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The Yorkor Timber Organisation Limited - Provisional Audited Results For The
Year Ended 31 December 2003 And Withdrawal Of Cautionary Announcement
The Yorkor Timber Organisation Limited
(Reg. No. 1916/004890/06)
Share code: YRK
ISIN: ZAE000008108
PROVISIONAL AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2003 AND WITHDRAWAL
OF CAUTIONARY ANNOUNCEMENT
ABRIDGED GROUP INCOME STATEMENT
31 December
2003 2002
R000 R000
Revenue 116 796 94 378
Operating profit before finance cost,
depreciation and taxation 12 091 8 876
DWAF compensation award 29 729 -
Less write off investment in York Lumber (1 344) -
Finance cost (1 679) (678)
Depreciation (2 871) (2 106)
Taxation (2 001) (2 397)
Profit after taxation 33 925 3 695
Minority interests (446) (397)
Profit attributable to ordinary
shareholders 33 479 3 298
Headline earnings per ordinary
share (cents) 9,9 23,8
DWAF compensation award 257,1 -
Surplus on disposal of equipment
and vehicles 11,1 0,7
Increase in fair value of investment property 25,1 5,4
Earnings per ordinary share (cents) 303,2 29,9
Number of ordinary shares in issue (000"s) 11 040 11 040
ABRIDGED CASH FLOW STATEMENT
31 December
2003 2002
R000 R000
Net cash (outflow)/inflow from
operating activities (4 269) 18 026
Net cash (outflow)/inflow from investing
activities (5 265) (5 114)
Net cash inflow/(outflow) from financing
activities 7 792 (9 435)
Net increase in bank balances and cash (1 742) 3 477
Bank balances and cash at beginning
of the period 7 156 3 679
Bank balances and cash at end
of the period 5 414 7 156
ABRIDGED GROUP BALANCE SHEET
31 December
2003 2002
R000 R000
ASSETS
Non-current assets
Property, plant, equipment and vehicles 60 722 56 180
Long-term receivables and investments 7 905 10 746
68 627 66 926
Current assets
Other 34 267 26 886
DWAF compensation due 37 438 -
Total assets 140 332 93 812
Equity and liabilities
Issued capital 3 612 3 612
Non-distributable reserves 18 629 21 579
Distributable reserves 61 776 26 660
Ordinary shareholders" funds 84 017 51 851
Outside shareholders" interest in subsidiary - 4 000
Total shareholders" funds 84 017 55 851
Non-current liabilities
Interest bearing borrowings 10 379 2 791
Shut-down provision 9 053 -
Deferred tax 10 617 11 273
Current liabilities 26 266 23 897
Total equity and liabilities 140 332 93 812
Net asset value per share (cents) 761,0 505,9
STATEMENT OF CHANGES IN SHAREHOLDERS" FUNDS
31 December
2003 2002
R000 R000
Shareholders" funds at beginning
of the period 51 851 34 177
Profit for the period 33 479 3 298
Disposal of subsidiary - (95)
Revaluation of fixed assets (1 612) 14 471
Increase in valuation of listed investment 299 -
Shareholders" funds at 31 December 2003 84 017 51 851
CHAIRMAN"S COMMENT
The good news is that the long and arduous arbitration matter with the
Department of Water Affairs and Forestry (DWAF) has, after
15 months since its commencement, culminated in an eminently satisfactory result
for Yorkcor. The Arbitrator, a retired judge, awarded compensation for the
State"s termination of its evergreen sawlog supply contracts over three
plantations near Bushbuckridge. In his award the arbitrator ordered DWAF to pay
York Timbers Limited an amount of R37,4 million on or before 30 June 2004.
The award also neutralises the effect of income tax or capital gains tax that
may in future be assessed by SARS on the compensation. DWAF is also ordered to
pay the costs of the arbitration, including the qualifying fees, and travelling
and subsistence expenses of eleven expert witnesses declared necessary. Certain
minor costs incurred in three or four days of hearing were disallowed.
The impact of the award is reflected in the accompanying financial statements,
as the termination and the value of undertaking which is now being compensated
for, relate to a period prior to
31 December 2003.
In a watershed judgment in 2002, the High Court has upheld the validity of
Yorkcor"s evergreen contracts. Safcol has noted an appeal. The majority of the
other pending litigation has been suspended by order of the High Court until the
outcome of the pending appeal is known.
Business was good for sawmillers in 2003, better even than the record figures
for the previous year. Your directors have taken key steps to ensure that we
continue to flourish in the years to come. Others in our industry do not appear
to have fared as well. Softwood lumber sales nationally increased by 27,7% from
1,8 million cubic metres to 2,3 million cubic metres. Average selling prices
improved by as much as 11,6%. South African pine lumber continues to sell at
better prices than its American rival product, Southern
Yellow Pine. As in most other industries, export performance softened
significantly - the result of the impact of the hardening rand to a great
degree. Yorkcor was fortunate that this did not affect the Group materially.
Group turnover increased by nearly 24%, from R94 million to
R117 million. Profit for the year amounted to R33,5 million, from R3,3 million
in 2002, representing earnings per share of 303,2 cents. Headline earnings were
9,9 cents compared to 23,8 cents in the previous year. There were problems at
York Lumber mill near Bushbuckridge, in the face of challenges associated with
the termination of the Government"s operations scheduled for
31 December 2006, and at Roburnia Forest Products where the start up effort was
impaired by faulty pre-acquisition installations. The remaining sawmills in the
group outperformed industry averages by a long chalk.
After adjustments occasioned by the Arbitrator"s award, the net asset value of
the group is reflected as 761,0 cents per share (2002: 505,9 cents per share).
The amount of R37 438 498 payable by 30 June 2004 in terms of the award is shown
under Current assets in the balance sheet.
Gearing increased to 7,8% mainly due to the financing of certain plant and
machinery, as well as Capex for the two new mills purchased at the end of the
previous year.
At the end of September 2003, the sinking fund created to redeem the preference
shares in Inland Realty was redeemed for an amount of R3,6 million and the
balance of R400 000 was financed from our own resources in order to redeem the
preference shares for an amount of R4 million.
Assertive action is underway to bolster the group"s access to an assured timber
resource.
With effect from 1 June 2004, I will be relinquishing my role as executive
chairman, which I have enjoyed for over 40 years. From that date, my main
contribution to Yorkcor will be as Chief Executive Officer. The board has
unanimously appointed Dr Tienie van Vuuren non-executive chairman from that
date. He knows the industry and the company inside and out and will, no doubt,
be a distinguished success here as he resoundingly has been in other places.
Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement published on 24 March
2004. As the compensation payable for the termination of York Lumbers" evergreen
contract has now been determined and announced, shareholders need no longer
exercise caution in dealing in their Yorkcor shares.
Report of the independent auditors
The financial information set out in this announcement has been audited by the
group"s auditors, KPMG Inc. The auditor"s report is available for inspection at
the company"s registered office.
Basis of accounting
These consolidated provisional 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 acccounting policies as set out in the 2002 Annual Report have been
consistently applied in producing these results.
Solly Tucker
Chairman
1 April 2004
Directors: S Tucker*, I S D Tucker*, A C de Villers*, Dr M J C van Vuuren,
L S Cooper*, Dr J Kopp, S Motlana, B Trisk *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: Computeshare Limited,
70 Marshall Street,
Johannesburg 2001,
PO Box 61051, Marshalltown 2107.
Date: 01/04/2004 04:25:10 PM Supplied by www.sharenet.co.za
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