Trading Update
Shareholders are referred to the announcement dated 20 November 2002, which
indicated that the company, in consultation with its three largest shareholders,
had decided to appoint a firm of independent forestry consultants to carry out a
valuation ("the valuation") of its forestry assets ("forestry assets").
The valuation has been completed. The independent forestry consultants ("the
consultants") have valued the forestry assets on a pre-tax basis at R70 million.
In arriving at this value the consultants considered five different valuation
scenarios which yielded a value range of between R11,5 million and R100 million
(before tax).
The value of R70 million was derived by valuing the projected cash flows from
standing timber in the various plantations, over a 26-year period, on a basis
that generates an Internal Rate of Return of 4.58% (in real terms, implying a
nominal discount rate of approximately 10.6%). The consultants indicated that
R44.4 million of the R70 million value would be taxable, resulting in a net
after tax value of R56.7 million.
At 31 December 2002, the forestry assets which were the subject of the valuation
had a net asset value of R18.8 million, on a historic cost basis.
The board of directors have considered the valuation and are of the opinion that
whilst it could provide a benchmark for the valuation of Masonite, it is not
necessarily indicative of the realisable value of the forestry assets in a
market which is currently oversupplied with hardwoods.
Durban
22 April 2003
Investment bank and sponsor
NEDBANK CORPORATE
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