since July 2015, returning USD 31.5m to Phaunos • 83% of NAV ¹ is medium or lower risk assets • Portfolio focused on New Zealand, Brazil and Uruguay Green China Sold: USD 2.9m GTFF: 8% Loc.: China Partial Sale: USD 13.4m Loc.: USA Mata Mineira: 11% Loc.: Brazil Matariki: 42% Loc.: New Zealand GRAS NTP: <1% Sold: USD 8.5m Loc.: East Africa Loc.: USA Aurora: 9% Loc.: Uruguay KEY Sold Eucateca: 9% Partial Sale Partial Sale: USD 2.5m Held Loc.: Brazil Pradera Roja: 9% Partial Sale: USD 4.2m 1 NAV estimate as of May 2016; 2 Cash and other assets includes GRAS, GTFF & Green China proceeds Cash and Other Assets 2 : USD 33.8 m (12% of NAV) Loc.: Uruguay 5
Strengthening cash position 2016 Financial Guidance Dec 2015 a May 2016 e Dec 2016 g (USD m) (USD m) (USD m) NAV 278.8 288.4 NAV per share (USD/share) 0.49 0.51 Cash inflows 17.2 2.7 8.3 Cash outflows (13.3) (2.5) (7.7) – – – One-off / restructuring costs Net cash flow 3.9 0.2 0.6 Sale of non current assets 6.7 21.9 24.6 – Share Buy-backs (1.1) - Cash held² at start of period 15.0 25.6 25.6 50.8 ¹ Cash held² at end of period 25.6 46.6 a Actual e Estimate, updated to 1 May 2016 g Guidance ¹ Excluding share buybacks or any non-budgeted capital expenses ² Across all entities 6
Net asset value changes Phaunos estimated NAV reconciliation • NAV reduced by USD 42.5m from USD 321.3m 350 (Dec 14) to USD 278.8m (Dec 15), this includes: • USD 43.8m of unrealised foreign exchange losses USD m • Partially offset by USD 1.2m valuation gains 300 • 2016 has seen the NAV increase to USD 288.4m ¹ , a USD 9.6m increase, comprising: 250 YE 2014 Movements Unrealised Net Value YE 2015 Unrealised Value May 2016 NAV in equity FX loss expenses increases NAV FX gain increases est. NAV • USD 5.3m in unrealised FX gains Negative Positive • USD 4.3m increase due to uplift in the assets NAV comparison 150 31 Dec 2014 NAV 31 Dec 2015 NAV 125 May 2016 est. NAV -4% -4% 100 USD m 75 50 6% 255% 25 -30% 13% -44% -11% 0% -35% -39% 13% 8% 0% - Matariki Mata Eucateca Aurora Pradera Non-Core Cash and Forestry Mineira Forestal Roja Assets Other Assets² ¹ NAV estimate as of May 2016 ² Cash and other assets includes GRAS, GTFF & Green China proceeds 7
Asset sales relative to NAV 50 50 GRAS • Sold 100% of interest in GRAS for USD 8.5m GTFF 40 40 (remaining) Non-core targeted for sale NTP NTP • Remaining loan of USD 781,000 (remaining) 30 Green China (sold) 30 Green China • Sold 100% of interest in Green China for USD 2.9m USD m • Sale price consistent with June 30, 2015, NAV GRAS (sold) • USD 1.5m reduction in annual operating costs 20 20 GTFF • 17% of a 11,400 hectare poplar plantation & sawmill • Agreement reached to sell underlying assets • Sale of underlying land has commenced, returning USD GTFF (sold) 13.4m to Phaunos, balance to be sold over 3-4 years 10 10 Pradera Roja • Sold 3 of 9 properties, representing 20% of planted area Pradera Roja (sold)* Pradera Roja (sold)* for USD 4.2m • Sale of remaining plantations to be considered should Eucateca (sold)* Eucateca (sold)* opportunity arise - - NAV 2015 Expected Sale Revenue ** (31 Dec 2015) Eucateca • Opportunistic sale of teak assets • 2 of 4 teak properties sold at 41% above NAV (USD Asset sales to date of USD 31.5m 2.5m) • Sale of eucalypt plantations to be considered should opportunity arise * Value indicated as at time of sale ** GTTF (remaining) sale distributions to Phaunos are expected over time. The numbers detailed are based on best estimates and may change as the remaining assets are realised 8
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