Keter Soars on Property Reassessment

Keter Publishing House announced yesterday that its 12-dunam property in Jerusalem's Givat Shaul neighborhood is worth NIS 38 million, and not NIS 6 million as listed in the company's financial statements. The new assessment will be calculated into the company's first-quarter results this year.

Keter, controlled by the Reshef family, saw its share (TASE: KETR) soar by over 10 percent yesterday following the announcement.

According to the Keter's chairman, Tzali Reshef, the NIS 32 million differential will bring shareholder's equity to over NIS 90 million. Keter is currently traded at a market value of NIS 43 million, considerably below its equity level.

Reshef, a founder of Peace Now who served as a Labor MK in the previous Knesset, noted that the company sold a nine-dunam parcel of the same property several years ago at an even higher price than the new assessed value.

Keter's low market value is peculiar when considering its positive business results. According to 2003 financial statements published by the company yesterday, the book publisher earned a net profit of NIS 5 million, up from NIS 1.8 million the previous year.

Fourth-quarter profits nearly doubled from NIS 400,000 in 2002 to NIS 750,000 last year. The company also announced it will distribute a dividend of NIS 4 million.

The increase in shareholder's equity following the revised real estate assessment may stimulate greater trade volume for the company's stock, and enable the controlling shareholder to raise capital or sell shares.

Reshef said that Keter plans to expand its operations via an acquisition or merger in the printing and publishing industry. He added that the company has no current plans to raise capital, but did not rule out this possibility in the future.

Books published by Keter last year include "The Monk Who Sold His Ferrari," "The Book of Management Wisdom," and Amos Oz's "A Tale of Love and Darkness." Keter also took over the production and marketing operations of Ma'ariv Book Guild in January 2003.