| Thu 30 Mar 2006, 16:31 | | Yorkcor - Strong Performance Lifts Yorkcors REVENU |
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YRK
YRK
Yorkcor - Strong Performance Lifts Yorkcor"s REVENUE BY 58%
The York Timber Organisation Limited
Reg. No. 1916/004890/06
Share code: YRK
ISIN: ZAE000008108
Strong performance lifts yorkcor"s REVENUE BY 58%
HIGHLIGHTS
* Revenue up 58% to R284 million
* Profit from operations before arbitration award up 109%
* New forestry division launched to secure future log supply
* R22,9 million provisions for arbitrations
* Yorkcor declared the top performing share on JSE in 2005
* Two special dividends totalling 195 cents a share paid in 2005
* Final dividend of 30 cents, plus interim dividend of 25 cents in 2005
Forestry products group Yorkcor delivered another set of excellent results,
lifting revenue by 58% to R284 million for the year ended December 2005 (2004:
R179 million).
Yorkcor, which was formed in 1916 and listed on the JSE Securities Exchange in
1946, was declared the JSE"s best performing share in 2005 by Moneyweb.
Profits from operations before non-recurring provisions for arbitration awards
climbed 109% to R28,2 million (2004: R13,5 million).
The financial statements show R26,6 million non-recurring provisions for
arbitration awards, of which R22,9 million was charged against income in the
2005 financial year. These provisions include an amount relating to the
arbitration awarded in Yorkcor"s favour, which was overturned on appeal in
February 2006 in favour of state-owned forestry group Safcol. Chief executive
officer Ivor Tucker says though the exact quantum of the award against Yorkcor
has yet to be determined, the group has made adequate provision. "This is a non-
recurring item, and we have sufficient resources to cover it," he says.
"Significantly, it brings to an end long-running legal disputes and allows us to
move forward, focusing on the ample growth opportunities that await us."
As a result of this non-recurring item, earnings per share declined 43% to 57
cents (2004: 101 cents), and net asset value per share fell 23% to 656 cents
(2004: 850 cents).
A highlight of the year was the formation of a forestry division following the
acquisition of Taurus Estates for R17 million, which provides greater security
in the sourcing of logs in future. Profits from this business will reflect in
the coming period"s financial statements.
Another positive feature of the results was the R8,8 million earned on investing
the group"s cash surpluses, while finance costs remained largely unchanged at
R1,4 million due to Yorkcor"s low gearing level.
Tucker says the timber market remained buoyant throughout the year, with volume
sales up 9% and average industry prices up nearly 15%. Yorkcor"s 58% increase in
revenue was due in part to firmer prices, but a more significant factor was the
improved sales mix resulting in higher value added sales. Yorkcor is now
regarded as the preferred supplier to leading timber distributors in South
Africa, and continues to enjoy the support of small and medium-sized timber
traders.
Taxation for the year declined to R6,4 million from R7,3 million the previous
year.
Tucker says good progress has been made in the group"s four-pronged growth
strategy:
- securing future log supplies through the acquisition of Taurus Estates and the
launch of a new forestry division;
- forging alliances with producers of compatible forest products and offering
them the benefit of secure markets;
- building on its pioneering work in black economic empowerment, Yorkcor is in
the process of expanding this to the shareholder level.
Another judicial development in January 2006, hailed as a victory for Yorkcor
and other independent sawmillers, was the decision by the two largest sawlog
forestry groups - Safcol-controlled Komatiland and Global Forests Products - to
abandon their plans to merge while the issue was under consideration at the
Competition Tribunal. This merger was strongly opposed by private sawmillers as
it would have led to a monopoly in forestry supply, opening the door to anti-
competitive conduct in these markets.
Tucker says the group"s legal issues are largely resolved, and a solid platform
for growth - unencumbered by the legal skirmishes of previous years - has been
put in place. "Our efficiency measures continued to show impressive improvement
during the year, and we have an excellent team of managers who are poised to
take the group forward. There are numerous expansion opportunities that await
us, and the future is the brightest we"ve seen in many a year."
Ends
ISSUED FOR: YORK TIMBER ORGANISATION LIMITED
CONTACT : Ivor Tucker, CEO 012 804 9730
FAX NO : 012 804 8611
WEBSITE : www.yorkcor.co.za
ISSUED BY : TISH STEWART PR ASSOCIATES
CONTACT : Tish Stewart 011 325 4195 / 082 443 6399
FAX NO : 011 325 4199
E-MAIL : tish@tspr.co.za
DATE : 30 March 2006
Date: 30/03/2006 04:31:07 PM Produced by the JSE SENS Department
