Business Context and Reporting Period
Company: CL Workshop Group Ltd (formerly Nature Wood Group Limited)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Jurisdiction: British Virgin Islands (BVI) holding company; operations in Peru, France, Hong Kong, Macau, and China.
Business Overview: The Company is a forestry enterprise engaged in the trading of wood products (logs, decking, flooring, sawn timber). In June 2025, the Company disposed of its manufacturing subsidiary, Peru Forestry Management Co., Limited, to refocus on trading and new product opportunities. In October 2025, a change in control occurred, with TUTU Business Services Limited (controlled by Ms. Liying Wang) becoming the controlling shareholder. The Company operates under a dual-class share structure where Class B shares hold 50 votes per share.
Key Financial Metrics
| Metric (USD '000) | 2025 | 2024 | 2023 |
|---|---|---|---|
| Revenue | 14,584 | 16,341 | 17,673 |
| Gross Profit | 1,400 | 5,439 | 7,159 |
| Gross Margin | 9.6% | 33.3% | 40.5% |
| Net Loss (Continuing Ops) | (6,417) | (938) | (704) |
| Net Loss (Total) | (5,856) | (8,729) | (11,933) |
| Cash from Operating Activities | (907) | 2,319 | (239) |
| Cash and Cash Equivalents (End of Period) | 967 | 2,963 | 3,979 |
| Total Debt (Bank + Other Borrowings) | 5,979 | 11,483 | N/A |
Note: Net Loss for 2025 includes a gain of $6.4 million from the disposal of discontinued operations (Peru Forestry Management Co., Limited), which offset a loss from continuing operations of $6.4 million.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased 10.8% to $14.6 million in 2025 compared to $16.3 million in 2024. This was driven by a drop in market demand and prices for logs and decking due to global economic downturns, geopolitical conflicts, and the Chinese property sector crisis.
- Margin Compression: Gross margin collapsed from 33.3% in 2024 to 9.6% in 2025. The decline is attributed to unfavorable market conditions, increased material costs, and the shift in product mix following the disposal of manufacturing operations.
- Discontinued Operations: The Company disposed of its manufacturing segment (Peru Forestry Management Co., Limited) in June 2025. This resulted in a one-time gain on disposal of $6.4 million, significantly reducing the reported net loss for the year.
- Impairment Charges: The Company recognized an impairment loss of $3.0 million on financial assets and prepayments in 2025, compared to a reversal of impairment in 2024.
- Change in Control: In October 2025, the ultimate beneficial shareholder changed from Mr. Hok Pan Se to Ms. Liying Wang (via TUTU Business Services Limited), resulting in a new dual-class share structure.
Guidance, Outlook, and Risks
Going Concern Uncertainty: The independent auditor has included an explanatory paragraph regarding substantial doubt about the Company's ability to continue as a going concern. This is due to the net loss and negative operating cash flows in 2025. Management plans to address this through cost control, revenue growth initiatives, and obtaining financing from banks or shareholders.
Outlook and Strategy: The Company is pivoting from manufacturing to a trading-focused model. Management intends to optimize the product mix and explore new opportunities to mitigate the impact of volatile log prices.
Key Risks:
- Customer Concentration: The top five customers accounted for 71.4% of total revenue in 2025, with the largest single customer representing 37.7%.
- Geopolitical and Regulatory: Operations are exposed to risks in China (regulatory oversight, cybersecurity reviews), Peru (political instability), and the Middle East (shipping disruptions). The Company is also subject to U.S. tariffs on wood products.
- Market Volatility: Revenues are highly sensitive to fluctuations in log prices and selling prices of wood products.
- HFCA Act: As a foreign private issuer with operations in China, the Company faces potential delisting risks if the PCAOB cannot inspect its auditors for two consecutive years.
Investor Verification Checklist
- Going Concern Plan: Verify the status of management's plan to secure additional financing to meet obligations over the next 12 months.
- Customer Concentration: Assess the stability of the top customer (37.7% of revenue) and the risk of losing this relationship.
- Discontinued Operations: Confirm that the gain on disposal of the Peru subsidiary is non-recurring and does not reflect sustainable profitability.
- Related Party Transactions: Review the nature of transactions with the new controlling shareholder and the repayment terms of amounts due to the former shareholder.
- Regulatory Compliance: Monitor developments regarding the Holding Foreign Companies Accountable Act (HFCA) and PCAOB inspection status.