To view the PDF file, sign up for a MySharenet subscription.

The York Timber Organisation Limited

Release Date: 28/03/2003 16:19
Code(s): YRK
Wrap Text

The York Timber Organisation Limited Registration number: 1916/004890/06 Share code: YRK ISIN: ZAE000008108 AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 ABRIDGED GROUP INCOME STATEMENT 31 December 2002 2001 R000 R000
Revenue 94 378 72 003 Operating profit before finance costs, depreciation and taxation 8 876 5 759 Finance costs (678) (1 410) Depreciation (2 106) (2 181) Taxation (2 397) (224) Profit after taxation 3 695 1 944 Minority interests (397) (387) Profit attributable to ordinary shareholders 3 298 1 557 Headline earnings per ordinary share (cents) 29,2 13,7 Surplus on disposal of equipment and vehicles 0,7 0,4 Earnings per ordinary share (cents) 29,9 14,1 Number of ordinary shares in issue (000"s) 11 040 11 040 ABRIDGED CASH FLOW STATEMENT 31 December
2002 2001 R000 R000 Net cash inflow from operating activities 18 026 4 030 Net cash (outflow)/inflow from investing activities (5 114) 136 Net cash outflow from financing activities (9 435) (1 297) Net increase in bank balances and cash 3 477 2 868 Bank balances and cash at beginning of period 3 679 811 Bank balances and cash at end of period 7 156 3 679 ABRIDGED GROUP BALANCE SHEET 31 December 2002 2001 R000 R000
ASSETS Non-current assets Property, plant, equipment and vehicles 56 180 28 857 Long-term receivables and investments 10 746 10 777 66 926 39 634 Current assets 26 886 26 407 Total assets 93 812 66 041 Equity and liabilities Issued capital 3 612 3 612 Non-distributable reserves 21 579 15 079 Distributable reserves 26 660 15 486 Ordinary shareholders" funds 51 851 34 177 Outside shareholders" interest in subsidiary 4 000 4 000 Total shareholders" funds 55 851 38 177 Non-current liabilities Interest bearing borrowings 2 791 10 918 Deferred taxation 11 273 69 Current liabilities 23 897 16 877 Total equity and liabilities 93 812 66 041 Net asset value per share (cents) 505,9 345,8 STATEMENT OF CHANGES IN SHAREHOLDERS" FUNDS 31 December 2002 2001 R000 R000
Shareholders" funds at beginning of period 34 177 32 620 Profit for the period 3 298 1 557 Disposal of subsidiary (95) - Revaluation of fixed assets 14 471 - Shareholders" funds at 31 December 2002 51 851 34 177 CHAIRMAN"S COMMENT Not for a decade have sawmillers known better times. In 2002, softwood lumber sales nationally soared to over 2,3 million cubic metres - a 22% improvement over 2001. Average selling prices improved by about 23%. South African pine lumber is now selling at better prices than its American rival product, Southern Yellow Pine. Exports were up as much as 106% on 2001 figures. However, the hardening of the Rand, together with the subdued pace of manufacture in the East, has begun to soften the export performance of South African pine products. We look forward to post-Baghdad business as usual. Whilst average national figures were good, Yorkcor"s were better. Turnover was boosted from R72,0 million in 2001 to R94,4 million in 2002. Cash-flow from operating activities amounted to R18,03 million (2001: R4,03 million) and net profit more than doubled, from R1,56 million in 2001 to R3,3 million in 2002. We ended the year with sound balance sheet figures. Shareholders" funds strengthened from R34,2 million in 2001 to R51,9 million at the last year end. Net asset value per share was 505,9 cents at the end of 2002 compared with 345,8 cents in 2001. Gearing was reduced from 30,7% to 12,5%. We retired interest- bearing debt, in fact, by as much as 70,5% from R13,2 million to R3,9 million. It was a good year operationally. We also made good gains strategically. We maintained our stance in regard to our entitlements to sawlog supplies. More than half the sawmillers who were our competitors a decade ago are no longer in business. The state forests have been under the hammer in the so-called restructuring process of privatisation. Sawmillers were expected to give up their long-term sawlog supply contracts without compensation. They did - to a man. We said, "no", and we say the Constitution and the law support us. The resulting litigation has been long and costly, but well worth the investment. Two watershed judgments of the High Court will have an enduring impact on Yorkcor"s financial strength. In September 2002, the High Court delivered judgment in litigation in which the parastatal, Safcol, sought to cancel two of our "evergreen" log contracts concluded in 1968 and 1970. The cancellation claim was dismissed with costs, but Safcol has appealed the decision. Contemporaneously, Yorkcor had found it necessary to launch legal proceedings against the government to enforce compliance with several Orders of Court. In February 2003, the High Court declared the Minister of Water Affairs and Forestry and his Director General to be in contempt of Court and directed the government, inter alia, to pay the costs of the litigation on a punitive scale. The substantial amount of the special costs order has not been credited to the accompanying accounts for 2002; nor have the costs of pending matters in which no judgment has yet been given. Litigation costs are written-off as and when they are expensed. Apart from the appeal by Safcol, mentioned earlier, another action is pending in which cancellation of our evergreen contracts is sought on different grounds. Your directors and the company"s legal advisors are cautiously optimistic. Also pending are substantial money claims and counter claims by both sides. The claims are mainly about log prices - we say we have been overcharged, Safcol contends the other way. Yorkcor currently does not deal with Safcol but with its new subsidiary Komatiland. The major portion of its sawlog requirements is procured elsewhere. Pending before the Competition Tribunal is a complaint brought by Mondi against Safcol about charges under the Competition Act, to which Safcol has already admitted guilt for reasons of its own. The complaint concerns an allegation that the arbitration clause in the evergreen contracts between Yorkcor and Safcol have the effect of "substantially preventing or lessening competition". Mondi itself is no longer in the sawmilling business in the relevant markets. The long-awaited arbitration between Yorkcor and the government begins today, 31 March 2003. The arbitrator, a retired judge, is required to determine the amount of compensation, payable on 31 December 2004, for the termination of its evergreen contract in terms of which our York Lumber sawmilling operations receive the bulk of their log supply. The government has already admitted liability. What has to be decided is the quantum, to be determined "on the basis of the value of York Lumber"s business as a going concern basis, enjoying the benefits of this contract without interruption. The intention is to place (the business) in at least the same financial position as if the contract had not been terminated". The quantum of Yorkcor"s claim is substantial, as is the gap separating the parties at this stage. Positive initiatives were taken to counter the threats to our business (however well we were acquitting ourselves in the fray) and to turn Yorkcor"s goodwill and know-how to good account for the future. The assets of the liquidated Bluechip companies were acquired at a cost of R6,5 million in October 2002. Stemming from the acquisition, the new Yorkcor sawmills, renamed, Golden Rhino Lumber and Roburnia Forest Products, have been refurbished and are currently in production. We expect both operations to be profitable in their first year in the group. They do not rely on state forests for their log intake, but on a diverse number of independent growers. To conserve liquidity, your directors have decided not to declare a dividend until the trend established with this year"s results is consolidated. By order of the board Solly Tucker (Chairman) 28 March 2003 Report of the independent auditors The financial information set out in this announcement has been audited by the group"s auditors, KPMG Inc. The auditors report is available for inspection at the company"s registered office. Basis of accounting These consolidated, abridged annual financial statements were drawn up in compliance with South African Statements of Generally Accepted Accounting Practice and the company has complied with the requirements of the Companies Act, 1973. Accounting policies The accounting policies as set out in the 2001 Annual Report have been consistently applied in producing these results. DIRECTORS S Tucker*, ISD Tucker*, AC de Villiers*, LS Cooper*, Dr J Kopp, S Motlana *Executive directors Company Secretary: HDA du Toit Registered Office Transfer Secretaries 5th Floor, Yorkcor Park Computershare Investor Services Ltd 86 Watermeyer Street 70 Marshall Street Val de Grace, Pretoria 0184 Johannesburg 2001 PO Box 380 PO Box 61051 Pretoria 0001 Marshalltown 2107 Sponsor Sasfin Bank Limited (Registration number: 1951/002280/06)

Share This Story