| Thu 30 Mar 2006, 12:00 | | Yorkcor - Abridged results for the year ended 31 D |
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YRK
YRK
Yorkcor - Abridged results for the year ended 31 December 2005
The York Timber Organisation Limited
Reg. No. 1916/004890/06
Share code: YRK
ISIN: ZAE000008108
Abridged results for the year ended 31 December 2005
- REVENUE UP BY 58%
- OPERATING PROFITS UP BY 109%
Condensed income statements
For the year ended 31 December 2005
Group Company
Audited Audited
2005 2004 2005 2004
R000 R000 R000 R000
Revenue 284 012 179 658 - -
Cost of sales (154 530) (85 088) - -
Gross profit 129 482 94 570 - -
Other operating income 4 157 1 543 20 25
Distribution expenses (5 827) (3 175) - -
Administration expenses (31 595) (23 474) (6 041) (5 034)
Other operating expenses (67 962) (55 922) (1 176) (772)
Profit/(loss) from operations 28 255 13 542 (7 197) (5 781)
Arbitration awards provision (22 956) - - -
Profit/(loss) before
finance costs 5 299 13 542 (7 197) (5 781)
Finance income 8 812 6 412 2 333 486
Finance expenses (1 449) (1 361) (1 684) (26)
Income from subsidiaries - - 34 636 5 852
Profit before tax 12 662 18 593 28 088 531
Income tax expense (6 404) (7 373) (2 937) (79)
Profit for the year 6 258 11 220 25 151 452
Attributable to:
Equity holders of the parent 6 258 11 220 25 151 452
Basic and diluted
earnings per share - cents 56,7 101,6
Dividends paid - cents 250,0 -
Condensed balance sheets
at 31 December 2005
Group Company
Audited Audited
2005 2004 2005 2004
R000 R000 R000 R000
ASSETS
Total non-current assets 95 256 71 348 8 059 6 910
Property, plant, equipment
and vehicles 63 894 57 796 1 064 1 096
Biological assets 14 278 - - -
Investment property 7 070 6 364 - -
Interest in subsidiaries - - (3 019) (1 374)
Investments 10 014 7 188 10 014 7 188
Total current assets 68 019 89 233 801 4 023
Inventories 24 066 12 777 - -
Trade and other receivables 35 246 27 724 148 387
Cash and cash equivalents 8 707 48 732 526 3 592
Income tax receivable - - 127 44
Total assets 163 275 160 581 8 860 10 933
EQUITY AND LIABILITIES
Issued capital 552 552 552 552
Share premium 3 060 3 060 3 060 3 060
Retained earnings 68 834 90 177 3 871 6 321
Total equity attributable
to equity holders
of the parent 72 446 93 789 7 483 9 933
Total non-current liabilities 32 070 32 542 9 333
Interest bearing loans
and borrowings 14 735 7 895 9 24
Provisions 12 728 12 719 - -
Deferred tax liabilities 4 607 11 928 - 309
Total current liabilities 58 759 34 250 1 368 667
Interest bearing loans
and borrowings 5 416 2 515 16 32
Provisions 22 956 - - -
Trade and other payables 29 645 26 627 1 352 635
Income tax payable 742 5 108 - -
Total equity and liabilities 163 275 160 581 8 860 10 933
Condensed cash flow statements
For the year ended 31 December 2005
Group Company
Audited Audited
2005 2004 2005 2004
R000 R000 R000 R000
Cash flows from
operating activities
Cash generated
by operating activities 15 633 52 699 (6 124) 25
Net finance income 1 302 (312) 137 (15)
Taxation paid (18 091) (3 523) (3 329) (120)
Income from investments 6 060 5 363 35 148 6 327
Dividends paid (27 601) - (27 601) -
Net cash (outflow)/inflow
from operating
activities (22 697) 54 227 (1 769) 6 217
Cash flows from
investing activities
Investment to
maintain operations:
Replacement of
equipment and vehicles (1 952) (2 172) (105) (64)
Proceeds on disposal of
equipment and vehicles 80 130 20 25
Acquisition of investments (2 826) (6 797) (2 826) (6 797)
Investment to
expand operations:
Investment in subsidiaries - - 1 645 4 214
Additions to property, plant
and equipment (1 278) - - -
Additions to biological assets (8 920) - - -
Net cash (outflow)/inflow
from investing activities (14 896) (8 839) (1 266) (2 622)
Cash flows from
financing activities
Settlement of non-current
borrowings (2 471) (2 448) (15) (32)
Advance/settlement
in current borrowings 39 253 (16) (1)
Net cash outflow from
financing activities (2 432) (2 195) (31) (33)
Net (decrease)/increase
in cash and cash
equivalents (40 025) 43 193 (3 066) 3 562
Cash and cash equivalents
at beginning of year 48 732 5 539 3 592 30
Cash and cash equivalents
at end of year 8 707 48 732 526 3 592
Statements of changes in equity
For the year ended 31 December 2005
Non-
Share Share distributable
capital premium reserves
R000 R000 R000
GROUP
As previously stated:
Balance at 1 January 2004 552 3 060 21 396
Remove minority interest
Changes due to adoption of IFRS (21 396)
Restated balance at 1 January 2004 552 3 060 -
Adjustment to deferred taxation on asset
revaluations (361)
Transfer of revaluation from investment property 1 978
Depreciation on asset revaluations reversed (1 402)
Transfer of 2004 movement per IFRS (215)
Net profit for the year
Balance at 31 December 2004 552 3 060 -
Dividends paid
Net profit for the year
Balance at 31 December 2005 552 3 060 -
COMPANY
Balance at 1 January 2004 552 3 060 601
Depreciation on asset revaluations reversed (601)
Net profit for the year
Balance at 31 December 2004 552 3 060 -
Dividends paid
Net profit for the year
Balance at 31 December 2005 552 3 060 -
Retained Minority
earnings interest Total
R000 R000 R000
GROUP
As previously stated:
Balance at 1 January 2004 58 595 2 643 86 246
Remove minority interest (673) (2 643) (3 316)
Changes due to adoption of IFRS 21 396
Restated balance at 1 January 2004 79 318 - 82 930
Adjustment to deferred taxation on asset
revaluations - (361)
Transfer of revaluation from investment
property (1 978) -
Depreciation on asset revaluations
reversed 1 402 -
Transfer of 2004 movement per IFRS 215
Net profit for the year 11 220 11 220
Balance at 31 December 2004 90 177 - 93 789
Dividends paid (27 601) (27 601)
Net profit for the year 6 258 6 258
Balance at 31 December 2005 68 834 - 72 446
COMPANY
Balance at 1 January 2004 5 268 9 481
Depreciation on asset revaluations
reversed 601 -
Net profit for the year 452 452
Balance at 31 December 2004 6 321 9 933
Dividends paid (27 601) (27 601)
Net profit for the year 25 151 25 151
Balance at 31 December 2005 3 871 7 483
The associate company is held by BoE on behalf of a BEE consortium to be
formed. The associate company is under the control of the Board of Directors.
Due to a change in the interpretation of accounting requirements, the company
has determined that the minority interest is no longer presented.
Earnings and headline earnings (cents)
at 31 December 2005
Group
Audited
2005 2004
Earnings and diluted earnings per share 56,7 101,6
Adjustments
- Surplus on disposal of equipment and vehicles (0,1) (0,6)
- Increase in fair value of investment property (4,5) (14,7)
- Increase in fair value of listed investment (3,5) (1,5)
- Impairment of plant (3,6) -
Headline earnings and diluted headline
earnings per share 45,0 84,8
Directors" report
Financial highlights
# Revenue rose by 58%, from R179 million to R284 million.
# Gross profit improved by about 37%, from R94 million to R129 million.
# Yorkcor"s profit from operations before any once off provisions for
arbitration awards, climbed by 109%, from R13,5 million to R28,2 million.
# Revenue from trading operations contributed 36% of total revenue for 2005
(2004: 17%).
# Taxation of R6,4 million (2004: R7,3 million) includes secondary tax on
dividends paid of R3,2 million in 2005.
# The earnings per share of the company declined by 43% from 101 cents in
2004 to 57 cents in 2005.
# This decline is the result of a non-recurring event dealt with below. Without
the non-recurring event and the secondary tax on the dividends the earnings
would have been 234 cents per share that is an increase of 131%.
# In the light of the above the net asset value per share declined by 23% from
850 cents to 656 cents per share.
Competition Tribunal victory
# In January 2006, there was a withdrawal of the proposed merger by a
consortium controlled by Global Forest Products with Komatiland Forests, a
parastatal wholly-owned by Safcol. Both are already dominant in the relevant
markets.
# Yorkcor played a leading role in opposing the proposed merger.
Forest acquisition
# A high water mark in the group"s quest for enlarged access to resource was
Yorkcor"s acquisition of Taurus Estates, a forest located within economic
distance of most of our sawmills.
The BEE factor
# Yorkcor"s record in this regard goes back a longer way than most. Yorkcor
continues to grow black representation at all levels of the company. We are
working on positive negotiations to that end.
Post balance sheet event
# The accompanying financial results include a non-recurring post balance
sheet event. The arbitration between Yorkcor and Safcol which was awarded
in favour of Yorkcor in November 2005 was overturned on appeal on
10 February 2006 in favour of Safcol. The final award for damages to Safcol
is to be determined by a final arbitration expected to be held after October
2006. Due to the uncertainty of damages to be determined there is a range of
possible outcomes and it is the responsibility of the directors to provide the
most likely outcome.
# Although it is uncertain, the directors have made a total provision for all
arbitration matters of R26,6 million in the balance sheet, of which
R22,9 million was charged against income in the year under review. Included
in the amount charged against income is a provision relating to the outcome
of the arbitration mentioned above. The after tax effect of this charge to the
income statement is R16,2 million. The company has sufficient resources to
make the payment of the above claims.
# Other than the matter mentioned above there are no material facts or
circumstance that have occurred between the balance sheet date and the
date of this report.
Dividends
# The board declared an interim dividend of 25 cents (February 2005) and a
final dividend of 30 cents (September 2005) per share during the year.
# Two special dividends of 125 cents (February 2005) and 70 cents (September
2005) per share were also declared during the year under review.
Basis of Accounting
The condensed consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) for
financial statements. These are the Group"s first IFRS condensed consolidated
annual financial statements. IFRS 1 First-time adoption of International
Financial Reporting Standards has been applied. The condensed consolidated
financial statements do not include all of the information required for full
annual financial statements.
Significant changes to the Group"s accounting policies as a result of the
adoption of IFRS
The principal accounting policies of the Group are consistent with those
applied in the previous year, except for the following:
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost or deemed cost less
accumulated depreciation and impairment losses. Previously, certain items of
property, plant and equipment had been revalued to fair value. These items of
property, plant and equipment that had been revalued on or prior to 1 January
2004, the date of transition to IFRS, are measured on the basis of deemed cost,
being the revalued amount at the date of that revaluation.
When parts of an item of property, plant and equipment have different useful
lives, those components are accounted for as separate items of property, plant
and equipment.
Impact of the transition to IFRS
In preparing its comparative information for the year ended 31 December 2004,
the Group has adjusted the amounts previously reported in financial statements
prepared in accordance with previous GAAP.
The net effect of the transition to IFRS are not material - the restatement of
comparative information resulted in an increase in retained earnings
(attributable to equity holders of the parent) of approximately R110 000 for
the year ending 31 December 2004.
A detailed explanation of how the transition from previous GAAP to IFRS has
affected the Group"s financial position, financial performance and cash flows
is set out in the annual financial statements to be distributed to
shareholders, which will be available from the Registered Office of the Group.
Report of the auditors
KPMG Inc"s unmodified audit report on the 31 December 2005 annual financial
statements and the summarised financial statements contained herein is
available for inspection at the company"s registered office.
On behalf of the board
Dr M J C van Vuuren I S D Tucker 30 March 2006
Non-executive chairman Managing director Pretoria
Directors: Dr M J C van Vuuren, I S D Tucker*, J K H Lehman*,
A C de Villiers*, L S Cooper*, Dr J Kopp, S Motlana, N Motlana
*Executive directors
Company Secretary: J F Dekker
Registered Office: 5th Floor, Yorkcor Park, 86 Watermeyer Street, Val de Grace,
Pretoria 0184, PO Box 380, Pretoria 0001.
Transfer Secretaries: Computershare Investor Services 2004 (Proprietary)
Limited,
70 Marshall Street, Johannesburg 2001.
PO Box 61051, Marshalltown 2107.
Date: 30/03/2006 12:00:18 PM Produced by the JSE SENS Department
