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