Kangaroo Island Plantation Timbers Ltd (ASX:KPT) has received a further insurance payout in the wake of summer bushfires with $4.2 million received to cover the replacement cost of fire-damaged houses.
The company advised yesterday of a likely range of $2 million to $6 million in insurance proceeds relating to the loss of houses and sheds in the recent fires on Kangaroo Island.
No sheds agreement yet
No agreement has yet been reached in relation to the loss of sheds.
Proceeds from this insurance policy were not included in the December 2019 accounts and KPT’s board has resolved to apply the house insurance proceeds immediately to reduce the company’s bank debt.
The fires in December 2019 and January 2020 impacted 95 per cent of KPT’s hardwood and softwood plantations on the island.
KPT remains committed to the timber plantation business and is making progress with the reconstruction process, including a revised business plan and detailed post-harvest plan with the restoration of infrastructure such as fencing underway.
Shares have rebounded today by as much as 10% to an intra-day high of $1.00.
Insurance payments progress
Ongoing assistance in the recovery work is coming from insurance policies with initial progress payments received and completion of final payouts advancing while KPT is also preparing a submission for government bushfire inquiries.
The company has received $10 million from the insurer with the outstanding $50 million virtually certain and this has been included in KPT’s first-half accounts for 2020.
Apart from the houses, there are other insurance components that are possible but not included in the accounts, including for incidental expenses, various sheds and a previous fire in December 2018.
Transition to non-executive role
Former executive director John Sergeant has today transitioned to a non-executive role, joining chairman Paul McKenzie and Gregory Boulton AM as non-executive directors.
Sergeant had worked as a part-time executive director in the period since stepping down as KPT’s managing director on June 1, 2019.
With lodgement of the final part of the KI Seaport Environmental Impact Statement and the resumption of trading in the company’s shares, the board agrees it is an opportune time for the transition.
Sergeant will also join the company’s Audit and Risk Committee, which will continue to be chaired by Gregory Boulton.
Managing director Keith Lamb and executive directors Shauna Black and Graham Holdaway continue in their current roles.
McKenzie has thanked John Sergeant for his service in an executive capacity over the last five years.
He has further thanked Mr Lamb and Mr Sergeant for managing a smooth transition in leadership as the company moves from its development phase to construction, production and sustainable growth.
Sergeant may undertake a small amount of work as a consultant to the company if required, however, this would be only temporary in nature.