Ann: HALFYR: KRK: Market Announcement - 2015 Half Year Result

• Release Date: 28/04/15 17:11
• Summary: HALFYR: KRK: Market Announcement - 2015 Half Year Result
• Price Sensitive: No
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					KRK
28/04/2015 17:11
HALFYR
PRICE SENSITIVE
REL: 1711 HRS Kirkcaldie & Stains Limited

HALFYR: KRK: Market Announcement - 2015 Half Year Result

The Group's pre-tax profit for the six-month period ended 28 February 2015
was $57,000.  This result compares to a pre-tax profit of $791,000 during the
same period last year, which reflected the rental revenues and expenses of
the Harbour City Centre (subsequently sold) for the full period.
The Group's after-tax loss for the six-month period ended 28 February 2015
was $501,000. This compares to the $563,000 after tax profit during the same
period last year.
The primary contributor to the difference in group performance arises from
the directors' decision to write down a previously recognised deferred tax
asset of $531,000.  This tax asset had arisen principally from the future tax
depreciation benefit from the retail store fit out and stock obsolescence
provision. With the current level of profits being achieved by the retail
operations, the directors no longer had confidence in the certainty of that
asset being fully realised within the foreseeable future.
In this period, the retail operations reported a pre-tax profit of $145,000,
against a pre-tax profit of $231,000 during the same period last year. The
after-tax loss was $404,000 (last year: $193,000 profit) - again largely
because of the write down of the tax asset.
After a good start to the year, February retail revenues disappointed and,
sales revenue ended 0.5% behind last year. Our cosmetics department, which
saw the addition of the Jo Malone counter, continues to perform above last
year and expectations. A new concession selling Georg Jensen Living and
Alessi products opened on the second floor in November 2014. Both have been
well received by customers. Our online presence continues to grow.
The now discontinued property operations reported a pre-tax loss of $5,000
which compares to a pre-tax profit of $650,000 during the same period last
year (which, as noted above, included the rental revenues and expenses for
the full period from the Harbour City Centre). The after-tax loss was
$14,000 (last year: $460,000 profit). A significant contributor to this after
tax loss was a fair value adjustment of $266,000 required in respect of the
outstanding receivable from the sale of the Harbour City Centre to take
account of the time value of money, but this will fully reverse on receipt of
the outstanding amount.
As previously reported, the sale of the Harbour City Centre building (HCC)
settled on 7 October 2014 when the first payment of $41,100,000 was received.
Net proceeds of that payment, after repaying the bank loan, were $16,981,000.
The proceeds have been placed on term deposit with three registered banks.
The final instalment of $4,750,000 is expected to be received from the
purchaser of the HCC on 7 October 2015.
At 28 February 2015, the Group held cash and cash equivalents of $19,858,000,
total shareholders' funds were $30,125,000, and net tangible assets per share
were $2.94.
As reported at the Annual Meeting of 17 February 2015, the Board continues to
work through different options of returning funds to shareholders. However,
any distribution to shareholders continues to be influenced by the retail
operation's results and by the timing of the receipt of the final instalment
from the sale of the HCC.
The strategic review of retail operations likewise continues and it remains
the main focus of the Board for the coming months. The Board decided that
while it is considering the options for the business, it should not make a
permanent CEO appointment to replace Mr John Milford, but instead it was
pleased to announce the return of Philip Shewell as Acting Chief Executive.

The Board was also very pleased to announce the appointment of Michael (Mike)
Curtis as a director.

Falcon Clouston
Chairman

ENDS

For further information:
Falcon Clouston
P O Box 1494
Wellington 6140
P: 04 499 1610
End CA:00263616 For:KRK    Type:HALFYR     Time:2015-04-28 17:11:03