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YORK TIMBER HOLDINGS LIMITED

YRK JSE Listed

Investment Analysis: York Timber Holdings Limited (JSE: YRK)

Date: 9 January 2026 Share Price: ~R2.30 (230c) Analyst Role: Senior Equity Analyst, JSE

Step 1: Data Gathering & Source Verification

I have reviewed the most recent financial disclosures and relevant SENS announcements. The latest available full-year results are for the period ended 30 June 2025.

  • Annual Results: Reviewed the Consolidated Annual Financial Results for the year ended 30 June 2025 (Released 30 September 2025).
  • Interim Results: Reviewed the Unaudited Interim Results for the six months ended 31 December 2024 (Released 28 March 2025).
  • SENS Activity (L12M): Key announcements include the Trading Statement (22 September 2025) signaling a massive earnings jump due to biological asset valuations, and dealings in securities by associates of directors (Oct 2025), signaling insider confidence.

Data Sources:

  • Annual Results (June 2025): https://www.york.co.za/docs/fin/Yorkyearend2025.pdf
  • SENS (Annual Results Announcement): https://senspdf.jse.co.za/documents/SENS_20250930_S511140.pdf

Step 2: Metric Extraction

| Metric | Value | Notes | | --- | --- | --- | | Market Cap | ~R1.09 Billion | Small-cap forestry stock. | | Dividend Yield (L12M) | 0.0% | No Dividend. York has not paid a dividend in many years. Cash is retained for debt servicing and replanting. | | Liquidity Check | Illiquid / High Risk | Average daily volume is very thin (often <10,000 shares traded per day). Large orders will move the price significantly. | | P/E Ratio | ~3.45x | Deceptive. Based on FY2025 HEPS of 66.69 cents. This low P/E is driven by non-cash "Fair Value Adjustments" on biological assets (trees growing in value), not necessarily cash profit. | | Net Asset Value (NAV) | 659 cents | Deep Discount. The stock trades at a massive ~65% discount to NAV (Price 230c vs NAV 659c). You are paying ~35 cents for R1.00 of net assets (mostly land and trees). |

Step 3: Operational & Strategic Analysis

Business Overview York is a vertically integrated forestry company.

  1. Forestry: Owns ~60,000 hectares of plantation land (pine/eucalyptus).
  2. Processing: Sawmills (lumber) and a Plywood plant (high-margin product).
  3. Wholesale: Distributes lumber and plywood.

Performance Trend

  • Headline vs. Core Reality:
  • Headline Earnings: Surged 385% to 66.69 cents. This looks spectacular but was driven primarily by a R435 million fair value upward adjustment to the biological assets (the trees).

  • Core Earnings: This is the metric that matters (excludes tree revaluations). Core Earnings were a loss of (0.28) cents, though this is a significant improvement from the loss of (10.74) cents in the prior year.

  • Cash Flow: Positive Turnaround. Cash generated from operations improved dramatically to R148 million (up from R28m). This suggests the operational "turnaround" is finally generating cash, even if accounting profits are noisy.

  • Operations: The Plywood division has seen strong export growth (+73%), offsetting soft domestic demand caused by the weak SA construction sector.

Sector Context

  • Construction: The local building market remains under pressure, limiting pricing power for structural timber.
  • Logistics: Exporting plywood is profitable but hampered by Transnet inefficiencies, forcing York to use more expensive road transport.

Step 4: The Verdict

Bull Case (Why Buy): Deep Asset Value. You are buying 60,000 hectares of prime forestry land and standing timber for one-third of its accounting value (0.35x P/NAV). . The massive discount offers a "margin of safety." If management can continue improving cash generation (as seen in FY25), or if a corporate action (buyout/delisting) occurs, the upside is 100%+. Recent director buying suggests insiders see this value.

Bear Case (Why Sell): The "Value Trap" & Liquidity. York has traded at a deep discount for a decade. Without dividends, shareholders have no "wait and see" income. The "profit" is mostly paper gains on trees, not cash in the bank. Furthermore, the stock is highly illiquid; entering is hard, but exiting a large position is even harder without crashing the price.

Fair Value Estimate: R3.50 - R4.00 Still a significant discount to NAV (R6.59) to account for the lack of dividends and liquidity risk.

Final Rating: SPECULATIVE BUY Only for patient value investors who can tolerate illiquidity. The improved cash generation in FY2025 is the first real "green shoot" we've seen in years.

Would you like me to analyze their "Biological Asset Valuation" methodology to explain why the earnings are so volatile?

AI Generated Analysis Last Updated: 2026-01-14