| Wed 17 Sep 2008, 12:01 | | YRK - York - York Delivers Sparkling 18-Month Results |
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YRK
YRK
YRK - York - York Delivers Sparkling 18-Month Results
The York Timber Organisation Limited
(Incorporated in the Republic of South Africa)
Registration number 1916/004890/06)
Share code: YRK
ISIN: ZAE000008108
("York" or "the Group")
YORK DELIVERS SPARKLING 18-MONTH RESULTS
HIGHLIGHTS
- Global Forest Products acquired for R1,7 billion in July 2007 and
successfully integrated
- Net asset value per share up from 941c to 2113c
- Headline earnings per share up by 280% to 1019c
- Cash generated by operating activities increased 28-fold, from R8 million
to R224 million
- Biological asset growth of 46% since July 2007
The York Timber Organisation Limited (York) has announced headline earnings per
share of 1019 cents for the 18-month period to 30 June 2008. This is a 280%
increase over the 12 month period ended 31 December 2006.
Revenue for the financial period under review increased to R1,52 billion, a 287%
increase over the previous 12-month period. This follows the acquisition of
Global Forestry Products (GFP) in June 2007, transforming York into the largest
forestry and timber milling company in Africa. The GFP acquisition lifts the
group`s share of the southern African sawn timber market to 19% from the
previous 8%.
"These results were achieved despite the massive disruption caused by a
devastating fire that affected about 6,5% of the country`s sawlog resource, and
a severe downturn in residential housing construction," says CEO Lance Cooper.
Cooper further says the results are rewarding in the light of the prevailing
market conditions, and the distortions introduced by the change in financial
year-end, as well as the acquisition of GFP for R1,7 billion in June 2007.
"The nature of York`s business model has changed substantially following the GFP
acquisition, in that we are now 60% self-sufficient in timber. Forestry accounts
for a quarter of our revenue, versus just 1% previously, and York is now a
diversified, vertically integrated forestry and timber group, with seven modern
and well-managed sawmills, as well as a plywood mill. We have been able to
extract efficiencies from the acquired mills and further efficiency benefits
wait to be realised."
The segmental breakdown for the period shows that merchandising now accounts for
19% of revenue, down from 40% prior to the GFP acquisition, timber milling 47%
(previously 59%), and plywood 9% (previously zero). The GPF assets and
operations were successfully integrated during the period under review, and
York`s acquisition programme - in line with the strategic objective of becoming
a fully integrated forestry and sawmilling company - continued, with the
acquisition of the Goedgeloof plantation from Crocodile Valley Estates (Pty)
Limited as a going concern for a consideration of R32,3 million. This was funded
from cash resources of R12,3 million, with the balance secured by way of long-
term funding. Goedgeloof was successfully integrated into York`s adjoining
London plantation.
Cash generated from operating activities grew to R224 million from the previous
12-month period`s R8 million. Net finance expenses were substantially higher at
R93 million (2006: R3 million) due principally to the increase in debt acquired
to effect the GFP acquisition. The GFP acquisition was funded by way of a R350
million rights offer and a R203 million issue of shares for cash to finance
working capital for the merged group. This resulted in the number of ordinary
shares in issue increasing to 78 million from 11 million, substantially
improving the liquidity of the counter.
Commenting on market conditions during the period under review, Cooper says the
fire that devastated 6,5% of the country`s pine sawlog reserves in July 2007
created a temporary surplus of logs as producers were forced to fell damaged
trees. This temporary surplus will transform into a shortfall as producers
struggle to meet the future timber needs of the country as a whole. Some 11 000
hectares of York`s plantations were affected by the fire, as well as the Driekop
sawmill. York is accelerating the replanting of the burnt areas over a 24-month
period in order to normalise the growing regime as quickly as possible. The
Driekop timber mill is being rebuilt as a new state-of-the-art mill, which will
be ready for commissioning in March 2009.
Cooper welcomed the increase in the group`s BEE shareholding to 39% as a result
of the Lereko Metier Capital Growth Fund`s interest in the company having
increased from 4% to 14.1%.
Dividend
Taking into account the debt facilities extended by York`s bankers for the GFP
acquisition and other growth plans, no dividend (save preference dividends) was
declared during the period under review. During the previous year, no dividend
was declared.
Outlook
Looking to the coming financial period, Cooper says market conditions will
remain tough in an environment of depressed residential construction and high
interest rates. "While we expect interest rates to fall over the coming 12-month
period, this will not be fully reflected until 2010 and beyond. York will focus
its energies on building market share and generating further efficiency
improvements across the group in an effort to maintain and grow margins. We
therefore expect to see a continued improvement in financial performance in the
coming financial year," concludes Cooper.
Ends/
ISSUED THE YORK TIMBER ORGANISATION LIMITED (YORK): 013 764
FOR : 9200
CONTACT Lance Cooper, CEO: 083 227 4700 / John Lehman CFO: 082
: 388 8998
FAX NO 013 764 1164
:
E-MAIL lcooper@york.co.za; jlehman@york.co.za
:
WEBSITE www.york.co.za
:
ISSUED YORK Corporate and Investor Communications
BY :
CONTACT Tish Stewart 011 442 5536 / 082 443 6399
:
FAX NO 011 447 9317
:
E-MAIL tishstewart@mweb.co.za
:
DATE : 17 September 2008
Date: 17/09/2008 12:01:01 Produced by the JSE SENS Department.
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