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Yorkcor - Abridged results for the year ended 31 December 2005

Release Date: 30/03/2006 12:00
Code(s): YRK
Wrap Text

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 Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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